TENTAP Flashcards
Which one of Ghemawat’s distances creates most challenges for Netflix in India?
1) ethnic 2) administrative 3) geographic 4) cultural 5) psychic
2 administrative
If a respondent in Trompenaars’ study believes that it is wrong to testify in court against a friend, this indicates a high level of … (complete this sentence)
1)universalism
2)particularism
3)individualism
4)communitarianism
2)particularism
A highly competitive process of selecting performers for the K-Pop groups is consistent with the following Hofstede’s cultural characteristic -… (complete this sentence)
1)high masculinity
2)high femininity
3)high power distance
4)high collectivism
5)high uncertainty avoidance
1)high masculinity
Identify one co…[13:01, 15/12/2020] Toia LM: 18. Emirates Airline was a late entrant in the international airline industry. Which factors helped Emirates Airline to overcome the disadvantages of a late mover?
-Dubai and its geographical placement was helpful in developing routes to emerging markets in the eastern world and BRICS countries
-The fact that it was based far from Europe helped because of minimal aviation traffic
-Dubai is also surrounded by areas with huge populations
-Dubai has good weather that help Emirates in the sense that flights don ́t get cancelled or delayed because of the weather
-Huge support from the government
Dubai has good weather that help Emirates in the sense that flights don ́t get cancelled or delayed because of the weather
Which organizational structure is suitable for MNC implementing multidomestic strategy?
1)worldwide area division structure
2)worldwide product division structure
3)international division structure
4)global matrix structure
1)worldwide area division structure
Which one of the following entry modes proved to be more successful than others when Walmart expanded its operations abroad?
1)acquisition of small local companies
2)acquisition of large local companies
3)greenfield investments
4)franchising
2)acquisition of large local companies
How should we characterize in terms of Herzberg’s theory of motivation those practices that have been proposed to improve employee retention at LG Display Wroclaw factory?
1)motivators
2)positive incentives
3)hygiene factors
4)satisfaction factors
3)hygiene factors
The reluctance of Polish workers to attend company-organized events at LG Display Wroclaw outside of normal working hours reflects cross-national differences between Poland and South Korea in… (complete this sentence)
1)job design
2)work centrality
3)reward systems
4)goal setting
2)work centrality
What type of ownership has significantly increased in the U.S. over the last 25 years?
1)founding family ownership
2)institutional ownership
3)employee ownership
4)state ownership
5)corporate cross-ownership
2)institutional ownership
Which of the following is not considered in World Economic Forum studies as a pillar supporting an entrepreneurial ecosystem?
1)accessible markets
2)human capital
3)funding / financial resources
4)government & regulation
5)low level of corruption
5)low level of corruption
The relationship between headquarters and subsidiaries is dependent on the strategy adopted by a multinational corporation. In which strategy is the dependence of subsidiaries on the headquarters is the lowest?
1)global
2)multidomestic
3)international
4)diversification
2)multidomestic
Sustainability can facilitate firm access to all of the following resources except … (complete this sentence)
1)human resources
2)financial resources
3)government resources
4)natural resources
4)natural resources
Which of the following is not a characteristic of the industries where the governments are more likely to rely on mandatory regulation to promote the adoption of sustainable practices
1)business-to-business industries
2)industries where the adoption of sustainable practices is associated with higher costs
3)industries where especially hazardous materials are used
4)industries where few companies are registered as B-corporations
5)industries where environmental NGOs are particularly influential
5)industries where environmental NGOs are particularly influential
On Carlos’ first day as a study-abroad student, he was surprised to find that his instructor asked for student feedback and that at the end of class, the instructor went to lunch with some of the students. Using one of Hofstede’s cultural dimensions, characterize briefly the culture in which Carlos found himself during his studies abroad.
The culture in the foreign country scores low in the power distance dimension of Hofstede’s model. Low power distance societies have small gaps between the least and most powerful, the instructor in this example being a more powerful member of society. The school appears to have a flatter organizational culture with relatively equal relations between students and instructors.
Provide examples from specific countries illustrating how government policies can determine the composition of the board of directors.
What are the sources of Logoplaste’s competitive advantage over local packaging plants in foreign markets?
Lean entrepreneurial venture, with most staff locally recruited and each employee performing multiple functionsThey created an Innovative LAB with the mission to revolutionize the way clients procured packaging solutions.They created on-site units servicing a single client with machines set up inside own client ́s filler plant.
London-based Time Out company opened its first physical marketplace in Lisbon. Is this choice consistent with the Uppsala model of internationalization? Why?
Despite Portugal not being England ́s neighbor country, Time Out Market in Lisbon was the first market that the company opened in 2014 and they saw how that went before deciding to open other markets in other cities which is consistent with the Uppsala model of internationalization.
What are the three layers of Edgar Schein’s model of culture? Provide examples illustrating what we can find on each of these three layers when using Schein’s model to analyze an organizational culture.
Basic assumptions and beliefs like relationship to the environment or the inner values of individuals, espoused values such as the vision, the mission and the philosophy of the organization , and artifacts like technology and architecture.
Explain why “market for corporate control” is less effective in disciplining senior management of state-owned enterprises.
Which geographic factors contributed to the prominence of “born global” startups in the Israeli entrepreneurial ecosystem?
Israel small size was important because all major elements of the industry were concentrated in geographic proximity around tel Aviv, such as research universities, venture capital firms, military R&D and an international airport.
Israel’s small size played an important role in its high-the ecosystem. All major elements of the industry were concentrated in geographical proximity around Tel Aviv, including research universities, VC firms, military R&D, and an international airport. Its small size also provided a small market to experiment in, yet because the domestic market was insufficient to sustain a start-up’s growth trajectory, most ventures had to develop a global outlook early in their lifecycle.
Which forces convinced Nike to switch its position during the 1990s from denying to accepting its responsibility for how Nike’s suppliers treat their employees?
The pressure from the MEDIA and from the population had an impact on this change in Nike. Although they weren ́t the only ones with criticisms about working conditions, their size, profitability and brand recognition made them a target and they felt that they needed to change.
Information disclosed in corporate governance reports will depend on the country where the company operates and its regulations. However, there are common trends in corporate governance reports. What is the major recent trend in corporate governance reports?
The stakeholder agenda is the major trend in corporate governance reports.
What could be the reasons for multinational companies to opt for hiring expatriates instead of local employees to conduct operations in a foreign subsidiary?
Expatriates already know how the company works and could transfer knowledge and skills.
They work closely to the subsidiary, distributors and agents to ensure that the new subsidiary understand the parent company ́s values, standards and culture.It is way better to have someone on the field trying to understand how everything works rather than employees who conduct overseas business from the headquarters. This helps companies to reduce risks and avoid mistakes
How outsourcing is different from offshoring? What is the main advantage of opting for outsourcing?
Outsourcing is related to performing activities outside the boundaries of the firm. Moving operations to a third party.
Offshoring is related to performing activities within the firm but in locations abroad.With outsourcing we can reduce costs, combine the competitive advantage of different firms, concentrate on core activities and share some risks.
What is globalization and what are its two dimensions?
it refers to the broadening and deepening of interactions and interdependences among individuals and organizations from different countries (Cohn, 2005)
- Broadening: extension of economic and geographic linkages to encompass virtually all
major societies and states - Deepening: An increase in the frequency and intensity of interactions
What are the three main costs associated with globalization?
- Trade Costs (cost of moving goods)
*Communication Costs (cost of moving ideas)
*Face-to-face Costs (cost of moving people)
What is the argument for open borders?
“The pie increases for everyone”
What is the argument for maintaining borders?
A zero-sum game perspective
What is absolute advantage?
The capability of one country to produce more of a product with the same amount of input than another country
Produce only goods where you are most efficient, trade for those where you are not efficient
Assumes there is an absolute advantage among nations – all countris are best at something
“If someone can do it more cheaply than you, and you can do something more cheaply than them – then you should both make your respective goods and trade”
What is comparative advantage?
David Ricardo (1817)
Introduced the concept of “opportunity cost” instead of direct cost in free-trade arguments
“Opportunity cost” is the amount of another good you must forgo in order to produce something
A theory of comparative advantage suggests that countries should:
Produce and export those goods and services for which it is relatively more productive than other countries
Import those goods and services for which other countries are relatively more productive.
Describe the values dilemma
What is fair?
