Chapter 13, Problem 6EC

Summary Introduction

To discuss:

The ethical issues that could arise in conjunction with each other entry mode discussed.

Introduction:

There are three types of Investment entry mode:

1. Wholly owned subsidiaries
2. Joint ventures
3. Strategic alliances

Wholly owned subsidiary is a facility that is entirely owned and controlled by a single parent company. Companies can establish wholly owned subsidiary either by forming a new company and constructing entirely new facilities such as factories, offices, and equipment or by purchasing an existing company and internalizing its facilities.

Joint ventures are created when two or more independent entities come together to achieve a common business purpose.

Strategic alliances are created when two or more entities cooperate to achieve each other’s goal in business. For example, a company and its suppliers can be strategic partners.