BA 310 Chapter 5 and 6 – Flashcards
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Culture
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Learned behavior; a way of life for one group of people living in a single, related, and independent community
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4 Characteristics of Culture
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1. Culture is not inherited; it is learned through parents, friends, schools, etc. 2. It is impossible to change an entire country's culture; culture is static and not easily modified 3. It is the responsibility of the global firm to ascertain the level of importance of various aspects of culture in the foreign market it serves, and recognize these aspects when doing business overseas. 4. Companies' operations need to recognize and adjust to the cultural environment existing in the countries the global company serves.
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Acculturation
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The ability to adjust to a culture different from its own
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Elements of culture
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Language Religion Values and attitudes Manners and customers Material elements Aesthetics Education Social Institutions
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Verbal Communication
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A message's actual contents (i.e. what the message says)
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Nonverbal Communication
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Involves the tone of voice as well as the gestures, body position, facial expressions, eye contact, and any other body language that accompanies verbal communication.
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Backward Translation
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Translating a message from English into a foreign language, then translating it back into English to check for accuracy
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Values
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Basic beliefs or philosophies that are pervasive in a society
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Attitudes
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Feelings or opinions
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Manners and Customers
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The way a society does things
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Material culture
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A direct result of technology best demonstrated by economic, social, financial, and marketing infrastructures
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Leapfrog technology
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technological advances that bypass intermediate stages industrialized nations experience
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Aesthetics
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What is perceived as taste and beauty in a society (color, form, and music)
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Social Institutions
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The way people in a society relate to one another within group settings
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Reference groups
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Groups that are important to individuals
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Social Stratification
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The extent to which groups at the top of the social pyramid exert control over others at lower levels of the pyramid
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Cultural Intelligence
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Individual intelligence pertaining to culturally diverse contexts
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Hofstede's Research
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Individualism vs. collectivism Power Distance Masculine vs. Feminine Uncertainty Avoidance Time Orientation
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Individualism vs Collectivism
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The worth of an individual versus the worth of a group
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Power distance
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the level of egalitarianism (equality) in a society
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Masculine vs Feminine
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The extent to which a society minimizes gender inequality
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Uncertainty Avoidance
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The extent to which societies tolerate risk or are risk averse
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Time Orientation
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The extent to which a society emphasizes short-run or long-run time horizons
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Universalism vs Particularism
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The importance of rules versus relationships
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Neutral vs Emotional
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The extent to which a society expresses itself emotionally
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Specific vs Diffuse
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The degree to which a society compartmentalizes roles
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Achievement vs Ascription
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Refers to how "rewards" in a society are handed out: performance vs. place in society
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High power distance
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- Superiors and elders are treated with deference and respect - centralized, tall organizational structures - wide salary gaps (e.g. Spain, Italy, Kuwair, Qatar)
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Low Power Distance
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- Flatter, decentralized structures - Smaller ratio of supervisor to employee - Narrow salary gaps (e.g., New Zealand, Australia)
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High Uncertainty Avoidance
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- Less risk taking - More written rules - Structure organizational activities (e.g. Germany, Switzerland)
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Low Uncertainty Avoidance
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- More risktaking -Fewer written rules - Less structured organizational activities (e.g. Greece, Russia, Poland)
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Individualism
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The extent to which people look after themselves and immediate family only (e.g, Australia, Canada) - Individual performance is more important than team performance - Tasks prevail over relationships
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Collectivism
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The tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty - Team performance is more important than individual - Relationships prevail over tasks
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Masculinity
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Society values traditionally masculine attributes (e.g., Japan, Greece, Mexico) - Assertiveness, Competition, dominance
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Femininity
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Society traditionally values feminine attributes (e.g. Denmark, Sweden, Norway) - Modesty, caring for others, cooperation
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Long term orientation
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People who are oriented towards the future (e.g., China, Hong Kong, Japan) - Strong propensity to save and invest, thriftiness - Perseverance in achieving results - 10-15 year strategic plans
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Short term Orientation
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People are oriented towards the recent past and the present (e.g. Philippines) - Small propensity to save for the future - Focus on achieving quick results - 3-5 years strategic plans
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Guanxi
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Chinese philosophy denoting friendships among unequals and unlimited exchanges of favors; it is not based on sentiment, emotions, or a group orientation
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Inwa
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Korean philosophy stressing harmony among unequals, loyalty to parents and authority figures, and superiors being responsible for all wellbeing of subordinates
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Democracy
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greek for "rule by the people"; form of government in which all citizens have the right to vote.
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Athenian Democracy
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a pure form of democracy, in which all adult citizens vote directly on matters affecting the community
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Representative Democracy
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Form of government in which citizens vote to elect given individuals to serve as their representatives for a certain period of time
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Totalitarian Government
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System of government in which individuals govern without the support or consent of the citizenry; for example, a military dictatorship
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Communism
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An economic ideology whereby the government or state owns and and controls all major factors of production and is philosophically an economically classless society
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Socialism
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An economic ideology in which the government plays a strong role in the economy and may own stakes in certain businesses
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Capitalism
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An economic ideology where businesses are privately owned, strong individual incentives exist, and the government plays very little role in the economy
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Economic Risks
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The risks that economic problems or mismanagement in a given country will have a meaningful negative impact upon the conduct of business in that country
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Political Risks
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The Risks that political forces or problems in a given country will have a meaningful negative impact upon the conduct of business in that country
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Micropolitical Risk
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A political risk that only affects a certain industry or set of firms in a given country
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Macropolitical Risk
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A political risk that essentially affects all businesses in a given country
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Terrorism
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Involves unlawful arts or violence threatening the physical safety of others
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Civil Law Legal System
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Is based on a comprehensive listing of legal rules in sets of written codes of law
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Common Law Legal System
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Is comprised of legislative bodies that enacts less specific legal rules that give judges or courts considerable authority in interpreting these rules based on precedent and other factors
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Theocratic Law Legal System
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Is based on a religious document and religious teachings
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Terrorism Risk Insurance Act of 2002
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A United States law that after a certain deductible provides U.S. businesses government insurance coverage for the risk of terrorism
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Overseas Private Investment Corporations
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A U.S. government agency that sells political risk insurance to U.S. businesses operating in countries with which the Unites States has a bilateral investment treaty
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Corruption
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a situation where businesses are able to illegally alter relevant private and/or public decision making by way of bribes, kickbacks, blackmail, extortion, and related activities
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Private Corruption
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Business corruption involving other private businesses, individuals, or groups
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Public Corruption
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The practice of making illegal payments to government officials or engaging in blackmail, extortion or other related activities to obtain government contracts or governmental approval for business activities
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Foreign Corrupt Practices Act (FCPA)
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a United States law that prohibits U.S. companies from bribing or otherwise corrupting foreign government contracts or obtain other foreign government assistance for their businesses
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Criminal Law
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Law that establishes which violations of a nation's laws are crimes punishable by possible incarceration
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Contract Law
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The body of law governing legally enforceable agreements between parties to engage in economic exchange
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Tax Law
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The body of law dealing with governmental levying of taxes on individuals and corporations
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Tax Haven Countries
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Countries with little or no tax transparency
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Antitrust Law
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Laws to promote "fair competition" among businesses
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Collusion
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Practice of companies acting in a manner which secretly thwarts competition amongst themselves
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Monopoly
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Situation where there is only a single seller of a product in an industry and there are very high barriers to enter this industry
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Product Safety Law
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The law which establishes the standards of product safety to which the manufacturers and sellers of products are to be held
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Caveat Emptor
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"Buyer beware";involves placing the burden of determining product safety to which the manufacturers and sellers of products are to be held
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Caveat Venditor
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"Seller beware"; Involves placing on manufacturers or sellers of products the burden of making sure products are safe or at least clearly and explicitly warning consumers about the potential safety risks of said products
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Dispute Settlement Law
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The law governing how disputes arising in the conduct of global business are settled
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Litigation
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Involves bringing a dispute to a publicly or governmentally run court of law for resolution
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Arbitration
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An alternative dispute resolution process whereby the parties designate a neutral private person or group of persons to hear and decide the case
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Intellectual Property
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Property that is the product of intellectual rather than physical activity
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Intellectual Property Protections
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The limited monopoly rights legally granted by a nation to the creator of intellectual property
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Patent
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The right grated to the inventor of a product or process that excludes others from selling, making, or using the invention for a certain period of time
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Trademark
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A distinctive phrase, name, word, picture, symbol or design, or combination of these, that identifies a given business' service or product and is owned by said business
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Genericized Trademark
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A trademark that has become so well known or colloquial that it now describes a general class of product or service, as opposed to a specific product or service as intended by the trademark's owner
