International Business Test #1

Front 1

In the world economy today, we see [MORE/FEWER] self-contained national economies with high barriers to cross-border trade and investment.

Back 1

fewer

Front 2

In the world economy today, we see a [MORE/LESS] integrated global economic system with lower barriers to trade and investment.

Back 2

more

Front 3

In the world economy today, we see over $____ in foreign exchange transactions daily.

Back 3

$4 trillion

Front 4

In the world economy today, we see over $____ of goods and ____ of services being sold across national borders.

Back 4

$12 million, $3.3 trillion

Front 5

In the world economy today, we see the establishment of ____ institutions.

Back 5

international

Front 6

the trend towards a more integrated global economic system

Back 6

globalization

Front 7

Two key facets of globalization are:
- the globalization of ____
- the globalization of ____

Back 7

markets, production

Front 8

the merging of historically distinct and separate national markets into one huge global marketplace

Back 8

globalization of markets

Front 9

In many markets today, the tastes and preferences of consumers in different nations are converging upon some ____ norm (Coca Cola, Starbucks, Sony PlayStation, and McDonald's hamburgers, IKEA furniture)

Back 9

global

Front 10

the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production

Back 10

globalization of production

Front 11

labor, energy, land, and capital

Back 11

factors of production

Front 12

The goal of the globalization of production is to lower overall ____ structure or improve the ____ or functionality of their product and gain ____ advantage (Boeing and Vizio)

Back 12

cost, quality, competitive

Front 13

Global institutions ____, ____, and ____ the global market place.

Back 13

manage, regulate, police

Front 14

Global institutions promote the establishment of multinational ____ to govern the global business system.

Back 14

treaties

Front 15

What global institution polices world trading system and ensure nations adhere to the rules established in the treaties?

Back 15

World Trade Organization (WTO)

Front 16

In 2010, the WTO's 154 members accounted for ____% of world trade.

Back 16

97%

Front 17

What global institution maintains order in the international monetary system?

Back 17

International Monetary Fund (IMF)

Front 18

What global institution promotes economic development?

Back 18

World Bank

Front 19

What global institution maintains international peace and security, develops friendly relations among nations, cooperates in solving international problems and promotes respect for human rights, and is a center for harmonizing the actions of nations?

Back 19

The United Nations (UN)

Front 20

What is driving the move toward greater globalization?
1. declining ____ and ____ barriers
2. ____ change

Back 20

1) trade, investment
2) technological

Front 21

International ____ occurs when a firm exports goods or services to consumers in another country.

Back 21

trade

Front 22

____ occurs when a firm invests resources in business activities outside its home country.

Back 22

Foreign direct investment (FDI)

Front 23

During the 1920s and 1930s, many nations erected barriers to international trade and FDI to protect ____ industries from ____ competition.

Back 23

domestic, foreign

Front 24

After WWII, advanced western countries began removing ____ and ____ barriers.

Back 24

trade, investment

Front 25

Under ____ (the forerunner of the WTO, over 100 nations negotiated further decreases in tariffs and made significant progress on a number of non-tariff issues.

Back 25

General Agreement on Tariffs and Trade (GATT)

Front 26

Under the WTO, a mechanism now exists for ____ resolution and the enforcement of trade law, and there is a push to cut ____ on industrial goods, services, and agricultural products.

Back 26

dispute, tariffs

Front 27

Lower trade barriers help companies view the world as a ____ market and establish production activities in optimal locations around the globe. This has led to an acceleration in the volume of world trade and investment since the early 1980s.

Back 27

single

Front 28

Since World War II, there have been major advances in ____, ____ processing, and ____.

Back 28

communication, information, transportation

Front 29

The Role of Technological Change:
- The ____- lowered the cost of global communication and the cost of coordinating and controlling a global organization.
- U.S. web-based transactions - $____ in 2008
- ____ Internet users in 2009
- Commercial jet aircraft and super freighters and the introduction of containerization - simplify ____ from one mode of transport to another.

Back 29

microprocessor, $133 billion, 1.6 billion, transshipment

Front 30

What are the implications of technological change for the globalization of production?
- Lower ____ costs make a geographically dispersed production system more economical and allow firms to better respond to international customer demands.

Back 30

transportation

Front 31

What are the implications of technological change for the globalization of markets?
- Low ____ communications networks help create electronic global marketplaces
- Low cost transportation enable firms to create ____ markets, and facilitate the movement of people from country to country promoting a convergence of consumer tastes and preferences

Back 31

cost, global

Front 32

In the 1960s, the U.S. dominated the world ____ and world ____ and world ____.

Back 32

economy, trade, FDI (foreign direct investment)

Front 33

In the 1960s, U.S. ____ dominated the international business scene.

Back 33

multinationals

Front 34

In the 1960s, about half the world - the centrally planned economies of the ____ world- was off limits to Wester international business. Today, much of this has changed

Back 34

Communist

Front 35

In the early 1960s: U.S. - dominant ____ power accounting for about 40.3% of world manufacturing output. By 2008, U.S. accounted for only 20.7%. Other developed nations experienced a similar decline. Rapid economic growth now in countries like China, India, and Brazil.

Back 35

industrial

Front 36

A further ____ in the U.S.'s share of the world manufacturing output is likely. Companies may find both new ____ and new ____ in the developing regions of the world.

Back 36

decline, markets, competitors

Front 37

The share of world output generated by developing countries has been steadily ____ since the 1960s.

Back 37

increasing

Front 38

The stock of foreign direct investment (total cumulative value of foreign investments) generated by rich industrial countries is ____.

Back 38

declining

Front 39

Cross-border flows of foreign direct investment are ____.

Back 39

rising

Front 40

The largest recipient of foreign direct investment is ____.

Back 40

China

Front 41

any business that has productive activities in two or more countries

Back 41

multinational enterprise

Front 42

Since the 1960s, there has been a ____ in non-U.S. multinational enterprises and a ____ in mini-multinational enterprises.

Back 42

rise, rise

Front 43

Globalization has resulted in a ____ in the dominance of U.S. firms in the global marketplace.

Back 43

decline

Front 44

____ and ____-size firms are now expanding internationally.

Back 44

Small, medium

Front 45

It is easier to build international sales via the ____.

Back 45

internet

Front 46

The collapse of communism in Eastern Europe resulted in ____ and ____ opportunities.

Back 46

export, investment

Front 47

The economic development in China has led to huge opportunities despite continued ____ control.

Back 47

Communist

Front 48

Free market reforms and democracy in Latin America has led to new markets and new sources of ____ and ____.

Back 48

materials, production

Front 49

A more integrated global economic gives rise to new ____ for firms, but ____ and ____ disruptions can throw plans into disarray.

Back 49

opportunities, political, economic

Front 50

Is the shift toward a more integrated and interdependent global economy a good thing? - Many experts believe that globalization is promoting greater prosperity in the global economy, more ____, and lower ____ for goods and services.
- Others feel that globalization is not beneficial.

Back 50

jobs, prices

Front 51

What are the concerns of critics of globalization?
- ____ protestors now turn up at almost every major meeting of a global institution.
- Protestors fear that globalization is forever changing the world in a ____ way.

Back 51

Anti-globalization, negative

Front 52

Critics of globalization claim that jobs in advanced economies are being lost to ____ nations.

Back 52

low-wage

Front 53

Supporters of globalization claim that while some jobs may be lost, the economy as a whole is better off. The reason is that ____ will result in countries specializing in the production of those goods and services that they can produce most efficiently, while importing goods and services that they can't produce as efficiently, and that in doing so, all countries will gain.

Back 53

free trade

Front 54

Critics of globalization argue that free trade encourages firms from advanced nations to move manufacturing facilities offshore to less developed countries with lax ____ and ____ regulations.

Back 54

environmental, labor

Front 55

Supporters of globalization claim that tougher environmental regulation and stricter labor standards reflect economic progress.
- As countries get richer as a result of globalization, they ____ their environmental and labor standards.
- Free trade does not lead to more pollution and labor exploitation, it leads to ____

Back 55

raise, less

Front 56

Critics of globalization worry that economic power is shifting away from national governments and toward ____ organizations such as the WTO, EU, and the UN.

Back 56

supranational

Front 57

Supporters of globalization argue that the power of these organizations is limited to what nation-states collectively agree to grant.
- The organizations must be able to persuade members to follow certain actions.
- Without the support of members, the organizations have no ____.

Back 57

power

Front 58

Critics of globalization argue that the gap between rich and poor has gotten ____ and the benefits of globalization haven't been shared ____.

Back 58

wider, equally

Front 59

Supporters of globalization suggest that the actions of governments have made limited economic improvement in many countries. Many of the world's poorest nations are under ____ regimes, suffer from endemic corruption, have few property rights, are involved in war, and are burdened by high ____.

Back 59

totalitarian, debt

Front 60

What does the shift toward a global economy mean for managers within an international business? Managing an international business differs from managing a domestic business in 4 key ways:
1. Countries differences require companies to vary their ____ country by country.
2. Managers face a greater and more complex range of ____.
3. International companies must work within the limits imposed by ____ intervention and the ____ trading system.
4. International transactions require ____ funds and being susceptible to ____ rate changes.

