Chapter 2 Flashcards
Until the late nineteenth century, all economies were agrarian.
Agriculture
From the late 1800s until the 1960s, most developed countries moved from agrarian societies to industrial societies.
Industrialization
Information technology is transforming society from its manufacturing focus to one of service.
Information
National borders serve to limit competition
•Technology reinforces rigid hierarchies and limits access to information
•Job opportunities are for blue-collar industrial workers
•Population is relatively homogeneous
•Business is estranged from its environment
•Economy is driven by large corporations
•Customers get what business chooses to give them
Old economy
National borders no longer define an organization’s operating boundaries
•Technology opens up organizations and makes information more accessible
•Job opportunities are for knowledge workers
•Population is characterized by cultural diversity
•Business accepts its social responsibilities
•Economy is driven by small entrepreneurial firms
•Customer needs drive business
New economy
Refers to the concept of a boundaryless world; the production and marketing of goods and services worldwide.
Global village
A management structure in which internal arrangements that impose artificial geographic barriers are broken down
Borderless organization
Companies that maintain significant operations in two or more countries simultaneously but are based in one home country
Multinational corporations (MNCs)
A company that maintains significant operations in more than one country simultaneously and decentralizes decision making in each operation to the local country
Transnational corporation (TNC)
A domestic and a foreign firm share the cost of developing new products or building production facilities in a foreign country
Strategic alliances
-Power distance
➢Individualism versus collectivism
➢Quantity of life versus quality of life
➢Uncertainty avoidance
➢Long-term versus short-term orientation
Hofstede’s framework for assessing cultures
-Low levels of uncertainty avoidance indicate a willingness to accept more risk, work outside the rules and embrace change. The might indicate a more entrepreneurial national culture
-High levels of uncertainty avoidance would suggest more support for rules, data, clarity of roles and responsibilities etc. These cultures might be less entrepreneurial as a consequence
Uncertainty Avoidance
This category is concerned with the different emphases national cultures have on the time horizons for business planning, objectives & performance
Other countries take a much longer-term perspective, which is likely to encourage more longer-term thinking
Long vs Short term Orientation
Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun
Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms
Indulgence vs Restraint
Any equipment, tools, or operating methods that are designed to make work more efficient
Technology
