chapter 5&6

Question 1

Cultural imperatives

Answer 1

business customs and expectations that must be met and conformed to or avoided if relationships are to be successful.

Question 2

cultural electives

Answer 2

relate to areas of behavior or customs that cultural aliens may wish to conform to or participate in but are not required.

Question 3

cultural exclusives

Answer 3

customs or behavior patterns reserved exclusively for the locals and from which the foreigners is barred.

Question 4

sovereignty

Answer 4

powers exercised by state in relation to other countries. Supreme powers exercised over country’s own members.

Question 5

political causes of instability in international markets

Answer 5

1. some forms of government that seem to be inherently unstable
2. changes in political parties during elections that can have major effects on trade conditions.
3. nationalism
4. animosity targeted toward specific countries
5. trade disputes themselves

Question 6

Nationalism

Answer 6

an intense feeling or national pride and unity, an awakening of a nation’s people to pride in their country. Can lead to ant-foreign business.

Question 7

political climate

Answer 7

the ideal climate for multination firms is stable and friendly government.

Question 8

confiscation

Answer 8

the seizing of a company’s assets without payment.

Question 9

expropriation

Answer 9

where the government seizes an investment but makes some reimbursement for the assets. investment sometimes becomes government-run entity.

Question 10

sovereign states

Answer 10

most have nominally preventatives governments with universal suffrage.

Question 11

domestication

Answer 11

The host country gradually gains control of investment. Series of government decrees that mandate local ownership and greater national involvement in the company’s management.

Question 12

political parties

Answer 12

important for international markets to know philosophies of all major political parties within a country. Dominant party will alter attitudes and overall business climate.

Question 13

political and social activists (PSAs)

Answer 13

they can interrupt the normal flow of trade.

Question 14

economic risk

Answer 14

Exchange controls, local-content laws, import/export restrictions, tax controls, price controls, and labor problems.

Question 15

political sanctions

Answer 15

nations can boycott others, stopping all trade. Almost always unsuccessful at reaching goal

Question 16

cyberterrorism and cybercrime

Answer 16

growing potential with the rise of the internet can inflict real harm.

Question 17

Vulnerable companies

Answer 17

subject to poltical attention. May face unpredictable government restrictions.

Question 18

less vulnerable companies

Answer 18

Often are in a high-priority industry for the host country. Excused from taxes, duties, quotes, and control.

Question 19

nongovernmental organizations (NGOs)

Answer 19

increasingly affecting policy decisions made by the government.

Question 20

department of commerce

Answer 20

is the principal agency that supports U.S. business abroad.

Question 21

export/import bank

Answer 21

which underwrites trade investments for U.S. firms