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INTB 2200 > Final Exam > Flashcards

Final Exam Flashcards

(101 cards)

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1
Q

What is institutional transition?

A

fundamental and comprehensive changes introduced to the formal and infromal rules of the game that affect firms as players

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2
Q

What is institution-based view?

A

A perspective in global business that suggests that the success and failure of firms are enabled and constrained by institutions

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3
Q

What is an institution?

A

Formal and informal rules of the game

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4
Q

What is institutional framework?

A

Formal and informal institutions that govern individual and firm behaviour

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5
Q

What is transaction cost?

A

The cost assocaited with economic transactions. aka the cost of doing business

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6
Q

What is opportunism?

A

The act of self-interest seeking with guile (dishonest behaviour used to deceive someone)

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7
Q

What is transition economy?

A

A label for a subset of emergine economies particularly those moving from central planning to market competition (russia, china…)

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8
Q

What are two types of institutions?

A

Formal and informal institutions

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9
Q

What are examples of formal and informal institutions?

A

Formal: laws, regulations, rules
Informal: culture, ethics, norms

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10
Q

What is formal’s supportive pillar?

A

Regulatory pillar - coercive power of governments

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11
Q

What are informal’s supportive pillars?

A

Normative pillar - norms influence behaviour
Cognitive pillar - values and beliefs that are taken for granted that guide individual and firm behaviour

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12
Q

How do institutions reduce uncertainty?

A

By constraining the range of acceptable actions

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13
Q

What can uncertainty lead to?

A

Can lead to transaction costs, which can rise opportunism (act of seeking self interest with guile)

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14
Q

What are two core propositions that underpin IBV in global business?

A

Proposition 1: managers act rationally and pursue their interests and make choices within the formal and informal constraints in a given institutional framework

Proposition 2: if formal constraints fail, informal constraints will play a larger role in reducing uncertainty and providing constancy to managers and firms

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15
Q

What are the three categories to understand cultural differences?

A

Context
Cluster
Dimensions

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16
Q

What is context?

A

underlying background upon social interaction takes place

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17
Q

What is low context culture?

A

communication is taken at face value, unspoken context isnt valued much | Canada, United States

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18
Q

What is high context culture?

A

Communication relies a lot on the underlying unspoken context, it is as important as the words used | China, Korea, Japan

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19
Q

What are clusters?

A

Countries that share similar cultures

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20
Q

What is power distance (dimension)

A

the extent to which less powerful members within a culture accept their position

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21
Q

What is individualism?

A

The idea that individuals identity is fundamentally their own

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22
Q

What is collectivism?

A

the idea that an individual’s identity is fundamentally tied to the identity of their collective group

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23
Q

What is masculinity?

A

strong form of societal gender role, where men have occupations that reward assertiveness and women tend to work in caring professionals

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24
Q

What is femininity?

A

weak form of societal gender role, where women occupy positions that reward assertiveness and more men work in caring positions

