Explanation : Advocated by John Dunning, the eclectic theory argues that a location in question attracts FDI because of it combines the unique advantages of ownership, location, and internalization. According to Dunning, FDI will occur when three conditions are uniquely combined.
Ownership advantage: This advantage stems from the fact that the firm is proprietary to some unique competitive advantage that
helps it overcome the disadvantages of competing with foreign firms in overseas markets. This unique advantage may be brand
recognition, technical knowledge, economies of scale or management ability.
Location advantage: This refers to the advantage of locating a particular factory in a specific location because of the unique
characteristics of that location. These advantages have historically been natural resources such as oil in the Middle East, timber in Canada, and copper in Chile. Cater Pillar, for example, manufactures bulldozers in Brazil to take advantage of lower labor costs and avoid high tariff walls on goods exported from its U.S. factories.
Internalization advantage: This arises from internalizing a business activity rather than leaving it to a relatively inefficient market. The firm must benefit from controlling (internalizing) the foreign business activity than leaving it to a local company to provide the service. Control is advantageous when monitoring and enforcing the contractual performance of the local company. It is expensive where the local firm may misappropriate proprietary technology, or when the firm’s reputation and the brand name could be jeopardized by the poor behavior of the local company.
Explanation : Ergonomics: Ergonomics is concerned with designing and shaping jobs to fit the physical abilities and characteristics of individuals so that they can perform their jobs effectively. Ergonomics helps employers to design jobs in such a way that workers’ physical abilities and job demands are balanced. Ergonomics does not alter the nature of job tasks but the location of tools, switches and other facilities, keeping in view that handling the job is the primary consideration.