First exam Flashcards
Intangibility
Products that cannot be seen, tasted, felt, heard, or smelled before they are purchased. We do not know the quality of the product until after we have experienced it.
Inseparability
Inseparability means both the employee and the customer are often part of the product.
Variability
Services are highly variable: services are produced and consumed simultaneously, which limits quality control.
Perishability
Services cannot be stored
Three pillars of sustainability
Economical, Social and Environmental
5 P of sustainability
- People
- Planet
- Profit
- Peace
- Partnership
Stakeholder
A stakeholder is any group or individual who can affect or is affected by the achievement of the organization’s objectives
Macro environment
Macroenvironment consists of the larger societal forces that affect the microenvironment (demographic, economic, natural, technological, political, and cultural forces).
Microenvironment
Microenvironment consists of the actors close to the company that affect its ability to serve its customers (the company, suppliers, marketing intermediaries, customer markets, competitors, and publics).
Country risk
Exposure to potential loss or adverse effects on company operations and profitability caused by developments in a country’s political and/or legal environments.
Dimensions of country’s risk
- currency
- commercial
- cross-cultural
- political risk
Individualism vs Collectivism (political system)
Individualism → an individual should have freedom in his own economic and political pursuits. It implies a democratic political system and free-market economies
Collectivism → primacy of collective goals over individual goals.
Democracy vs totalitarianism
Democracy → political system in which government is by the people, exercised either directly or through elected representatives. Most modern democratic states practice representative democracy where citizens periodically elect individuals to represent them.
Totalitarianism → is a form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties
Country risk produced by political systems
- Government takeover of corporate assets
- Embargoes and sanctions
- Boycott against firms and nations
Government takeover of corporate assets
Confiscation → seizure of corporate assets without compensation
Expropriation → asset seizure with compensation
Nationalization → takeover of an entire industry, with or without compensation
Embargoes and sanctions
Embargoes → completely stopping, they are bans on exports or imports that forbid trade in specific goods with specific countries.
Sanctions → are bans on international trade, usually undertaken by a country, or a group of countries, against another judged to have jeopardized peace and security.
Boycotts
Voluntary refusal to engage in commercial dealings with a nation or a company.
Market economy
All productive activities are privately owned and production is determined by the interaction of supply and demand. The government encourages free and fair competition between private producers
Command economy
Government plans the goods and services that a country produces, the quantity that is produced, and the prices at which they are sold. All businesses are state-owned, and governments allocate resources for “the good of society”.
Mixed economy
Certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning. Governments tend to own firms that are considered important to national security.
Common law
It’s based on legal precedents, tradition, and past practices, set by courts via interpretation of statutes, legislation, and past rulings. Common law is relatively flexible.
Civil law
Based on an all-inclusive system of laws that have been clearly written by legislative bodies. Laws are not strongly subject to interpretation by courts. Civil law is mainly legislative and based on laws passed by national and state legislatures.
Trademark
Trademarks protect words, names, symbols, sounds, or colors that distinguish goods™ and services. It protects everything that makes your brand recognizable
Patent
Form of protection that provides a person or legal entity with exclusive rights for making, using, or selling a concept or invention and excludes others from doing the same for its duration.
Its utility is 20 years.
Copyright
Give ownership to “original works of authorship,” such as literary works, paintings, and video games.
Market attractiveness: benefits
Are a function of the market’s size, the purchasing power of its consumers, and their likely future wealth
Market attractiveness: cost
Are a function of its
- political system
- economic level
- legal system
Market attractiveness: risk
Are a function of:
- political risk → the likelihood that political forces will cause drastic changes in a country’s business environment
- economic risk → the likelihood that economic mismanagement will cause drastic changes in a country’s business environment
- legal risk → the likelihood that a trading partner will opportunistically break a contract or expropriate property rights
Proxemics (perceptions of space)
Personal space → it is characterized by an invisible zone with distinct boundaries. When an intruder enters this zone, people may feel uncomfortable.
High touch vs low touch
Perception of time
Monochronic → a rigid orientation to time in which the individual is focused on schedules, and punctuality. Time is linear. These are task-oriented countries.
Polychronic → a flexible, non-linear orientation to time, in which the individual takes a long-term perspective. Time is elastic, long delays are tolerated before taking action, and punctuality is relatively unimportant. These are relationships oriented countries.
High and low-context cultures
Low context → the communication is direct, clear, efficient, and logical. Expertise and performance are valued. Agreements are done in a legal way (contracts). Negotiations are as efficient as possible. They are usually monochronic.
High context → based on nonverbal or indirect communication. It’s necessary to establish social trust first. Personal relations and goodwill are valued. Agreements emphasize trust. Negotiations are slow and ritualistic because you need to establish trust. They are face-saving cultures.
Evaluating
Direct negative feedback → negative feedback is clear and straight said. Negative feedback stands alone, not accompanied by a positive one. Absolute descriptions are often used. Criticism may be given to an individual in front of a group, and must not be taken personally
Indirect negative → negative feedback to a collogue is provided softly, subtly, and diplomatically. Positive messages wrap up negative ones. Qualifying descriptors are often used when criticizing. Criticism is given only in private.
Leading
Egalitarian → the ideal distance between a boss and a subordinate is low. The best boss is a facilitator among equals. Organizational structures are flat. Communication often skips hierarchical lines
Hierarchical → the ideal distance is high. The best boss is a string director who leads from the front. Status is important. Organizational structures are multilayered and fixed. Communication follows set hierarchical lines
Deciding
Consensual → decisions are made in groups through unanimous agreement
Top-down → decisions are made by individuals (usually the boss)
Trusting
Task-based → trust is built through business-related activities, work relationships are consistent, and people are reliable. Work relationships are built and dropped easily
Relationship-based → trust is built through personal connection (sharing emails, evening drinks, visits at the coffee machine) and work relationships build up slowly over the long term. People share personal time.
Disagreeing
Confrontational → disagreement and debate are positive for the team or organization, open confrontation is appropriate and will not negatively impact the relationships
Avoids Confrontation → disagreement and debate are negative for the team. Open confrontation will break group harmony.
Scheduling
Linear-time → monochronic perception of time. The project’s steps are followed in a sequential fashion. One thing at a time is done with no interruptions. Emphasis is on promptness and good organization over flexibility.
Flexible-time → polychronic. The project’s steps are approached in a fluid manner. Many things are dealt with at once and interruptions are accepted. The focus is on adaptability, and flexibility is valued over the organization.
Hofstede cultural dimensions
- Power distance
- Individualism
- Masculinity
- Indulgence
- Uncertainty avoidance
- Long-term orientation
