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95 Cards in this Set
- Front
- Back
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1. What are the factors contributing to globalism?
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(9 things)
1) Information technology 2) More players: 3) Free trade areas and the WTO (world trade organization) 4) Growing trade and investment 5) Global products/customers 6) Privatization in developed, transition, and developing economies 7) New emerging competitors 8) Global standards 9) Emergence of multinational/transnational corporations (MNCs/TNCs) |
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What is the Triad?
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USA, Japan, EU
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What are the NICs?
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newly industrialized countries:
India, Chile, Brazil, Mexico |
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What are the BRICs?
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dynamic developing nations with large populations
Brazil, Russia, India, China |
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What are the LDCs?
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less developed countries; poor nations often with unstable political regimes, high unemployment, and low worker skills,
Usually in Central and South America , Africa and the Middle East. |
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Who are the Four Tigers?
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Taiwan, Singapore, Hong Kong, South Korea
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Who are the Baby Tigers?
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Indonesia, Malaysia, Thailand, Vietnam
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Who are the transitional economies?
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Czech Republic, Hungary, Russia, Poland
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International corporation characteristics?
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Real focus on domestic market
No concentration outside of HQ Knowledge created back home, spread to subsidiaries |
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Multinational corporation characteristics?
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Local focus and responsiveness
HQ may be smaller than subsidiaries Multinational company’s philosophy is that there are differences in every market (no arrows) Developing knowledge specific to a market Historically, a more European model |
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Global corporation characteristics?
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Focus is at home
Knowledge created at home Historically, product is produced at home Export to subsidiaries that just sell products from HQ Efficiency, mass production, global product |
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Transnational corporation characteristics?
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Multiple HQ, decentralized, sharing of ideas between markets, “web”, opportunistic
More complex, fully integrated business operations Capitalize on efficiency, putting activities where they are most productive |
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What are the four different models of overseas business operations described in Reich’s article (“Who is us?”) and how do they contribute to the national competitiveness of a country?
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Importers, Assemblers, Plant complexes, Fully integrated business operations
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What are importers? (Reich)
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a. Limit local economic activity to sales, marketing and distribution.
b. Goal is simply to gain market share for “engine of competitiveness” located offshore. |
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What are assemblers? (Reich)
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a. EX: US organizations of many Asian-owned consumer electronics companies
b. Import most important components, as well as R&D and manufacturing processes from the home country. c. May buy some local components, but most will come from home country or local subsidiaries of companies within the home country. d. All decisions made in home country. |
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What are plant complexes? (Reich)
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a. Add intellectual content to assembler.
b. Typically fabricate product components with some local engineering content. c. Do not provide the same level of benefit as integrated business operations because the “competitive engine” remains offshore. i. Build more mature products, intellectual element of product and production system are still in the home country (even if the distinctions are becoming more subtle). |
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What are fully integrated business operations? (Reich)
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a. For complex manufacturing businesses—ex: automobiles, electronics—only FIBOs build local skill base and infrastructure in such a way as to increase the standard of living.
b. “Insources” product design, manufacturing, process engineering, vendor management. c. Raises quality, decreases labor hours, provide a high level of product variety, and rapidly incorporate new technology into products. |
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Why does Reich believe that foreign ownership is no longer important?
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Reich believes that the contribution to the American workforce is the most important factor in judging the value of a corporation to American society. Foreign owned businesses can, and often are, more beneficial to the American workforce and standards of living if they are fully integrated and investing in human capital, providing skills to the workforce and increasing global competitiveness.
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What counter-arguments to Reich are offered by Tyson?
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1) US multinationals still locate their “higher-end” jobs within the US. Companies and continue to spend the bulk of their R&D budgets within the US.
2) Most large American companies don’t have any foreigners on their boards of directors. 3) Many foreign markets are highly regulated, often in America’s disadvantage. 4) America cannot just foster the best possible workforce and then rely on market forces to bring high-wage jobs to our shores. 5) Foreign affiliates still represent only a relatively small fraction of total economic activity within the US. |
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Describe some of the different environmental factors the international environment poses for those companies doing business globally (i.e., what are some of the factors that a company should examine in order to evaluate country risk?).
