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FIN 3310 > INB Midterm Flashcards > Flashcards

INB Midterm Flashcards

1
Q

How many countries are there in the world?

A

195 Countries

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2
Q

How many people are there in the world?

A

7.5 Billion

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3
Q

How many languages are there in the world? How many cultures?

A

There are 6,000 languages; perhaps as many cultures

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4
Q

How many multinational corporations (MNC) are there in the world? What about equity based subsidiaries?

A

80,000 MNC’s
400,000 Equity based subsidiaries operating globally

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5
Q

What is the dollar amount of world merchandise exports (in US $) based on data from 2016-2016?

A

$16 trillion

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6
Q

What is the dollar amount of world commercial services exports (in US $) 2015-2016

A

$4.7 Trillion

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7
Q

What is the dollar amount of Foreign Direct Investment (FDI) (Total Global FDI Flows) in 2015

A

$1.7 Trillion

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8
Q

How many mergers and acquisitions were there in 2016? What was the dollar amount?

A

17,369 deals
US$ 3.2 trillion

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9
Q

What percentage of mergers and acquisitions will fail?

A

70-90% according to Harvard Business Review

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10
Q

Why do roughly 30% of mergers and acquisitions fail?

A

30%+ of all M&A’s fail for cultural reasons (failure to integrate cultures)

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11
Q

Culture

A

The visible and invisible values and beliefs that underlie behaviors and are unique to each society

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12
Q

Global Mindset

A

The ability to recognize and adapt to cultural signals so that you intuitively see global opportunities and are effective in dealing with people from different backgrounds around the world. A global mindset is the ability to integrate the seven cultural dimensions into personal behavior and management styles without compromising your authenticity.

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13
Q

Globalization

A

The process of services, manufacturing, and shipping becoming increasingly interconnected and global (couldn’t find in the book)

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14
Q

Global Collaboration

A

Technology has made it physically possible to work with people from around the world as easily as with colleagues next door

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15
Q

What are some examples of supra-national organizations?

A
  1. WHO (world health organization)
  2. UN (united nations)
  3. WTO (world trade organization)
  4. NATO (North Atlantic Treaty Organization)
  5. EU (European Union)
  6. OPEC (Organization of Petroleum Exporting Countries)
  7. ACS (association of Caribbean states)
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16
Q

What are the 7 cultural dimensions of the culture wizard? (The 7 Keys)

A
  1. Hierarchy versus egalitarianism
  2. Group Focus
  3. Relationships
  4. Communication styles
  5. Time orientation
  6. Change tolerance
  7. Motivation/work-life balance
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17
Q

Core Culture

A

The invisible layer, the principles people take for granted. Core or invisible culture harkens back to the essence of people’s innermost beliefs about universal, nonnegotiable truths that were learned in childhood and retold generation after generation

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18
Q

Stereotyping

A

A conventional, formulaic, and oversimplified conception, opinion, or image

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19
Q

Ethnocentricity

A

Assuming that your particular ethnicity is the superior one, can involve assumptions about qualifications or ability

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20
Q

Personal cultural style

A

Even though national cultures create behavioral standards, individuals are unique, and their behavior varies from the national norm

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21
Q

Personal Cultural Profile

A

A profile of your specific preferences

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22
Q

Diversity

A

Generally refers to different personal styles, behaviors, values, and subcultures

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23
Q

Empowerment

A

A sense that employees in egalitarian cultures have (intuitively) that their roles are to ensure the successful accomplishment of a business activity rather than dutifully following task-based instructions

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24
Q

The Team Apron Culture

A

The risk of misinterpreting familiar, visible, but superficial signs such as uniforms, jackets, and aprons as indicative of deeper attitudes and beliefs

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25
Q

Harmony

A

The need to have a comfortable, non-contentious working environment

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26
Q

Guanxi

A

The idea of a complex series of connections and obligations to individuals and families that can last for generations
In business, it commonly refers to the networks or connections used to open doors for new business and facilitate deals

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27
Q

Connections

A

Interrelated contacts

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28
Q

Hospitality

A

The elaborate ways individuals treat each other outside the workplace; may include extended family

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29
Q

Outsourcing

A

At its most basic, outsourcing is simply the farming out of services to a third party. With regard to information technology, outsourcing can include anything from outsourcing all management of IT… to outsourcing a very small and easily defined service, such as disaster recovery or data storage, and everything in between

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30
Q

What are the foreign market entry modes?

A

Exporting, Licensing, Joint Venture, Direct investment

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31
Q

Exporting (definition)

A

Sending goods/services to another country for sale

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32
Q

Licensing (definition)

A

Grant a license to permit the use of something or to allow an activity to take place

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33
Q

Joint Venture (definition)

A

A commercial enterprise undertaken jointly by two or more parties that otherwise retain their distinct identities

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34
Q

Direct Investment (definition)

A

An investment in a business enterprise in a country other than the investor’s country designed to acquire a controlling interest in the foreign business enterprise

35
Q

Exporting (pros/cons)

A

Pro - it is relatively easy to sell overseas
Con - Foreign competition can very easily copy your products and compete with you

36
Q

Licensing (pros/cons)

A

Pro - Least risky method
Con - No control over how the brand is used

37
Q

Joint Venture (pros/cons)

A

Pro - Local expertise
Con - Risk brand damage from actions taken by local partner

38
Q

Direct investment (pros/cons)

A

Pro - The most control
Con - The most risk

39
Q

The 5 major cultural models/typologies

A
  1. Hofstede
  2. Trompenaars
  3. GLOBE project of Cultural Attributes
  4. Culture Wizard
  5. Lewis
40
Q

What are some indicators of a global mindset?

A
  • Have the ability to be effective in interpersonal relations (EQ)
  • Understand local. markets and take advantage of business opportunities
  • Recognize talent regardless of the “package” in which it comes
  • Adjust your personal strategies and plans in a foreign culture
41
Q

What do you need to know to have a global mindset

A
  • Recognize your cultural values and biases
  • Understand that others are a product of their cultures
  • See the manifestations of the seven keys and learn about the specific cultures of the countries in which you work
  • Develop personal strategies to adjust to signals in other cultures
  • Be a continuous learner
42
Q

Wa Wa

A

Japanese cultural concept usually translated into English as “harmony”; It implies a peaceful unity and conformity within a social group, in which members prefer the continuation of a harmonious community over their personal interests

43
Q

Global team gurus tell us that successful teams have the following elements

A
  • Clear goals and objectives that are accepted by all the members
  • Rules, role definitions, and clear procedures
  • Active participation of each team member
  • Clear discipline and consequences
  • Clear communication channels (nothing lost in translation)
44
Q

What are the primary challenges that cultural diversity presents?

A
  • Overcoming differences in language and culture
  • Developing trust and relationships despite distance
  • Overcoming logistical challenges
  • Developing a common context for decision making
45
Q

Hofstede Model

A

1 most recognized model with how cultures are compared around the world

(1) Power Distance: if its on the high end, heirarchial… on the low end, egalitarian
(2) Individualism: High end embraces individualistic behavior (US), low end is a collectivist culture
(3) Masculinity vs. Femininity: High end is power!, low end is nurture
(4) Uncertainty Avoidance: High means ambiguity generates anxiety in people, low means comfortable with “going with the flow” (USA is on the LOWWW end)
(5) Long-Term Orientation: High puts long term goals first, low puts short term goals first (USA is LOW, we want things done NOW)
(6) Restraint/indulgence: High - happiness is always good; Low - Happiness can be bad

46
Q

Trompenaars Model

A

(1) Universalism (vs. Particularism) “What is more important, rules or relationships?
(2) Individuals (vs. Collectivism) “Do we function in group or as individuals?”
(3) Neutral (vs. Emotional) - “Do we display our emotions?”
(4) Specific (vs. Diffuse) - How separate we keep our private and working lives?”
(5) Achievement (vs. Ascription) “Do we have to prove ourselves to receive status, or is it given to us?”
(6) Sequential (vs. Synchronic) “Do we do things one at a time, or several things at once?”
(7) Internal Control (vs. External Control) Do we control our environment, or are we controlled by it?”

47
Q

The Culture Wizard Model

A

(1) Hierarchy (egalitarian vs. hierarchical)
(2) Group (individualistic vs. Group-Oriented)
(3) Relationships (Transactions vs. Interpersonal)
(4) Communication (Direct vs. Indirect)
(5) Time (controlled vs. fluid)
(6) Control (internal vs. external)
(7) Formality (informal vs. formal)
(8) Motivation (Status/achievement vs. Work/life balance)

48
Q

The GLOBE Project of Cultural Attributes

A
  • 951 organization in 62 countries
  • Took Hofstede’s original 1980 research findings and dedicated an entire academic into exploring the differences of cultures
49
Q

The Lewis Model

A

Linear-Active
Multi-Active
Reactive

50
Q

Modes of entry into the global market

A

Exporting, LIcensing, Franchising, joint venture, and direct investment

51
Q

Daimler-Chrysler Merger Failure

A
  • Merger between Chrysler and Daimler-Benz
  • The cross-border merger in 1998 was called the “deal of the century”
  • Chrysler Corporation was the quintessential American company. Its corporate values reflected its American roots, and those values were what made the com- pany successful. Chrysler had mastered the concept of speed from design to production and had the ability to read and adjust to the American consumer’s taste and quickly design products appropriate for it. It valued innovation, risk taking, and rapid change.
  • Daimler-Benz also was a company that reflected its national culture. Daimler was disciplined, structured, and formal. Its manufacturing process emphasized perfection, not speed. Its designs changed slowly through small modifications. Risk taking was eschewed. Change came slowly, and innovation had to be well documented, carefully designed, and meticulously produced. The company’s success came from producing exceptionally well engineered, expensive cars that people owned for an average of nine years
  • Both companies’ corporate values and cultural differences existed from the outset. They were obvious and readily visible. However, if you see only what you want to see, you choose not to recognize impending cultural land mines.
52
Q

Groupon Failure in China

A
  • One of the first big mishaps with Groupon was their approach to poach employees from other companies. In response, competitors threatened employees that they would not be able to work in any of their sister companies again in the future if they decided to go work for Groupon.
  • . They ran a Super Bowl commercial that mocked Tibetan culture saying they it was soon to disappear, but that Groupon customers could still enjoy their food with their discounts to Tibetan restaurants.
  • Groupon was of little priority to Tencent, something which Groupon failed to consider.
  • Groupon failed to gain respect in China, which is a major value in Chinese culture. To start, Groupon should have made themselves aware that their offer of 50/50 shares with Lashou was much too aggressive, because of the idea of partnering with a company from foreign lands.
  • By overvaluing their importance as a partner and in the market, they only had a small share of the market
  • E-mail marketing wasn’t a success
  • The thing Groupon could have done to avoid most of these issues though would be to have hired a predominantly Chinese staff, or at least to have a much higher representation on senior management. Being managed from Americans abroad who have no knowledge of cultural norms, customs, and practices caused Groupon to gain little respect as a company
53
Q

Home Depot Failure in China

A
  • Home Depot assumed that this increase in home ownership would mean that there was an ample market for home improvement needs.
  • Where Home Depot failed in their assumptions about the Chinese market was the motivations and interests of DIY updates for their homes
  • The warehouse style of Home Depot stores did not appeal to women buyers.
  • Stores were also located primarily in the suburbs which caused them to miss out on the market share of the middle-class which were located in densely packed areas
  • Culturally, the DIY concept was reserved for lower-class citizens and was not targeted to women at all. Because of this, Home Depot could have found more success if they adjusted their services to a “do-it-for-me” model.
54
Q

Foster Beer failure in Vietnam

A
  • The beginning of its downfall was Foster’s decision to sell the rights to produce in Europe in 2006 by selling to Scottish and Newcastle
  • According to the CEO of Foster’s, the company was struggling to generate adequate value and revenue from the brand in the Asian market, despite its seeming popularity
  • One of Foster’s biggest failures was understanding the culture and brand perception of the Vietnamese. Foster’s entered with the tagline, “the Australian styled beer”. At first, this was intriguing but overall, it was strange to the target market that the product would not be marketed to the Vietnamese but instead highlighted the Australian roots.
  • Foster’s entered the Vietnamese marketing in 1998 where living standards were low and there was not quite a demand for premium beers.
  • They also teamed up with two local breweries that were known for manufacturing popular beer products which failed to align in the mind of their target market of high-income earners.
  • Doing an internal and external analysis of the demand for a premium beer product in Vietnam. Partner with premium beer breweries, re-market to not be an “Australian” beer
55
Q

Coke Cola Marketing Failure in Israel

A
  • I think that Coca-Cola’s most obvious oversight in Israel was that they failed to consider the names and identities of a large portion of the population
  • Selected 150 of the most popular names in select countries (such as Sweden) and failed to take further steps in considering the demographics, religious influences, and cultural identities associated with names
56
Q

Walmart and Wertkauf Failure (Germany)

A
  • Wal-Mart management, marketing, and customer service philosophy would be decidedly American in style. In other words, it would be extremely informal, friendly, and egalitarian.
  • Wal-Mart executives believed that since most Germans had a good grasp of English, the company could transport its corporate culture efficiently. They would send a man who successfully had managed 200 stores from the company’s small-town-America headquarters in Bentonville, Arkansas, to run the new German operations.
  • Walmart cheer
  • ethnocentrism and cultural ignorance played a role along with the structural business elements, such as severely re- strictive zoning, pricing, and operational codes
  • Germany is a very formal, hierarchical society in which individuals reserve smiles for people they know.
  • The rah-rah cheers that start the Wal-Mart workday were so foreign and uncomfortable to the German employees that they became an early-morning embarrassment
  • In that hierarchical society, leaders are expected to demonstrate leadership by an upward connection, not a downward one. They are expected to dress in a somewhat more upscale way and show the trappings of power and authority. Thus, not only were the cheers out of place for the German workplace, but they put leaders into a role that Germans couldn’t respect.
  • For example, Wal-Mart’s prohibition of romantic encounters between employees and super- visors was particularly offensive to the Germans
  • Perhaps one of the most stunning cultural confrontations occurred when Wal-Mart’s nonunion attitude ran full force against the immovable German works councils.
  • It discovered that Germans will go from store to store to take advantage of the lowest prices as opposed to the American preference for one-stop shopping.
57
Q

Disneyland in Paris (Euro Disney Resort)

A
  • Park’s promoters didn’t understand several key culturally based buying and lifestyle habits of the French and neighboring Europeans.
  • Disney wrongly assumed that European parkgoers would purchase Disney paraphernalia with the same relish as Americans and Japanese.
  • Failed to recognize the need to customize its products to the local marketplace. Managers underestimated the importance of wine and wrongly assumed that French consumers would find wine interchangeable with Coke or iced tea.
  • This not only lowered food consumption but dampened enthusiasm for park visits overall
58
Q

Mattel Failure in China

A
  • The Barbie brand was not well established before they decided to erect a standalone store.
  • In China, Barbie is just a toy. Mattel failed to understand that while there is familiarity with the product, there isn’t any cultural significance tied with the doll.
  • Mattel also attempted to market Barbie the same way as they did in the US instead of adjusting their strategy to their target market. The article mentions that the strategy of having Barbie be an aspirational icon to Chinese girls would have been more successful
  • Shoppers couldn’t justify the high price tag for something they weren’t connected to
  • be less “sexy”
  • changing Barbie’s image to be “I can be…” would be a good strategy to have implemented.
  • the Chinese Barbie, Ling, was seen as the Americanized version of what a Chinese doll should be, despite their attempts to make dolls in the likeness of Chinese celebrities and influencers
59
Q

Dunkin Donuts ad failure in Thailand

A
  • Duncan Doughnuts was under fire by American media when they released an ad for their new charcoal doughnut. The imagery portrayed was a Thai executive’s daughter in “blackface” wearing pink lipstick and eating the advertised doughnut
60
Q

Creating a Global Mindset in Business

A
  • Liam, from Integreon, has an unusual ability to grasp the gestalt of a global organization—the business strategy and tactics as well as the entire employee life cycle (hiring, training, and retaining)—and translate it
    into a unique corporate culture that embraces national cultural differences as a marketplace advantage.
  • Liam knew that to make that strategy work, the team members needed to develop rapport and trust with one another. If the vision was to succeed, especially within the virtual constraints of a global company, people needed to develop strong ongoing relationships with one another.
    -If Integreon’s employees didn’t understand culture, they couldn’t deal with clients—or with one another.

