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Internationalization & Organization > Chapter 1 - Qualitative and quantitative trends in the international business environment > Flashcards

Chapter 1 - Qualitative and quantitative trends in the international business environment Flashcards

1
Q

Causes of the rapid development of international business activities

A
  • demographic-educational trends
  • technological trends
  • socio-cultural trends
  • economic trends
  • political-legal trends
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2
Q

Causes of rapid development of international business activities

Demographic-educational trends

A

The age structures of the countries are different. In Germany for example, are more older people than young people. Therefore it might not have enough potential employees (in the future).
Furthermore, there are differences between the educational standards across the world.

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3
Q

Socio-cultural trends: a fundamental Cultural change has taken place in the world

A

1970:
Die Kulturen der einzelnen Länder waren sehr heterogen.

2017:
Heutzutage sind die kulturellen Cluster aufgrund der Globalisierung und des Internets viel dichter beieinander.
Die Cluster übergreifend sind soziale Untergruppen entstanden, z.B. traditionelle Familien (Vater arbeitet, drei Kinder), double income no kids (Dincs), die älteren

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4
Q

Causes of rapid development of international business activities

Socio-cultural trends

A

1970:
The country cultures used to be very heterogenous.

2017:
Nowadays the country cultures or cultural clusters are much closer due to the globalization and the internet. Therefore, the differences are not that big as they used to be.
Additionally, there are basically the same or very similar subgroups in the different country cultures, e.g. traditional families -> father works, three children, house, …; dincs – double income, no kids; the elderly

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5
Q

Causes of rapid development of international business activities

Economic trends

A

There are big differences between the labor costs of different countries. In developed countries the wages are much higher than in developing countries.
Likewise, the real wage growth during the last decade across the world has been very different. In some areas the wage level stayed almost the same whereas in other areas a significant increase occurred.

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6
Q

Differences between the labor costs of developed and developing countries

A

Die Lohnkosten in entwickelten Ländern sind deutlich höher als in Ländern, die sich noch in der Entwicklung befinden.

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7
Q

Causes of rapid development of international business activities

Political-legal trends

A

The situation concerning politics and law are very different comparing high income countries with low income countries, e.g. political stability and absence of violence/terrorism is higher in high income countries as well as control of corruption.

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8
Q

Dülfer’s Layer model

What is it used for?

A

Used for analyzing foreign business Environments.

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9
Q

Dülfer’s Layer model

Layers

A 
natural environment
perception of reality, technology
culture-related values
social relations and connections
political-legal norms
firms (external) interaction partners

natural environment -> given by nature
rest -> culture (man made)

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10
Q

Dülfer’s Layer model

natürliche vs. kulturelle Umwelt

A
  • Unterscheidung zwischen natürlicher Umwelt und der kulturellen Umwelt
  • Natürliche Umwelt bzw. natürliche Gegebenheiten: alles, was nicht durch den Menschen geschaffen wurde, z.B. klimatische oder geologisch-ressourcenorientierte Bedingungen
  • Kulturelle Umwelt: wird von all den Faktoren konstituiert, die vom Menschen geschaffen wurden
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11
Q

Dülfer’s layer model

Natural environment / natürliche Gegebenheiten

A
  • Alles, was nicht durch den Menschen geschaffen wurde

* z.B. Klima, Ressourcen

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12
Q

Dülfer’s layer model

Perception of reality; technology / Stand der Realitätserkenntnis und Technologie

A
  • das in einem Land vorherrschende Weltbild, die dort gesprochenen Sprachen und alle verfügbaren Technologien, insbesondere Kommunikationstechnologien
  • Weltbild kann entweder auf magisch-mythische Art oder auf Grundlage naturwissenschaftlicher Erklärung gewonnen warden
  • Weltbild spiegelt sich in Verfahren und Technologien wieder
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13
Q

Dülfer’s layer model

Culture-related values / kulturell bedingte Wertevorstellungen

A

Religiose Glaubensinhalte, ethische Normen, individuelle Motive und Präferenzen, sowie Erziehungsgrundsätze

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14
Q

Dülfer’s layer model

Social relations and connections

A
  • Soziale Beziehungen und Bindungen bilden sich aufgrund der zuvor geschilderten Wertvorstellungen
  • Demographische Merkmale, Merkmale dyadischer Beziehungen (z.B. Paternalismus), Mermale von Gruppenbeziehungen (horizontale und vertikale Mobilität und Rollenverhalten, Konfliktverhalten)
  • Sozialstrukturen in Form von Familienstrukturen, Stammesstrukturen, Kastenwesen
  • Besonderen Einfluss hat diese Schicht auf die Arbeitgeber-Arbeitnehmerbeziehungen, auf die Rolle von Arbeitgeberverbänden und Gewerkschaften
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15
Q

Dülfer’s layer model

Political-legal norms / rechtlich politische normen

A
  • Als Konsequenz der kulturellen Wertvorstellungen und der sozialen Beziehungen und Bindungen entwickeln sich rechtliche und politische Normen
  • Art des Rechts, Rechtsbewusstsein, Regelungen wie das BGB oder HGB
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16
Q

Dülfer’s layer Model

Task environment: firms (external) interaction partners / Aufgabenumwelt

A
  • Die Aufgabenumwelt wird von internen und externen Stakeholdern der Unternehmung konstituiert
  • Diesen Stakeholdern kommt besondere Bedeutung zu, da sie mit ihren Forderungen und Leistungszusagen Entscheidungen erheblich beeinflussen können
  • Interne Stakeholder: Unternehmungsleitung, Mitarbeiter, Eigenkapitalgeber
  • Externe Stakeholder: Kunden, Lieferanten, Fremdkapitalgeber, Gewerkschaften, Staat
  • Stakeholder können zu Einschränkungen oder Erweiterungen von Alternativen, Entscheidungskriterien und möglichen Lösungen beitragen
17
Q

