Ch 4: Globalization Flashcards
globalization
the trend of the world economy toward becoming a more independent system
country rankings
Switzerland, united states, singapore
3 developments that reflect globalization
-rise of the global village
-e commerce
-trend of becoming one big market
what is competitiveness
the set of institutions policies and factors that determine the level of productivity of a country
Global village
the shrinking of time and space as air travel and the electronic media have made it easier for ppl of the globe to communicate w each other
Ecommerce
the buying and selling of products and services through computer networks
Global economy
economies of the world to interact w one another as 1 market instead of as many
Positive effects globalization
-availability of supplies
Avoidance of tariffs
Lower labor costs
Access to fnan capital
Newer markets
negative effects globalization
Job losses
Threats to info security
Tendency of the econ of the world to interact as one market instead of many
Multinational corporation
business firm with operations in several countries (mcdonalds)
Multinational organization
nonprofit org with operations in several countries (redcross)
Why learn about international management
You may deal with foreign customers or partners
You may deal with foreign employees or suppliers
You may work for a foreign firm in the UDS
You may world for A US firm outside the US
how to be successful abroad
-be patient, quiet, and no slang
Be global in focus but study local customs too
Learn appropriate behavior
Learn rituals
Become minimally skilled in language
what are the 3 types of managers
ethnocentric
polycentric
geocentric
ethnocentric
Believe that their native country, culture, language,etc is superior
Related to parochialism- a narrow view in which ppl see things solely through their perspective
polycentric
Take the view that native managers in foreign offices best understand the native personnel/practices so the home office should leave them alone
geocentric
Accept that there are diffs/similarities btw home and foreign personnel and practices and that they should use whatever technique is most effective
Why companies expand internationally
Availability of supplies
New markets
Lower labor costs
Accesses to financial capital
Avoidance of tariffs and import quotas
Global outsourcing
Using suppliers outside the company to provide goods and services
Importing, exporting, and countertrading
Importing-buying goods outside the country and reselling them domestically
Exporting-producing goods domestically and selling them outside country
Countertrading- tradings goods for goods
licensing and franchising
Licensing-company allows foreign company to pay a fee to make or distribute the product
franchising-Form of licensing in which company can use the brand name and goods in return for fee and share of profit
Joint ventures
2 orgs that have joined forces to get advantages they couldn’t get alone
Wholly owned subsidiaries
Foreign subsidiary that is totally owned and controlled by an organization
Tariffs
customs duty, or taxi levied on imports
Import quotas
limits the number of a product that can be imported
Embargos
complete bans on trade between 1 country and another
Sanction
a trade prohibition on certain types of products or services for a specific reason
4 types of trade barriers
sanction, tariff, import quota, embargo
Orgs promoting international trade
-world trade org
-world bank
-international monetary fund
world trade org
designed to monitor and enforce trade agreements
world bank
provide low interest loans to developing nations
International monetary fund
designed to assist in smoothing the flow btw money and nations
Trading bloc
countries that have agreed to remove trade barriers w each other
NAFTA
allows for freer flow of goods, services, and capital in the U.S., Canada, and Mexico.
EU
28 “borderless” trading partners in Europe
APEC
group of 21 Pacific Rim countries, most with a Pacific coastline
ASEAN
trading bloc of 10 countries in Southeast Asia
Mercosur
largest trading bloc in Latin America.
CAFTA-DR
Central America, including the Dominican Republic
Culture
shared set of beliefs, value, knowledge, and patterns of behavior common to a group of ppl
Power distance-
degree to which a society’s members expect power to be unequally shared.
Uncertainty avoidance
extent to which a society relies on social norms and procedures to alleviate the unpredictability of future
Institutional collectivism
extent to which individuals are encouraged and rewarded for loyalty to the group
In-group collectivism
extent to which people should take pride in being members of their family, friends, and their
work organization.
Gender egalitarianism
extent to which a society should minimize gender discrimination and inequalities.
Assertiveness
extent to which a society expects people to be confrontational and competitive as opposed to tender and
modest
Future orientation
The extent to which a society encourages investment in the future
Performance orientation
The extent to which society encourages and rewardsits members for performance improvement
Human orientation
degree to which individuals are encouraged to be altruistic, caring, kind, generous, and fair.
Other cultural variations
Language, interpersonal space, communication, time orientation, religion, law and political stability
Expatriates
Americans living or working in a foreign country
The ability to operate in different cultures is the definition of _
cross-cultural awareness
Countries grant most favored nation status as a way to
promote strong and more stable ties between countries
