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Globalization of markets - Solution -refers to the interconnectedness of national economies and the growing interdependence of buyers, producers, suppliers, and governments around the world Role of Technology in Globalization - Solution -technology offers products/services worldwide, communication finding information, the world has become a "small place" Examples of Technology's Role in Globalization - Solution -- shorter flight times -declining cost of global communication -growing # of internet users -ease of offering your product to a world-wide audience -ease of paying a supplier/receiving money abroad -ease of delivering a service abroad Drivers of Globalization (all based on change) - Solution -1. Political
- Technological
- Market
- Cost
- Competitive Example of Political driver of globalization - Solution -more friendly towards trade, FDI Example of Technological driver of globalization - Solution - communication, delivery of services Example of Market driver of globalization - Solution -tap into demand or suppliers in other markets
Example of Cost driver of globalization - Solution -economies of scale, wage differentials Example of Competitive driver of globalization - Solution - internationalize or die Is the idea of doing business internationally new? - Solution -Of course not Importing - Solution -the transportation of any good or service into a country or region from a foreign origination point Arguments against globalization - Solution -1. it has produced uneven results across nations and people
- deleterious effects on labor and labor standards
- decline in environmental and health conditions Top 3 largest trading nations - Solution -1. China
- United States
- Germany Major trading partners of the U.S. - Solution -1. China
- Canada
- Mexico 2013 largest markets for american exports - Solution -about 1/ went to other nations in North America Trade balance - Solution -value of imports = value of exports Trade surplus - Solution -the amount by which the value of a national exports exceeds the value of its imports
National competitiveness - Solution -a nation's relative ability to design, produce, distribute, or service products within an international trading context which earning increasing returns on its resources Countries that receive a lot of FDI - Solution -1. China
- Hong Kong
- U.S.
- UK 5.Singapore Countries that are the source of a lot of FDI - Solution -1. U.S.
- China
- UK
- Germany
- Japan US accumulated FDI investment abroad in which countries - Solution -Canada, Mexico, Europe, Australia Greenfield investment - Solution -the establishment of new facilities from the ground up Portfolio investment - Solution -the purchase of an existing business in another nation Culture (2 definitions) - Solution --the learned, charged, and enduring orientation patterns in society demonstrated through values, ideas, attitudes, behaviors, and symbols -a collective programming of the mind that distinguishes the members of one group or category of people from another Culture (characteristics) - Solution --applies to nationalities as well as sub-cultures (professions)
-influences: how people behave, negotiate, communicate, what people buy, food preferences, risk taking, behavior interpretation, expectations Ethnocentric orientation (definition) - Solution -using our own culture as the standard for judging other cultures (we believe that the way we act, see the world, the things we like etc. is superior to others) Ethnocentric orientation (consequences) - Solution -stereotypes (generalizations that may or may not be factual and often overlook real, deeper differences) Socialization - Solution -the process of learning the rules and behavioral patterns appropriate to one's society Acculturation - Solution -the process of adjusting and adapting to a culture other than one's own; commonly experienced by expatriate workers Top 3 Languages in the world - Solution -1. Chinese
- Spanish
- English Communication context - Solution -the degree in which communication (verbal and non-verbal) needs some degree of "interpretation" by the receiver in order to understand the true meaning of the message Low-context cultures - Solution --rely on explicit explanations with an emphasis on spoken words -communication is direct (including criticism) -the meaning of the communication can be taken literally -"no" means no
- Brazil
- China Individualism vs. Collectivism - Solution -social orientation refers to whether a person primarily functions as an individual or within a group Collectivism (definition) - Solution -the degree to which a culture or subculture emphasizes the well-being and role of a group Collectivism (characteristics) - Solution --high level of loyalty -group members very important -slow decision making and less flexibility Collectivism (country rankings) - Solution -1. China
- Brazil
- Germany
- U.S. Power distance (definition) - Solution -describes how a society deals with inequalities in power that exist among people (manner in which people of a culture defer to legitimate authority in familial, societal, and organizational authority structures) High power distance (characteristics) - Solution --people defer to authority with little to no resistance Examples of high power distance countries - Solution -Latin American, Malaysia, Philippines, several middle east countries Low power distance (characteristics) - Solution --people feel free to question and challenge authority Examples of low power distance countries - Solution - Scandinavian countries, U.S., Western Europe
Power distance implications - Solution --who do you schedule meetings with? -how do you act with authority figures? -whom do you send to negotiations in a foreign country? Power distance countries ranked - Solution -1. China
- Brazil
- U.S.
