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global business environment > Internationalisation of services > Flashcards

Internationalisation of services Flashcards

1
Q

example of services

A

construction, education, insurance, health, financial

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2
Q

what do services account for

A

high proportions of stock, flow and share of outward and inward FDI in world economy

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3
Q

what are some features of the internationalisation of services

A

development of international financial system,
consumption and production at point of demand,
multinational service corporation

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4
Q

professional services d

A

services which provide an intermediary role in the production process

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5
Q

who do professional service TNCs supply services to

A

other professional services

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6
Q

what is an organisational form of professional services

A

TNC office networks

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7
Q

expatriate d

A

person who lives outside their native country

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8
Q

advantages of expatriates (parent country nationals PNCs)

A

direct control over subsidiary,
help to transfer and establish organisational culture,
provides career ladder for high performing HQ employees

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9
Q

disadvantages of expatriates (parent country nationals PNCs)

A

expensive,
failure,
problems with local assimilation (cultural adaptation),
personal issues (dual-career households, family),
immigration/work permit issues

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10
Q

advantages of employing locals (host country nationals HCNs)

A

knowledge of local culture legislation and markets,
career paths,
cheaper than primary country nationals (PCN),
continuity,
good relationship with local government and employees

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11
Q

disadvantages of employing locals (host country nationals HCNs)

A

more difficult to exercise control,
reduced career opportunities for primary country nationals (PCNs),
possible lack of familiarity or network with HQ personnel

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12
Q

advantages of employing third country nationals (TCNs)

A

neutral alternative to PCN for local staffing,
cheaper than PCN,
reduce language barriers,
expand recruitment pool,
may be more willing to accept international assignment than PCN

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13
Q

disadvantages of employing third country nationals (TCNs)

A

MNCs take short-term view of subsidiary operation,
immigration/work permit issues,
cultural differences,
repatriation issues,
selected on language rather than technical abilities

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14
Q

why expatriate

A

fill vacancies in foreign locations that cannot be taken by local qualified staff,
part of global management development programme to enhance junior and middle ranking managers,
develop global organisation of firm in terms of corporate strategy, sharing of best practice, learning and knowledge

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15
Q

main reasons for expatriation

A 
career development,
local expertise not available,
creating international cadre of managers,
transfer of expertise,
control of local operations
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16
Q

what is the stat about expatriate failure in developing country assignments

A

15-50% failure in developing country assignments

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17
Q

what is the failure rate of US MNCs for expatriates

A

30-40%

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18
Q

what is the failure rate of expatriates for European MNCs

A

up to 10%

19
Q

why is European expatriate failure so low

A

more exposure to different cultures and languages,
closer attention paid to selection and training,
high calibre of managers on assignment,
managers more international in orientation and outlook (than US counterparts)

20
Q

what are some modes of international assignments

A 
short term assignments (up to year),
traditional expatriation (1-4 years or more),
rotational assignments (regular commutes abroad)
21
Q

what has happened recently to do with expatriation

A

there has been a shift from traditional expatriation to alternative expatriation of more short term and business travel

22
Q

what is the rough ratio between international financial flows and the value of international trade in manufactured goods

A

international financial flows and foreign currency transactions totally dwarf the value of international trade in manufactured goods

23
Q

what has deregulation of financial markets facilitated the opening of

A

the opening of new geographical markets, the provision of new financial products, and changes in how prices of financial services are set

24
Q

how has the internationalisation of financial markets changed demand for financial services

A

demand for financial services is no longer restricted to the domestic context; financial markets have become increasingly global

25
Q

what is absolutely central to all advanced business services (ABS)

A

information and communications technology (ICT)

26
Q

what can global integration and instantaneous financial trading also create

A

costs, such as shocks that occur in one geographical market now spread instantaneously around the globe, creating the potential for global financial instability

27
Q

what are derivatives

A

derivatives are financial tools derived from other financial products, such as equities and currencies, the most common are futures, swaps and options

28
Q

how did regulation change over time

A

in the past six decades went from tight to looser regulation to deregulation - that is, until the 2008 financial crisis and reregulation returned to the agenda

29
Q

where did pressures for deregulation come from

A

increasing abilities of transnational financial firms to take advantage of ‘gaps’ in the regulatory system and to operate outside national regulatory boundaries

30
Q

why did governments rescue banks after the 2008 financial crisis

A

simply because credit is so absolutely essential for an economy to operate

31
Q

what did deregulation lead banks to do

A

it became increasingly possible for banks to act as securities houses, for securities houses to act as banks, and for both to offer a bewildering array of financial services way beyond their original operations

32
Q

did banks just have locations in their host country

A

no, they followed their major clients overseas

33
Q

why do law firms require a high level of direct contact with their clients (and thus lots of offices everywhere etc)

A

legal regulations differ from country to country (lawyer qualified in one country may not be able to operate in another country),
the nature of the information being transmitted and the high level of trust involved necessitate a high level of face-to-face interaction

34
Q

has ict developments and deregulation released advanced business services (ABS) from geographical constraints

A

no, this has resulted in cities becoming the natural habitat for advanced business services, so are just highly concentrated in cities

35
Q

examples of advanced business services (ABS)

A 
financial,
legal,
accounting,
consultancy,
headhunting,
advertising
36
Q

why are lots of advanced business services (ABS) concentrated in cities *

A

diversity of markets in international centres (large size and flexible in terms of entry and exit),
the culture of international cities (send/receive large amounts of information),
dynamic external economies of scale which arise of sheer size and concentration of ABS in same area (ex, attraction of linked services like legal etc, enhanced reputation which increases reputation and attracts new firms)

37
Q

why is London significant as a global financial sector

A

historical evolution of the city as world centre has created a large pool of relevant skills and a high concentration of linked institutions in a very small geographical area,
geographical position located in time zone between Asia and New York,
regulatory environment encouraged growth of transnational banking,
London market brings together in one place great diversity of market participants

38
Q

what has happened due to dispersed computer networks

A

decentralising higher-skilled functions away from head office into dispersed locations to avoid high costs (both land and labour)

39
Q

who plans to move jobs out of central locations

A

Bank of America,
JP Morgan,
Deutsche Bank,
recently announced plans to move around 3000 jobs out of the City of London to other UK centres

40
Q

what have ABS firms become increasingly involved in

A

offshoring some of their functions,
such as IT, lower value-added activities (payroll) and lower value-added contact with customers (such as scripted outbound sales calls)

41
Q

what is the company in india called and what do they do *

A

Tata consultancy services (TCS),

one of the leading Indian IT-outsourcing companies

42
Q

what has Tata consultancy services (TCS) done *

A

established its own operations in Hungary, as part of its increasingly global network

43
Q

why did Tata consultancy services (TCS) choose Hungary *

A

cheap eastern european,
closer to customers,
Hungarians can often speak english as well as other european languages

global business environment (10 decks)

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