Back 60

1) practices
2) problems
3) government, global
4) converting, exchange

Front 61

any firm that engages in international trade or investment

Back 61

international business

Front 62

The trend away from distinct national economic units and toward one huge global market is known as: ____

Back 62

globalization

Front 63

Which of the following is not an example of a global institution?
a) The Federal Reserve
b) The International Monetary Fund
c) The World Bank
d) The World Trade Organization

Back 63

a) The Federal Reserve

Front 64

Coca-Cola, Sony Playstations, and McDonald's hamburgers are all examples of ____ products.

Back 64

global

Front 65

Which organization provides a mechanism for dispute resolution and the enforcement of trade laws?

Back 65

The World Trade Organization (WTO)

Front 66

Which of the following statements is true?

a. The U.S. has been accounting for an increasing share of world trade in recent years
b. The U.S. has been accounting for an increasing share of world foreign direct investment in recent years
c. The U.S. has been accounting for an increasing share of world output in recent years
d. The share of world trade accounted for by China has been increasing in recent years

Back 66

d. The share of world trade accounted for by China has been increasing in recent years

Front 67

What is the political economy of a country?
- A country's political economy refers to its ____, ____, and ____ systems.
- These systems are ____, and interact and influence each other.
- A country's ____ system has major implications for the practice of international business.

Back 67

- political, economic, legal
- interdependent
- political

Front 68

the system of government in a nation

Back 68

political system

Front 69

Political systems can be assessed:
- in terms of the degree to which they emphasize ____ as opposed to ____
- in terns of the degree to which they are ____ or ____

Back 69

- collectivism, individualism
- democratic, totalitarian

Front 70

a system that stresses the primacy of collective goals over individual goals

Back 70

collectivism

Front 71

Collectivism can be traced to the ancient Greek philosopher, ____. Today, ____ support collectivism.

Back 71

Plato, socialists

Front 72

When collectivism is emphasized, the needs of the society as a whole are generally viewed as being more important than individual ____.

Back 72

freedoms

Front 73

Modern socialists trace their roots to ____. He advocated state ownership of the basic means of ____, ____, and ____. The state then manages the enterprises for the benefit of society as a ____.

Back 73

Karl Marx, production, distribution, exchange, whole

Front 74

In the early 20th century, socialism split into ____ and social ____.

Back 74

communists, democrats

Front 75

____ believed that collectivism could only be achieved through revolution and totalitarian dictatorship. ____ worked to achieve the same goals by democratic means

Back 75

Communists, Social Democrats

Front 76

Many state-owned enterprises failed to succeed, and today, many nations are implementing ____ programs whereby state-owned enterprises to private investors.

Back 76

privatization

Front 77

a political philosophy that suggests individuals have freedom over their economic and political pursuits

Back 77

individualism

Front 78

Individualism can be traced to ____ who argued that individual diversity and private ownership are desirable.

Back 78

Aristotle

Front 79

Individualism stresses individual ____ and self- ____ , letting people pursue their own self- ____ to achieve the best overall good for society, and ____ systems and ____ markets.

Back 79

freedom, expression, interests, democratic, free

Front 80

political system in which government is by the people, exercised either directly or through elected representatives

Back 80

democracy

Front 81

The most common form of democracy today is ____ democracy, where elected representatives vote on behalf of constituents.

Back 81

representative

Front 82

form of government in which one person or political party exercises absolute control over all spheres of human life, and opposing political parties are prohibited

Back 82

totalitarianism

Front 83

In most totalitarian regimes:
- there is widespread political ____
- there are no free and fair ____
- ____ is censored
- basic civil ____ are denied
- challenges to the ____ are prohibited

Back 83

- repression
- elections
- media
- liberties
- regime

Front 84

____ totalitarianism advocates achieving socialism through totalitarian dictatorship.

Back 84

Communist

Front 85

____ totalitarianism occurs when political power is monopolized by a party, group, or individual that governs according to religious principles

Back 85

Theocratic

Front 86

____ totalitarianism occurs when a political party that represents the interests of a particular tribe monopolizes power.

Back 86

Tribal

Front 87

____ totalitarianism occurs when individual economic freedom is allowed, but individual political freedom is restricted in the belief that it could lead to communism.

Back 87

Right wing

Front 88

Political ____ and economic ____ are connected.

Back 88

ideology, systems

Front 89

There are three types of economic systems: the ____ economy, the ____ economy, and the ____ economy.

Back 89

market, command, mixed

Front 90

A free market system is likely in countries where ____ goals are given primacy over ____ goals.

