Final Flashcards
1
Q
In the postwar boom of the 1950s, economists such as Moses Abramovitz and Robert Solow believed that several stimuli contributed to economic growth, generating abundant opportunities for international business. Which of the following stimuli contributed the most to economic growth? (test question)
A
Advancement in Technology
2
Q
Know the facts about physical infrastructure in a given county.
A
- Countries with low levels of infrastructure will be less attractive to international business
- Need to know how available each of these things are: raw materials, manufacturing capabilities, transportation networks
3
Q
Raw materials definition
A
basic materials from which goods are made
4
Q
Global manufacturing cluster
A
concentrate suppliers and produces industry in the same geographic location, facilities the free flow of ideas, people and resources (silicon valley)
5
Q
Know which of the following companies is the world’s largest transporter of shipping containers today. (Test question)
A
Maersk
6
Q
Large container ship was introduced by Maersk and is called ________. (test question)
A
Triple-E container
7
Q
Know benefits of shipping container standardization
A
Enable for a special ship and has increased efficiency and reduced costs in the shipping industry
8
Q
Know the effects of having the busiest ports in the world for China
A
Allows China to make it easy for global firms to manufacture in china and ship to other markets and for Chinese exports to ship products abroad
9
Q
Ships
A
Perhaps the most important technological advancement in the transportation industry in the past twenty years has been the invention of the standardized shipping container.
10
Q
Sea Ports and Canals
A
Ports have grown dramatically to keep pace with the demands of global shipping.
11
Q
Air transportation
A
Major technological changes have increased the safety and efficiency of air transportation and air travel; these changes have led to reductions in their cost.
12
Q
Rail and Road
A
Shipping by sea is cheap but slow, and limited to coastal ports. Ground transportation bridges the gap between the two. Trucks and trains transport containers from coastal ports to facilities inland.
13
Q
Know factors in choosing air transport over shipping
A
- Air is fast but expense and limited to regions with airports
- Shipping allows things to move inland where a lot of the population lives
14
Q
X-Road
A
System that allows citizens to register vehicles, file health insurance claims, and vote all electronically
15
Q
Know the speed of the Internet in Korea
A
21.1 Mbps
16
Q
Shared economy (collaborative consumption)
A
system in which an owner rents something they are not using, such as a room, a car, or a service to a stranger using peer-to-peer services
17
Q
Turo
A
car sharing service, you can rent your car to others
18
Q
SoFi
A
lend your money to others
19
Q
M-Pesa
A
phone based money transfer
20
Q
Moore’s Law
A
the prediction that processing power will double every 24 months
21
Q
Human capital
A
the abilities, skills, experience, and knowledge possessed by individuals
22
Q
Brainware
A
the human capital infrastructure of a company
23
Q
Business incubator
A
a company that helps find and grow new businesses
24
Q
In globalization context know facts from the book about research and development (R&D)
A
- International companies are spending more on R&D
- Companies have moved to locations around the world, especially China and India
Rise toward business sponsored R&D
25
Know the difference between the research and development (R&D) trend in the US when compared with other nations (test question)
- In U.S R&D is increase proportional to increases in GDP
| - In Asia it increases faster than GDP
26
Invention
new concept or product that derives from ideas or from scientific research
27
Innovation
combination of new or existing ideas to create marketable value
28
Know the definition of innovation according to Brian Junling Li, the vice president of Alibaba Group
Innovation doesn’t come from organized plans. It comes from our preparedness to deal with the uncertainty of the future.
29
Improve performance
- improvements to existing products or ideas that meet more of a customer's needs
○Usually doesn't create a ton of new growth for the company
30
Enhance efficiency
- changes to existing products or ideas that make them lower cost
○ Allows companies to increase profit margins by raising productivity
○ Companies can reach a lower income segment of the market
○Often eliminates jobs
31
Create a market
products or ideas that meet the needs of a group of potential consumers whose needs have not been met before
32
The innovators imperative
the need for individuals to understand local market problems, to reach out to others globally to search for unique solutions to the problem, and to uncover the causal relationships found within that foreign knowledge to ensure it is correctly applied to the local problems
33
Know the steps of the innovator’s imperative
- Go local
- Reach Out
- Uncover Principles
34
Go local
- helps units adapt standardized products to flourish in the new context
○ Gain a deep understanding of customers by observing how they use the product in the local environment
○Questioning pre-existing assumptions about the customer
35
Reach out
- understanding the client helps identify the problem
○ Collaborating with individuals with whom employees have developed strong relationships
○Integrating the new knowledge with the local knowledge base
36
Uncover principles
○ Explore why a product or service works
| ○ Identify the universal principles behind it
37
Stretch Goals
goals that represent company-level objectives that require employees of a company to do something beyond what one might reasonably expect
38
Patent
- form of legal protection provided by a government that excludes anyone other than the patent holder from making, using, or selling the invention for a set period of time
○ Advantages: have a long history so many countries recognize them, call upon a government to back the claim
○ Disadvantages: process to obtain a patent is very specific, must disclose the technical details of product, costly and time consuming application process
39
Copyright
- form of protection available to authors of literary, dramatic, musical, or artistic intellectual property
○Work is automatically protected from the moment of its creation throughout the author's life, plus 70 years after the author's death
○Registration is not required
○Granted by national governments
○Advantages: allow global companies to invest resources in creating unique work
○Disadvantages: costs and challenge of enforcement
40
Trademark
- legal protection of a recognizable brand name, design, or log that calls a specific product to a consumers mind
○Advantages: allows companies to stop unauthorized use of their trademark
○Disadvantages: costly to enforce
Litigation can cost from $300,000 to over $3 million
41
Servicemarks
like trademarks but are represents of services, like FedEx logo for FedEx
42
Trade Secret
- any information that provides a business with a competitive advantage but isn't shared openly
○Advantages: disclose is not required, there are no filing costs, no end they last as long as the information remains secure
○Disadvantages: don’t stay secret for too long if the company has a tangible product, competitors can patent a trade secret once they discover it, legal remedies are difficult
43
The liability of foreignness
liability foreign firms face as the geographic, economic, cultural, or administrative differences between foreign market and the domestic market increase
44
Cultural Distance
-Different languages, ethnicities, religions, values, norms, & dispositions
45
Administrative Distance
-Different colonial ties, trading blocks, currency, & politics
46
Geographic Distance
- Physical difference
- No shared land borders
- Different environment, climate, & agriculture
47
Economic Distance
-Different GINI coefficient, natural resources, financial resources, human resources, and information resources
48
Ethnocentrism bias
bias indicating that customers prefer local brands over foreign brands and are willing to pay more for local brands even when their quality is inferior
49
Which of the following is likely to happen to ABC Inc, a successful company in the domestic market, when it is the first entrant into a foreign market? (test question)
In many cases, the first entrant into a market captures a leadership position, enabling it to control critical resources such as distribution channels and to build up buyer-switching costs, particularly where network effects or branding are important
50
Non-equity modes
typically carry less risk but also bring fewer rewards
51
Equity modes
require a larger investment and engage the foreign firm in local operations. This increases the risk of the activity but also allows the firm to get close to customers and thus build better products
52
Exporting
producing good in one country and selling it in another
53
Turnkey
company builds a facility in a foreign market for a client, makes it operational, and hands over the "keys to the client, who will own and operate the facility
54
Licensing
contractual agreement between two parties that grants the licensee certain rights, such as right to produce or sell patented goods, display the licensor's brand name, or use licensor's intellectual property
55
Franchising
unique form of licensing in which a partner is given the right to use the franchisors brand and other intellectual property, while the franchisor takes an active role in the ongoing operations of the firm, such as advertising, training, and managing inventory
56
Master franchise arrangement
Gives the master franchisee the ability to create sub franchises in a specific geographic area
57
Green field operation
creating a new subsidiary from scratch
58
Wholly owned subsidiary
new legal entity set up for operation in a foreign market that is legally a separate company but is fully owned by the parent firm
59
In the context of entry tactics available for different entry modes, which of the following is a difference between the “make” tactic and the “buy” tactic? (Test questions)
Unlike with the "make" tactic, with the "buy" tactic a firm can acquire existing franchise operations to enter a new international market
60
White-label goods
exporting firms offer their unbranded products to partners in the local market
61
Alliance
contractual relationship between two or more companies
62
Consortium
alliance of companies pooling their resources to deliver a turnkey project
63
International Strategy
International strategy consists of the steps by which companies manage differences across borders to create advantages over their competitors. Gaining a competitive advantage is at the core of the international strategy.
