NAME:______
Chapter 5
Vocabulary
Word / Definition / ExampleSole proprietorship
Net income/ profit
Unlimited liability
Partnership
Corporation
Stockholder/ shareholders
Dividends
Limited liability
Charter
Municipal corporation
Nonprofit corporation
Cooperative/
Co-op
Multinational Corporation
Indirect exporting
Direct exporting
Management contract
Licensing
Franchise
Joint venture
Foreign direct investment (FDI)
Wholly-owned subsidiary
5-1
What are 2 advantages and 2 disadvantages of a proprietorship?
What are 2 advantages and 2 disadvantages of a partnership?
Give an example of a:
municipal corporation
Nonprofit Corporation
Co-op
How do nonprofit organizations benefit society?
In each of the following situations what type of business organization would you recommend?
A group of programmers in India plan to start a software company and sell stock to other investors.
A person in Italy wants to turn a jewelry-making hobby into a business.
Three doctors in Bali wish to share office space, staff, and equipment,
Three friends in Finland are opening a small store to sell sports equipment.
5-2
What are the 4 characteristics of a MNC?
Is it likely that a well-managed MNC could be successful in every country in the world? Explain.
Read the Global Business spotlight on page 123 and answer question 1.
5-3
What is the difference between licensing and franchising?
For each of the following situations, indicate what method the company is using for its global business activities.
A Vietnamese company share production costs and profits of a chemical manufacturing enterprise with an Israeli company.
A British toy company allows a Japanese company to create clothing and school supplies with one of the British company’s doll characters on the products.
A company in Egypt has purchased 51 percent of the stock of a company in Peru.
A small food-packaging firm cannot afford to sell in other countries, so it asks an export agent to obtain orders for the company.