Question

LaurelEdge is a U.S. firm that wanted to enter the Asian market. Some members of the board were in favor of opening branch offices in several Asian countries. After much debate, the board eventually decides to enter into cross-border alliances with firms based in the specific markets LaurelEdge wished to enter. Which of the following arguments was likely made during the board meetings by one faction or the other?

a.Cross-border alliances present less complexity than what would be involved in opening branch offices.
b.Cross-border alliances would simplify the human resource management required by international expansion.
c.Cross-border alliances would provide better information about the local markets, sources of capital, and legal procedures in the Asian markets.
d.Cross-border alliances create obstacles to dealing with foreign government economic policies.

Answer 1

During LaurelEdge's board discussions on entering the Asian market, it's likely that proponents of cross-border alliances argued these provided simplicity, reduced complexity, and valuable local market insight. Critics may have raised concerns about the potential loss of control and obstacles in foreign economic policy handling. Ultimately, the decision to form alliances was based on leveraging local expertise and minimizing risks.

Step-by-step explanation:

During the board meetings of LaurelEdge regarding their expansion into the Asian market, several arguments likely emerged. One faction may have argued that cross-border alliances present less complexity and overhead compared to establishing branch offices, which involves high capital investment and greater risks associated with entering a new market. Another plausible argument could have been that such alliances would greatly simplify the human resource management challenges posed by international expansion because local firms would already have management structures and employees accustomed to local business practices and regulations.

Another key point likely made by proponents of the strategy could be that cross-border alliances would provide better information about the local markets, sources of capital, and legal procedures, allowing the company to leverage local expertise and networks, as opposed to navigating these complexities on their own. On the other hand, possible objections might have included concerns that these alliances could create obstacles when dealing with foreign government economic policies and potentially restrict the company's control over its operations.