BMAL 590 LEGAL ENVIRONMENT OF
BUSINESS ACTUAL EXAM PAPER 2026
QUESTIONS WITH VERIFIED SOLUTIONS
GRADED A+
⩥ OECD - Organisation for Economic Co-operation and Development
Countries. Answer: Whereas the resources and capabilities to harness
new technologies are available in the developed world, natural resources
are often found in emerging economies and developing countries.
More than a third of the world's population is in one continent - Asia.
Just two countries, China and India, account for nearly 2.5 billion
people. It is not surprising that corporations look at these countries as
huge markets.
⩥ Exporting. Answer: Export refers to sending goods produced in the
firm's home country to be marketed in other host countries.
Exports are governed by the laws of the home country (which may
prevent certain goods and services being exported) and those of the host
country (which may prohibit some goods, restrict quantities, impose
customs and countervailing duties, and in some cases may impose anti-
dumping duties).
,Thus, firms need to study the fine print before getting into exports.
Exporting enables the firm to exploit economies of scale in existing
facilities and reduces risk that may arise out of having operations in
another country.
Exporting becomes unviable to certain countries due to geographic
distance and related transportation costs, or where the other country
imposes restrictions and/or high customs duties.
⩥ Other options in going global include:. Answer: Licensing
Franchising
Joint ventures
Strategic alliances
Wholly-owned subsidiaries
Acquisitions
⩥ Licensing. Answer: a firm in the host country manufactures goods
under license to a company that is paid royalties on the sales
Licensing is beneficial in low-tech sectors. In hi-tech sectors, licensing
has the risk of losing valuable tacit knowledge.
, ⩥ Franchising:. Answer: common in industries such as fast food, coffee,
and services
Franchising works well in the services sector. The key is due
diligenceand trust.
⩥ Joint ventures:. Answer: firms enter into a co-operative arrangement
with a firm in the host country, usually with equity participation
Joint ventures are politically acceptable in most countries because they
enable a firm in the host country to upgrade its own capabilities. On the
other hand, many joint ventures fail because of a breakdown in
trustbetween the partners.
⩥ Strategic alliances:. Answer: co-operative arrangements for a specific
purpose
⩥ Wholly-owned subsidiaries:. Answer: the firm invests 100% of the
funds required in the host country
Wholly-owned subsidiaries are beneficial from the firm's perspective.
Most countries have limitations for 100% foreign investment except in
sectors where the host country may be lacking or favors foreign direct
investment to leapfrog certain technologies.
BUSINESS ACTUAL EXAM PAPER 2026
QUESTIONS WITH VERIFIED SOLUTIONS
GRADED A+
⩥ OECD - Organisation for Economic Co-operation and Development
Countries. Answer: Whereas the resources and capabilities to harness
new technologies are available in the developed world, natural resources
are often found in emerging economies and developing countries.
More than a third of the world's population is in one continent - Asia.
Just two countries, China and India, account for nearly 2.5 billion
people. It is not surprising that corporations look at these countries as
huge markets.
⩥ Exporting. Answer: Export refers to sending goods produced in the
firm's home country to be marketed in other host countries.
Exports are governed by the laws of the home country (which may
prevent certain goods and services being exported) and those of the host
country (which may prohibit some goods, restrict quantities, impose
customs and countervailing duties, and in some cases may impose anti-
dumping duties).
,Thus, firms need to study the fine print before getting into exports.
Exporting enables the firm to exploit economies of scale in existing
facilities and reduces risk that may arise out of having operations in
another country.
Exporting becomes unviable to certain countries due to geographic
distance and related transportation costs, or where the other country
imposes restrictions and/or high customs duties.
⩥ Other options in going global include:. Answer: Licensing
Franchising
Joint ventures
Strategic alliances
Wholly-owned subsidiaries
Acquisitions
⩥ Licensing. Answer: a firm in the host country manufactures goods
under license to a company that is paid royalties on the sales
Licensing is beneficial in low-tech sectors. In hi-tech sectors, licensing
has the risk of losing valuable tacit knowledge.
, ⩥ Franchising:. Answer: common in industries such as fast food, coffee,
and services
Franchising works well in the services sector. The key is due
diligenceand trust.
⩥ Joint ventures:. Answer: firms enter into a co-operative arrangement
with a firm in the host country, usually with equity participation
Joint ventures are politically acceptable in most countries because they
enable a firm in the host country to upgrade its own capabilities. On the
other hand, many joint ventures fail because of a breakdown in
trustbetween the partners.
⩥ Strategic alliances:. Answer: co-operative arrangements for a specific
purpose
⩥ Wholly-owned subsidiaries:. Answer: the firm invests 100% of the
funds required in the host country
Wholly-owned subsidiaries are beneficial from the firm's perspective.
Most countries have limitations for 100% foreign investment except in
sectors where the host country may be lacking or favors foreign direct
investment to leapfrog certain technologies.