- Germany Uncertainty avoidance (definition) - Solution -refers to the extent to which people can tolerate risk and uncertainty in their lives Low avoidance - Solution --people feel comfortable working with limited information or under the premise of uncertainty -decisions are made quickly -more innovative -more comfortable changing jobs High avoidance - Solution --people and companies have a more difficult time dealing with risk and uncertainty -emphasize stable careers -decisions made slowly Examples of countries with high avoidance - Solution -Belgium, France, Japan, Latin America Uncertainty avoidance country rankings - Solution -1. Brazil
- Germany
- U.S.
- China
Why is sustainability important to an international business course? - Solution -sustainability is a systems concept because it combines a group of interconnected elements that forms a complex whole Why is sustainability becoming so important? - Solution -firms must think about both its competitive present and the needs for future generations Environments sustainability - Solution -concept is about maintaining something- the environment, society, the economy people within the economy, or the organization Life cycle assessment - Solution -an approach used to evaluate the environmental aspects of a product or service throughout its life cycle (aka cradle-to-grave analysis) Cradle-to-cradle (C2C) design - Solution -suggests that products and services should be designed to completely close the production, so that all resources needed to produce them are recycled and reused rather that discarded or left to pollute Carbon footprint - Solution -a measure of the volume of greenhouse gas emissions caused by a product's manufacture and use Water footprint - Solution -a measure of the amount of water used in a product's manufacture and use Stakeholder theory - Solution --an understanding of how business operates that takes into account all identifiable interest holders -calls for managers to consider the network of tensions caused by competing internal and external demands that surrounds the business
Triple-bottom-line accounting - Solution --an approach to accounting that measures the firm's social and environmental performance in addition to its economic performance -does not allow for comparisons across companies because measurements, especially social and environmental areas are not standardized Natural capital - Solution -natural resources such as air, land, and water that provide us with the goods and services on which our survival depends Topography - Solution -the physical features of an area Topography- Mountains - Solution --separate people, impede exchange and interaction -results in language and culture differences -create regional markets, often with altitude adjustments Topography- Deserts and Tropical Forests - Solution --separate markets -increase cost of transportation -create population concentrations Why is the issue of energy source, energy production so important? - Solution -at some time an energy revolution that replaces nonrenewable energy sources(fossil fuels) with renewable energy sources in inevitable because either -the price of nonrenewable energy sources will become too high -nonrenewable sources will become unavailable Renewable energy sources - Solution -Windpower, biomass, solar photovoltaic power, concentrating solar thermal power, geothermal power, ocean energy, hydropower Windpower - Solution -mainstream electricity source
Country risk assessment (CRA) - Solution -an assessment of a country's economic situation and politics to determine how much risk to employees, property, and investment exists for the firm doing business there Reasons for Restricting Trade - Solution --Provide for national defense -Impose sanctions -Protect an infant or dying industry -Protect domestic jobs -Ensure fair competition -Retaliate -Increased revenue Dumping - Solution -consists of selling a product abroad for less than the cost of the product, less than the price in the home market, or less than the price to third-party countries Subsidies - Solution -a government makes to a domestic firm either to encourage exports or to help protect the firm from imports Countervailing duties - Solution -competitors in importing nations frequently ask their governments to impose these to offset the effects of a subsidy Tariffs (trade barrier) - Solution -taxes levied on imported goods primarily to raise their selling price in order to reduce competition for domestic producers Non-tariff trade barriers - Solution -All forms of discrimination against imports other than the import duties we have been examining
Quota (NTB) - Solution -sets numerical limits for specific kinds of goods that a country will permit to be imported during a specified period Voluntary export restraining (NTB) - Solution -export quotas Customs and administrative procedures (NTB) - Solution -cover a large variety of government policies and procedures that either discriminate against or favor exports Standards (NTB) - Solution -governmental and private standards to protect the health and safety of a nation's citizens Do governments sometimes have legitimate reasons to restrict free trade? - Solution -yes Who will pick up the tab (by paying more for products and services) of these trade restrictions? - Solution -consumers
