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30 Cards in this Set

  • Front
  • Back
y do MNEs and host gov compete?
- animosity b/t host gov and MNEs home government
- host gov support for domestic firms
- MNEs wants control over resources that host gov owns
what is the formula used to describe the relationship a MNE has with its host government
coopetition = cooperation + competition
political behavior
the acquisition, development, securing and use of power in relation to other entities
sources of bargaining power for the home government
- ability to provide incentives
- control a large portion of the market or rare resources
ways in which the home gov can support their MNEs
- apply political or diplomatic pressure
- impose barriers on foreign competitiors
why does an MNE want to cooperate w/ host gov?
- access to resources
- establish a sense of legitimacy
- benefit from stable infrastructure
ways to deal w/ political risk
- buy locally
- do your homework (learn b4 u go)
- communication (acquire host gov contacts)
- form partnerships w/ firms in host country
- proactive lobbying
why do host gov want to cooperate w/ MNEs?
- jobs for economy
- increase sense of urgency for FDI
- downturn in economic stability
what determines who wins b/t MNEs and host governments?
the bargaining power of either side
are MNEs subject to all the legal systems that they operate in?
yes, interpretations may vary
sources of MNEs bargaining power against host gov
- technologically advanced products the host gov doesnt have
- employment
- tax revenue
- complex management requirements
- home government
do patents in one country cover the company in all countries and what types of patents are there?
- no just in that one
- first to file and first to invent
3 types of political risk and whatre they
1- ownership--> threat to the ownership from nationalization or seizure
2- operational--> threats that gov impose for "changing the rules of the game"
3- transfer--> impediments to the transfer of production factors
3 types of legal systems
- common law--> cases based on precedent
- civil law--> cases based on rules/laws
- theocratic law--> cases based on religious code
political risk
the probability of disruption on an MNEs operations due to political forces or events
explain low power distance?
smaller wage differentials, minimized distance b/t blue & white collar workers, less centralization
how others see us
implications of high femininity
- more equality b/t sexes
- emotions & compromise rewarded
- family life is central interest
5 dimensions of Hofstede's cultural figure
1- masculinity/femininity
2- long-term orientation
3- individualism/collectivism
4- uncertain avoidance
5- power distance
elements of low uncertainty avoidance
- more risk-taking
- less structure
- more variability in practices
types of currency management systems and explain
- independent float--> adjusts freely according to the laws of S & D
- managed float--> promotes an orderly pattern of exchange rates changes & eliminates volatility
- fixed rate--> a par value is set to make the home currency relatively constant w/ respect to others (buy or sell their own currency)
- crawling peg--> establishing limits against which the currency can deviate around
whatre some components of low long-term orientation?
- instant gratification preferred
- more worried about current profits
- shorter planning horizon
- more flexibility in change
what does high power distance involve?
highly structurized, many supervisors, tall organizational pyramids
exchange rates are determined by the cost of a certain basket of goods thruout different countries
how we see ourselves differentiated from others
characteristics of culture
- shared
- intangible
- confirmed by others
what does lingua franca mean?
a language that widely used by many people outside its native speakers
difference b/t direct & indirect quote
- direct quote is the amount of home currency it take to buy one unit of foreign
- indirect quote is the of foreign currency it take to buy one unit of home currency
how we perceive others based on our own beliefs (culture & upbringing)
what does high individualism involve?
- practices encourage individual initiative
- work is just "work"