Environmental Challenges of International Management – Flashcards
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The Economic Environment
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- economic system - natural resources - infrastructure
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Economic System
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most countries are moving towards a market economy; freedom of choice in mature market economy - complete private ownership - complete public ownership
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Natural Resources
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a very broad range of resources is averrable in different countries; depending on the amount of natural resources a country have, they import or export
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Infrastructure
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schools, hospitals, power plants, railroads, highways, ports, communication systems, airfields, and commercial distribution systems of a country
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The Political-Legal Environment
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- government stability - incentives for international trade - controls on international trade - economic communities
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Government Stability
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- the ability of a given government to stay in power against opposing factions in the country - the permanence of government policies toward business - 'nationalization'
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Nationalization
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in some countries, foreign businesses may be taken over by the government with little or no warning
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Incentives for International Trade
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attracting foreign business ex: Alabama offering Mercedes huge tax breaks and other incentives to entice the German firm to select a location for a new factory in that state
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Controls on International Trade
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the extent to which there are controls on international trade; tariff, quota, export restraint agreement ex: a government might decide that foreign competition is hurting domestic trade and may enact barriers to international trade
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Tariff
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a tax collected on goods shipped across national boundaries collected by the exporting country, countries the good passes through, and the importing country
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Quota
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most common form of trade restriction; a limit on the number for value of goods that can be traded ex: Honda is allowed to import 425,000 autos each year into the US; the company may produce unlimited amount within the US
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Export Restraint Agreement
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designed to convince other governments to voluntarily limit the volume or value of goods exported to or imported from a particular country ex: Japanese steel produces voluntarily limit the amount of steel they send to the US each year
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Economic Communities
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a set of countries that agree to markedly reduce or eliminate trade barriers among member nations ex: EU, NAFTA, Latin American Integration Association
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The Cultural Environment
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- values, symbols, beliefs, and language - individual behaviors across cultures; orientations
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Values, Symbols, Beliefs, and Language
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cultural values and beliefs are often unspoken; difficulties arise when there is little overlap between countries ex: England and US are relatively familiar cultures; China and US are not familiar cultures
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Individual Behaviors Across Cultures
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- Social Orientation - Power Orientation - Uncertainty Orientation - Goal Orientation - Time Orientation
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Social Orientation
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beliefs about relative importance of individual vs. groups they belong to - Individualism - Collectivism
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Individualism
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the person comes first
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Collectivism
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the group comes first
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Power Orientation
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people hold about the appropriateness of power and authority differences in hierarchies, like business organizations - power respect - power tolerance
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Power Respect
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people tend to accept the power and authority of their superiors simply on the basis of their position and respect their right to hold that power
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Power Tolerance
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more willing to question a decision from someone at a higher level or even refuse to accept it
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Uncertainty Orientation
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feelings regarding uncertain and ambiguous situations - uncertain acceptance - uncertain avoidance
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Uncertain Acceptance
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people are stimulated by change and thrive on new opportunities
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Uncertain Avoidance
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people dislike and will avoid ambiguity whenever possible
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Goal Orientation
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the manner people are motivated to work toward different kinds of goals - aggressive goal behavior - passive goal behavior
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Aggressive Goal Behavior
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place a high premium on material possession, money, and assertiveness
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Passive Goal Behavior
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higher value on social relationships, quality of life, and concern for others
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Time Orientation
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extent people adopt a long-term vs. short-term outlook on work, life, another elements
