N-Pharma Case Study

|IB Business and Management SL Ms. Sawsan’s Case Study notes |May 4 |
| |2010 |
|[Here are the notes that we made for the IB Business and Management Paper 1 May 4th 2010 exam |[Paper 1] |
|Good Luck.] | |

Business and Management May 2010 Paper 1 Case Study

Business Organizations (Unit 1)

1. Define MNC:

i. a large firm that has subsidiaries or unit plans in more than one country, the mother firm is usually in developed nations, and other subsidiaries are in LEDC's

2. Analyze 2 Advantages and disadvantages for a country hosting MNCs

Advantages

i. Offer employment opportunities so unemployment decreases in that country

ii. Brings in foreign currency which is usually in shortage in LEDCS (as it comes from exports)

iii. Transfer of technology and skills of labor

Disadvantages

i. Poor working conditions for labor (sweatshops and child labor)

ii. Gain political power of the ruling government by threatening to leave the country if some regulations are changed

iii. Externalities are not considered (Examples include air and noise pollution)

iv. Try to evade taxes by any chance

v. Profit flies back to the home country

3. Define Subsidiary

A unit plant or factory plant of the MNC that is usually located in LEDCs where costs are low (such as wages, land).

4. Why did N-Pharma open subsidiaries in Australia, Canada, Mexico, Chile, Vietnam, South Korea and New Zealand?

i. Expansion for markets and proximity to the market

ii. Vietnam,