Back 90

individual, collective

Front 91

State-owned enterprises and restricted markets are common in countries where ____ goals are dominant.

Back 91

collective

Front 92

In a pure ____ economy the goods and services that a country produces, and the quantity in which they are produced is determined by supply and demand.

Back 92

market

Front 93

In a market economy, the role of government is to encourage free and fair ____ between private producers.

Back 93

competition

Front 94

In a pure ____ economy the goods and services that a country produces, the quantity in which they are produced, and the price at which they are sold are all planned by the government.

Back 94

command

Front 95

In a command economy, all businesses are ____ owned, and so have little incentive to control costs and be efficient. Because there is no private ownership, there is little incentive to better consumer needs.

Back 95

state

Front 96

A ____ economy includes some elements of a market economy and some elements of a command economy.

Back 96

mixed

Front 97

In a mixed economy, governments tend to take over trouble firms that are considered to be vital to ____ interests. The number of mixed economies in the world today is ____ .

Back 97

national, falling

Front 98

rules, or laws, that regulate behavior, along with the processes by which the laws of a country are enforced and through which redress for grievances is obtained

Back 98

legal system

Front 99

A county's legal system is important because:
- laws regulate ____ practice
- laws define the manner in which business transactions are to be executed
- laws set down the ____ and ____ of those involved in business transactions

Back 99

business, rights, obligations

Front 100

a type of legal system based on tradition, precedent, and custom (found in most of Great Britain's former colonies, including the U.S.)

Back 100

common law

Front 101

a type of legal system based on a very detailed set of laws organized into codes (found in over 80 countries, including Germany, France, Japan, and Russia)

Back 101

civil law

Front 102

a type of legal system based on religious teachings (Islamic law is the most widely practiced)

Back 102

theocratic law

Front 103

How do common law and civil law differ?
- The two systems approach ____ in different ways.

Back 103

contract law

Front 104

In a common law state, contracts are very detailed with all ____ spelled out.

Back 104

contingencies

Front 105

In a civil law state, contracts are shorter and much less ____ than common law states.

Back 105

specific

Front 106

A ____ specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved

Back 106

contract

Front 107

the body of law that governs contract enforcement

Back 107

contract law

Front 108

In a contract dispute, which country's laws should apply?
- The United Nations Convention in Contract for the International Sales of Goods (CIGS) establishes a uniform set of rules governing certain aspects of the making and performance of everyday commercial contracts between sellers and buyers who have their places of business in different nations. Countries that adopt CIGS signal to other nations that they will treat the convention's rules as part of their ____.

Back 108

law

Front 109

the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource

Back 109

property rights

Front 110

Property rights may be violated:
- by ____ action (theft, piracy, blackmail, and the like by private individuals or groups)
- by ____ action (public officials extort income or resources from property holders)
* excessive taxation, requiring expensive licenses or permits from property holders, or taking assets into state ownership without compensating the owners.

Back 110

private, public

Front 111

____ is present in all countries to some degree, however when a country has a high level of corruption:
- foreign direct investment ____
- international trade ____
- economic growth ____

Back 111

Corruption
falls (x3)

Front 112

The ____ Act limits corruption in the U.S.
- It is illegal to ____ a foreign government official in order to obtain or maintain business over which the foreign official has authority
- all publicly traded companies must keep detailed records so that it is clear whether a ____ of the act has occurred
- facilitating or expediting payments to secure the performance of routine government actions are permitted

Back 112

Foreign Corrupt Practices Act, bribe, violation

Front 113

property that is the product of intellectual activity (computer software, screenplay, chemical formula for a new drug)

Back 113

intellectual property

Front 114

____ give the inventor exclusive rights to the manufacture, use, or sale of that invention.

Back 114

Patents

Front 115

____ - exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and dispose of their work as they see fit.

Back 115

Copyrights

Front 116

Designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products are known as ____.

Back 116

trademarks

Front 117

Agreement signed by 96 countries to protect intellectual property rights

Back 117

Paris Convention for the Protection of Industrial Property

Front 118

Trade Related Aspects of Intellectual Property Rights (TRIPS) requires WTO members to grand and enforce patents lasting at least ____ years and copyrights lasting ____ years.

Back 118

20, 50

Front 119

Product ____ laws set certain safety standards to which a product must adhere.

Back 119

safety

Front 120

Product ____ involves a firm and its officers responsible when a product causes injury, death, or damage. Liability laws are usually [MORE/LESS] extensive in less developed countries.

Back 120

liability, less

Front 121

A country's level of economic development affects its attractiveness as a possible market or production location for firms. One common measure is a country's ____ per head of population.

