Exam 1 Flashcards
President of the United States
Joe Biden
President of China
Xi Jinping
President of the European Union
Ursula von der Leyen
Prime Minister of India
Narendra Modi
President of France
Emmanuel Macron
Prime Minister of the United Kingdom
Rishi Sunak
Prime Minister of Canada
Justin Trudeau
President of Russia
Vladimir Putin
Chair of the Federal Reserve
Jerome “Jay” Powell
Director General of the World Trade Organization (WTO)
Ngozi Okonjo-Iweala
After WWII, international trade helped and promoted what?
Democracy, Economic Security, and Military Security
These multilateral institutions enforced the rules post-WWII.
United Nations (UN)
World Trade Organization (WTO)
The International Criminal Court
Why did the view of international trade change about 20 years ago?
Not all were helped by Globalization
Rise of Nationalism and Populism
Protection of domestic industries (industrial policy)
Rise of China as a threat to US and rule-based trading
US-China Rivalry
World Trade Organization
1995
Replaced General Agreement on Tariffs and Trade (GATT)
Geneva, Switzerland
Intergovernmental Organization
Directed by Ngozi Okonja-Iweala
Nationalism
Loyalty and devotion to a nation, especially as expressed in a glorifying of one nation above all others and a stressing of its culture and interests.
Populism
A political program or movement that champions the common person, usually by contrasting with an actual or perceived elite or establishment
Multinational Management
The formulation of business strategies and management practices to take advantage of international opportunities outside of domestic borders. Can be large, small, for-profit, non-profit, publicly traded, or privately held businesses
Evolution of International Trade
Original Silk Road
Rise of Spain (15th & 16th centuries)
Rise of Netherlands (17th century)
British Empire (19th & early-20th centuries)
Rise of USA (post-WWII)
Rise of Germany and Japan (1990s)
Rise of China and India (last 20 years)
Globalization
The world’s economies become borderless and interconnected. Companies are not bound by domestic boundaries and may conduct business everywhere. This is made easier by international flights and technology.
Benefits of Globalization
Spurs innovation and competition
Better products and cheaper prices
Improve the country’s economy at a macro level
Less likely to go to war
Negatives of Globalization
Not all benefit equally
Climate change
Can hurt the local culture
More interrupted supply chains
Contributes to unfair labor practices
Current Trends in Globalization
Technology-driven
US-China Rivalry
Protectionism (Industrial Policy)
Reshoring
Friendshoring
Rise of Authoritarian Regimes
New and Strong Competitors (India, Singapore, Indonesia, Vietnam, Bolivia, Argentina, and Chile)
Developed Country
Mature and diverse economies
Substantial GDP
Significant private ownership and flow of capital
Reasonably good record on respect for human rights
Developing Country
Have grown significantly over the last 25 years
Not as mature or diverse as developed countries
Capital does not flow as easily
Political systems may still be holding back private enterprise
Underdeveloped Countries
Widespread poverty
Poor infrastructure
Poor access to capital/banking
Unstable political systems`
Emerging Economies
They have the same characteristics but growing faster than developing countries.
Transitioning Economies
A Socialist/Communist economy that switches to a Market economy.
Characteristics of a Multinational Manager
Global Mindset
Interest in World Events
Adaptability
Willingness to Travel
Respectful of different Cultures
Language Skills
United States-Mexico-Canada Agreement (USMCA)
Regional trading agreement between the United States, Mexico, and Canada
The aim is to make moving goods and services between countries easier.
Labor and environmental standards
No common currency
Hard borders
Indo-Pacific Framework
Still in progress
Trying to strike trade deals with countries that have a border with the Pacific Ocean that are friendly to the United States
European Union
A free trade agreement
27 European countries
Has removed most all trade barriers and travel restrictions between member countries
17 share a common currency (the Euro)
World Bank
Makes loans to underdeveloped and developing countries for large infrastructure projects
International Money Fund
Helps to stabilize and strengthen currencies around the world
Export-Import Bank of the United States
An agency of the U.S. Government
Provides loans to American companies to facilitate exports of American goods around the world
Culture
Shared beliefs, norms, values, and symbols that guide the everyday life of a group. It helps guide a society in what is and what is not acceptable behavior.
National Culture
The dominant culture within the political and geographic boundaries of a nation-state.
