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Scenario: Hafstrom Motors Based in Kentucky, Hafstrom Motors Has Always Used Spare Parts

question 21

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Scenario: Hafstrom Motors
Based in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's production activities.
-The senior manager recommends that Hafstrom obtain auto parts from a country where production activities would generate more value than it would generate elsewhere.He wants to take advantage of ________.


Definitions:

Legal Authority

The lawful right or power to make decisions, enforce laws, or administer justice within a given jurisdiction.

Domestic Corporation

A corporation that is registered and operates in the same country in which it was incorporated, adhering to the legal and regulatory standards of that country.

Incorporated

Refers to the process of legally declaring a business as a separate legal entity, distinct from its owners, with rights to own property and sue or be sued.

Creature of the State

An entity that is created by and subject to state law, often used to describe municipalities or corporations.

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