Schermerhorn Chapter 3- Global Dimensions Of Management Flashcards
What is globalization?
The process of growing interdependence of these components in the global economy.
Components: Resource suppliers, product markets, and business competition
What are some reasons for businesses going global?
Profits Customers Suppliers Capital Labour
Name 5 types of market entry strategies for companies going global
Global Sourcing
Exporting
Importing
Licensing Agreement: one firm pays fee for rights to make or sell another company’s products
Franchising: a fee is paid for rights to use another firm’s name and operating methods
Name 3 types of direct investment strategies
Joint ventures:operates in a foreign country through co-ownership by foreign and local partners
Global strategic alliances:a partnership in which foreign and domestic firms share resources and knowledge for mutual gains.
Foreign subsidiaries:local operation completely owned by a foreign firm
Name 4 causes of complications in a global business environent
Political risk Local Legal systems World Trade Organization Protectionism Regional Economic Alliances
Name 3 benefits of a country hosting multinational corporations. Name 3 downsides to a country having MNC’s operating within it
Upside:
Larger tax base
Increased employment opportunities
Development of local resources
Downside: Excessive profits Domination of local economy Brain drain (soaks up best local talent) Sometimes limited technology transfer Disrespect for local customs
What is an MNC?
Multinational corporation
Name 3 complaints MNC’s have about host countries
Profit limitations Overpriced resources Exploitative rules Foreign trade restrictions Failure to uphold contracts
Name 4 ethical issues MNC’s face
Corruption
Sweatshops
Child labour
Sustainable development
Why can culture pose a barrier to international business?
Culture shock occurring on an organizational level, possibly between management and subordinates: Confusion and discomfort experienced in an unfamiliar culture
Compare High- and Low-context cultures
Low context: emphasize communication via spoken or written words
High context: rely on nonverbal and situational cues as well as on spoken or written words in communication
The use of time and distance in communication can also be different cross culturally
What are 5 culture traits defined by Hofstede?
Power Distance Uncertainty Avoidance Individualism-Collectivism Masculinity-Femininity Time Orientation
Name 5 facilitators and 5 inhibitors of success that are applicable internationally, according to Project GLOBE
Facilitators:
Acting trustworthy, just, honest
Showing foresight, planning
Being positive, dynamic, motivating
Inspiring confidence
Being informed and communicative
Being a coordinator and team builder
Inhibitors:
Being a loner
Acting uncooperative
Being irritable
Acting autocratic
Describe the distinction between Ethno-, Poly-, and Geocentric attitudes
The words describe where certain attitudes can be successfully applied.
Ethnocentric attitudes: country-wise (social)
Polycentric attitudes: political, social, and financial Geocentric attitudes: international (not limiting)