Back 121

gross national income (GNI)

Front 122

A ____ adjustment allows for a more direct comparison of living standards in different countries.

Back 122

purchasing power parity (PPP)

Front 123

Broader conceptions of development:
- ____ - What person's belief was that development should be assessed less by material output and more by the capabilities and opportunities that people enjoy?

Back 123

Amartya Sen

Front 124

The UN created the ____ index based on life expectancy, education attainment, and whether average incomes are sufficient to meet the basic needs of life in a country. This reflects Sen's ideas and gauges a country's economic development and likely future growth rate.

Back 124

Human Development

Front 125

____ (new products, new processes, new organizations, new management practices, and new strategies) and ____ are the engines of long-run economic growth.

Back 125

innovation, entrepreneurship

Front 126

What are people that are the first to commercialize innovative new products and processes called?

Back 126

Entrepreneurs

Front 127

Economic freedom in a market economy creates [GREATER/LESS] incentives for innovation and entrepreneurship than in either a planned or mixed economy.

Back 127

greater

Front 128

Strong legal protection of ____ rights is another requirement for a business environment conducive to innovation, entrepreneurship, and economic growth.

Back 128

property

Front 129

Democratic regimes are [MORE/LESS] conducive to long-term economic growth than a dictatorship, even one of the benevolent kind.

Back 129

more

Front 130

Subsequent economic growth leads to establishment of ____ regimes.

Back 130

democratic

Front 131

Other factors influencing a country's rate of economic development:
- ____ - influences economic policy, and thus economic development. Countries with a favorable geography are more likely to engage in trade which can promote economic growth.
- ____ levels - countries that invest more in the education of their young people develop faster economically.

Back 131

geography, education

Front 132

Since the late 1980s, a wave of ____ revolutions has swept the world, and many of the previous ____ regimes collapsed. There has been a move away from centrally planned and mixed economies towards ____ markets.

Back 132

democratic, totalitarian, free

Front 133

Democracy has spread to new countries because:
- many totalitarian regimes failed to deliver economic ____ to the majority of their population
- new ____ and ____ technologies have broken down the ability of the state to control access to uncensored information
- economic advances of the last quarter century have led to the emergence of increasingly prosperous middle and working classes who have pushed for democratic reforms

Back 133

progress, information, communication

Front 134

The end of the Cold War and the "new world order" that followed the collapse of communism in Eastern Europe and the former Soviet Union, taken together with the collapse of many authoritarian regimes in Latin America, have given rise to intense speculation about the future shape of global geopolitics. Geopolitical forces can affect how companies operate in certain countries.

Back 134

NOTE

Front 135

Since the late 1980s there has been a transformation from centrally planned ____ economies to ____-based economies.
- Command and mixed economies failed to deliver sustained economic performance achieved by countries that had adopted market-based systems
- Many countries shifted to a market-based system.

Back 135

command, market

Front 136

The shift toward a market based economic system involves:
1. ____ - involves removing legal restrictions on the free play of markets, the establishment of private enterprises, and the manner in which private enterprises operate
2) ____ - transfers the ownership of state property into the hands of private investors, because private investors are motivated by potential profits to increase productivity, this should increase economic efficiency
3) ____ system protects property rights and the machinery to enforce that system. Many countries have made significant strides toward creating a strong legal system, but more work is necessary.

Back 136

deregulation, privatization, legal

Front 137

Markets that were formerly off-limits to Western business are now open
- ____ (population 1.2 billion) could be a bigger market than the U.S., the EU, and Japan combined.
- ____ (population 1.1 billion is also a potentially huge market.

However, just as the potential gains are large, so are the risks.

Back 137

China, India

Front 138

What are the implications of the political economy for international businesses?
1) The political, economic, and legal systems of a country raise important ethical issues that have implications for the practice of international business.
2. The political, economic, and legal environment of a country clearly influences the attractiveness of that country as a market and/or investment site.

Back 138

NOTE

Front 139

The benefits of doing business in a country are a function of ____ size, and ____ and ____ consumer purchasing power. By identifying and investing early in a potential future economic stars, firms may be able to gain first mover advantages (advantages that accrue to early entrants into a market)

Back 139

market, current, future

Front 140

Firms must be prepared to deal with the costs of doing business in foreign markets:
1) ____ costs- include the cost of paying bribes or lobbying for favorable or fair treatment
2) ____ costs - relate primarily to the sophistication of the economic system, including the infrastructure and supporting businesses
3) ____ costs - can be higher in countries with dramatically different product, workplace, and pollution standards, or where there is poor legal protection for property rights.

