Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

International Business Management > Lecture 2 - The International Business Environment > Flashcards

Lecture 2 - The International Business Environment Flashcards

1
Q

Define formal institutions

A

Laws, regulations, and rules - may be imposed by home countries and host countries

Guided by the regulatory pillar:
- coercive power of governments (can force companies to do specific things)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Define institutional transitions

A

Fundamental and comprehensive changes introduced to formal and informal rules of the game that affect firms as players

e.g. Brexit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the institution-based view?

A

Success and failure of firms are enabled and constrained by institutions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Define informal institutions

A

Norms, cultures and ethics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the normative pillar of informal institutions?

A

How the values, beliefs and actions of other relevant players influence the behaviour of focal individuals and firms

  • external to firm an individual
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the cognitive pillar of informal institutions?

A

Internalized values and beliefs that guide individual and firm behaviour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Draw a diagram showing how institutions, firms and firm behaviour are all linked

A

Look at lecture 2 notes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the four different legal systems?

A

Common law

  • look at comparative/previous cases to make judgements
  • mainly found in English speaking countries

Civil law
- no deviation from what’s written

Religious law
- countries base law on religion (e.g. Iran)

Bureaucratic law

  • countries where a dictatorship takes place
  • less about the actual law and more about who’s in power
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

In the legal environment, what are the impacts of domestically orientated laws?

A

1) Firm’s domestic operations
2) International competitiveness of domestic firms
3) Business practices of foreign firms operating outside the country’s borders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Outline and explain the 4 laws directly affecting international business transactions?

A

SANCTIONS: avoiding commerce with another country

EMBARGOS: comprehensive sanction against all commerce with a given country

EXPORT CONTROL OF DUAL-USE PRODUCTS: e.g. high tech products used by civilian and military

EXTRATERRITORIALITY: countries regulating business outside their borders, e.g. US firms still subject to antitrust laws

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Outline and explain laws directed against foreign firms

A

1) Nationalisation: the transfer of ownership of resources from private to public sector, e.g. Northern Rock bank (2008), China’s recent nationalisation of smaller coal mines
2) Expropriation: when host government compensate private owners for loss (South Africa land reforms)
3) Confiscation: host government offer no compensation (e.g. Zimbabwean government taking land)

4) Privatisation: state owned industry moving into private hands
- good opportunities for international business

5) Repatriation: host government constraining MNCs by imposing restrictions on their ability to repatriate the profits earned in the host country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are property rights?

A

Legal rights to use an economic property (resource) and derive income and benefits from it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Define intellectual property

A

Intangible property the result of intellectual activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Define intellectual property rights

A

Rights associated with ownership of intellectual property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are the three types of intellectual property rights?

A

Patents

Copyright

Trademarks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Define what patents are

A

Legal rights awarded by government authorities to inventors of new products or processes

17
Q

Define what a copyright is

A

Exclusive legal rights of authors and publishers to publish and disseminate their work

18
Q

Define what a trademark is

A

Exclusive legal rights of firms to use specific names, brands and designs to differentiate their products from others

19
Q

What are the foundation and determinants of the technological environment?

A
  • resource base
  • investments in infrastructure and human capital
  • technology transfer
  • protection of intellectual property rights
20
Q

What are the three main impacts that MNCs have on host countries and their positives and negatives

A

Economic
Political
Cultural

POSITIVES

  • increased employment
  • increased investment
  • technology transfer
  • new products

NEGATIVES

  • promote corruption
  • environmental damage
  • child labour
21
Q

What are the 4 questions regarding dispute resolution in international business?

A
  • which country’s laws apply?
  • in which country should the issue be resolved?
  • which technique should be used to resolve the conflict: litigation, arbitration, mediation or negotiation?
  • how will the settlement be enforced?
22
Q

What are the main influences on a country’s accounting system?

A
  • sources of capital
  • legal system
  • cultural values and attitudes
  • international political ties
  • economic system
23
Q

Differences among countries’ accounting practices affect a firm’s decisions on:

A
  • reported income and profits
  • valuations of assets and inventories
  • tax reporting
  • desire to operate in a given country
  • use of accounting reserves

Impact on capital market:

  • evaluating the performance of firms incorporated in different countries
  • assessing the riskiness of potential loans
24
Q

What are the political risks associated with international business?

A

Ownership risk
- confiscation and expropriation

Operating risk

  • how do you operate day to day?
  • do you pay bribes?

Transfer risk

  • repatriation
  • transferring resources from country to country
25
Q

What are macro-political risks?

A

Affects all businesses in a country - not specific

26
Q

What are micro-political risks?

A

Targeted at particular company or industry

27
Q

Give some examples of political risk

A
  • expropriation
  • confiscation
  • campaigns against foreign goods
  • mandatory labour benefits legislation
  • kidnapping, terrorist threats, violence
  • civil wars
  • inflation
  • repatriation
  • currency devaluations
  • increased taxation
28
Q

What questions would you ask in a political risk assessment?

A
  • democracy or dictatorship?
  • free market or government control?
  • public or private sector customers?
  • arbitrary change to policies or rule of law?
  • stability of the existing government?
29
Q

What are the implications for action by managers who go to work abroad?

A
  • economic, political and cultural risks (influenced by formal and informal institutions)
  • look at previous companies who have moved there
  • need to plan a strategy

International Business Management (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions