Introduction international business diplomacy Saudi Arabia has one quarter of the world’s known reserves and is the largest exporter and second-largest producer (after the former Soviet Union) of petroleum. By the early 1990s one company, Aramco, accounted for over 90 percent of the Saudi production and more than double the output of the two...
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NEEDS AND ALTERNATIVES FOR FULFILLMENT Nature of Assets The international firm and the host country each may control assets that are useful to the other. There is thus an inducement to agree on the establishment of operations and to ensure that the operations continue functioning. The foreign firm may be able to bring in...
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Home-Country Needs Thus far we have implied that terms of operations are highly dependent on the interplay of needs between the MNE and the host country. Although this is true, it overlooks the role of the home country. Although concerns vary widely among home countries, the home country seldom takes a neutral position in...
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Other External Pressures The complementary nature of the assets that international firms and countries control would seem, at first, to dictate a mutual interest in finding means to ensure that mutual benefits are developed. While there are pressures to do this, there are other constraints as well, particularly on governmental decision makers, who may...
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NEGOTIATIONS IN INTERNATIONAL BUSINESS Increasingly, negotiations are used as a means of deciding the terms by which a company may function or terminate operations in a foreign country. At one time these negotiations prevailed only for direct investments; more recently, however, they have sometimes been extended to other operating arrangements, such as licensing agreements,...
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