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Sterling Auto International (Scenario)
Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts.
-One shareholder questioned the CEO's rationale for beginning an exploratory effort to establish a new manufacturing plant in India. The CEO responded by explaining that India was an untapped market with a high demand for products such as those produced by Sterling. His rationale represented an example of which of the following reasons for international expansion?
Incentives
Rewards or penalties that motivate individuals or entities to act in certain ways.
Hazardous Jobs
Occupations that pose significant risks of injury, illness, or death as a result of the work environment or tasks involved.
Moral Hazard
A situation where one party is more likely to take risks because the consequences of their actions are partly borne by others.
Straight Salary
A fixed amount of pay given to an employee, not dependent on the hours worked or performance.
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