question

BRIC stands for

answer

Brazil, Russia, India, China

question

BRIC are all

answer

strongest amongst emerging economies

question

emerging markets

answer

Countries that are currently between developed and developing countriesand are rapidly growing

question

General Agreement on Tariffs and Trade (GATT)

answer

Tariff negotiations among several nations that reduced the average worldwide tariff on manufactured goods

question

Regional trade agreements (or free trade areas)

answer

Agreements among nations in a particular region to reduce tariffs and develop similar technical and economic standards

question

North American Free Trade Agreement (NAFTA)

answer

A multilateral treaty that links the United States, Canada, and Mexico in an economic bloc that allows freer exchange of goods and services

question

Global and regional trade agreements (major ones)

answer

*look at exhibit 1.5 page 12-13

question

The multinational enterprise (MNE)

answer

-Firms with manufacturing enterprises all over the world -Has been a dominant force of the international economy

question

Driving forces of Globalization

answer

-Greater integration and interdependency of national economies -Freer movement of goods, services, capital and knowledge -Emergence of monetary unions, networks, NGOs, etc. -Convergence of customer lifestyles, requirements, etc.

question

Traditional Motivations

answer

-Resource seeking (key suppliers, low cost factors) -Market seeing

question

Emerging Motivation

answer

-Scale economies, Ballooning R&D investments, shortening product life cycles -Scanning and learning -Competitive positioning

question

Different mindsets

answer

-International mentality -Multinational mentality -Global mentality -Transnational mentality

question

Multinational company (MNC)

answer

Any company that engages in business functions beyond its domestic borders

question

Globalization

answer

The worldwide trend of cross-border economic integration that allows businesses to expand beyond their domestic boundaries

question

Global mindset

answer

Mindset that requires managers to think globally but act locally

question

Global customers

answer

search the world for their supplies without regard for national boundaries *At present, most are companies making industrial purchases

question

Hofstede's Model of National Culture Five Dimensions

answer

Power distance, uncertainty avoidance, individualism, masculinity, long-term orientation

question

Hofstede's Model of National Culture

answer

A model mainly based on differences in values and beliefs regarding work goals; clear link between national and business cultures

question

Power distance

answer

expectations regarding equality among people

question

Uncertainty avoidance

answer

typical reactions to situations considered different and dangerous

question

Individualism

answer

relationship between the individual and the group in society

question

Masculinity

answer

expectations regarding gender roles

question

Long-term orientation

answer

basic orientation toward time

question

Cultural paradoxes

answer

When individual situations seem to contradict cultural prescriptions

question

Economic Freedom

answer

The absence of government coercion or constraint on the production, distribution, or consumption of goods and services beyond the extent necessary for citizens to protect and maintain liberty itself

question

Index of Economic Freedom

answer

-includes 10 indicators ranging from trade and taxation policies, to property rights and regulation, including government intervention in the economy -Determines the extent of governmental intervention in a country

question

Economic system

answer

System of beliefs(concerning work,property, and wealth); activities(extraction,production, and distribution);organizations(business firms, labor unions); and relationships (ownership,management) that provide the goods and services consumed by the members of a society

question

Different types of economic systems

answer

capitalist or market economy, socialist or command economy, mixed economy

question

capitalist or market economy

answer

System where production is decentralized to private owners who carry out these activities to make profits

question

socialist or command economy

answer

production resources are owned by the state and production decisions are centrally coordinated

question

mixed economy

answer

Combines aspects of capitalist and socialist economies

question

Industrialization

answer

Cultural and economic changes that occur because of how production is organized and distributed in society

question

Preindustrial society

answer

Characterized by agricultural dominance and shaping of the economic environment

question

Industrial society

answer

Characterized by the dominance of the secondary or manufacturing sectors

question

Postindustrial society

answer

Characterized by emphasis on the service sectors

question

GINI Index

answer

-indicator of the degree of social inequality -(0=perfect equality, 100=perfect inequality)

question

Religion

answer

Shared set of beliefs, activities, and institutions based on faith in supernatural forces

question

Foreign direct investment (FDI)

answer

Multinational firm's ownership, in part or in whole, of an operation in another country

question

FDI advantages

answer

Ownership, Location, Internalization

question

OLI model

answer

Benefits of FDI: Ownership, Location, Internalization

question

Major Risks of FDI

answer

-expose more to policy risks, technology, political risks, regulations, labor laws

question

Porter's generic strategies

answer

differentiation strategy and low-cost strategy

question

Low-cost strategy

answer

Producing productsor services equal to those of competitors at a lower cost

question

Differentiation strategy

answer

Strategy based on finding ways to provide superior value to customers

question

Business-level strategies

answer

Strategies for a single-business operation

question

Corporate-level strategies

answer

How companies choose their mixture of different businesses *also known as multi-business companies

question

Competitive advantage

answer

-When a company can outmatch its rivals in attracting and maintaining its targeted customers -occurs when a company's strategy creates superior value for targeted customers and is difficult or too costly for competitors to copy

question

Value Creation

answer

Value - Price = Consumer Surplus Price - Cost = Profit Margin Value - Cost = Value Created *"A firm is profitable if the value it commands exceeds the costs involved in creating the product. Creating value for buyers that exceeds the cost of doing so is the goal of any generic strategy. Value, instead of cost, must be used in analyzing competitive position ..."

question

Value chain

answer

All the activities that a firm uses to design, produce, market, deliver, and support its product *consists of areas where the firm can create value for customers

question

value chain is divided into primary and support activities

answer

1. processes of creating good or services 2. the organizational mechanisms necessary to support the creative activities

question

value chain primary activities

answer

involve physical actions of creating, selling, and after-sale service

question

value chain support activities

answer

include systems for human resources management, organizational design and control, and a firm's basic technology

question

upstream activities

answer

early activities in the value chain: R&D and dealing with suppliers

question

downstream activities

answer

later value chain activities: sales and distribution channels

question

The resourced-based view

answer

-Companies are different collections of physical and intangible assets and capabilities. -Internal resources and capabilities provide basic direction for a firm's strategy. -Resources and capabilities are the primary source of profit for the firm. Competitive advantage, and superior performance is based upon competitively distinct set of resources and capabilities.

question

Porter's five forces model

answer

A popular technique that can help amultinational firmunderstand the majorforces at work in the industry and the industry's degree of attractiveness

question

Porter's five forces

answer

1. degree of competition in the industry 2. the threat of new entrants 3. bargaining power of buyers, which is the degree to which buyers of the industry's products can influence competitors within the industry 4. bargaining power of suppliers 5. the threat of substitutes: the extent to which competitors are confronted with alternatives to their products

question

Outsourcing

answer

The deliberate decision to have outsiders or strategic allies perform certain activities in the value chain

question

Global-local dilemma

answer

Choice between a local-responsiveness or global approach to a multinational's strategies

question

Multinational companies face a fundamental strategic dilemma

answer

the global-local dilemma

question

Solutions to the global-local dilemma

answer

On one hand, there are pressures to respond to the unique needs of the markets in each country or region in which a company does business. When a company chooses this option, it adopts the local-responsiveness solution. On the other hand, there are efficiency pressures that encourage companies to deemphasize local differences and to conduct business similarly throughout the world. Companies that lean in this direction choose the global integration solution

question

Multi domesticstrategy

answer

A strategy that emphasizes local-responsiveness issues

question

Transnational strategy

answer

An approach that seeks location advantages and economic efficiency through operating worldwide

question

Entry-mode strategies

answer

Options multinational companies have for entering foreign markets and countries: including exporting, licensing, strategic alliances, and foreign direct investment

question

Passive exporting (entry-mode strategy)

answer

Treating and filling overseas orders like domestic orders

question

Licensing (entry-mode strategy)

answer

Contractual agreement betweena domestic licenser and a foreign licensee. (Licenser usually has avaluable patent, technological know-how, a trademark, or a company name that it provides to the foreign licensee)