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(4 things)
regulatory, political, economic, technological |
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Regulatory factors of the environment:
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a. Legal System
b. Protectionist laws c. Tax laws d. IP laws e. Import/export restrictions f. Foreign business regulations i. Domestic equity ownership ii. Local content requirements iii. Exchange/capital controls iv. Price controls |
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Political factors of the environment:
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a. Form of government
b. Political stability c. Foreign policy d. State companies e. Role of military f. Corruption g. Organized religion in government h. Level of political turmoil i. Terrorism ii. Large scale protests iii. General strikes iv. Riots |
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Economic factors of the environment:
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a. Economic system
b. Stage of development c. Economic stability d. GNP e. International financial standing f. Monetary/fiscal policies g. Foreign investment |
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Technological factors of the environment:
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a. Level of technology
b. Availability of local skills c. Transfer of technology (GE has to do joint venture and share a turbine that they spent half a billion dollars on developing) d. Infrastructure (didn’t have roads so the competition from KFC wouldn’t come) |
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What are some different approaches to manage risk?What are some specific ways in which organizations can adapt to the environment or create dependence?
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avoidance, adaptation, dependency, hedging
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What is adaptation?
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a. Equity shares
b. Participative management c. Localization of operations d. Development assistance |
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What is dependency?
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a. Input control
b. Market control c. Position control d. Staged contributions |
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What is hedging?
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a. Diversification of operations
b. Local debt financing c. Political risk insurance |
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According to Reich (“Who is them?”), what has happened to the importance of “world headquarters”?
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The location of headquarters is less important as corporations become more transnational. Headquarters for the new global web can be a suite of rooms in an office park or near an international airport. The global web may have several world-wide headquarters, depending on where certain markets or technologies are. The highest value-added activities (e.g., R&D) also don’t need to be in the nation where most of the company’s shareholders and executives are.
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What are some of the “spillovers from corporate investment” that Reich describes?
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Some might still want global managers to favor the US because of national benefits that aren’t on balance sheets. These spillovers might include the jobs that result from having sophisticated factories, labs, and equipment in the US, whose high wages multiply throughout the economy, raising other incomes. Good jobs generate higher tax receipts, which allow government to invest in public facilities and programs. Also, on-the-job training enables Americans to innovate and generate more wealth for the US.
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Briefly describe the counterfeiting problem in China.
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China is counterfeiting everything from computer chips to life-saving medicines. Counterfeit products are now so well-done that forensic experts are needed to spot the fakes. Counterfeiters can make a fake more cheaply than real products, and they don’t have to deal with the marketing R&D, or advertising costs. The local Chinese law enforcement cannot fully deal with the situation because compared to other crimes, counterfeiting is a light issue in China. Counterfeiting thrives on the whole process of globalization itself. Globalization is the spread of capital and know-how to new markets.
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What are some key reasons that counterfeiting continues?
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Finance – Middle Eastern businessmen, local Chinese entrepreneurs, criminal networks, and sometimes multinationals invest in facilities
Expertise – current and former employees of licensed manufacturers can disassemble products and reengineer them. Licensed factories can use cheaper materials, and sophisticated packaging equipment gives the appearance of authenticity. Distribution – authorized licensees tap legitimate channels to enter markets. Some counterfeiters mix real items with fake ones. Fakes are deliberately shipped through so many ports that it becomes impossible to determine their origin. |
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What are the key points from the article, “It’s all made in China now”?
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China is emerging as a reliable, stable producer of high-value, technologically sophisticated products; they can manufacture anything. Global companies will have to have a major manufacturing presence in China if they want to be competitive. Multinationals have found China’s labor force vast, cheap, educated, and disciplined. The country also provides a very large and growing market. Thus, China is attracting a lot of foreign investment and becoming the “workshop of the world.”
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Describe the two major views of ethics?
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Ethical Universalism/Absolutism – some things are right or wrong, universally, no matter where you are
Ethical Relativism – when in Rome, do as the Romans. Ethics are relative, depends on what is accepted in the culture |
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What is convenient relativism?
