Briefly Describe How National Differences in Compensation Affect International Business

question 9

Essay

Briefly describe how national differences in compensation affect international business.
Substantial differences exist in the compensation of executives at the same level in various countries.These differences raise the question: Should the firm pay executives in different countries according to the prevailing standards in each country,or should it equalize pay on a global basis?

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Definitions:

Highest Rating

The top tier or grade assigned by rating agencies to entities or securities, indicating the lowest risk of default.

Bid Price

The highest price a buyer is willing to pay for an asset in the financial markets.

Dealer

An individual or firm in the financial markets that stands ready to buy or sell securities for their own account, at their own risk.

Security

A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship with governmental body or a corporation (bond), or rights to ownership as represented by an option.