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1、41002072李民權1ExamQuestions(50%each)1)GiliaChinesecarmakerisspendingaverylargeamountofmoneybuyinganotherfeigncarproducer.AccdingtothetheiesinthiscoursedoyouthinkthisisagooddealTakeChineseGeelyclosetoVolvoacquisitionfexampl
2、eIdontbelieveitsinthebestinterestfChinesecarmakers.ChinesecarmakerGeelyissaidtobeinthefinalspurttoacquireSwedenbasedVolvoCarsfromFdbutanalystsarealreadycriticizingthedeal.1.Mergersacquisitions(abbreviatedM&A)isanaspectof
3、cpatestrategycpatefinancemanagementdealingwiththebuyingsellingdividingcombiningofdifferentcompaniessimilarentitiesthatcanhelpanenterprisegrowrapidlyinitssectlocationofiginanewfieldnewlocationwithoutcreatingasubsidiaryoth
4、erchildentityusingajointventure.Thedistinctionbetweena“merger“an“acquisition“hasbecomeincreasinglyblurredinvariousrespects(particularlyintermsoftheultimateeconomicoutcome)althoughithasnotcompletelydisappearedinallsituati
5、ons.Firstlytheacquisitionextendthetransactioncost.Ineconomicsrelateddisciplinesatransactioncostisacostincurredinmakinganeconomicsexchangethecostofparticipatinginamarket.Anumberofkindsoftransactioncosthavecometobeknownbyp
6、articularnames:?Searchinfmationcostsarecostssuchasthoseincurredindeterminingthattherequiredgoodisavailableonthemarketwhichhasthelowestpriceetc.F?Bargainingcostsarethecostsrequiredtocometoanacceptableagreementwiththeother
7、partytothetransactiondrawingupanappropriatecontractsoon.Ingametheythisisanalyzedfinstanceinthegameofchicken.Onassetmarketsinmarketmicrostructurethetransactioncostissomefunctionofthedistancebetweenthebidask.?Policingenfce
8、mentcostsarethecostsofmakingsuretheotherpartystickstothetermsofthecontracttakingappropriateactionifthisturnsoutnottobethecase.2.Assetspecificityisatermrelatedtotheinterpartyrelationshipsofatransaction.Itisusuallydefineda
9、stheextenttowhichtheinvestmentsmadetosupptaparticulartransactionhaveahighervaluetothattransactionthantheywouldhaveiftheywereredeployedfanyotherpurpose.Assetspecificityhasbeenextensivelystudiedinavarietyofmanagementeconom
10、icsareassuchasmarketingaccountingganizationalbehavimanagementinfmationsystems.MultidimensionalityScholarshaveacknowledgedthemultidimensionalpropertyofassetspecificity.FexampleWilliamson(1983)identifiedfourdimensionsofass
11、etspecificity:41002072李民權3sameamountofwkasintheUnitedStatesbutflessthanhalfthesalarythatanAmericanemployeewillmake.Thismotivatescompaniestooutsourceoverseastofindfeignwkerswhoarewillingtowkftheselowerwages.Thecompanycans
12、penduptohalftheusualcosttotrainthesewkerstobecomeexpertsinadifferentcountry.Lowerregulatycostsareanadditiontocompaniessavingmoneywhenoutsourcing.ComparingthecoststoemployingawkerintheUnitedStatestoawkerinChinaitisnoticed
13、thatanemployerintheU.S.hastopayhighertaxes(socialsecurityMedicaresafetyprotection(OSHAregulations)alsoFICA(taxes)).Companiesareabletofocustheirmoneyresourcesmetowardsimprovingtheceaspectsofitsbusinesswhenoutsourced.Fexam
14、pleaninsurancecompanymayoutsourceitslscapingfunctionstoaserviceproviderthatspecializesinlscapingsinceitisirrelevanttotheceoperationsofinsurance.Thelscapingisperfmedbyanexpertoutsourcedganizationtheinsurancecompanycanfocu
15、sondoingwhatitspecializesin.Thisallowstheoutsourcingcompanytobuildontoitscefunctionsthatkeepthebusinessrunningsmoothly.Anotherexampleisthatcompaniespublicentitiessuchasapublicschooldistrictthatoutsourcesfunctionssuchasth
16、eirpayrollofficestocompanieslikeADPCeridianwhichspecializeinpayrollfunctions.Inthecaseofoutsourcingfirmsmayfindthatwkersinothercountriescanprovidebettercustomersupptthantheirdomesticcounterparts.Fexampleanonlinecoffeesho
17、pownerwhomovedhiscallingcentertothePhilippinesfoundthathiscustomersreceivedbettercustomersupptfromwkersinthiscountry.Revenueprofitplaysalargeroleinthereasonfacompanyoutsourcing.Sincethecostsarecheaperindifferentcountries
18、facpationtorunitaswellastotraintheemployeesthissavesthecompanyalargesumofmoney.Meprofitcomesinwhenthevendsareabletopurchaseproductsatalessexpensiveratecontinuetosellthematareasonablepricefconsumers.Thepricesarereducedfse
19、rvicesaswellasproductswhenpurchasedatacheaperprice.RisksWhencompaniesoffsheserviceseventhoughitmaynotbethecepartsofthebusinessthosejobsleavethehomecountryffeigncountries..Outsourcingmayincreasetheriskofleakagereduceconfi
20、dentialityaswellasintroduceadditionalprivacysecurityconcerns.AdvantagesCompaniesareabletoprovideservicesproductstoconsumersatacheaperpricewhilestillhavingalargemarginfprofit.Thisprofitmarginbenefitsboththecompanyaswellas
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