Global Leadership and Organizational Behavior Effectiveness (GLOBE)
170 researchers collected data from 17,000 managers in 62 countries
Hofstede’s Model is the foundation but is expanded on
1. Assertiveness Orientation and Gender Egalitarianism
2. Institutional and Family Collectivism
3. Future Orientation
4. Power Distance
5. Uncertainty Avoidance
Performance Orientation: degree of want to strive for excellence in work
Humane Orientation: extent of expectation for people to be fair and altruistic
7d Culture Model
- Universalism VS Particularism
- Collectivism VS Individualism
- Neutral VS Affective
- Specific VS Diffuse
- Achivement VS Ascription
- Time Orientation
- Control of VS Accommodation of Nature
1-5 related to relationships
Hofstede’s Model
Gold Standard
1. Power Distance
2. Uncertainty Avoidance
3. Individualism VS Collectivism
4. Masculinity VS Feminity
5. Long-term VS Short-term Orientation
6. Indulgence VS Restraint
Power Distance
How cultures deal with inequality
Norms for superiors
Determination of subordinate behavior
The belief that superiors and subordinates are fundamentally different
High: inequality is acceptable, everyone has a place, the powerful are entitled to privilege, and the powerful should not hide power
Uncertainty Avoidance
Tolerance for ambiguity
Conflict should be avoided
Deviant people/ideas should not be tolerated
Laws are important
Experts/Authorities are usually correct
Consensus is important
Mimics high/low power distance countries
Individualism VS Collectivism
I: Focus on individual
People are responsible for themselves
Individual achievement is ideal
Don’t be emotionally dependent on organizations or groups
C: one’s identity is based on group membership
Group decision-making is best
Loyalty to the group is paramount
Masculine VS Feminism
M: Support masculine orientation
Work takes priority over other duties and family
Advancement, success, and money are important
Highly Competitive
F: Cooperation
Strong relationships
Warmth and openness
Team-oriented
Long-term VS Short-term Orientation
LT: Orientation towards time that values patience
ST: Focus on immediately usable skills
Value logical analysis in approach to organizational decisions
Designed and managed to respond to immediate pressures of the environment
Want immediate financial return
Restraint VS Indulgence
R: Restrictive and places strict norms on gratification of needs
I: The degree to which societies enjoy life based on the gratification of basic human desires
Favors free satisfaction of human needs related to “enjoying life and having fun.”
Business Culture
Beliefs, norms, and values to doing business in a country
Occupational/Industry Culture
Norms, values, and beliefs of expected ways of doing business in the same occupational group/industry, regardless of employer
Organizational Culture
Beliefs, norms, and behaviors inside of any specific organization.
Each firm is different.
Cultural Paradoxes
Some individuals will act differently from cultural norms
Stereotyping
Assumes all people of one culture act the same
Ethnocentrism
The belief that one’s culture is correct and the best
Who are the biggest Trade partners of the United States and Mississippi?
Canada
Mexico
China
Social Institutions
Tell us how to act in society
Regulative- constrains and regularizes behaviors by its capacity to establish rules.
Normative- values and norms promulgated by the social institutions
Cognitive- widely shared knowledge regarding how things are done in society
(Economic Systems, Industrialization, Education, Religion)
Capatalist/Market Economy
Most firms are privately-owned
Profit Motive
Socialist/ Command Economy
Resources owned by state
Decisions are centralized
Communist
Similar to socialist
More state control
Authoritarian regime
Industrialization
Cultural and economic changes that occur because of how production is organized and distributed in society
Pre-industrial
Agricultural Focused
Traditional
Industrial
Manufacturing focused
Technologically developed
Post-industrial
Service Focused
Knowledge economy
Quality of life
Religion
A shared set of beliefs, activities, and institutions based on faith in some superior being/entity
(Christianity, Islam, Buddhism, Hinduism)
Education
Organized network of socialization experience that prepares/teaches individuals to act and prosper in society
Basic literacy
Constructs competency, professions, professionals
What to consider related to education
What % of the population:
-can read and write
-completed high school
-completed some college or advanced training
-completed a college degree
-has an advanced degree
How much money the government puts into research and development
Does the government give money to universities to conduct research
Economic Freedom
Property rights
Government intervention in the economy
Number of public sector employees
Quality of courts and banks
Ease of doing business
Trade and tax policies
Levels of corruption
Trust in politicians
Heritage Foundation
An activist American conservative think tank based in Washington, D.C.
Plays a part in economic freedom
Multinational companies must follow the laws of the country it is located in.
True
American companies are subject to American laws as well.
True
American citizens working for American companies are protected by American laws and protections.
True
Ethics
What you “should” do
All unethical actions are illegal.
False
Not all unethical actions are illegal
Companies decide the level of ethics.
True
Ethics vary from country to country.
True
Power does not influence ethical behavior.
False
The Foreign Corrupt Practices Act (FCPA 1977)
Anti-Bribery
It makes it unlawful to give agents of foreign governments money or gifts to assist in obtaining or retaining business.
Enforced by the Securities and Exchange Commission (SEC) and Department of Justice (DOJ)
Civil Liability- both company and individuals involved, money judgment
Criminal Liability- individuals involved
