Chapter 3: Managing in a Global Environment Flashcards
Direct investing
A market entry strategy in which the organization is directly involved in managing its production facilities in a foreign environment
Bottom of the pyramid (bop) concept
Proposes that corporations can alleviate poverty and other social ills, as well as make significant profits, by selling to the worlds poor.
Global mindset
Ability of managers to appreciate and influence individuals, groups, and systems that represent:
• different social, cultural, political, institutional, and psychological characteristics.
Multinational corporations (MNC)
Controlled by one management authority. Managers must have a global perspective.
Ethnocentric companies
Place emphasis on there home countries
Polycentric companies
Oriented toward the markets of individual foreign host countries
Geocentric companies
World oriented and favor no specific country.
Exporting
Transferring products for sale to foreign countries.
Outsourcing
Also called offshoring, work activities are done in countries with cheap labor.
Licensing
Enabling a company to produce and market a product in another country.
Franchising
Licensing that provides a complete package of materials and services.
Key factors in the international environment
Economic
Legal-political
Sociocultural
Economic factors of international environment
- economic development
- infrastructure
- resource and product markets
- per capita income
- exchange rates
- economic conditions
The legal-political factors of the international environment
- political risk
- government intervention
- tariffs, quotas, taxes
- terrorism, political instability
- laws, regulations
Political risk
The risk of lost assets, earning power, or managerial control
