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INTB 1203 > Semiglobalization: Challenges and solutions > Flashcards

Semiglobalization: Challenges and solutions Flashcards

1
Q

What is semi-globalization?

A

Both forces of globalization and localization are taking place at the same time

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2
Q

Why is semi-globalization important for a firm?

A

There is tension - a fundamental source of uncertainty in the world - can change strategies very differently

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3
Q

What does Free Trade Economists say?
Non-sum zero

A

If we open all borders, everyone will become bigger and everyone wins.
Free trade allows companies to specialize in what they are good in - national competitive advantage

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4
Q

What should be done to enhance global competition good?

A

Open all borders:
Drive market prices down, quality increases, efficiency increases

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5
Q

What does Zero-sum world say?

A

When countries grow; rich become richer and poor become poorer

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6
Q

What are 2 reasons so many people oppose free trade?

A

Economic arguments
Political arguments

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7
Q

What are economic arguments for opposing free trade?

A
  • Protecting infant industries. If a country has a competitive advantage - they will protect it until they become good enough
  • Strategic trade policy. During times of recession, we need to intervene and protect industries
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8
Q

What are political arguments for opposing free trade?

A

PPPNR
- Protect domestic jobs (bailouts and subsidies)
- Protecting consumers (GMOs)
- Protecting human rights and the natural environment
- National security (energy companies, defense industries)
- Retaliation vs. unfair foreign competition (sanctions)

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9
Q

How do governments intervene in trade?

A

T-SALIVA
Tariffs - taxes levied on imports

Subsidies - help domestic producers produce minimum level

Antidumping duties - selling goods in a foreign market at below their COP or below market value

Local content requirements - some specific fraction of a good must be produced locally

Import quotas - direct restriction on the quantity of some good imported

Voluntary export restraints - quotas on trade imposed by exporting country

Administrative policies - bureaucratic rules are designed to make it difficult for imports to enter a country

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10
Q

What are waves of globalization?

A

When times are bad, people tend to oppose free trade

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11
Q

What is the retreat into nationalism in terms of the US?

A

Protectionism and the Smoot Hawley Tariff
- Herbert Hoover increased tariffs on more than 20,000 imported items
- He wanted to support domestic products

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12
Q

Retaliatory tariffs

A

All countries increased tariffs since Hoover did it

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13
Q

Development of World Trading Organization

A

Since WW2, an international trading framework has evolved to govern world trade
- In 1947, GATT was there to liberalize trade and eliminate barriers to trade
In GATT, there were 8 rounds - most important was Uruguay because of intellectual property

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14
Q

How has the protectionism grown since 2009 crisis?

A

G-20 leaders pledge to refrain from raising new barriers
Right after US, EU and other countries put up tariffs.

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15
Q

How do regions drive trade?

A

10 countries make up 66% of the world’s GDP
They gain more political and economic power

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16
Q

What does regional economic integration mean?

A

Agreements among countries in a geographic region to reduce and encourage free flow of goods
+ easier to trade with 3 countries than 50
+ greater interdependence reduces wars and increases political strength
- could lead to major losses if insider free trade is offset by competition

!!The valid premise of regional trade is when trade creation exceeds trade diversion!!

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17
Q

What are the levels of integrations?

A

Free Trade Area
Customs Union
Common Market
Economic Union
Political Union

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18
Q

What is FTA?

A

Trade barriers to trade g/s among members countries are removed
eg. NAFTA

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19
Q

What is Customs Union?

A

Eliminates trade barrier but adopt a common external trade policy
eg. MERCOSUR

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20
Q

What is a Common Market?

A

FOPs move freely between members
eg. CARICOM

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21
Q

What is an Economic Union?

A

Tax rate,common currency, common monetary and fiscal policies
eg. EU

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22
Q

What is a Political Union?

A

Central political apparatus coordinates the economic, social and foreign policy
eg. USA (not rlly)

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23
Q

Evolution of EU

A

Result of 2 world wars - political devastation - Russia and USA
1951 - Forerunner - European Coal and Steel community
1957 - Treaty of Rome - established the European Economic Community (EC)
1986 - Single European Act - EC countries to work towards establishment of a single market
1993 - Maastricht Treaty - committed EU members to adopt a single currency
1994 - Name changed

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24
Q

Advantages and disadvantages of the Euro

A

+Easier to work with, compare prices
- Loss of control over monetary policy
- EU is not an optimal currency area - all countries react differently to changes in euro