Arises because trade generates many outcomes that citizens evaluate on the basis of ethical principles and social values.
Free trade advocates believe that open borders maximize economic efficiency, competitiveness and standards of living.
Opponents point out that allowing markets to operate freely may allow economic considerations to dominate ethical considerations such as human rights and labor standards
Describe the distributional dilemma
Who wins and who loses?
Emerges from the propensity of trade to alter the distribution of income and wealth within a country
Because these distributional consequences have such political implications, the state is more attentive to them than economic theorists are.
Describe the sovereignty (state goals) dilemma?
Should we allow others to make and enforce rules over us?
States and their people prefer to preserve their sovereignty to make their own decisions. States
are wary that the interdependence implicit in cooperating with foreign actors may constrain independent action and threatens the autonomy
What are the benefits of trade?
*Improves economic performance: efficient allocation of countries ́ resources, so increasing its productivity
*Increase competition: stimulates industries to become more efficient and productive
often by forcing less productive firms out of business and allowing more productive
firms to expand.
*Increases the transfer of foreign technologies that enhance productivity
Describe and name Hofstede’s model of national cultures
- Individuals VS collectivism
Refers to whether a person primarily functions as an individual or as a member of a group
Individualistic societies: each person emphasizes his or her own self-interest. Ex. Australia, Britain, Canada & the U.S.
Collectivist societies: ties among individuals are important. Business is made in a group context. Ex. China, Panama, Japan & South Korea.
-Power distance
Refers to how a society deals with inequalities in power that exist among people.
High power distance: Societies exhibit big gaps between the most and the least powerful. Top management tends to be autocratic, giving little autonomy to lower-level employees.
Low power distance: Societies have small gaps between the most and least powerful. Ex. US & Scandinavia
- Uncertainty avoidance
Refers to the extent to which people can tolerate risk and uncertainty in their lives
High uncertainty avoidance societies create institutions to minimize risk and ensure security. Stable careers & decisions are made slowly. Ex. Belgium, France & Japan
Low uncertainty avoidance societies, managers are entrepreneurial and comfortable with risks.
- Masculinity VS feminity
Refers to society’s orientation based on traditional male and female values.
Masculine cultures: value competitiveness, ambition assertiveness and the accumulation of wealth. Ex. Australia & Japan
Feminine cultures: emphasizes nurturing roles, interdependence among people, and carfir for less fortunate people.
Ex. Scandinavia
- Long-term VS short-term orientation
Long-term orientation: emhpasizes the long view in planning and living, focusing on years and decades. Ex. Asian cultures
Short-term orientation: short term planning and living, focusing on the present.
- Indulgence vs restraint
Indulgent societies: encourage instant gratification, it is good to be free and do what your impulses tell you to do. Ex. North and Latin America
Restraint societies: Regulate and control behavior based on social norms, life is perceived to be hard and duty is not freedom is the normal state of being. Ex. Asia and eastern Europe
Describe and name the dimensions of Trompenaars framework of national cultures
- Universalism VS Particularism -
Universalism – Ideas and practices can be applied everywhere (ex, Canada, US, Netherlands)
Particularism – Circumstances dictate how ideas apply (ex. China, South Korea)
-Individualism VS Communitarianism
Individuals - “People as individuals”, stress personal and individual matters, great personal responsibility (ex. Canada, US, Japan)
Communitarianism – People regard themselves as a member of a group. (Ex. Malaysia and Korea)
-Neutral VS Emotional
Neutral – Culture in which emotions are not shown. (ex. Japan & UK)
Emotional – Emotions are expressed openly and naturally. (ex. People smile a lot, talk loudly etc. Ex. Mexico)
-Specific VS Diffuse
Specific – Large public space shared with others and small private space guarded closely. (Ex separation between work and personal life ex. Austria, UK, US)
Diffuse – Public and private spaces are similar. (ex. Venezuela, China, Spain)
-Achievement VS Ascription
Achievement – People are accorded status based on how well they perform functions. (Ex. Austria, Switzerland and US)
Ascription – Status based on who or what this person is. (Ex. China, Indonesia)
-Sequential VS Synchronous
Sequential – Only one activity at a time: Appointments kept strictly, follow plans (US)
Synchronous – Multitask, appointments are approximate. (Ex. France, Mexico)
-Inner-directed VS Outer-directed
Inner-directed – People believe that they have control over outcomes. (Ex. US, Greece, Japan)
Outer-directed – People believe in letting things take its own course. (China, Asian countries)
What is needed for the market to function?
Laws and regulations (Ex. Property rights and business laws)
Free trade barriers
Platforms for market transactions (Ex. Shopping centers or online platforms)
Payment system
Ex. Selling a car second-hand
Sellers need to prove their trustworthiness
An independent third party solves the problem of the price question
If both parties trust the third party, the market clears at prices that reflect its truw value
What is culture?
It is the way through which we make sense of the world and, consequently, it shapes
perceptions, rules and norms, beliefs, needs, likes/dislikes, and values
What are perceptions?
they are framed
Our frames are usually
culturally determined
We learn to see the
world in a certain way based on our cultural background.
Our assumptions act as filters and lead
us to distort, block, and even create what we choose to see and hear
How can institutions facilitate market transactions?
Through:
Reducing information asymmetries
Aligning incentives
Reducing transaction costs
Generating trust
How can producers get access to capital in developed economics?
Paying with credit cards
Loan from banks
Venture capitalists
Raising funds
Issuing bonds
Crowdfunding
How can producers get access to capital in emerging economies?
In emerging economies (Bangladesh & India) :
Borrow from family and friends
Credit unios
Trade credit
Obtaining funds from the government
Microfinance
Describe the CAGE framework
Cultural:
- Language
- Ethnicity
- Religion
- Work systems
- Traditions
- Values
Administrative:
- Colonial ties
- Trade agreements
- Currency
- Legal systems
- Government policies
- Political hostility
- Corruption
- Visa and work permit regulations
Geographic:
- Physical distance
- Common land border
- Time Zones
- Climate
- Landlockedness
- Transportation
- Communication
Economic:
- Per capita income
- Cost of labor
- Human resources
- Economic size
- Age and gender
What is a MNC? (MNE/TNC)
Multinational Corporations (MNC)
MNC have operating facilities with dedicated employees in more than one country
A company without operating facilities abroad can sell its product to foreign customers
Some authors suggest that to be considered a MNC you need to operate in more than two countries
How can you compensate for the foreignness?
Offer something that local domestic companies cannot.
How can added value arise?
Added value can arise from introducing something from a firms home country in a new market
(Can be seen as an extension of a firms domestic competetive advantage)
Added value can also arise from accessing in the new market something that would be valuable in the domestic market of this firm
Describe the Uppsala model of entering foreign markets
Foreign target markets are selected primarily according to their proximity in terms of “physic distance”
Physic distance reflects differences in language, culture, political systems, level of education, or level of industrial development
The physical distance makes it harder to understand a foreign market
According to the model: companies start investing in one or few neighboring countries rather than in a variety of countries simultaneously
Investment is carried out cautiously, gradually, and according to manager’s learning progress
As a result, the company is expected to follow a sequence from low to high commitment and to enter new markets successively greater physic distance
What is the rational optimization approach?
An entering foreign markets approach by going after the market with the most appealing characteristics
Name a few entry modes
Exporting
Licensing & franchising
Wholly owned subsidiaries (greenfield investments)
Mergers and acquisitions
Strategic alliances and joint ventures
What are the determinants of entry mode choices made by firms?
Goals and objectives of the firm
Degree of control desired regarding decisions, operations etc.
The firm’s resources (financial, organizational, technological) - both strength & weaknesses
The types of risk inherent in each proposed foreign venture
Conditions in the target country (legal, cultural, economic circumstances)
The nature and extent of competition from rivals that might enter the market later
Availability and capabilities of partners in the market
The value-adding activities the firms is willing to perform and what it will delegate to local partners
Characteristics of the product or service
How can entry modes be affected by prior entry experience?
Path dependency – firms often repeat entry modes they have pursued before, even if it is not the most appropriate one
Learning from experience
What are the low commitments (Home based) entry modes?
- Exporting
- Licensing/Franchising
Describe Exporting and its advantages VS disadvantages
Exporting:
- Producing products or services in one country and selling/distributing them to customers in other countries
- Usually the firm’s foreign entry strategy
- Low risk, low cost, and flexible
- Export channels: Independent distributor/agent VS firm’s own distributor abroad
Advantages:
No need to establish foreign operations
Do not transfer competencies to foreign firms
Easy to control operations
Disadvantages:
Costs (transportation, tariff)
Limited learning opportunities
Less responsive to local demands
Ex: Microsoft software, Disney’s movies
Describe Licensing and Franchising and its advantages VS disadvantages
Goverened by a contract that provides the focal firm a moderate level of control over the foreign partner.
Typically involve exchange of intangibles (trademarks, intellectual, property, know-how”
Advantages:
Low-risk & low-cost
Fast expansion
When a target market is not of strategic interest
Disadvantages:
Limited control over licensee’s operations
Lower profit
Create potential competitors in other markets
Ex: licensing – Lego, Franchising – McDonalds, Marriott
Name the high-commitment entry modes
Foreign Direct Investment (FDI)
- Wholly owned subsidiary (greenfield investments
- Mergers and Acqusitions
Strategic Alliances & joint ventures
- Non equity strategic alliance
- Equity strategic alliance
- Joint venture
Describe FDI
FDI involves establishing a presence in the foreign market by investing capital in property located aborad
FDI entails risk and resource commitment
Can be done through: wholly owned subsidiaries, acquisitions, equity-based collaborative ventures with foreign partners
Describe Wholly Owned subsidiary (greenfield investments) and its advantages VS disadvantages
A firm sets up presence abroad – alone and from scratch
Local knowledge and understanding of the market will have to come from within the firm or by hiring locals
Takes time and substantial resources
Advantages:
High level of control over the subsidiary
High profit potential
Internal transfer of competencies and proprietary knowledge
Disadvantages;
High risk and capital investments
Market access may be difficult
Lack of local knowledge
Host government may not allow (laws & regulations, corruption)
Ex: Toyota North America, Philips USA
Describe M&A’s and its advantages VS disadvantages
Mergers(equal): assets of two previously separate companies are combined to establish a new legal entity
Acquisitions: assets of the acquired company are absorbed by the acquirer and the target company disappears as a legal entity
Real “mergers” are rare – usually there is a dominant party
Advantages (Acquistions)
Allows rapid global expansion opportunities
Start foreign operations with a substantial market share
Does not intensify competition
Disadvantages:
Could be expensive
Complex regulation
Difficult to obtain information
Cultural differences
Ex: Walmart & Woolco
Describe Non-equity strategic alliances
Cooperation between firms is managed directly through contracts, without equity holdings or a new firm being created
Detailed contracts are necessary
Describe Equity strategic alliances
Cooperative contracts are supplemented by equity investments
Why do firms invest in their alliance partners?
Company A makes an investment in company B
Describe Joint ventures
Cooperating firms invest in a new firm and share its profits
Choosing partners - skills & resources
Working with partners – are they contributing? Who is more dependent on success?
Terminating joint projects – who will learn faster?
What are the advantages VS disadvantages with Strategic Alliances & Joint ventures
Advantages:
Share risks and resource requirements
Opportunity to learn from partners
Partners assets
Often favored by host governments
Disadvantages:
Transfer of competencies to a potential competitor
Difficult coordination (different culture, goals etc)
Ex: Renault & Nissan. Cisco & Wipro
Through which ways can firms locate value chain activities in countries with comparative advantage?
Aggregation:
Some firms wish to integrate activities to
develop global economies of
scale and scope, creating efficiencies based on exploiting similarities (such as geographies or markets) rather than adapting to differences
*Arbitrage:
Some firms wish to integrate activities to
exploit economic or other
differences between national or regional markets, usually by locating separate parts of
the supply chain in different places. Can be more than achieving cost efficiencies: firms
may seek knowledge and innovation by locating near worldwide centers of excellence
What is Porters diamond model?
The determinants of the competitive advantage of nations are:
*Factor conditions: Natural resources and
created factor conditions (skilled labor,
scientific knowledge, and infrastructure)
*Demand conditions: size and sophistication of domestic demand
*Related and supporting industries: High-quality, internationally competitive suppliers and supporting industries
*Firm strategy, industry structure, and
rivalry: highly competitive domestic industry is preparing firms for facing
foreign competitors
What is corporate governance?
Is about the structure of rights and responsibilities among the parties with a stake in the firm
Is about relationships of various stakeholders or constituents
Who controls a company, and what types of mechanisms are used
Name a few types of ownerships
Institutional investors
Families
The state
Other corporations
Banks
Employees
VC investors
Why may managers have different interests than shareholders?
Growth, profitability, risk
Why do we need corporate governance?
To make sure that managers act in the best interest of the shareholders
How can we make sure that managers act in the best interests of the shareholders?
Alignment of interests
Close monitoring
Name the steps in Maslows hierarchy of needs and describe how it differs from Asian cultures
Psychological needs
Safety
Love/belonging
Esteem
Self-Actualization
Asian cultures: In Asian cultures, individuals are inseparable from social groups and their needs are defined by thesesocial groups
- Belonging (social)
- Physiological
- Safety
- Selfactualization
Describe Herzbergs two-type motivation factors
Motivation: job-content (intrinsic) factors associated with the job satisfaction
Hygiene factors: Job-context (extrinsic) factors associated with job dissatisfcation
Describe McClellands achievement for motivation
Need for achievement
Need for affiliation
Need for power
(Need for avoidance)
Describe the equity theory
Equity theory states that e mployees compare their contributions to the organization with what they get from their job (whether they are treated fairly).
When people perceive that they are treated equitably, this will have a positive effect on their job satisfaction
If people believe they aren’t being treated fairly (especially, relative to relevant
others), they will be dissatisfied, leading to negative effects on job performance; they will
attempt to restore equity
What is the goal setting theory by Locke?
Managers and employees(together)
must find what goals can produce the desired outcomes. One of the best ways
is by using the SMART principle:
Specific
Measurable
Attainable
Relevant
Time-based
What are the conditions that may prevent effective monitoring?
Conflicts
Social ties
Lack of expertise
Weak incentives to perform the monitoring function properly
What happens when shareholders sell their shares?
Strong signal for the board to fire the CEO
The firm becomes an attractive acqusition target
What is CSR?
“the actions of a firm to benefit society beyond the requirements of the law and the direct interests of them firm” or “the actions that appear to further some social good, beyond the interests of the firm and that which is required by law”
What could be the purpose of firms?
Exist to serve the customers
Earn profits
Solving social problems
Generating value for shareholders
What are the problems with sustainability motivation
Most companies would like to minimize their environmental impact, but they are under pressure to increase profitability
Few companies are ready to sacrifice profits and thus sustainable practices will be widely adopted only if they can generate profits
What are the forces of global integration?
- Economic
- Technological
- Perception VS reality of globalization
What does broadening and deepening refer to in the context of globalization?
Broadening: extension of econmic and geographic linkages to encompass virtually all major societies and states
Deepening: An increase in the frequency and intensity of interactions
What is the “Golden Straitjacket”?
it refers to facilitating economic growth, individual countries must sacrifice some aspects of their economic sovereignty to global institutions
What are the Friedman’s “10 flatteners”
- Collapse of the Berlin wall (global embrace of capitalism)
- Netscape (Internet)
- Workflow software (machines communicate with other machines)
- Uploading (collaborative online projects)
- Outsourcing (activities to other firms)
- Offshoring (production to other countries)
- Supply-chaining (streamlining supply chain like Walmart does)
- Insourcing (the reverse of outsourcing)
- Informing (spreading information like Google)
- Steroids (wireless internet, file sharing, etc)
What are the three economic constraints on integration?
- Trade costs (cost of moving goods)
- Communication costs (cost of moving ideas)
- Face-to-face costs (cost of moving people)
What is globalization backlash?
A populist movement that questions many of the assumptions of the mutual benefits to trade, open borders and immigration
What is great power politics?
Growing contestation between sovereign countries and blocs over who shall set and enforce the rules of world politics and trade
What are the forces that impose constraints on globalization?
Social and political factors that reinforce the importance of national borders
What is the theory of absolute advantage
- Capability of one country to produce more of a product with the same amount of input than another country
- Produce only goods where are most efficient, trade for those where you are not efficient
- Assumes there is an absolute advantage balance among nations - all countries are best at something
