Host government demands generally:
A) increase pressures for local responsiveness.
B) decrease pressures for cost reductions.
C) do not encompass local content rules.
D) compel companies to abandon localization strategies.
E) impede a company's ability to differentiate its product offering across national borders.

Question

Quizplus · Accepted Answer

When a host government demands certain things from foreign companies operating within its boundaries, it often leads to increased pressures for local responsiveness. This means that the company has to adapt to the local market and its demands, making it more difficult to use standardized products and operations across multiple markets.

Answer: B
 Host government demands can also decrease pressures for cost reductions. For example, a government may mandate that a company use a certain type of expensive but environmentally-friendly material in its manufacturing processes. This would increase the costs for the company, but it may be necessary to comply with local regulations and maintain goodwill with the government and citizens.

Answer: E
 Host government demands can impede a company's ability to differentiate its product offering across different countries. For instance, if a government requires all products to have certain standard features or specifications, it may limit a company's ability to create tailored products for specific local markets.

Host Government Demands Generally