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International Business > Ch. 12 Politics > Flashcards

Ch. 12 Politics Flashcards

1
Q

What are the physical and social factors that influence international business operations?

A
  1. Political policies and legal practices
  2. Cultural factors
  3. Economic forces
  4. Geographic influences
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2
Q

Define a country’s political system.

A

The structural dimensions and power dynamics of its government that specify institutions, organisations, and interest group, and define the norms that govern political activities. Each country has its own political and legal environment.

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3
Q

What is a political ideology?

A

A set of ideas that stipulate how society ought to function and outlines the methods by which it will do so.

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4
Q

Name the four types of political risk.

A
  1. Systemic risk
  2. Procedural risk
  3. Distributive risk
  4. Catastrophic risk
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5
Q

Define systemic risk.

A

A risk that impacts all firms that operate in the particular political system

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6
Q

Define procedural risk.

A

A risk evolving from the daily movement of people, products, and funds from point to point in the global market. The risk of interference with the company’s transactions between al of its internal and external units.

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7
Q

Define distributive risk.

A

The result of the profits generated by foreign companies in the local economy. The host country may question whether it is receiving its fair share of the company’s profits that is operating in their territory

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8
Q

Define catastrophic risk.

A

Random political developments that adversely affect the operations of every company in a country. Specifically, ethnic discord, civil uprising, riots, coups, war, etc.

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9
Q

Define legal system.

A

The mechanism for creating, interpreting, and enforcing the laws in a specified jurisdiction.

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10
Q

Name the five types of legal systems.

A
  1. Common law based on tradition, precedent, custom, usage and interpretation by the courts
  2. Civil law relies on a systematic collection of codes and statutes that judges must follow
  3. Theocratic law based on religious precepts
  4. Customary law based on the wisdom of daily experience
  5. Mixed legal system combines elements of the other four systems
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11
Q

Define the rule of man.

A

Legal rights derived from the individual who commands the power to impose them

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12
Q

Define the rule of law.

A

Systematic and objective laws applied by public officials who are held accountable for their administration

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13
Q

Name the concerns of starting a new business in a new political/legal environment.

A
  • Registering the new company’s name
  • Choosing the appropriate tax structure
  • Getting licenses and permits
  • Arranging credit
  • Securing insurance
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14
Q

Name some operational issues of business in a new political/legal issues.

A
  • Making and enforcing contracts
  • Hiring and firing local workers
  • Closing down the business
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15
Q

What are the longer term strategic concerns related to the political/legal environments?

A
  • Managers are vulnerable to abrupt changes forcing adjustments of manufacturing configuration, supply chain coordination, and their marketing strategy
  • Marketplace behaviour can make strategic decisions challenging especially where rule of man prevails
  • Governments determine what is permissible in all forms of business activity
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16
Q

List four strategic issues.

A
  • A product’s country of origin (tariffs, import charges, local content laws)
  • Product safety and liability (Each locality has its own standards, often reflect cultural values or social norms)
  • Countries stipulate the law that set the criteria for litigation, typically in a cross-national dispute each company petitions its home country court to become involved to hopefully secure preferential treatment
  • Intellectual property rights and protection
17
Q

Define intellectual property.

A

Creative ideas, expertise, or intangible insights that grant the owner a competitive advantage

18
Q

Define intellectual property rights.

A

The right to control and derive the benefits from writing, inventions, processes, and identifiers

19
Q

Name the factors that affect attitudes towards intellectual property.

A
  • Historical legacies (rule of man vs the rule of law)
  • Economic circumstances (levels of economic development)
  • Cultural orientation (individualism vs collectivism)
20
Q

Name three ways telecommunications technology is reshaping international business.

A
  • Near instantaneous high volume information transfer
  • Increased ease of person-to-person exchange
  • Political concerns of network dependency on foreign suppliers
21
Q

Name two ways Social Media & eCommerce technology is reshaping international business.

A
  • Increased reach and volume
  • Aggregation of markets for otherwise niche offerings
22
Q

Name two ways technology trends in Production & Operations is reshaping international business.

A
  • 3D printing, Augmented Reality and other tech that recues effective distance
  • Digital finance, including cryptocurrency & blockchain, may increase speed and lower dependence on traditional institutions
23
Q

Name two ways trends in Transportation technology are reshaping international business.

A
  • Increased efficiency reduces costs
  • Automated transport opens new possibilities
24
Q

Name two ways Standards Integration in technology is reshaping international business.

A
  • Increased global standardization aids interoperability
  • Standards may also be used as a means of maintaining influence/capture
25
Q

Name five advantages of 3D printing in international business.

A
  1. More portable production
  2. Increases customization
  3. Decreases time to market
  4. Higher resource efficiency
  5. Better inventory management
26
Q

Name five advantages of blockchain technology.

A
  1. Origin traceability
  2. Certification & customs clearance
  3. Supply chain integration
  4. Payments transfer
  5. Governance & transparency

International Business (6 decks)

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