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46 Cards in this Set
- Front
- Back
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Globalization
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Trend toward greater economic, cultural, political and technological interdependence among national institutions and economics
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Two forces causing Totalitarianismcommunicate effectively
-know the customer -emphasize global awareness -market effectively -monitor business environmen globalization to increase |
1. Globalization of markets: convergence in buyer preferences in markets around the world
2. Globalization of production: dispersal of production activities worldwide to minimize costs or maximize quality |
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Benefits of Global Marketing
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reduces marketing costs
-creates new opportunities -levels income |
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Benefits of Global Production
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Lower cost labor
-technical expertise -production inputs |
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What benefits might companies obtain from the globalization of markets and the globalization of production?
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A. Global markets can reduce marketing costs, create new market opportunities abroad and level income streams. Global production can allow access to lower cost workers, technical expertise and production inputs
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Globalization Drivers
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-GATT
-WTO -Regional trade agreements |
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Keys to Global Success:
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communicate effectively
-know the customer -emphasize global awareness -market effectively -monitor business environment |
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A Global Business Environment is described as a
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model of international business as occurring within a dynamic and integrated system
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Totalitarianism:
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Leaders govern without people’s support, government controls much of peoples lives, leaders do not tolerate opposing views. Types: Theocratic (religious) & secular (military)
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democracy
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freedom of expression, periodic elections, full civil & property rights, minority rights, nonpolitical bureaucracies
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Expropriation
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forced transfer of assets from a company to the government with compensation
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Nationalization
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forced asset transfer to the government of an entire industry
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Localization
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Is incorporating political risk into business strategies by modifying operations, the product mix or some other business element
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Civil Law
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dates to Roman times in the fifth century B.C., Rules and statues constitutes a legal code, defines all obligations, responsibilities and privileges.
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Intellectual property rights are…….?
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A. legal rights to resources that result from intellectual abilities and any income these resources generate. Like other typed of property, intellectual property can be traded, sold and licensed in return for fees and/or royalty payments. Intellectual property laws are designed to compensate people whose property rights are violated.
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The philosophy of business ethics and social responsibility conveyed by the expression, “When in Rome, do as the Romans of,” is called the _____ view.
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A. Cultural relativist
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World Trade
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80% Merchandise
20% Services |
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World output impacts trade
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- Growing output = growing trade
- Sluggish output = sluggish trade World trade grows faster than world output |
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Mercantilism
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Nations accumulate financial wealth by encouraging exports and discouraging imports
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Inherent flaws of Mercantilism
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- World trade is zero-sum game
- constrains output and consumption - limits colonies’ market potential |
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Three Pillars of Mercantilism
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- Maintain surplus
- Government intervention - Exploit colonies |
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Absolute Advantage
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ability of a nation to produce a good more efficiently than any other nation (greater output using same or fewer resources)
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Comparative Advantage
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Inability of a nation to produce a good more efficiently than any other nations, but an ability to produce that good more efficiently than it does any other good
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Factors Productions Theory
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Countries produce and export goods that require resources (factors) in abundance, and import goods that require resources in short supply
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Leontief Paradox
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Research discovered evidence opposite the prediction of factor proportions theory
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International Product Life Cycle
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A company begins by exporting its product and later undertakes foreign direct investment as a product moves through its life cycles
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New Trade Theory
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Economic and strategic advantage of being first to enter an industry, gains from specialization and increasing economies of scale, companies forest to market create barriers to entry
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National Competitive Advantage:
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Nation’s competitiveness in an industry depends on the industry;s capacity to innovate and upgrade, which in turn depends on four main determinants
- factor conditions - demand conditions - related and supporting industries - firm strategy, structure and rivalry |
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Reasons Nations intervene in trade:
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1. political motives: protect jobs, preserve national security, respond to unfair trade & gain influence
2. economic motives: protect infant industries & emerging industries during developing from global competition 3. cultural motives: nations block imports deemed harmful, usual suspects are Us media and consumer goods, result of increased globalization |
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Trade Promotion Methods
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-subsidies
-export financing -foreign trade zones -special government agencies |
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Trade Restriction Methods
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Tariffs
-Quotas -Embargoes -Local content requirements -Administrative delays - currency controls |
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GATT
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treaty designed to promote free trade by reducing tariffs and non tariff barriers to trade
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WTO
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international organization that regulates trade between nations
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Ethnocentric Staffing:
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Individuals from home country manage operations abroad
*Advantages include: -locally qualified people not always available -tight control over subsidiaries -re create local operations in home office image -interests of home office may be better protected *Disadvantages include: -relocations are expensive -gives the business a “foreign” image |
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Polycentric Staffing
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Individuals from host country manage operations abroad
*Advantages include: -Responsibility on those knowing local business -Avoids expensive relocation from the home nation *Disadvantages include: -Resembling a collection of national entities - Could potentially harm performance |
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Geometric Staffing
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Individuals that are the most qualified regardless of nationality manage operations abroad
*Advantages include:-Managers can adjust anywhere -Breaks down national barriers *Disadvantages include: - These individuals demand higher salaries |
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Human Resource planning : forecasting human resource needs and supply
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Phase 1: Take inventory of current human resources
Phase 2: Estimate firm’s future human resource needs Phase 3: Develop a plan to recruit and select for vacant new positions |
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Tips for Small Businesses:
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expanding internationally can severely strain the resources of small firms
-Do not rely solely on home country expatriates -Local contacts do not guarantee contracts -Treat employees abroad with respect -Employ the web in your talent search |
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Recruiting Human Resources
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process of identifying and attracting a qualified pool of applicants for vacant positions
-Current Employees -Recent college grads -Local managerial talent -Non-managerial workers |
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Selecting Human Resources
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process of screening and hiring the best qualified applicants with the greatest performance potential
-Ability to bridge cultural differences is essential -Must be able to adapt to new ways of life -Cultural Sensitivity raises odds for success |
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Culture Shock:
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psychological process affecting people living abroad that is characterized by homesickness, confusion, depression, aggraviation, and irritability
Stage 1: Thrilling Experience Stage 2: Downward Slide Stage 3: Recovery Beginss Stage 4: Embrace Local Culture |
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Reverse Cultural Shock
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The psychological process of readapting to one’s home culture
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What types of cultural training methods can help prepare managers for international assignments?
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The main methods of cultural training used to prepare managers for international assignments include environmental briefings, cultural orientations, cultural assimilation, sensitivity training, language training, and field experience.
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Labor Management Relations:
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Positive or negative relations between a company’s management and its workers
-Rooted in local culture -Directly influences workers’ lives -Often affected by political movements |
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Labor Unions:
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Selection of location
-Performance in a market - Codetermination in Germany - Emerging markets |
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International Labor Movement
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International activities of unions are making progress in improving treatment of workers and reducing child labor
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