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Convenient Relativism – is a term to critique ethical relativism, made up by ethical absolutists. Some accept unfair/inappropriate practices because it is advantageous
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What is ethical convergence?
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Ethical Convergence – People are beginning to think about what is right/wrong in similar ways around the world due to
globalization imitation/re-evaluation MNCs/TNCs. |
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Discuss the four views of corporate responsibility (company’s view on its own responsibility to society):
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Obstructionist – break rules and try to get away with it
Traditional – have a responsibility to shareholders (Reich assumes companies will act in this manner.) Stakeholder – broader interpretation; not just shareholders but other people have stake in company too such as employees and local community Affirmative – responsible to all mankind |
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Discuss the Foreign Corrupt Practices Act:
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(4 things)
1. It is illegal to influence foreign officials through personal payments or political contributions in order to gain or increase business. 2. The “Reason to know” provision states that a firm is liable for bribes or questionable payments made by agents acting on behalf of the company, regardless of whether they were seen, known to or made by a company employee. 3. Mixed evidence of effects on American businesses. Research suggests both that not being able to make bribes has hurt, and had no effect on American corporations. 4. 35 industrialized countries have signed the “Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.” |
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What is not illegal in the FCPA?
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(3 things)
Not Illegal to make “grease payments” to low or midlevel officials in order to facilitate them doing their own job. Also not illegal to provide “gifts” to overcome bureaucratic technicalities that impede business, or to acquire permits and equipment, or to make payments under duress in order to avoid injury or violence. |
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Describe the key elements of Buller et al.’s model for managing cross-cultural ethical conflicts (e.g., what are the principal strategies they propose in their model?).
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(6 things)
Accomodation Avoiding Negotiation Collaboration Education Forcing |
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What is accommodation?
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Accommodation – one party merely adapts to the ethics of the other party.
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What is avoiding?
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Avoiding – the decision-maker chooses to ignore or not deal with the conflict, so it remains unsolved.
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What is negotiation?
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Negotiation – both parties give up something to reach a settlement. The resulting compromise leads one party or the other or both to feel dissatisfied with the outcome and to feel that the basic conflict has not been resolved.
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What is collaboration?
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Collaboration – both parties choose to confront the conflict directly and collaborate to develop a mutually satisfying solution: a win-win outcome. This strategy is most likely to address the root source of the conflict.
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What is forcing?
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Forcing – the decision-maker imposes his/her ethical views on the other party.
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What is education?
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Education – attempts to facilitate learning about one’s own and others’ points of view. In some cases, education is intended to convert others to one’s own position.
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What key factors and general considerations are likely to influence strategy selection?
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moral significance, power, urgency
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What is moral significance?
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Moral significance – how morally significant the situation is. Values that are central to an individual, company, or society, and that are widely shared.
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What is power?
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how much power the sides have. The decision maker’s ability to influence the outcomes of a conflict ranges from complete control to no influence at all.
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What is urgency?
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any time constraints on the matter. The need for immediate action and can range from highly urgent to not at all urgent. Managers faced with a conflict situation tend to take the expedient (forcing or avoiding) even when they recognize that collaboration or problem solving might lead to more positive outcomes. IN short term, they often select more expedient strategies.
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What general considerations are likely to influence strategy selection?
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pragmatic
ethical ethical corollaries |
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What are pragmatic considerations?
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Pragmatic considerations:
1. Short-term and long-term strategies can be different. 2. Only strategies that one has power to implement are feasible. |
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What are ethical considerations?
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1. The higher the moral significance of the values at stake, the more one is justified in pressing for conformity with one’s views.
2. The less the moral significance, the more one is justified in accommodating or negotiating. 3. The position of the other party must be treated respectfully. 4. The freedom and autonomy of those who differ should be respected. |
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What are ethical corollaries?
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1. Use collaborative problem-solving approaches when possible.
2. Negotiation and compromise may be considered second in preference. 3. Avoiding, forcing, and accommodation are usually only short-term or low-power solutions. 4. Education is a long-term strategy that often accompanies other shorter-term strategies like forcing, accommodation or negotiation. |
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What is culture?