Having a global mindset means that you:
* Have the ability to be effective in interpersonal relations
* Understand local markets and take advantage of business opportunities
* Recognize talent regardless of the “package” in which it comes
* Adjust your personal strategies and plans in a foreign culture

61
Q

Corporate Social Responsibility (CSR)

A

A business’s obligation to pursue policies, decisions, and actions that align with the objectives and values of society

62
Q

Friedman Doctrine (Milton Friedment)

A

The social responsibility of business is to increase its profits

63
Q

Shareholders View or Theory

A

The view that the only duty of a corporation is to maximize the profits accruing to its shareholders. This is the traditional view of the purpose of a corporation, since many people buy shares in a companys trictly in order to earn the maximum possible return on their funds

64
Q

Stakeholders View or Theory

A

View of capitalism that stresses the interconnected relationships between a business and its customers, suppliers, employees, investors, communities and others who have a stake in the organization. The theory argues that a firm should create value for all stakeholders, not just shareholders

65
Q

Triple Bottom Line (3 P’s)

A

An accounting framework that incorporates three dimensions of performance: social, environmental, and financial; The TBL dimensions are also commonly called the 3 P’s (people, planet, profits)

66
Q

Balances Scorecard

A

Measurement of organizational performance in 4 equally important areas: finances, customers, internal operations, and innovation/learning

67
Q

Ethics

A

The principles of right and wrong that guide an individual in decision making

68
Q

Ethical Dilemma

A

A situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal

69
Q

Utilitarianism

A

Idea that the goal of society should be to bring about the greatest happiness for the greatest number of people

70
Q

Nemawashi

A

Digging the root in Japan; Seeking consensus
The broad-based consensus-building procedure that occurs within the Japanese Ringi system of decision making

71
Q

Ringi

A

The Japanese process of decision making, which involves circulating a proposal among all people who will be affected by it, addressing concerns and negative consequences raised by as many parties as possible, consulting on as broad a basis as possible about the proposal, and achieving consensus before the proposal is formally implemented.

Decision making process in Japan where everyone reaches consensus and uses their “stamp” on any documents

72
Q

5 factors that influence ethical or unethical behavior

A
  1. Individual Factors (knowledge level, moral value, attitudes, and personal goals)
  2. Social Factors (cultural norms, actions of co-workers, actions of significant others)
  3. Opportunity Factors
73
Q

What are the 7 Major Religions of the World

A
  1. Christianity
  2. Islam
  3. Hindu
  4. Budhism
  5. Confucianism
  6. Judaism
  7. Shinto
74
Q

Christianity (major religion)

A

Roman Catholics are expected to place God and people above material ambitions. Protestants believe faith in God brings salvation and that hard work glorifies God

75
Q

Islam (major religion)

A

The word “Islam” means “submission to Allah”. For devout Muslims, religion determines acceptable goods and services. Strict Muslims to not drink alcohol, eat pork, or charge interest on money lent

76
Q

Hindu (major religion)

A

In Hindusim, the caste system influences people’s ways of life and occupations. Strict Hindus do not eat or harm living creatures because they believe in reincarnation - Rebirth of the human soul at the time of death

77
Q

Budhism (major religion)

A

Buddhism promotes a life centered on spiritual rather than worldly matters. Buddhists seek nirvana (escape from reincarnation) through charity, modesty, compassion, nonviolence, and general self control

78
Q

Confucionism (major religion)

A

A life focused on money, above all else, violates strict beliefs in Confucianisms. Businesses in South Korea reflect Confucian thought in their rigid organizational structure and reverence for authority.

79
Q

Judaism (major religion)

A

In Judaism, fully observant Jews eat only “kosher” foods and do not eat pork and shellfish. Work schedules might need adjustment for key Jewish holidays and the Sabbath (from sundown Friday to sundown Saturday)

80
Q

Shinto (major religion)

A

Shinto, the native religion of Japan, teaches sincere and ethical behavior, loyalty and respect toward others, and enjoyment of life. In the workplace, Shinto fosters a loyal workforce and good labor-management cooperation

81
Q

The Cultural Iceberg

A
82
Q

Drivers of Globalization

A
  1. Declining Trae and Investment Barriers
  2. Growth in technological change
  3. Globalization of production and markets
  4. Travel
  5. Rise of Supra-National organizations
  6. Environmental issues & collaboration (including pandemics!)
  7. Terrorism
  8. Supra-National Culture
83
Q

Monochrome Time vs. Polychrome Time

A

FIN 3310 (2 decks)

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