Professor Khan International Business Exam 1

Front 1

Trends affecting international business

Back 1

1. Rapid growth of the WTO & regional free trade

2. The trend toward acceptance of the free market system among developing countries.

3. Impact of internet, mobile phones, & global media on dissolution of national borders.

4. The mandate to properly manage resources and global environment for generations to come.

Front 2

Ethnocentrism

Back 2

The notion that one's culture or company knows best.

Front 3

Domestic Orientation

Back 3

(ethnocentric) international operations are secondary.

Front 4

World Trade, World Trade Organization

Back 4

The organization that succeeded the GATT as a result of the Uruguay round of GATT negotiations

Front 5

The Monroe Doctrine

Back 5

old countries of Europe could no longer influence the new world (RESISTED EUROPEAN INTERVENTION)

Front 6

Culture's Impact

Back 6

Cultural differences influence how business is done

Front 7

Social Stratification

Back 7

(organization into hierarchical classes/social categories) Social Stratification is significant if it affects the operation of business organizations

Front 8

All 4 Hofstede's Dimensions

Back 8

(How does society's culture affect workplace values)

1. Power Distance- how society deals w/ the fact that people are unequal physically & intellectually

2. Individualism vs. Collectivism- focus on the relationship between the individual & her fellows

3.Uncertainty Avoidance- measured the extent to which different cultures socialized their members into accepting ambiguos situations/accepting uncertainty.

4. Masculinity vs Femininity- looked at the relationship between gender & work roles in addition to environmental and social welfare conditions

Front 9

Individualism

Back 9

refers to the philosophy that an individual should have freedom in his own economic and political pursuits.

Front 10

Types of Socialism

Back 10

1. Communism- socialism can only be achieved thru violent revolution/totalitarian dictatorship

2. Social Democracy- socialism is achieved through democratic means

Front 11

Market Economy

(UNITED STATES)

Back 11

all productive activities are privately owned & production is determined by supply and demand

Front 12

SRC and Steps to overcome

Back 12

Self Reference Criterion- unconscious reference to one's own cultural values/experience/knowledge as a basis for decisions

Front 13

Global Awareness

Back 13

-Tolerance of cultural differences.

-Knowledge of cultures, history, world market, and global economic social and political trends.

Front 14

Anti Globalization forces and limits to globalization

Back 14

-many protest that the world isn't sharing the fruits of globalization equitably.

-fear that the globalization is homogenizing the world.

-influence of developing nation's arts has grown over the past century

Front 15

GLobal Population Trends

Back 15

Controlling Population Growth: religion, politics, education

Rural/Urban Migration: Desire for greater access to education/healthcare/job opportunity

Population Decline & Aging: In many countries population growth has dropped

Front 16

Culture

Back 16

system of values and norms shared among a group of people

Front 17

Major Religions' impact on business

Back 17

Christianity- Protestant Work Ethic

Islam- Prohibition on interest

Hinduism- Caste System

Buddhism- Austerity

Confucism- Loyalty to the group

Front 18

Criticisms of Hofstede

Back 18

-He assumed there's a one to one relationship between culture & nation-state

-Hofstede's research was culturally bound to

Europe & America & his research was biased to one company (IBM)

Front 19

Capitalism

Back 19

You have total freedom to live where you want & what job to pursue

Front 20

Pure Democracy

Back 20

based on the belief that citizens should be directly involved in decision making

Front 21

Confiscation

(Investment Risk)

Back 21

Property seized w/ no compensation

Front 22

(GNI) Gross National Income

Back 22

total annual income received by residents of a nation

Front 23

MultiDomestic Orientation

Back 23

Control is decentralized. Independent program for each country

Front 24

Global Orientation

Back 24

Marketing activity is global. Marketing coverage is the world

Front 25

MultiNational Corporations

Back 25

Business that has direct investments abroad in multiple countries

Front 26

Manifest Destiny

Back 26

westward expansion of the US was both justified and inevitable.

Front 27

Collectivism

Back 27

stresses the primacy of collective goals over individual goals

Front 28

Types of Totalitarianism

Back 28

1. Communist Totalitarianism- communist party monopolizes power

2. Theocratic Totalitarianism- power monopolized by a party, group, or individual according to religion

3.Tribal Totalitarianism- power monopolized by a party representing the interests of a tribe

4. Right Wing Totalitarianism- some individual economic freedom but restricts individual political freedom

Front 29

Command Economy

(CHINA)

Back 29

Government plans goods/services that a country produces. All businesses are state-owned. Government allocates resources "for the good of society"

Front 30

Mixed Economy

(ISRAEL/SWEDEN/FRANCE)

Back 30

Certain sectors are left to private ownership/free market mechanisms and other sectors have significant state ownership/government planning.

Front 31

Immigration

Back 31

FREE FLOW OF IMMIGRATION WILL AMELIORATE DUAL PROBLEMS OF EXPLOSIVE POPULATION EXPANSION IN LESS DEVELOPED COUNTRIES AND WORKER SHORTAGE IN INDUSTRIALIZED REGIONS

Front 32

Determinants of Culture

Back 32

1. Religion

2. Political/Economical Philosophies

3. Education

4. Language

5. Social Structure

Front 33

The 5 Major Religions

Back 33

1. Christianity

2. Islam

3. Hinduism

4. Buddhism

5. Confucianism

Front 34

The Role Of Language

Back 34

English is the most widely spoken anguage in the world

Chinese is the mother tongue of the largest number of people

Front 35

Socialism

Back 35

Concept that an individual should have freedom in his own economic & political pursuits

Front 36

Representative Democracy

Back 36

elected representatives vote on behalf of constituents

Front 37

Uncertainty Avoidance

Back 37

The extent to which people tolerate uncertainty

Front 38

Masculine vs Femininity

Back 38

Masculine values assertiveness and materialism

Feminine- values relationships and concern for others

Front 39

(PPP) Purchasing Power Parity

Back 39

an adjustment in GDP per capita to reflect differences in cost of living

Front 40

(GDP) Gross Domestic Product

Back 40

All the economic acivity produced within the borders of a country

Front 41

Expropriation

(Investment Risk)

Back 41

Property seized but w/ some compensation

Front 42

Domestication

(Investment Risk)

Back 42

Property seized w/ some compensation OVER TIME

Front 43

1st Mover Advantages

Back 43

Loyalty and experience in a country

Front 44

Patents

Back 44

Exclusive rights for a defined period of time to the manufacture, use, or sale of that invention

Front 45

Copyrights

Back 45

Exclusive legal rights of authors, composers, playwrights, artists, an publishers to publish and disperse their work as they see fit

Front 46

Trademarks

Back 46

design and names by which merchants or manufacturers designate and differentiate their products (LOGO/Brand-Apple)

Front 47

Common Law

Back 47

based on tradition, precedent, and custom (America/England)

Front 48

Civil Law

Back 48

based on detailed set of laws organized into codes (Germany/Japan)

Front 49

Theocratic Law

Back 49

Law is based on religious teachings (Iran, Sudan, Saudi Arabia)