Entrepreneurial process: people combine existing inputs to create new outputs

These skills are required to create new FSAs from the resources

Paradox of transferability

= challenge of IB

Strategic elements that make IB harder: bounded reliability and bounded rationality

Do all firms fit in the framework?

Yes but categorization into 4 types

International projector:

Difficulty: coordination of all activities; high costs= reason organisations fail to outsource. Difficult to measure these costs. 

Challenge of Multi centered MNE: need to familiarize yourself with local host market; international marketing. Need to know the supply chain in order to chose distribution etc

àadaptation costs

Standardize products = keeping products

Bonds

A security, usually long term, representing money that a corporation borrows form the investing public 

Its a security, like a share but in essence it is a loan

The amount borrowed (principal) and interest have to be (re)paid at a specified rate at specified times

(borrowed not from the bank but from investors)

Face value of bond is stated on bond paper itself

If bond is sold at face value, there is no amortization

Hardly ever happens in practice 

Bond price lower than face value: 

The bond is sold at discount

Bond price higher than face value:

Bond is selling at premium

Selling price of bond is stated as percentage of face price

Revenues are an increase in SE

Epenses are a decrease in SE

When expenses exceed revenues, net loss occurs

Fiscal year a 12-month accounting period 

Interim periods accounting periods of less than a year

The matching rule

Matching rule to measure the net income adequately, revenues and expenses must be assigned to the accounting period in which they occur regardless of when the cash is received or paid

Revenues and expenses are recorded in the periods in which they occur rather than in the periods in which they are received or paid.

The revenue and expense are recognized now even though they will be paid later

1. Record revenues when earned
2. Record expense when incurred 
3. Adjust accounts

So step one and two when contract is

Lecture 5                                                                                                                   13-11-18

Non-equity is based on a contract but no exchange of ownership

Equity is based on ownership structure

If you own something, you control something

With a contract it depends on the degree to which you can control the non-equity part

Licensing

Easily described, terms also easily described

You can specify the details under which the contract can be used: is precondition for licensing

Terms, period

Regulators can specify, conditions under which the licensee can use the licensing

Franchising

Local partner would like to use logo, brand, trademark, way of working developed by a firm

Have to follow rules and regulations of how firm operates

Greenfield

One firm in a country