64
Low cost strategy
helps companies succeed through efficiencies and by reducing costs
65
Differentiation Strategy
helps companies succeed by differentiating their product in order to persuade customers to pay more
66
Value Creation
process of maximizing the difference between a customer's willingness to pay and the cost of a product
67
Value Capture
Value capture = process of maximizing the portion of that value the company keeps
68
In the context of value chain function, know the difference between (R&D) and production.
○ Research and development (R&D) - The process responsible for coming up with ideas for new products and production processes. For service companies, R&D focuses on developing new services.
○Production - The function that actually makes the product or provides the service. For physical products, production means manufacturing.
69
Human Resources definition
this function applies management practices and policies to the company’s workforce. It ensures that the company has employees with the right mix of skills to follow the organization’s strategy and create value, and that they are adequately trained, motivated, and compensated to perform their value creation tasks.
70
Local responsiveness
adjusting or creating an approach to meet the differentiated needs of local markets, customers, stakeholders (government officials and employees, and suppliers and distributors)
71
Intracultural variation
understanding of differences within a nation and the ability to identify local preferences that are irrelevant for global companies
72
Global integration
the process by which a company combines different global activities so the different parts of the corporation use the same methods
73
Multidomestic strategy
- a strategy where global firms respond to differentiated needs and preferences in each local market in which they operate
○ Allow local subsidiaries to decided what products to develop and sell in local markets
74
Meganational strategy
global firms focus on increasing profitable growth by reaping cost reductions from economies of scale and other advantages of global integration
○Location economies = cost advantage of performing each state in the value chain at the lowest cost for that activity
○Decisions are made at headquarters
○Avoids adaptation to spend more resources on innovation
75
Transnational strategy
- global firms take a hybrid approach that combines Meganational and multidomestic strategies, simultaneously offering the benefits of both global and local advantages
○Promotes knowledge flow throughout the organization regardless of where the ideas originate
76
Global branding
process of making a product known in a consistent manner across the world
77
Digital platform
A common digital platform allows people outside and inside the company to contribute to knowledge and products
78
Location economies
cost advantage of performing each stage in the value chain at the lowest cost for that activity
79
Transnational approach
a strategy whereby global firms take a hybrid approach that combines the meganational and multidomestic strategies, simultaneously offering the benefits of both global and local advantages
80
Functional Structure
- structure that organizes a company into units identified by their functional roles
○Advantage: efficiency in coordinating people who work in the same tasks
○Disadvantage: Limits interaction and coordination between functions, organizations struggle to respond to market needs and opportunities
81
Divisional structure
- structure that organizes a company by units according to the products they make, the customer segments they serve, or the geographic location in which they operate
○Advantage: ability to develop specific and unique offerings for each target group
○Disadvantage: lead to inefficient knowledge flows between unites and high coordination costs
82
Multidivisional structure
companies use both a product and geographic divisional structure
83
Matrix Structure
- structure that organizes a company along multiple dimensions that may include geography, function, and division
○Employees generally report to two managers a functional manager and a product manager
○Are often pretty complex
84
Network structure
- structure that organizes a company by groups that form to work on a project and then dissolve once the project is complete
□ Advantages:
□ Ability to respond to rapid and frequent change
□ Collaboration occurs in an informal and fluid manner
85
Know arguments that a network structure is not suitable for military
The military requires a rigid hierarchy and coordination failures could cost human lives
86
Control systems
means by which headquarters can force compliance from global subsidiaries
87
Bureaucratic control
- accomplished through rules and routines
□ Help standardized interactions and processes
□ Saves time and eliminates errors
88
Output control
- focuses on profitability/market share
| □ Objective standards govern operations
89
Normative control
- gets subunits to adhere to the values of the organization
| □ Requires strong buy in from the subunits
90
Personal control
- use of frequent human interaction to enforce control
| □ Downside = high cost of personal interaction, it can be expensive to send people around the globe
91
Virtual organization
- organization that enables employees to coordinate and execute activities almost entirely through information technology, rather than by working in the same physical space
□ Can be difficult to build a strong culture and socialize new employees
92
Contract employees
outside workers who are hired by a firm to perform specific predetermined tasks for a company and who are paid by the job
93
Modular design
- system in which a process, product, or service is divided into components that can be changed independently and then reintegrated into the system
○ Allows companies to achieve economies of scale and work on different aspects of the product
○Disadvantage is that the overall design is usually not optimized
94
Horizontal coordination
- process by which subsidiaries communicate and coordinate work among themselves
○ A hoarding of expertise problem = a subsidiary may face resistance from individuals in the other subsidiary who may be reluctant to invest the time, energy, and effort to share their knowledge
○ A not-invented-here problem = subsidiaries are reluctant to use knowledge that was not created in their unit, even when the knowledge is beneficial to them
○ A foreigner problem = can be difficult for different subsidiaries to understand knowledge that is provided to them
95
Global leadership
the process of influencing others to adopt a positive vision in a global context
96
Complexity
operating in multiple countries, dealing with various cultures, and recognizing optimal solutions will vary across different countries
97
Presence
degree to which an individual is required to move physically across geographic, cultural, and national boundaries (not just through the use of technology)
98
Know why global leaders require a higher degree of presence than domestic leaders
Not only must they successfully settle in a foreign country, but they must also travel back to headquarters and interact and communicate with people there
99
Collaborative synergy
- the ability to create an environment where people understand that success for one member of the team means success for all members of the team
* core of global leadership
100
Cultural intelligence
the knowledge to function effectively across cultural contexts
101
What is required to exhibit high cultural intelligence
A person with high cultural intelligence is able to differentiate features of someone else’s behavior that relate to culture and alter their own expressions when a cultural encounter requires it.
102
Cultural chameleons
- someone who can blend into many different cultural environments quickly
- This person has high cultural intelligence
103
Contextual resilience
- leader's ability to anticipate roadblocks and find better ways of doing things in a complex, cross-boarder environment
- requires leaders to be self-aware
104
Personal integrity
- demonstration of honesty and high ethical standards in work
○ Requires adherence to a moral or ethical principles
○ Need to pursue continual self-improvement
105
Functional excellence
the ability to collaborate with difference units and functions within the company
106
Market savvy
leader's ability to be accountable for the products and services they deliver in a local market
107
Global mindset
ability to scan the global market and bring together ideas from diverse contexts
108
RAP Framework
- Recognize and review
- Align for Performance
- Provide Purpose
109
Know the goals of the RAP framework
By walking through the RAP framework with potential leaders on a regular basis, managers can develop these employees, enhancing their international experiences and helping them learn from the different challenges they experience in their international roles.
