Business Process Management: Globalization & Local Economies

Question 1

Globalization

Answer 1

distribution of industrial and service activities across an increasing number of nations.

Question 2

Globalization is measured by:

Answer 2

world trade as a percentage of GDP- The greater the percentage the greater the degree of globalization

Question 3

Factors that drive globalization

Answer 3

a) Improvements in Transportation
b) Technological Advancements
c) Deregulation of International Financial Markets
d) Organizational/Operational Options for International Business

Question 4

Globalization Promotes Specialization

Answer 4

Economies of scale are larger in a global economy.

• Businesses have more choices.
• Specialization that leverages comparative advantage

Question 5

Motivations for International Business Operations

Answer 5

1) Comparative Advantage
2) Imperfect Markets-limited by the regulatory barriers or limited by the physical immobility
3) Product Cycle - Starting with the initial development of the product to meet needs in the domestic markets

Question 6

Methods of Conducting International Business Operations

Answer 6

1) international Trade- exporting/importing products or services

Question 7

Licensing

Answer 7

Entities that provide the right to use processes or technologies in exchange for a fee

Question 8

Franchising

Answer 8

entities whose marketing service or delivery startegy provides training and related service delivery resources in exchange for a fee

Question 9

Joint Venture

Answer 9

take advantage of comparative advantage of one or both of the participants in marketing or delivering a product

Question 10

Direct foreign investment

Answer 10

go buy a company and make them a subsidary

Question 11

Relevant Factors of Globalization

Answer 11

Political and Legal Influence
Potential for Asset Expropriation
Taxes and Tariffs 
Limitations imposed by Govt.
Content or Value Added Limits-NAFTA
Foreign trade zones
Economic Systems

Question 12

Inherent Risks of International Business Operations

Answer 12

Exchange Rate Fluctuations 
Foriegn Economies
-Interest Rates
-Inflation
-Exchange Rates

Question 13

Defining National Power

Answer 13

• geography
• Population
• Resources
• Economy
• Military
• Diplomacy

Question 14

Functional Interdependence

Answer 14

Need participation and cooperation to have globalizations

Question 15

Systemic Interdependence

Answer 15

acknowledges that all members of the global community share the planet earth

Question 16

Dynamics of the Balance of Power

Answer 16

1) Developed vs. Emerging Nations
2) Trade Deficits
3) Balance of Power