Dülfer’s layer model

Verständnis des Modells

A
  • Hierarchischer Aufbau der einzelnen Schichten
  • Die tiefer liegenden Schichten beeinflussen die höher liegenden Schichten starker, als die höher liegenden Schichten die tiefer liegenden Schichten berühren
  • Interdependenz und Feedback-Beziehungen  feedback reaction von oben nach unten
  • Das Modell erlaubt die Identifikation natürlicher und kultureller Einflussfaktoren
  • Im Anschluss daran zwingt es jeden Manager/jede Unternehmung zur Einschätzung der Relevanz der Einflussfaktoren in konkreten Situationen  nicht alle Faktoren haben in allen Situationen die gleiche Bedeutung
  • Die einzelnen Schichten sind nicht nur Rahmenbedingungen, denen Unternehmungen passiv ausgesetzt sind; vielmehr stehen Unternehmungen mit Elementen der einzelnen Schichten permanent in aktiver Interaktion
18
Q

International Company

Definition

A

= a company, which is conducting international business activities in the form of exports, foreign direct investments, international contracts (licenses,…), M and A’s, or international strategic alliances on a regular basis

= like the first one but with a specific minimum level, e.g. 10%

= a company which shows specific structural characteristics (a specific type of strategy; a mixture of top manager’s nationality)

= a company, which is run by a group of managers who think internationally

19
Q

Consequences of the international Business Activities for companies’ functional areas

Production

A

Often necessary to adapt …
… to local standards (foreign subsidiaries tend to be smaller, lower levels of economies of scale)
… to local habits of product use
… to consumers’ preferences (bigger vs. smaller product packages)
… to country-specific economies-of-scale-effects
… to the availability of production factors (if the wages are low -> use people, if wages are high -> automatization)
… production specific potentials
in the respective country

20
Q

Consequences of the international Business Activities for companies’ functional areas

Marketing

A

4 P’s of marketing

Market research:
• Necessity for a decentralization and market-specifity
• Yet necessity for a regional or even a global coordination of activities (in order to analyze similarities and differences between countries)

Distribution (Place), wrapping and product policy (Product):
• Usually country specific
-> within a product there are different components that are standardized and some that are adapted to other markets
-> low context cultures: everything you want to express, you express directly (USA); high context cultures: you don’t express it directly (China)

Pricing policy (Price):
•	Usually determined on the basis of a consideration of the competitive situation given in the respective country
21
Q

Consequences of the international Business Activities for companies’ functional areas

Finance

A
  • Focused on the analysis and the shaping of country-integrating and country-specific financial funds and cash flows
  • Integration of the budgets for domestic and foreign projects
  • Adjustment of the financial policy to the change of currency exchange rates
  • Management of the firm’s general financial risk, which is increased because of the firm’s international activities
22
Q

Consequences of the international Business Activities for companies’ functional areas

Accounting

A
  • Reporting on foreign transactions
  • Consolidation of annual accounts which have been developed on the basis of the respective host-country law
  • Development and implementation of informative, internal, decision-oriented reporting systems
  • Minimization of the firm’s tax burden
23
Q

Consequences of the international Business Activities for companies’ functional areas

Human Resource Management

A
  • Main activity: Recruitment, selection, training, motivation, and compensation of international expatriates (offering special benefits for going abroad? Like helping the family to go there as well)
  • Necessity to repatriate international managers into their home country organization after their foreign assignment
  • Often: explanation of the firm’s preference of home country nationals instead of host country nationals
  • Necessity for a country-integrative management of industrial relations
24
Q

Consequences of the international Business Activities for companies’ functional areas

Conclusion

A
  • some areas are more influenced by internationalization than others
  • finance is the most centralized function in the firm -> the one who has the money has the power, so money stays in HQ
25
Q

Alternative forms of international business activities

Which indicators would you use, if you had to estimate a country’s (a firm’s) level of internationalization (internationality)?

A
  • International trade (foreign trade)
  • Foreign direct investments (FDI)
  • International licensing / international technology contracts / international management contracts
  • International mangers and acquisitions (M and A’s)
  • International strategic alliances / international joint ventures
26
Q

Alternative forms of international business activities

International trade (foreign trade)

A

export / import of goods and services

27
Q

Alternative forms of international business activities

Foreign direct investments (FDI)

A
  • stocks/flows; outflows/inflows; outward stocks / inward stocks
  • investieren, um Tochterfirma zu gründen, or opening a sales unit
  • FDI flows: amount of money that is spent in a predefined period
  • FDI stocks: accumulated values -> flows minus depreciations
  • FDI outflows / inflows -> which amount of money has flown out to other countries and how much has flown out to other countries
28
Q

Alternative forms of international business activities

international licensing / international technology contracts / international management contracts

A
  • Licensing: transfer of know how

- specific technological know how -> decision to sell it to foreign firms

29
Q

Alternative forms of international business activities

International mergers and acquisitions (M&A’s)

A
  • mergers: two companies become one

- in an acquisition there’s a dominant party -> asymmetry of power

30
Q

Alternative forms of international business activities

International strategic alliances / international joint ventures

A
  • alliance: two companies work together on a project but they remain independent - is often very focused, competitors on the market but in R&D they cooperate

Internationalization & Organization (4 decks)

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