Chapter 6 Flashcards
International Management
What is the international model?
Composed of a company’s overseas subsidiaries and characterized by greater control by the parent company over the research function and local product and marketing strategies than in the multinational model.
What is the multinational model?
Consists of the subsidiaries in each country in which a company does business and provides a great deal of discretion to those subsidiaries to respond to local conditions.
What is the global model?
Consists of a company’s overseas subsidiaries and characterized by centralized decision making and tight control by the parent company over most aspects of worldwide operations.
What is the transnational model?
- Characterized by centralizing certain functions in locations that best achieve cost economies.
- Basing other functions in the company’s national subsidiaries to facilitate greater local responsiveness.
- Fosters communication among subsidiaries to permit transfer of technological expertise and skills.
What is exporting and the advantages?
Provides scale economies by avoiding the costs of manufacturing in other countries. It is also consistent with a pure global strategy.
What is international licensing?
An arrangement by which a licensee in another country buys the rights to manufacture a company’s product in its own country for a negotiated fee (typically, royalty payments on the number of units sold).
What is franchising?
The company sells limited rights to use its brand name to franchisees in return for a lump-sum payment and a share of the franchisee’s profits.
What are joint ventures?
- Local partner’s knowledge of the host country’s competitive conditions, culture, language, political systems, and business systems.
- Sharing of development costs and/or risks with the local partner.
What is outsourcing?
Contracting with an outside provider to produce one or more of an organization’s goods or services.
What is offshoring?
Moving work to other countries.
What are expatriates?
Parent-company nationals who are sent to work at a foreign subsidiary.
What are host-country nationals?
Natives of the country where an overseas subsidiary is located.
What are third-country nationals?
Natives of a country other than the home or the host country of an overseas subsidiary.
What are inpatriates?
Foreign nationals brought in to work at the parent company.
What is ethnocentrism?
The tendency to judge others by the standards of one’s group or culture, which are seen as superior.
What is a culture shock?
The disorientation and stress associated with being in a foreign environment.
What is a power distance?
the extent to which a society accepts the fact that power in organizations is distributed unequally.
What is uncertainty avoidance?
the extent to which people in a society feel threatened by uncertain and ambiguous situations
What is individualism/collectivism?
the extent to which people act on their own or as a part of a group.
What is masculinity/femininity?
the extent to which a society values quantity of life over quality of life.
