Question

Should the firms' overseas operations be judged by the standards (legal, economic, cultural, and moral) of the country in which it is operating or should they be judged by the standards of the U.S. market?

Answer 1

Answer: Standards of the country they operate in

Explanation:

Various countries have differing norms on what is legally, socially, morally and culturally acceptable. In order to be able to operate in those countries, companies would have to adapt to these requirements in order to maximize business operations.

It would therefore be illogical to judge these overseas operations in terms of the U.S. market which would be different from them. They should be judged on their own merit and then a standardizing factor can be used to relate them to the U.S. market to see whether they are performing well given their unique circumstances.