110
Do know the steps to be offered international assignment
Be clear that your desire to work internationally
111
Production system
overall strategy and mechanism for converting inputs - like raw materials, land, labor, machinery, information, and energy - into a product that brings value to customers
112
procurement process
Time spent acquiring goods and services
113
sourcing decision
Whether to buy production components from external suppliers or make those components in house
114
Outsourcing
obtaining a good or service from an externa supplier, often in international markets
115
Advantages of global procurement
○Cheaper costs abroad for components
○Save millions of dollars of investment
○Firms can focus on core capabilities by outsourcing those activities that are not vital to create value to the customer
○Gives firm more flexibility on deciding which products or inputs to use
116
Disadvantages of global procurement
○Transportation costs
○Supply chains can become long and convoluted - as the supply chain lengthens inventories can become larger and less efficient
○Just in time manufacturing - consists of carefully planning the whole production process from start to finishing in order to avoid carrying excess inventory
○Suppliers can become future competitors
○Offset agreements = an agreement where a supplier agrees to buy products from the party to whom it is selling in order to win the buyer as a customer and offset the buyers production costs
117
Offshoring
moving production outside the home country
118
Insourcing
practice of using a company's internal employees or other resources to accomplish a task
119
Dual sourcing
source strategy in which firms produce products in house to ensure quality and availability while also purchasing the same products from suppliers in order to force competition and push innovation with the in house unit
120
Reshoring
moving production from outside a country back to the home country
121
make-or-buy decision process
Whether to make or buy locally or globally
122
global procurement
buying globally
123
Just-in-time system
consists of carefully planning the whole production process from start to finishing in order to avoid carrying excess inventory
124
Offset agreement
an agreement where a supplier agrees to buy products from the party to whom it is selling in order to win the buyer as a customer and offset the buyers production costs
125
Operational risk
- measure of a firm's inability to document the work remote employees do, describe different situation they might face, and direct their responses in each scenario
○travel
○telecommunications
○coordination mistakes
126
Structural risk
```
- measure of a firms difficulty when relationships with vendors do no work as expected
○finding reliable vendors
○drafting contracts
○enforcing contracts
○dispute resolution
```
127
low value-to-weight ratio
how expensive is a product compared to its weight (does the value exceed shipping costs?)
128
Enterprise resource-planning system
technology that helps firms gather all relevant information into a single database, represent all business functions in a module, and provide access to data in real time
129
big data
extremely large data sets that users can analyze to uncover important and helpful statistical patterns, trends, and associations
130
company specific human capital
employees knowledge about the company itself
131
Global HR wheel
guide to help align employee skills and behaviors with a company's strategic objectives
132
Human resource practices
tasks focused on attracting, training, motivating, and retaining people
133
location-specific human capital
knowledge relevant or applicable to a particular market
134
Activities in Recruitment and Selction
- workforce planning
- employer branding
- recruitment
- selection
- induction and socialization
- termination and outplacement
135
Activities in performance management
- Job evaluation
- Goal setting
- performance measurement
- appraisal and feedback
- compensation and benefits
- rewards recognition
136
Activities in development and training
- training
- talent assessment and reviews
- succession planning
- career management
- coaching and mentoring
- leadership and development
137
Performance management
links business objectives to the goals of units, teams, and individuals
138
Phases of performance management
setting goals, evaluating and reviewing performance, providing feedback, and linking goal achievement to compensation and development outcomes
139
Competitive advantage
a condition that puts a company in a superior business position
140
Strategic objectives
long-term organizational goals that help make a strategy successful
141
Critical behaviors
few key areas of activity in which meeting strategic objectives are absolutely necessary
142
KPIs
clear cut instruments to quantify whether individuals re on the right track to helping company achieve its strategic objectives
143
Local human capital
the knowledge, skills, abilities, and other attributes that make up the location-specific experiences of employees in a particular country or market
144
Subsidiary human capital
company knowledge within a specific location
145
Corporate human capital
company specific knowledge, skills, and abilities that transcend any particular location within the entire global company, not simply the collective knowledge or the staff at headquarters
146
International human capital
knowledge of global best practices, global industry standards, international trade laws, modular systems and process, and other experience applicable across multiple companies and countries
147
multidomestic strategy
focus on increasing profitability by customizing products, services and operations to respond to differentiated needs in each country
148
Meganational strategy
coordination across business units to provide a common platform for the company
149
Transnational strategy
combines multinational and Meganational
150
expatriates
employees assigned from headquarters to work in a foreign market
151
codetermination
cooperation between management and workers in decision-making, particularly by the representation of workers on boards of directors
152
examples of human resource services
Payroll, benefits, and retirement