Back 140

political, economic, legal

Front 141

the likelihood that political forces will cause drastic changes in a country's business environment that adversely affects the profit and other goals of a business enterprise

Back 141

political risk

Front 142

the likelihood that economic mismanagement will cause drastic changes in a country's business environment that adversely affects the profit and other goals of a business enterprise

Back 142

economic risk

Front 143

the likelihood that a trading partner will opportunistically break a contract or expropriate property rights

Back 143

legal risk

Front 144

The overall attractiveness of a country as a potential market and/or investment site for an international business depends on balancing the ____, ____, and ____ associated with doing business in that country. Generally the costs and risks are lower in economically developed and politically stable markets. However, the potential for growth may be higher in less developed nations.

Back 144

benefits, costs, risks

Front 145

The political, economic and legal systems of a country are called:

Back 145

political economy

Front 146

Individuals who believe socialism can be achieved only through revolutions and totalitarian dictatorship are called ____

Back 146

communists

Front 147

Which system emphasizes individual freedom and self-expression?

Back 147

Individualism

Front 148

Which of the following is not one of the three broad types of economic systems?
a) market economy
b) command economy
c) mixed economy
d) free economy

Back 148

d) free economy

Front 149

Which types of legal system is based on a very detailed set of laws organized into codes?

Back 149

b) Civil law

Front 150

Which type of risk involves the likelihood that a trading partner will opportunistically break a contract or expropriate intellectual property rights?

Back 150

legal risk

Front 151

an understanding of how cultural differences across and within nations can affect the way in which business is practiced

Back 151

cross-cultural literacy

Front 152

There may be a relationship between ___ and the costs of doing business in a country or region.

Back 152

culture

Front 153

Culture is not ___, the actions of MNFs can contribute to cultural change.

Back 153

static

Front 154

a system of values (abstract ideas about what a group believes to be good, right, and desirable) and norms (the social rules and guidelines that prescribe appropriate behavior in particular situations) that are shared among a group of people and that when taken together constitute a design for living

Back 154

culture

Front 155

_____ provide the context within which a society’s norms are established and justified

Back 155

Values

Front 156

the social rules that govern the actions of people toward one another and can be further subdivided into:

- ____ - the routine conventions of everyday life
- ____ - norms that are seen as central to the functioning of a society and to its social life

Back 156

norms
folkways, mores

Front 157

a group of people who share a common set of values and norms

Back 157

society

Front 158

The values and norms of a culture are the evolutionary product of a number of factors at work in a society including:
- prevailing _____ and _____ philosophies
- a society’s _____ structure
- the dominant _____, _____, and _____

Back 158

- political, economic
- social
- religion, language, education

Front 159

A society's social _____ is its basic social organization.

Two dimensions to consider:
- the degree to which the basic unit of social organization is the individual, as opposed to the group
- the degree to which a society is stratified into classes or castes

Back 159

structure

Front 160

an association of two or more individuals who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other’s behavior

Back 160

group

Front 161

Groups are common in many ____ societies. Many Western countries emphasize the _____.

Back 161

Asian, individual

Front 162

In societies where the ____ is emphasized:
- individual _____ and _____ are promoted, but this can encourage job switching, competition between individuals in a company rather than team building, and a lack of loyalty to the firm.

Back 162

individual, achievement and entrepreneurship

Front 163

In societies where the ____ is emphasized:
- _____ and team work are encouraged and life time employment is common, but the individual initiative and creativity may be suppressed

Back 163

group, cooperation

Front 164

All societies are stratified on a hierarchical basis into social categories, or _____. They are usually defined by characteristics such as family background, occupation, and income.

Back 164

social strata

Front 165

Societies differ in terms of:
- the degree of _____ between social strata
- the significance attached to social strata in a ____ context

Back 165

mobility, business

Front 166

the extent to which individuals can move out of the strata into which they are born

Back 166

social mobility

Front 167

a closed system of stratification in which social position is determined by the family into which a person is born, and change in that position are unlikely

Back 167

caste system

Front 168

a form of open social stratification in which the position a person has by birth can be changed through achievement or luck

Back 168

class system

Front 169

Question: What is the significance of social stratification for business?

Answer:
In cultures where class _______ (a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with others) is high, the way individuals from different classes work together may be prescribed
- _____ between labor and management can raise the costs of doing business

Back 169

consciousness, antagonism

Front 170

a system of shared beliefs and rituals that are concerned with the realm of the sacred

Back 170

religion

Front 171

Religions with the greatest following are
- ______ (1.7 billion adherents)
- ______ (1 billion adherents)-
- ______ (750 million adherents)
- ______ (350 million adherents)
- ______ also influences behavior and shapes culture in many parts of Asia

Back 171

Christianity, Islam, Hinduism, Buddhism, Confucianism

Front 172

a set of moral principles, or values, that are used to guide and shape behavior

Back 172

ethical systems

Front 173

The ethical practices of individuals within a culture are often closely intertwined with their _____.

