When a company's specialized knowledge is embodied in its employees, the only alternative to exploit a market opportunity in another nation may be to undertake foreign direct investment.

Question

Quizplus · Accepted Answer

If a company's specialized knowledge is embodied in its employees, then the company cannot simply export their goods and services to another country. Instead, the company may have to establish a presence in the foreign market through foreign direct investment, which involves setting up operations such as subsidiaries or joint ventures overseas. This allows the company to transfer their expertise to local employees who can then use it to compete in the foreign market. Therefore, the statement is true.

When a Company's Specialized Knowledge Is Embodied in Its Employees