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Culture definitions:
1. Definition: “Traditional ideas and their attached values” 2. A set of characteristics common to a particular group of people. 3. Culture is pervasive, it exists around individuals. |
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How can one also account for individual differences within cultures?
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Culture is representative of a large group of people, however there will always be differences between individuals. Culture is generalized.
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Describe Hofstede’s culture framework:
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(5 things)
Power distance Uncertainty avoidance Individualism-collectivism Masculinity-femininity Long-term orientation |
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What is power distance?
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Power Distance – expectations of equality/acceptance of unequal power distributions
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What is uncertainty avoidance?
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Uncertainty Avoidance – tolerance for ambiguity and use of structures to make things predictable
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What is individualism-collectivism?
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Individualism-Collectivism – relationship between the individual and the group
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What is masculinity-femininity?
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Masculinity-Femininity – tendency to support “masculine” values of achievement, advancement
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What is long-term orientation?
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Long-Term Orientation – tendency to value future rewards, perseverance, and thrift
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Describe Kluckhohn and Strodtbeck’s culture framework (value orientations model).
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(5 things)
What is human nature? How do people relate to nature? What is the sense of time? How do people conduct activities? What are the relationships of people to one another? |
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What is human nature?
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i. EVIL—Most people can’t be trusted
ii. MIXED—Both good and bad people in the world, people can be changed, and you have to find out which kind of person a person is. iii. GOOD—Most people are basically good at heart, they are born good. |
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What is the man-nature relationship?
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i. NATURE DOMINATES MAN—people can’t change nature. Life is largely determined by genetic variables.
ii. HARMONY WITH NATURE—Man should try and live in harmony with nature. iii. MAN DOMINATES NATURE—It is the great human challenge to conquer nature. All human achievement has come from this challenge. |
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What is the sense of time?
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i. PAST—People should learn from history. Draw values they live by from history. Strive to follow tradition.
ii. PRESENT—The present moment is everything. Seize/live for the day. iii. FUTURE—Planning and goal setting make it possible for people to develop, change and grow. A little sacrifice today will bring a better tomorrow. |
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How do people conduct activities?
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i. BEING—It’s enough to just “be.” It’s not necessary to accomplish great things to be satisfied with life.
ii. BECOMING—The main purpose for being on earth is to develop oneself. iii. DOING—If people work hard and apply themselves their efforts will be rewarded. What a person accomplishes is a measure of their worth. |
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What are the relationships of people to one another?
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i. AUTHORITARIAN— (hierarchical) There is a natural order to relations. Some are born to lead, others are born to follow, and decisions should be made by those in charge.
ii. COLLATERAL—The best way to be organized is as a group, where everyone shares in the decision process. It is important not to make decisions alone. iii. INDIVIDUAL—All people should have equal rights, and should have complete control over ones destiny. |
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Describe Trompenaar’s culture framework.
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(7 things)
1. Universalism vs. Particularlism 2. Individualism vs. Communitarianism 3. Neutral vs. Affective 4. Specific vs. Diffuse 5. Achievement vs. Ascription 6. Sequential vs. Synchronous 7. Internal vs. External |
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What is universalism?
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1. Ideas and practices should be applied everywhere without modification.
2. Objective 3. A deal is a deal 4. A focus on rules, not relationships 5. A trustworthy person honours contracts and promises |
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What is particularlism?
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1. Circumstances dictate how ideas and practices should be applied.
2. Subjective (the spirit of the law is more important than the letter of the law. 3. Relationships evolve. 4. A focus on relationships, not rules 5. A trustworthy person honours changing circumstances. |
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What is individualism?
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Individualists: people achieve alone and assume personal responsibility
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What is communitarianism?
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Communitarians: people ideally achieve and groups share responsibility
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What is neutral?
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1. Do not reveal what they are thinking.
2. Cool, self-controlled behavior is admired. 3. Physical contact, gesturing and strong facial expressions are all taboo. |
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What is affective?
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1. Reveal thoughts and feelings verbally and non-verbally.
2. Heated, animated expressions admired. 3. Touching, gesturing and strong facial expressions are admired. |
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What is specific?
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1. More open, more direct, more to the point, purposeful in relating.
