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INBU3450 International Marketing > Quiz #2 (ch. 3-4) > Flashcards

Quiz #2 (ch. 3-4) Flashcards

1
Q

Consider the four risks in international marketing. Which one is closely related with the political and legal systems?

A

Country risk (harmful or unstable political system, unfavorable laws to foreign firms, bad legal system, etc.)

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2
Q

MCE hopes to expand into Switzerland but decides to partner with a company with little knowledge of the Swiss landscape. This is an example of what risk?

A

Commercial risk (weak partner)

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3
Q

I move to Japan to source better talent but all of my new employees are averse to challenging authority. Which risk did I forget to account for?

A

Cross-cultural risk

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4
Q

I take 50% of my business’s liquid assets and convert it to Venezuelan currency. What is the most prevalent risk involved here?

A

Currency/financial risk

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5
Q

China does not have good protections of IP - what type of risk does Tesla have expanding there?

A

Country risk

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6
Q

Country risk

A

Exposure to company operations and profitability risks caused by developments in a country’s political and/or legal environments.

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7
Q

What is the example given in class for country risk? Hint: Coca-Cola

A

Germany gov. enacted new recycling plan requiring consumers to return soft-drink containers to stores for 0.25 euro refund. Big chains pulled Coke products from shelves.

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8
Q

Political system

A

A set of formal institutions that constitute a government and how the groups interact with each other.

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9
Q

What are the three major types of political systems?

A
  1. Totalitarian
  2. Socialism
  3. Democracy

Can be mixed!

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10
Q

Totalitarianism

A

Government controls all economic and political matters

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11
Q

Theocratic

A

A religion-based totalitarian regime

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12
Q

How is power sustained in a totalitarianism

A

Secret police, propaganda, regulation of free discussion (think The Lives of Others)

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13
Q

Socialism

A

Government’s role is to control the basic means of production, distribution, and commercial activity.

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14
Q

In a socialist country, (group/individual) welfare outweighs (group/individual) welfare

A

In a socialist country, group welfare outweighs individual welfare

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15
Q

Is a socialist or democratic country more economically and politically free?

A

Democracy

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16
Q

Command economies are most associated with which political system?

A

Totalitarianism

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17
Q

Command economy

A

The state makes all decisions on what to produce, how much to produce, and what prices to charge (ex. Russia)

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18
Q

Mixed economies are most associated with which political system?

A

Socialism

19
Q

Mixed economy

A

Combines state intervention and market mechanisms (ex. Sweden, Singapore)

20
Q

Market economies are most associated with which political system?

A

Democracy

21
Q

Market economy

A

Decisions are largely left to market forces (supply and demand)

22
Q

What are the four major types of legal systems?

A
  1. Common Law
  2. Civil Law
  3. Religious Law
  4. Mixed systems
23
Q

Three traits of a legal system

A
  1. Applied to all citizens equally.
  2. Issued via recognized gov. authorities.
  3. Enforced fairly and systematically.
24
Q

Common law is relatively (flexible/rigid)

A

Flexible. It can change depending on the outcomes of cases.

25
Q

Common law is mainly ______ in origin whereas civil law is mainly _______ .

A

Common law is mainly judicial in origin whereas civil law is mainly legislative.

26
Q

What are the three country risks produced by political systems?

A
  1. Confiscation: Seizure of corporate assets without compensation.
  2. Expropriation: Asset seizure with compensation.
  3. Nationalization: Takeover of an entire industry, with or without compensation.
27
Q

What is the Bolivian example of country risk produced by a political system?

A

The Bolivian government nationalized the oil and gas industry in 2006.

28
Q

What is the most common country risk today of the three (confiscation, expropriation, nationalization)?

A

Expropriation, seizing assets with compensation.

29
Q

What was the example for expropriation given in class?

A

PayPal will suspend its operations in Turkey because the Turkish government wants the company to set up an IT center within the country and share its IP.

30
Q

Sanctions vs. embargoes against a country

A

Sanctions only concern a specific industry or set of products while embargoes bans exports or imports to the entire country.

31
Q

The Anheuser-Busch example given in class is an example of what?

A

Country risk due to political system. Closing brewery in Russia due to tougher regulations and higher taxes.

32
Q

Conciliation

A

Formal process of negotiation to resolve differences. It is the least adversarial method (similar to mediation)

33
Q

Arbitration

A

A neutral third party hears both sides of a case and decides in favor of one party or the other. Can be binding.

34
Q

Iceberg concept of culture shows three layers of awareness. What are they?

A

High culture, folk culture, and deep culture

35
Q

High culture

A

Cultural makeup that is visible. Ex. Fine arts, music, architecture

36
Q

Folk culture

A

Cultural makeup we are aware of. Ex. Humor, religion, cooking, dress

37
Q

Deep culture

A

Cultural makeup we are unaware of. Ex. Conversational patterns, concepts of beauty, beliefs on right vs. wrong

38
Q

According to Hall’s high and low context typology, establishing social trust and ritualistic negotiations are what level?

A

High context, found in many Asian countries.

39
Q

Does Germany have a high context or low context culture?

A

Low context

40
Q

What are Hofstede’s five dimensions of cultural differences?

A
  1. Power distance
  2. Uncertainty avoidance
  3. Individualism - collectivism
  4. Masculinity - femininity
  5. Time orientation
41
Q

Ethnocentric orientation (managerial)

A

Using our own culture as the standard for judging other cultures

42
Q

Polycentric orientation (managerial)

A

Where the manager develops a greater affinity for the country where he/she works than for their own country.

43
Q

Geocentric orientation (managerial)

A

A global mindset where the manager is able to understand a business/market without regard to national boundaries.

INBU3450 International Marketing (5 decks)

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