BMG Flashcards
What are the factors/drivers influencing globalization?
Internet Jet engine Lower taxes Free trade agreement End of Cold War
Types of Global Value Chains
Buyer Driven GVC
Outsource
Producer driven GVC
Off shore
Governance of GVC
Hierarchical structure Captive value chains Relational structure Modular structure Market structure
Measures of globalization
Economic integration
Cultural integration
Technological integration
Political integration
Why are the four factors of globalization of business enterprises
Globalization of markets
Value chain
Capital
Knowledge and talent
Factors influencing globalization
Rapid industrialization of emerging markets
Liberalization of international trade and investment
Advancement of information, telecommunication and transport technologies
Ecuadorian roses
Some of the best roses in the world
Rich countries sell the most, they create the market
Ecuador has a great environment to grow roses
Benefits for Ecuador include more income, empowering woman worker and economic boost
Negative consequences include poor working conditions and child labour
Costs of globalization and benefits of globalization
Costs Erodes cultural diversity Exploitation of labour Environmental degradation Loss of sovereignty Rising unemployment Rising income disparity
Benefits Economic growth Trade expansion Higher standard of living Poverty reduction Greater transparency Higher productivity
Factors that make up values,
Norms and attitudes
Education Religion Communication and language Aesthetics and symbols Political philosophy Social structure
4 levels of culture
National culture
Business culture
Organizational culture
Occupational culture
Measures of culture
Power distance Masculinity vs femininity Universalism vs particularism Uncertainty avoidance Individualism vs collectivism Long term vs short term
Cultural intelligence
Capability of an individual to recognize cultural differences, adapt and successfully interact with people of different cultures
Cultural adaptation Cultural knowledge
Cultural curiosity Cultural sensitivity
Characteristics of culture
Culture is shared Learned Taken for granted Relative Interrelated Adaptive Symbolic Pervasive
3 types of international managerial orientation
Polycentric mindset: adapt to foreign culture
Ethnocentric mindset: change everything to the root culture
Geocentric mindset: combine foreign and root culture
Suggested factors influencing institutional transformation in Eastern Europe
Religious divide
Muslim and Eastern Orthodox
Respect for authority
Disregard for legal rules
Imperial history
Austro Hungarian empire
European values
ottoman and Russian empire
Rejected path to democracy
Autocratic
Dominance of major ethnic groups
Level of urbanization
Dependence on natural resources
Factors influencing the rise of authoritarian tendencies
Anti globalization sentiment Global financial crisis and euro zone crisis Austerity measures Income inequality Global terrorism Immigration Fear
Ways of managing political risks
Assessment of political system Adapting to host country Collaboration with foreign stakeholders Splitting the product value chain Purchase of foreign direct investment insurance Lobbying policy makers
Managing intellectual property rights
Ensure legal protection through patents, trade marks and copy rights
Prosecute any violation of intellectual property
Careful selection of host country business partners
Careful selection of employees
Split global value chain
Fair product prices
Government trade policy instruments
Tariffs Embargo/sanctions Quotas Subsidies Local content requirements Low interest loans
What is mercantilism
A country's wealth is measured by its holdings of treasure Ex>imports Tariffs to reduce imports Subsidies to increase exports Zero sum game
Explain the theory of factor proportions
Sources of comparative advantages include endowments of land, labour and capital
Explain New trade theory
Trade between countries with similar endowment
Specialization and increasing returns to scale
Imperfect competition due to first mover advantage
Barriers to entry
Explain the porter diamond theory
Theorizes that national competitive advantage is embedded in four determinants
Factor endowments
Demand conditions
Related and supporting industries
Firm strategy, structure and rivalry
Name 3 business implications
Location implications
Disperse production activities to countries where they can be produced more efficiently -national competitive advantages matter
First mover implications
Policy implications
Promoting free trade in best interests of home country