question

Foreign direct investment (entry-mode strategy)

answer

Foreign direct investment (FDI) Multinational firm ' sownership, in part orin whole, of anoperation in another country

question

International strategic alliance (entry-mode strategy)

answer

Agreement between two or more firms from different countries to cooperate in anyvalue chain activityfrom R&D to sales

question

10 Flatteners (by Friedman)

answer

1. Fall of Berlin Wall 2. Netscape went public: PC -> internet based 3. Workflow Software 4. Uploading or Open-sourcing 5. Outsourcing 6. Offshoring 7. Supply-chaining 8. In-sourcing 9. In-forming 10. The Steroids

question

Three Waives of Globalization (Friedman)

answer

Globalization 1.0 (1492-1800) Globalization 2.0 (1800-2000) Globalization 3.0 (2000-present)

question

Globalization 1.0 (1492-1800)

answer

shrank from large to medium, globalizing for resources and imperial conquest

question

Globalization 2.0 (1800-2000)

answer

shrank from medium to small, globalizing for markets and labor

question

Globalization 3.0 (2000-present)

answer

shrank from small to tiny, flattened the playing field

question

CAGE Framework

answer

Cultural Distance, Administrative Distance, Geographic, Distance, Economic Distance

question

Cultural Distance

answer

different languages, different ethnicities, lack of connective ethnic or social networks, different religions, different social norms

question

Administrative Distance

answer

absence of colonial ties, absence of shared monetary or political association, political hostility, government policies, institutional weakness

question

Geographic Distance

answer

physical remoteness, lack of a common border, lack of sea or river access, size of country, weak transportation or communication links, differences in climates

question

Economic Distance

answer

differences in consumer incomes, differences in costs and quality of: natural resources, financial resources, human resources, infrastructure, intermediate inputs, information or knowledge

question

Ethnocentrism

answer

A self-centered mentality held by a group of people who perceive their own culture, ethics, and norms as natural, rational, and morally right

question

Culture (Geert Hofstede)

answer

"the collective programming of the mind which distinguishes the members of one group or category of people from another."

question

Cluster approach

answer

people and firms are more comfortable doing business with other countries within the same cluster. Having a common language, history, religion, or culture reduces the liability of foreignness when operating abroad.

question

low-context cultures

answer

such as those in North American or Western Europe, communication usually taken at face value without much reliance on unspoken conditions or assumptions. "No" means "no."

question

high-context cultures

answer

such as those in Arab and Asian countries, communication relies heavily upon unspoken conditions or assumptions. "No" does not necessarily mean "no."

question

dimension approach

answer

This approach is far more influential than the context or cluster approach for two reasons: The context approach only represents one dimension. The cluster approach has relatively little to offer regarding the differences between countries within a single cluster. There are five dimensions to the dimension approach: Power distance - the extent to which less powerful members within a country expect and accept that power is distributed equally. Individualism vs. collectivism - the idea that an individual's identity is fundamentally his or her own. Masculinity vs. femininity - sex role differentiations. Uncertainty avoidance - the extent to which members in a culture accept or avoid ambiguous situations and uncertainty. Long-term orientation - emphasizes perseverance and savings for future betterment

question

Ethics

answer

The principles, standards, and norms of conduct governing individual and firm behavior

question

Managing Ethics Over Seas

answer

There are two schools of thought on how to manage ethics overseas. Ethical relativism follows the line of thought "When in Rome, do as the Romans do." Ethical imperialism refers to the absolute belief that "There is only one set of Ethics, and we have it." Americans are especially renowned for believing that their ethical values should be applied universally.

question

Ethics Three Core Principles

answer

Respect for human dignity and basic rights, Respect for local traditions, Respect for institutional context

question

Corruption

answer

The abuse of public power for private benefits usually in the form of bribery, in cash or in kind.

question

VRIO Framework

answer

Value Rarity Imitability Organizational

International Management Midterm – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards