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international business > midterm > Flashcards

midterm Flashcards

1
Q

how can a company engagement in international business 4
mode of operations

A
  • foreign direct investment (controlling interest)
  • joint venture ( 2 or + companies share ownership of investment)
  • portfolio investment (non-controlling interest)
  • exporting and importing goods or services
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2
Q

short definition of international business

A

company that operates in more than one country
export/import/invest OR collabortive arrangements

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3
Q

3 types of collaborative arrangements

A
  • licensing agreements
  • managements contracts
  • long-term contractual arrangements
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4
Q

definition multinational company

A

company that have already a global approach to markets and production and have operations in minimum 6 countries

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5
Q

what structures makes a company an international one

A

has headquarters and subsidiaries

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6
Q

def and components of headquarters

A

in home country
board of directors:
- chairman
- executive (CEO,CFO,COO,CMO,CTO,CPO)
–> take strategic decisions

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7
Q

subsidiaries definition

A

in host country
where the strategy are implemented
=> give profit and dividends to headquarters

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8
Q

definition globalization and examples of areas

A

relationships and wider interdependence amoung peple from different countries in all areas:
- business (trade)
- culture
- education (exchange student)
- diseases (COVID)
-war

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9
Q

what does globalization do?

A

uniformization of tastes and behavior of the consumer
contributes to:
- digital economy and development
-decrease of transportation and telecomm costs
- develop in the global financial markets

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10
Q

corporation strategies with globalization => capture scale economies
5 examples

A
  • in production -> lower production costs
  • in marketing -> global brand/advertising
  • research and development -> collaboration
  • in logistic -. large distribution centers
  • in sourcing -> lower material costs
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11
Q

normal structure vs new structure organization big difference

A

normal: headquarters ask subsidiaries profit and dividends to the subsidiaries
new : more communication between headquarters and subsidiaries but not command

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12
Q

3 criticism of globalization

A
  • cultural homogeny
  • environmental stress
  • growing income inequality and personal stress
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13
Q

3 environmental differences

A
  • culture
  • political risk
  • government, legal, economic
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14
Q

4 cultural factors

A
  1. cultural awareness
  2. identification and dynamics of cultures
  3. behavioral practices affecting business
  4. strategies for dealing with cultural differences
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15
Q

definition of culture

A

refers to norms based on values, attitudes, and beliefs of a group of people

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16
Q

on what can culture be based
10

A
  • nationality
  • ethnicity
  • values
  • norms
  • symbol
  • language
  • traditions
  • religion
  • gender
  • political ideology
    ……
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17
Q

how can culture help international businesses 2

A
  • gain global competitive advantage by bringing together people of diverse backgrounds and experience
  • deeper knowledge about products in ways to produce and deliver them
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18
Q

definition cultural collision

A
  • occur when company implements practices that are less effective OR when employees encounter distress because of difficulty in accepting/adjusting to foreign behaviors
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19
Q

example of cultural collision

A

assumptions that all societal subgroups are similar

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20
Q

definition nation

A

useful definition of society because similarity among people is cause and an effect of national boundaries:
- laws apply primarily along national boundaries
- language and values are shared within borders
- rites and symbols are shared along national boundaries

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21
Q

communication example and problem

A
  • spoken/writtin
  • silent language
    —-body language
    (there is no universal meaning for gesture)
    —-color, distance, time and punctuality, prestige
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22
Q

political risk definition

A

refers to the risk that political decisions or political events in a country negatively affect the profitability or sustainability of an investment

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23
Q

example of political risks
3

A
  • weak legal system
  • volatile political systems
  • fragile regimes
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24
Q

types of political risks
4

A
  • systemic
  • procedure
  • distributive
  • catastrophic
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25
Q

definition systemic risks

A

happen when big problems affect lots of countries or businesses at the same time
-> if one falls, it can makes the others fall too
covid

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26
Q

definition procedure risk

A

risk evolving from daily movement of people, products, and funds from point to point in the global market
-> each moves creates a procedural transaction between units involved and sometimes frictions

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27
Q

definition distributive risks

A

result of the profits generated by foreign companies in the local economy
- gains or losses from a specific transaction
ex: delays, disruption in supply chain leading to losses in sales or increase in costs

28
Q

definition of catastrophic risk

A

arises from specific dramatic events, disrupt business environment, and affect the operations of every company in a country
ex: illegal regime change, civil disorder

29
Q

5 types of legal systems

A
  • customary laws (mongolia)
  • civil laws (asia)
  • common law (north america)
  • muslim law (marocco)
  • mixed system (quebec)
30
Q

Definition legal issues

A

refers to a matter or question that involves the interpretation, application, or enforcement of laws, regulations, contracts, or other legal principles

