Lesson 6

Question 1

Global Economy

Answer 1

Is making the diverse countries of the world increasingly interdependent regarding resource supplies, product markets and business competition

Question 2

What is globalization

Answer 2

Process of growing interdependence among the components of the global economy

Question 3

What is World 3.0

Answer 3

A world where nations cooperate in the global economy while still respecting different national characters, cultures, and interests

Question 4

What is Global Management

Answer 4

It involves managing operations in more than one country

Question 5

What is a Global manager

Answer 5

A manager who is informed about International Development Trans-national in outlook

Question 6

What are the reasons why businesses go global

Answer 6

1. Profits
2. Customers
3. Suppliers
4. Labour
5. Capital
6. Risk

Question 7

International Businesses:

Answer 7

Conducting for-profit transactions of goods and services across national boundaries

Question 8

Types of Market entry strategies:

Answer 8

1. Global Sourcing
2. Exporting and importing
3. Licensing agreement
4. Franchising

Question 9

Direct Investment Strategies:

Answer 9

1. Joint Ventures
2. Foreign Subsidiaries

Question 10

Market entry strategies:

Answer 10

Involves the sale of goods or services to foreign markets but
do not require expensive investments

Question 11

Joint Ventures:

Answer 11

Operate in a foreign country through co-ownership by foreign and local partners

Question 12

Foreign subsidiaries

Answer 12

Local operation completely owned by a foreign firm

Question 13

Foreign Direct Investments (FDIs):

Answer 13

Involves setting up and/or buying all or part of a business in another country

Question 14

What does Insourcing refer to

Answer 14

Local job creation that results from foreign direct investment

Question 15

Political risk

Answer 15

Potential loss in value or control of a foreign investment due to instability and political changes in the host country

Question 16

Political risk Analysis

Answer 16

Forecast political disruptions that threaten the security of a foreign investment

Question 17

World Trade Organization (WTO) deals with issues about:

Answer 17

1. Tariffs as trade barriers
2. Non-tariff barriers: e.g., protectionism
3. Most favored nation (MFN) status (often means lowest tariffs, the fewest trade barriers and import
   restrictions, and the highest import quotas)

Question 18

Transnational corporation

Answer 18

A global corporation that operates worldwide on a borderless basis without being ID to one national home

Question 19

Mutual benefits for host country and MNC

Answer 19

1. Shared growth opportunities
2. Shared income opportunities
3. Shared learning opportunities
4. Shared development opportunities

Question 20

Ethical challenge: Corruption

Answer 20

Illegal practices that further one’s business interests

Question 21

Ethical challenge: Corruption of foreign public officials act (CFPOA)

Answer 21

Makes it illegal for Canadian firms and their representatives to engage in corrupt practice overseas

Question 22

Ethical challenge: Conflict Minerals

Answer 22

Gains sale of minerals used to help finance armed violence

Question 23

Ethical challenge: Child Labour

Answer 23

Employment of children for work otherwise done by adults

Question 24

Ethical challenge: Sweatshops

Answer 24

Business operations that employ workers at low wages for long hours and in poor working conditions

Question 25

The Uppsala Model:

Answer 25

1. Firms change by learning from their experience of operations, current activities in foreign markets
2. Firms change through the commitment decisions that they make to strengthen their positions in the foreign market