International business midterm Flashcards
chapters 1-7
What is Globalization?
refers to the shift toward a more intergrated and interdependent world economy
- globilization of markets
- globilization of production
- globilization of consumers
What is Globalization of production?
refers to the sourcing of goods and services around the world to tke advantge of nationl differences in costs and quality of factors of production (labour, energy, land, capital)
What are Global Institutions?
-World trade Organization
- International monetary fund
- help manage, regulate and police the global marketplace
Drivers Of Globalization
- decline in barriers to the free flow of goods
- Technologicalchange in communication, information processing, transportation
Technological change
purpose of microprocessors and Telecommunications
enabled the explosive growth of high power, low cost computing, vastly increasing the amount of information that can be processed
Technological change
The internet
makes it easier for buyers and sellers to find eachother and enables enterprises to control a golablly dispersed production system.
What is the largest recipients of Foreign Direct Investment
China followed by Brazil, Mexico, India
What is a multinational enterprise?
any business that has productive activities in two or more countries
Us mutinationals has had economic dominance since world war 2
The Globilization Debate
Is the shift toward a more integrated and interdependent
global economy a good thing?
Anti-globalization arguments:
* Harmful effects on jobs and income
* Labor policies
* Environmental impact
* National sovereignty
* World’s poor
What is the solution to the Globilization debate?
increasing societys investment in education to reduce the supply of unskillled workers
Collectivism Vs Individualism
collectivism - focuses on collective goals over individual goals
Individualism - focuses on the intrests of the individual over the intrest of the state
Socialism invloves?
- Communism - revolution and totalitarian dictatorship
- Social Democrats - socialism by democratic means
Individualisms two central tenets?
- individualism fredom and self expression
- Let people pursue their own economic self interest
What is Democracy?
political system in which people elect representatives to form the government
What does democracy demand?
- freedom of expression
- free media
- regular elections
- limited terms for representatives
- fair court system
- Non political - police and army
What is Totalitarianism?
all the constitutional guarantees on which representative democracies are built are denied to citizens
Market vs command vs Mixed economy
Market economy - all productive activiteis are privatley owned
Comman economy- the governemnt determines the allocation of resources, production and prices
Mixed economy - some private ownership and some government ownership
What are Legal systems?
a system of rules that regulate the behaviour and processses by which the laws of a country are enforced.
Common Law
law based on tradition, precedent, and custom
Civil Law
law based on very detailed set of written laws and codes
Theocratic Law
System of law based on religious teachings
Protection of Intellectual Property
refers to property that is the product of intellectual activity such as computer software, music, formulas
patents, copyrights, trademarks
ownership rights established through:
The Paris Convention for the protection of Industrial Property
international agreement signed by 96 nations to protect intellectual property
Determinants of Economic Development
Determinants of Economic Development
- Human Development Index- measures quality of life in different countries
- innovation and entrepreneurship
- strong property rights
- required political system
- geography, education
The Nature of Economic Transformation
What is Deregulation?
invloves removing legal restrictions to the free play of markets, to the establishment of private enterprises, and to the manner in which private enterprises operate
The Nature of Economic Transformation
What is Privitization?
Transfers the ownership of state property into the hands of private individuals, frequently by the sale of state assests through an auction
Implications for business
- size of market
- purchasing power in market
- future weatlth of consumers
- politcal factos
- economic factors
- legal factors
- ethics and human rights
- ethics and regulations
What Is Culture?
a system of values and norms that are shared among a group of people
Values
provide context within which a societys norms are established and justified
Norms
social rules that goven peoples actions toward one another
Determinants Of Culture
- religion
- politcal philosophy
- Economic Philosophy
- Education
- Language
- Social Structure
Social Strata
Heirarchical social catogories often based on family background, occupation, and income
individuals are born into a particualr statum
Social Mobility
refers to the extent to which individuals can move out of the strata into which they are born
Caste System
closed system of stratification in which social position is determined by the family into which a person is born, and change in that position is not possible during an individuals lifetime
Ethical systems
refer to a set of moral principles, or values, that are used to guide and shape behaviour
Circumstances that affect ethical considerations
- politcal enviornment, and the consequent laws and regulations
- Social culture enviornment (different cutures together)
- Technological environemnt ( communication)
Ethics in the Changing Political Environment
Corruption
International business can still gain economic advantages by making payments to corrupt officials
briebery of foregin public officials is a criminal offence
Perceptions of corrupt politicians in Canada
Political scandals based on unethical dealings that are played out daily in the international news raise concerns of international business people dealing with Canada.
Ethics in the Changing Sociocultural Environment
- how gift giving might be considered bribery;
- how you interact with law enforcement officers;
- whether companies only concern themselves with
obeying precise regulations
Employment practices
Competitive environment increases in intensity, and
continued advances in the technological environment
conspire to challenge companies to increase employee
productivity
Enviornmental Pollution
ethical issues arise when environmental regulations in host nations are far inferior to those in the home nation
Ethical Dilemmas
Ethical dilemmas exist because many real-world decisions are complex, difficult to frame, and involve first-, second-, and third-order consequences that are hard to quantify
Determinants of Ethical Behaviour
Persoanl ethics
organization culture
Unrealistic Performance goals
Decision mkaing processes
Leadership
Why Does the Internet Have Such a Big Influence on Ethics?
Quantity
*Variety
*Speed
*Impact