31
Q

3 legal issues

A
  • operation concerns
    (tax labor, admin)
  • strategic concerns
    (product and safety liability, marketplace behavior, arbitration)
  • intellectual property rights
32
Q

6 examples of economics factors that influences managerial decisions

A
  • exchange rate
  • level of population
  • inflation
  • purchasing power of consumers
  • savings rate
  • public debt
33
Q

3 types of economic systems

A
  • Communism
  • Socialism
  • Capitalism
34
Q

Communism 3

A
  • low degree of economic freedom
  • government owns most or all resources
  • advocate centralized, large-scale, capital-intensive production
35
Q

Socialism 3

A
  • medium degree of economic freedom
  • government and private ownership of economic resources mixed in varying proportion
  • advocate Optimizing economic efficiency, promoting egalitarian, anticipating self-interest
36
Q

Capitalism 3

A
  • high economic freedom
  • mostly private ownership of resources
  • advocates decentralized entrepreneurial innovation
  • property rights and individualism
37
Q

definition ethics

A

the accepted principles of right or wrong governing the conduct of business people
depends on values, culture, different worldwide

37
Q

definitions ethical issues

A

differences in economic development, politics, legal system, and culture

38
Q

example of common ethical issues
5

A
  • employment practices
  • environmental pollution
    (global warning, sustainability)
  • human rights
  • corruption
  • moral obligations (philanthropy usually for big businesses)
39
Q

definition corporate responsability

A

concept where companies integrate social and environmental concerns in their business operations and in interaction with their stakeholders
–> voluntary basis
–> strive to be a win-win solution to company’s management and their shareholders

40
Q

ESG standards

A

the tripple bottom line (TBL)
1. people (social)
2. planet (environmental)
3. profit (economic)

41
Q

example of stakeholders 5

A
  • shareholders
  • employees
  • investors
  • consumers/suppliers
  • public authorities
42
Q

definition of environmental standards

A

related and care for nature and the sustainability of the planet

43
Q

definition of social standards

A

how they engage with stakeholders

44
Q

definition of governance standards

A

shareholders rights, boards leadership, employees, internal control, risk assessment

45
Q

definition greenwashing

A

lying about the environment friendliness of a product

46
Q

definition social washing

A

misleading claims about a company’s social responsibility initiatives or positive impact on society

47
Q

yearly report required from the european union

A

Integrated report

48
Q

3 types of attitudes

A
  • ethnocentric
  • polycentric
  • goecentric
49
Q

ethnocentric

A

belief or viewpoint that one’s own culture, values, and customs are superior to those of other cultures, leading to a biased or judgmental perspective towards people from different backgrounds.

50
Q

3 factors to consider when going global

A

physical
institutional
competitive advantage

51
Q

external environment factors that affects international business

A
  • physical factors
  • institutional factors
  • competitive environment
52
Q

3 components of competitive environment

A
  • product strategy
  • resources and environment
  • competitors in each market
53
Q

4 components of institutional factors

A
  • laws and regulations (taxes)
  • legal policies
  • cultural forces
  • economic forces
54
Q

2 components of physical factors

A
  • demographic
  • geographic
55
Q

globalization big definition

A

Globalizationis the word used to describe the growing
interdependence of the world’s economies, cultures, and populations,
brought about by cross-border trade in goods and services, technology,
and flows of investment, people, and information.

56
Q

3 international mode of operations

A
  • goods exports/imports
  • services exports/imports
  • investment
57
Q

5 advantages of globalization

A
  • job creation
  • foreign direct investment
  • economies of scale
  • technological innovation
  • development of weaker economies
58
Q

3 critism of globalization

A

-threats to national sovereignty
- environmental stress
- growing income inequality

59
Q

factors impacting the futur of globalization

A
  • trade political conflict
  • attitude of consumers
  • supply chain management
  • behavior of national government
60
Q

cultural diversity vs cultural collision

A

Cultural diversity ► nationalities that come together with diverse
perspectives and experiences ► deeper knowledge of how to create and
deliver products and services ► can be difficult to manage
Cultural collision ► contact among divergent cultures creates problems
► may result in implementation of practices that are less effective and to
employees’ distres

61
Q

How to Access the Risk of Cultural Diversity / Collision?

A
  • social stratification
  • work motivation
  • relationship preferences
  • risk-taking behavior
  • information and tasks processing
62
Q

rule of man definition

A

ultimate power in the hands of one person and is the cornerstone of totalitarian governments.
=> china

63
Q

rule of law definition

A

hallmark of democratic governments and holds that authority comes from written and transparent law
=> united states

64
Q
A

international business (2 decks)

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