International Business Final

Front 1

Two components of enterprise valuation

Back 1

profitability and profit growth

Front 2

Profitability

Back 2

rate a return a firm makes on its invested capital, which is calculated as net profits/invested capital

Front 3

profit growth

Back 3

%increase in net profit over time

Front 4

Value Chain

Back 4

a series of value-creating activities, both primary and support, to position well on the efficiency frontier a firm must manage effectively

Front 5

Components of Primary Activities

Back 5

research and development, production, marketing and sales, service

Front 6

Components of Support Activities

Back 6

Materials management or logistics, human resources, information systems, company infrastructure

Front 7

Organizational Structure

Back 7

formal division of an organization into sub-units, the location of decision-making responsibilities, the establishement of integrating mechanisms to coordinate activities of subunits

Front 8

Three dimensions of organizational structure

Back 8

vertical differentiation, horizontal differentiation, establishment of integrating mechanisms

Front 9

Vertical differentiation

Back 9

location of decision makers within the structure

Front 10

horizontal differentiation

Back 10

formal division into subunits

Front 11

establishment of integrating mechanisms

Back 11

for coordinating subunits

Front 12

centralization

Back 12

facilitates coordination, ensures consistent objectives, top-level managers bring about change, no duplication of activities

Front 13

decentralization

Back 13

overburndened top management, greater flexibility, can result in better decisions, increase control

Front 14

Advantages of entering a foreign market before others

Back 14

preempt rivals and capture demand with strong brand name, build sales volume, create switching costs

Front 15

disadvantages of entering a foreign market before others

Back 15

pioneering costs, possibility regulations might change

Front 16

Six methods of entering a market

Back 16

Exporting, turnkey, licensing, franchising, joint ventures, wholly-owned subsidiaries

Front 17

Pros and Cons of Exporting

Back 17

Pros- avoid costs of establishing manufacturing ops, can help experience curve and location economies
cons- may compete with low cost location manufacturers, possible high transit costs, tariffs, lack of control over marketing reps

Front 18

Pros and Cons of Turnkeys

Back 18

pros- can earn return on knowledge assets, less risky than conventional FDI

cons- no long term interest in country, may create competitor, selling process technology can give away competitive advantage

Front 19

Pros and Cons of Licensing

Back 19

pros- reduces development costs, lack of capital needed, unfamiliar market, overcomes investment barrier

Front 20

Pros and Cons of Franchising

Back 20

pros- reduces costs and risk of establishing enterprise

cons- may prohibit lack of movement of profits from one country to another, quality control

Front 21

Pros and Cons of Joint Ventures

Back 21

pros- benefits from local knowlege, shared costs/risks, reduced political risk

cons- risk giving away technology, shared ownership can lead to conflict

Front 22

Pros and Cons of Wholly-owned subsidiary

Back 22

Pros- no risk of losing technology, tight control of operations, realize learning curve

cons- bear full cost and risk

Front 23

Strategic Alliances

Back 23

cooperative agreements between potential and actual competitors

Front 24

Pros and Cons of Strategic Alliances

Back 24

pros- facilitate market entry, share fixed costs, bring together skills and assets that neither company can develop, establish industry technology standards

cons- low cost route to technology and market for competitors

Front 25

Information Sources for US Exporters

Back 25

US and Foreign Commercial Service Agency, provide "best prospects' list, comparison shopping service, and market research for a small feel, matchmaker programs, organizes exhibitions

trade commissions- maintained by large surveys, provides business counseling, info gathering, and financial

commercial banks and accounting firms

Front 26

export/import financing

Back 26

lack of trust between parties becaues theyve never met, cultural and language barriers, difficulty tracking down a party if default

Front 27

documents for export/import financing

Back 27

letter of credit (bank guarentees payment), drafts (written order telling the importer to pay), and Bill of Lading (serves as a receipt)

Front 28

Four major tasks of HRM

Back 28

staffing policy, management training and development, performance appraisal, compensation policy

Front 29

Three types of staffing policy

Back 29

ethnocentric, polycentric, geocentric

Front 30

Ethnocentric

Back 30

management are parent-country nationals, suited to IB

pros- overcomes lack of qualified managers, unified culture, transfers core competencies

cons- produces resentment in host country, cultural myopia

Front 31

Polycentric

Back 31

host-country nationals manage subisidiaries, parent company nationals hold HW positions, suited to multi-domestics

Pros- alleviates cultural myopia, inexpensive, transfers core competencies

cons- limits opportunity for international experience, creates gap between home and host country

Front 32

Geocentric

Back 32

best people regardless, global and transnational

pros- best use of HR, equips execs to work in lots of cultures, build strong unifying culture and informal network

cons- national immigration policies, expensive, compensation structure

Front 33

Expatriate

Back 33

citizens of one country working in another

Front 34

inpatriates

Back 34

expatriates who are citizens of a foriegn country working in the home country of their employers

Front 35

reasons for expat failure

Back 35

inability of spouse to adjust, managers inability to adjust, immaturity, lack of technical competence, difficulty with new environment

Front 36

four attributes that predict success

Back 36

self orientation, others-orientation, perceptual ability, cultural toughness

Front 37

self-orientation

Back 37

high self-esteem, self-confidence, and mental well being

Front 38

others-orientation

Back 38

ability to develop relationships with nationals, willingness to communicate

Front 39

perceptual ability

Back 39

why people of other countries behave the way they do, nonjudgemental and flexible

Front 40

cultural toughness

Back 40

relationship between country of assignment and the expats adjustment to it