2. Work and personal relationships are separate. 3. Friendly and accessible with most people, but only intimate with close friends. 4. You can have interaction without completely knowing someone. |
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What is diffuse?
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1. More indirect, more ambiguous in communications.
2. Work and personal relationships/lives are linked 3. Guard their public space carefully, because entry in public space affords entry into private space as well 4. Tend to seek personal relationships before doing business. 5. A friend is a friend across all situations. |
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What is achievement?
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1. Respect based on performance.
2. Influence based on performance. 3. Use of titles only when relevant. |
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What is ascription?
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1. Respect based on who or what you are.
2. People are born into a position of influence. 3. Use of titles tends to be important. |
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What is sequential?
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1. One activity at a time
2. Keep appointments strictly 3. Preference for following plans as they are laid out and not deviating from them |
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What is synchronous?
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1. More than one activity at a time
2. Appointments are approximate and may be changed at a moment’s notice 3. Schedules are generally subordinate to relationships |
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What is internal?
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1. What happens to me is my own doing
2. I control outcomes |
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What is external?
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1. What happens to me is beyond my control
2. I should let things take their course 3. Nature moves in mysterious ways and you never know what will happen to you |
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Describe Schwartz’s culture framework.
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(10 values, 4 grouped domains)
1. Openness to change a. Hedonism b. Stimulation c. Self-direction 2. Conservation a. Conformity b. Security c. Tradition 3. Self-enhancement a. Power b. Achievement 4. Self-transcendence a. Universalism b. Benevolence |
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What is included under openness to change?
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i. Hedonism--Pleasure and gratification for oneself
ii. Stimulation--Excitement, novelty, and challenge in life iii. Self-direction--Independent thought and action-choosing, creating, exploring |
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What is included under conservation?
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i. Conformity--Restraint of actions, inclinations, and impulses likely to upset or harm others and violate social expectations or norms.
ii. Security-- Safety, harmony, and stability of society, of relationships, and of self iii. Tradition--Respect, commitment and acceptance of the customs and ideas that traditional culture or religion provide the self |
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What is included under self-enhancement?
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i. Power-- Social status, control, or dominance over people and resources
ii. Achievement--Personal success through demonstrating competence according to social standards |
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What is included under self-transcendence?
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i. Universalism--Understanding, appreciation, tolerance and protection for the welfare of all people and for nature
ii. Benevolence-- Preservation and enhancement of the welfare of people with whom one is in frequent personal contact |
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What are some characteristics (e.g., theoretical vs. empirical) and strengths/weaknesses of these different frameworks (especially Hofstede)?
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Hofstede: items used to measure values lack face validity and capitalize on chance, research is based on responses from IBM only, dimensions are based on data collected in the past, framework was data-driven, empirical (lots of data)—not theoretical
The Kluckholn and Strodtbeck model is based on the belief that that it is possible to distinguish cultures based on how they each addressed five common human concerns. It is based upon a ranking of CORE VALUES. The basic survey method consists of a survey with 16 situations and corresponding questions. |
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What do we mean by “high context” or “low context”?
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High context: very little of the information is in the coded, explicit, transmitted part of the message; inside jokes, context gives the word meaning
Low context: the bulk of the information is in the coded message, the words themselves |
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What are the different ways in which verbal communication styles might vary across cultures?
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(4 things)
1. Indirect vs. Direct 2. Succinct vs. Exacting vs. Elaborate 3. Contextual vs. Personal 4. Affective vs. Instrumental |
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What are indirect and direct communication?
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Indirect (don’t say exactly what you mean)
Direct (say what you mean) |
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What are succinct, exacting, and elaborate language?
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Succinct (lots of silence, few words)
Exacting (right amount) Elaborate (a lot of words, metaphors, flowery language) |
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What are contextual and personal communication?
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deals with formality, whom is spoken to
Contextual (more formal) Personal (less formal) |
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What are affective and instrumental communication?
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What is the purpose of communication?
Who is responsible for communicating? Affective (build relationships, process-oriented, listener’s job to listen well) Instrumental (goal-oriented, sender’s job to communicate effectively) |
