Final Flashcards
Why is it difficult to compete internationally?
- culture + language discrepancies
- competition/industry varies
- government Policies
- currency + exchange rates
Why go global?
- Tax Shelters
- More consumers, more profit
- access resources + capabilities
- testing governmental policies
- exploit core competencies
Globalization
The world becomes a smaller more interconnected
The convergence of cultures, markets, political institutions
What are the two components in an IB context
Markets & Production
Globalization of markets
The merging of distinctly separate national markets into a global marketplace
Globalization of production
Refers to sourcing of goods and services from locations around the world
Labor
Land
Capital
Volume of world trade and production 1950-2002
It has been actively increasing
Drivers of globalization
Political institution cooperation & technology
Globalization debate pros
More choices, market opportunities, innovation + technology
Globalization cons
Loss of culture + culture identity
Environment concerns
Income disparity increases
Changes labor market some people can loose jobs
Cultural disparity between a firms home country and its targeted host country
- power distance
- individualism
- masculinity - femininity
- uncertainty avoidance
- long term orientation
- indulgence
Administrative & Political distance
Captured in factors such as
- shared monetary or political associations
- political hostilities
- weak or strong legal and financial institutions
Political and administrate barriers
Tariffs, trade quotas, Fdi restrictions
Geographic distance
Physical size Countries topography Time zones Access to waterways and the ocean Infrastructure
Economic distance
Wealth and per capita income of customers
Wealthy countries tend to engage in more cross border trade
Wealthy countries trade with wealthy countries
Wealthy countries trade with poor countries
Why is culture so important
It drives consumption
It affects business interactions
It dictates what can be done
Self-reference criterion
Reference your own cultural variables
Eg japanise car companies in ohio
Parochialism
He other culture will just fall in line with your culture
Ethnocentrism
When one culture feels their values are far above other cultures
Influences on National Culture
Art Kinship Language Education Economy Politics
Influences on National Culture
Religion Topography- mountains make it harder to travel Health Recreation Food
How does China protect its culture
Restrictions
Increased censorship
Joint operation
Hofstede’s Dimensions
Power Distance - acceptance of disparity in power Southeast Asia, higher in power distance. CEO has ultimate power and respect
Uncertainty avoidance - how much tolerance a culture has for risk
Hofstedes Dimensions
Long-term/short-term orientations
More concerns about the future us. Here + Now
