Sears Department Store Has Over 900 Stores in the U

question 30

Multiple Choice

Sears Department Store has over 900 stores in the U.S. and over 300 stores in Mexico and Canada. Sears has been particularly successful in Mexico, and the firm's executives believe Sears should expand into other Latin American countries. As a result, plans are underway for the construction of a new Sears store in Managua, Nicaragua. Construction should be complete within three months, so staff selection needs to begin soon. Sears' executives are considering the idea of using parent-country nationals to manage the new store in Nicaragua. Which of the following, if true, undermines the argument that parent-country nationals should manage the Sears store in Nicaragua?

• A) Sears is implementing a multinational strategy of global expansion.
• B) Decision-making authority stems primarily from Sears' top executives
• C) Managers must stay in close communication with Sears' headquarters.
• D) Sears' HR department recently developed new repatriation policies.

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Definitions:

Mutually Beneficial Agreement

An arrangement between parties where both or all receive benefits or advantages.

Coase Theorem

A legal and economic theory that states that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property.

Taxes

Compulsory financial charges or levies collected by governments from businesses and individuals to fund public expenditures.

Negative Externalities

Costs suffered by a third party due to an economic transaction that they were not a part of.