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25
Issues in the EU
Greece with economic difficulties Brexit - de-integration Russian enlargement
26
What is the political structure of the EU?
European commission - proposes law European council - most power - says yes or no European parliament - debates the law Court of justice
27
What is NAFTA?
Trade agreement between USA, Mexico, Canada NAFTA has intellectual property rights They have their own internal compliance board + Jobs increased in Mexico + Cheap market share for USA and Canada - Mexico has loss of sovereignty - Jobs could be lost in USA and Canada
28
Why is having 17 trade blocs in Africa difficult for multinational trade?
Difficult for FDI - u need to look at differences from the trade blocs Sovereignty and coordination - we want power
29
What is morality?
Guiding principles of what's right and wrong
30
What is ethics?
Specific rules or actions, guidelines for behaviour Informal
31
What is legal?
Breaking formally written rules of a community Formal
32
Are firms individual?
No and we should not view companies as people
33
What are some ethical issues in International Business?
MEECH Moral obligations - social responsibility and ethical dilemmas Employment practices - working conditions, pay, hours Environmental regulations - tragedy of commons Corruption - foreign corrupt practices act Human rights - freedom of speech, movement, assembly
34
What are factors that determine ethical behaviour?
D-PLOPPS Decision making Personal morals Leadership Organizational culture Processes Performance goals Societal culture
35
What are personal ethics?
Generally accepted principles of right and wrong that govern the conduct of a person Pressure is reduced when managers are geographically and psychologically away from home
36
What is decision making process?
Multishareholder approach - asking community, government, etc. for opinion on the introduction of a good
37
What is organizational culture?
The values and norms in the organization
38
What are performance goals?
Unrealistic performance goals that can only be attained only by cutting corners ie. 4 exams in a day - likely to cheat in some
39
What is leadership?
Actions speak louder than words - leading rather than managing
40
What is societal culture
Different ideas of right and wrong
41
What is the Friedman doctrine?
The only responsibility for the firm is to make profit within the rule of law within the host country, and besides this, there is no responsibility
42
What is cultural relativism?
Do and act as the people and businesses in that country act and do - when in rome, do as the romans do
43
What is the righteous moralist?
The home country ethics/morals should always be followed
44
What is the naïve immoralist?
Follow the lead of other countries - if it's okay for other businesses to do it, then it is okay for you to do it The company may not know that they are doing something ethically wrong
45
What is utiliatarian?
Make ethics scientific. Take 1 action and think of all the consequences and then indicate whether if the consequences were good and bad, and if the sum is good then the action is ethical and otherwise it is unethical Greatest good for the greatest number of people
46
What is kantian/universal ethics?
All humans have 1 rule to follow - categorical imperative - you must treat all humans with inherent and respect. You cannot ask someone to act as a means to end Important for employment since you are a means to someone else - you work for someone else
47
What is rights theories?
If you want to know if something is ethical or not - check it in the UN human rights document Would not exist without kantain
48
What is the justice theory?
Ethical to equally divide the resources Distribution of goods
49
What is the John Rawls: Theory of Justice?
Any political action is ethical if it upholds 2 principles: 1. the action gives most benefit to least advantageous people 2. if the action intends to help people make decisions
50
What is the Leon Sullivan: Sullivan Principles?
Designed to talk about businesses Promotes CSR and to apply economic pressure on South Africa during crisis Assess whether a business is ethical - uphold the action with the 7 principles
51
Where does a firm fit in ethics?
As we become more globalized, there is increased pressure on firms for ethical dilemma
52
What is the Bill Gates Model of philanthropy?
Setting up schools, etc. in LDCs - under the name of this not Microsoft
53
What do corporations do during bad times?
When things go wrong, companies tend to express that they are engaging in people and making a contribution
54
What are institutional voids?
Gap in resources
55
Why are there institutional voids?
Lack of trust in the system Poor national level institutions Low levels of infrastructure
56
Are institutional voids black holes or opportutnites?
Khanna suggests that firms must either escape the void or navigate them
57
How can institutional voids be filled by firms?
Provide resources post disasters Serve as policy advocates Push for global regulations
58
What does distributive fairness mean?
Judgments over the fairness of the final allocation of resources - are you okay with the fact that everyone got the same thing
59
What is procedural fairness?
Judgments over the fairness of the procedures by which allocation happened- are you okay with the way the fairness came about?
60
What are types of distributive fairness?
Equality rule, equity rule, needs-based rule
61
What is the equality rule?
Everyone gets the same thing
62
What is the equity rule?
Distribution is based on the effort given
63
What is the needs-based rule?
The thing is distributed based on its needs

INTB 1203 (4 decks)

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