Back 173

religion

Front 174

_____ is the most widely practiced religion. It is common throughout Europe, the Americas, and other countries settled by Europeans.

Back 174

Christianity

Front 175

What are the economic implications of Christianity?

In 1904, Max Weber suggested that it was the Protestant work ethic (focus on hard work, wealth creation, and frugality) that was the driving force of ______

Back 175

capitalism

Front 176

What religion is an all-embracing way of life that governs one's being? Muslims believe that there is one true omnipotent God.

Back 176

Islam

Front 177

- _____ fundamentalism is associated in the Western media with militants, terrorists, and violent upheavals,
- the vast majority of ______ claim that Islam teaches peace, justice, and tolerance
- fundamentalists have gained political power in many Muslim countries, and have tried to make Islamic law the law of the ____

Back 177

Islamic, Muslims, land

Front 178

What are the economic implications of Islam?

- Under Islam, people do not own _____, but only act as stewards for God and thus must take care of that which they have been entrusted with.
- Islam is supportive of ______, but the way business is practiced is prescribed
- businesses that are perceived to be making a profit through the exploitation of others, by deception, or by breaking contractual obligations are unwelcome

Back 178

property, business

Front 179

What religion focuses on the importance of achieving spiritual growth and development, which may require material and physical self-denial and is practiced primarily on the Indian sub-continent?

Back 179

Hinduism

Front 180

What are the economic implications of Hinduism?
Answer:
- Hindus are valued by their _____ rather than _____ achievements
- Promotion and adding new ____ may not be the goal of an employee, or may be infeasible due to the employee's ____

Back 180

spiritual, material, responsibilities, caste

Front 181

What type of religious followers stress spiritual growth and the afterlife, rather than achievement while in this world and are found mainly in Central and Southeast Asia, China, Korea, and Japan?

Back 181

Buddhists

Front 182

What are the economic implications of Buddhism?
Answer:
Buddhism does not support the _____ system, so individuals do have some mobility and can work with individuals from different classes
- entrepreneurial activity is acceptable

Back 182

caste

Front 183

What religion teaches the importance of attaining personal salvation through right action? The need for high moral and ethical conduct and loyalty to others is central. It is mainly practiced in China.

Back 183

Confucianism

Front 184

Three key teachings of Confucianism - ____, ____, and ____ - may all lead to a lowering of the cost of doing business in Confucian societies.

Back 184

loyalty, reciprocal obligations, and honesty

Front 185

There are two forms of language. What are they?

Back 185

spoken & unspoken

Front 186

____ is one of the defining characteristics of culture.

Back 186

Language

Front 187

Countries with more than one spoken language often have more than one ____.

Back 187

culture

Front 188

______ is the most widely spoken language in the world, and is becoming the language of international business

Back 188

English

Front 189

nonverbal cues (facial expressions, hand gestures)

Back 189

unspoken language

Front 190

Many nonverbal cues are _____ bound and because they may be interpreted differently, can result in misunderstandings.

Back 190

culturally

Front 191

Formal ______ is the medium through which individuals learn many of the language, conceptual, and mathematical skills that are indispensable in a modern society

Back 191

education

Front 192

The knowledge base, training, and educational opportunities available to a country's citizens can also give it a ______ advantage in the market and make it a more or less attractive place for expanding business

Back 192

competitive

Front 193

The general _____ level of a country is a good indicator of the types of products that might sell in that location or the type of promotional materials that might be successful

Back 193

education

Front 194

How does a society's culture impact on the values found in the workplace?

Answer:
Geert Hofstede isolated four dimensions that summarized different cultures
1) ____ distance
2) ____ versus ____
3) ____ avoidance
4) ____ versus ____

Back 194

1) Power
2) Individualism, collectivism
3) Uncertainty
4) Masculinity, femininity

Front 195

how a society deals with the fact that people are unequal in physical and intellectual capabilities

Back 195

power distance

Front 196

the relationship between the individual and his or her fellows

Back 196

individualism vs. collectivism

Front 197

the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity

Back 197

uncertainty avoidance

Front 198

the relationship between gender and work roles

Back 198

masculinity vs. femininity

Front 199

Hofstede later added a fifth dimension, _______ - captures attitudes towards time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors

Back 199

Confucian dynamism

Front 200

_____ evolves over time, although changes in value systems can be slow and painful for a society
- social turmoil is an inevitable outcome of cultural _____
- cultural change is particularly common as countries become economically _____

Back 200

Culture, change, stronger

Front 201

Differences in culture imply that"
1) there is a need for managers to develop cross-cultural _____
2) there is a connection between culture and _____ competitive advantage
3) there is a connection between culture and _____ in decision making

Back 201

literacy, national, ethics

Front 202

a belief in the superiority of one's own culture

Back 202

ethnocentric behavior

Front 203

The connection between culture and competitive advantage is important because:
- the connection suggests which countries are likely to produce the most ____ competitors
- the connection has implications for the choice of countries in which to locate production facilities and do business

Back 203

viable

Front 204

Abstract ideas about what a society believes to be good right and desirable are called:

Back 204

Norms

Front 205

The extent to which an individual can move out of the social strata into which they are born is called:

Back 205

social mobility

Front 206

The religion with the largest following in the world is:

Back 206

Christianity

Front 207

Which of Hofstede’s dimensions measures the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating uncertainty?
a) Individualism versus collectivism
b) Uncertainty avoidance
c) Masculinity versus femininity
d) Power distance

Back 207

uncertainty avoidance

Front 208

accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization

Back 208

ethics

Front 209

the accepted principles of right or wrong governing the conduct of business people

Back 209

business ethics

Front 210

is a strategy, or course of action, that does not violate these accepted principles

Back 210

ethical strategy

Front 211

The most common _____ issues in business involve
- employment practices
- human rights
- environmental regulations
- corruption
- the moral obligation of
multinational companies

Back 211

ethical

Front 212

What is the responsibility of a foreign multinational when operating in a country where basic human rights are not respected?

Basic human rights taken for granted in the developed world such as freedom of association, freedom of speech, freedom of assembly, freedom of movement, and so on, are not ______ accepted

Back 212

universally

Front 213

Should a multinational feel free to pollute in a developing nation if doing so does not violate laws?

Answer:
- When ______ regulations in host nations are far inferior to those in the home nation, ethical issues arise
- The tragedy of the ______ occurs when a resource held in common by all, but owned by no one, is overused by individuals resulting in its degradation

Back 213

environmental, commons

Front 214

a resource held in common by all, but owned by no one, is overused by individuals resulting in its degradation

Back 214

tragedy of the commons

Front 215

s it ethical to make payments to government officials to secure business?

Answer:
- In the United States, the _______________ outlawed the practice of paying bribes to foreign government officials in order to gain business
- The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions adopted by the Organization for Economic Cooperation and Development (OECD) obliges member states to make the bribery of foreign public officials a criminal offense

Back 215

Foreign Corrupt Practices Act

Front 216

Corruption:

- Some economists suggest that the practice of giving _____ might be the price that must be paid to do a greater good
* In countries where preexisting political structures distort or limit the workings of the market mechanism, corruption in the form of black-marketeering, smuggling, and side payments to government bureaucrats to “speed up” approval for business investments may actually enhance welfare
- However, other economists have argued that corruption reduces the returns on business ______ and leads to ____ economic growth

Back 216

bribes, investment, low

Front 217

the idea that business people should take the social consequences of economic actions into account when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and good social consequences

Back 217

social responsibility

Front 218

situations in which none of the available alternatives seems ethically acceptable

Back 218

ethical dilemmas

Front 219

Unethical behavior may exist in firms with an ______ culture - the values and norms that are shared among employees of an organization - that does not emphasize business ethics
* Values and norms shape the culture of a firm, and that culture influences decision making

Back 219

organization

Front 220

_______ approaches are raised by business ethics scholars primarily for the purpose of demonstrating that they offer inappropriate guidelines for ethical decision making in a multinational enterprise

Back 220

Straw men

Front 221

The _____ Doctrine - the only social responsibility of business is to increase profits, so long as the company stays within the rules of law

Back 221

Friedman

Front 222

the belief that ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate

Back 222

cultural relativism
"when in Rome, do as the Romans do"

Front 223

straw men approach that says that a a multinational’s home country standards of ethics are the appropriate ones for companies to follow in foreign countries ; the approach is common among managers from developed countries.

Back 223

righteous moralist

Front 224

straw men approach where if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either; actions are ethically justified if everyone else is doing the same thing

Back 224

naive immoralist

Front 225

_______ approaches to ethics hold that the moral worth of actions or practices is determined by their consequences

Back 225

Utilitarian

Front 226

_____ ethics are based on the philosophy of Immanuel Kant who argued that people should be treated as ends and never purely as means to the ends of others

Back 226

Kantian

Front 227

human beings have fundamental rights and privileges that transcend national boundaries and culture

Back 227

rights theories