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25
What is uncertainty avoidance?
the extent to which members in a culture accept or avoid ambiguous situations and uncertainty
26
What is long-term orientation
Dimension of how much emphasis is placed on perseverance and savings for future betterment
27
What is the VRIO framework?
a resource based framework that focuses on the value, rarity, imitability, and organizational aspects of resources and capabilities
28
What is benchmarking?
examining whether a firm has the resources and capabilities to perform a particular activity in a manner superior to competitors
29
What is commoditization?
a process in market competition where unique products that command high prices and high margins gradually lose their ability to do so... thus becoming commodities
30
What is offshoring?
Outsourcing to an international / foreign firm
31
What is onshoring?
Outsourcing to a domestic firm
32
what is captive sourcing?
setting up subsidiaries abroad so that the work is done in house but the location is foreign, aka FDI
33
what is reshoring?
moving formerly offshored activities back to the home country of the local firm
34
Why do nations trade?
There are economic gains from trading
35
What is export?
selling abroad
36
what is import?
buying from abroad
37
what are merchandise (goods)
tangible products being traded
38
What is a service
Intangible services being traded
39
What is a trade deficit?
an economic condition in which a nation imports more than it exports
40
What is a trade surplus?
an economic condition where a nation exports more than it imports
41
What is balance of trade?
the aggregation of importing and exporting that leads to the country-level trade surplus or deficit
42
What are the three classical trade theories?
Mercantilism, absolute advantage, comparative advantage
43
What are the three modern trade theories?
Product life cycle, strategic trade, national competitive advantage of industries (diamond theory)
44
What is mercantilism?
Classical trade theory Believes that the wealth of the world is fixed Believes in protectionism (governments should protect domestic industries)
45
What is protectionism?
Governments should protect domestic industries
46
What is absolute advantage?
Classical trade theory Believes in free trade Believes that nations should specialize in economic activities that they are more efficient in producing
47
What is free trade?
free market forces should determine the buying and selling of goods and services (with little to no government intervention)
48
What is comparative advantage?
Classical trade theory nations gain by specializing in the production of goods where they have a comparative advantage relative advantage in one economic activities that one nation enjoys in comparison to another Opportunity cost - the cost of pursuing one activity at the expense of another
49
What are factor endowments
the extent to which different countries possess various factors of production (labour, land, technology)
50
What is the product life cycle theory?
Divide the world into: lead innovation nation, developed nation, developing nations Divide products into life cycle stages: new, maturing, standardized Accounts for changes in the patters of trade over time by focusing on product life cycles
51
What is the strategic trade theory?
Suggests governments should intervene in certain industries to enhance their odds for international success
52
What is the national comparative advantage of industries (diamond theory)
Suggests that the competitive advantage of certain industries in different nations depends on four aspects - firm strategy, structure, and rivalry - country factor endowments - domestic demand conditions - related and supporting industries
53
What is the OLI framework?
Ownership, location, internalization advantages
54
What is ownership advantages?
firms possession and leverage of VRIO assests overseas in the context of firm specific advantage (FDI)
55
What is location advantages?
advantages enjoyed by firms operating in a certain location
56
What are internalization advantages?
the replacement of cross border markets with one firm locating and operating in two or more countries
57
What is licensing?
firms giving another firm the rights to use their proprietary patent or trademark for a royalty payment
58
What is foreign portfolio investment (FPI)
investment in a portfolio of foreign securities as stocks and bonds
59
what is sovereign weath funds (SWF)
a state owned investment fund composed of financial assets such as stocks, bonds, real estate, and other financial investments
60
What are management control right?
the right to appoint key managers and establish control mechanisisms
61
What is horizontal FDI
a type of FDI in which a firm duplicates its home country based activities at the same value chain stage in a host country
62
what is up stream vertical FDI?
a type of vertical FDI in which a firm engages in an upstream stage of the value chain in a host country
63
What is down stream vertical FDI?
a type of vertical FDI in which a firm engages in a downstream stage of the value chain in a host country
64
What is FDI flow?
the amount of FDI moving in a given period (usually a year) in a certain direction
65
What is FDI inflow
Inward FDI moving into a country in a year
66
What is FDI outflow
outward FDI moving out of a country in a year
67
What is FDI stock
total accumulation of inward FDI in a country or outward FDI from a country across a given period
68
What are location specific advantages?
the benefits a firm reaps from the features specific to a place
69
What does the CAGE framework stand for / looks at
Cultural Administrative / political Geographical Economic Looks at the difference between two countries to determine the distance between the two
70
What is first mover advantage?
the benefits that accrue to firms that enter the market first and that late entrants do not enjoy
71
What are examples of first mover advantage?
avoidance of competition, relationships with key stakeholders, establish entry barriers
72
What is late mover advantage?
beneftis that accrue to firms that enter the market later and that early entrants do not enjoy
73
What are examples of late mover advantages?
Potential free ride on first movers investments, resolution of technical / market uncertainty, first movers may have difficulty adapting to market changes
74
What are the two scales of entry? // what is a scale of entry
Large scale of entry Small scale of entry The amount of resources committed to entering a foreign market
75
What are the benefits / drawbacks of a large scale entry?
Benefits: shows commitment, helps assure local customers / suppliers Drawbacks: limited strategic flexibility, potential for huge loss
76
What are the benefits / drawbacks of a small scale entry?
Benefits: less costly Drawbacks: lack of strong commitment, difficulties building market share and capturing first mover advantage
77
What is a entry mode?
A form of operation that a firm employs to enter foreign markets
78
What is a non equity mode?
a mode of entry that reflects smaller commitments to overseas markets
79
What is a equity mode?
a mode of entry that indiates relatively larger commitments to overseas markets
80
What is a joint venture (JV)
A new corporate entity jointly created and owned by two or more parent companies
81
What is a wholly owned subsidiary (WOS)
A subsidiary located in a foreign country that is entirely owned by the parent multinational
82
What are the two categories of a wholly owned subsidiary?
Greenfield operstaions Acquisitions
83
What are greenfield operations?
Building new factories and offices from scratch Greater flexability, slower to establish, alerts competitors
84
What are acquisitions
acquiring the control of another firms operations and management from one firm. Becomes a subsidiary Quick to execute, may pervent competitors, often produces disappointing results
85
What are the four types of international / multinational strategy?
Home replication strategy Localization strategy Global standardization strategy Transnational strategy
86
What is home replication strategy
emphasizes the duplication of home country based competencies in foreign countries
87
What is localization strategy?
focuses on a number of foreign countries / regions, each of which is regarded as a stand alone (domestic) market worthy of significant attention and adaptation
88
What is global standardization strategy?
focuses on the development and distribution of standadized products worldwide in order to reap the maximum benefits from low cost advantages
89
What is transnational strategy?
Endeavours to be simultaneously cost-efficient, locally responsible, and learning-driven around the world
90
What does P.E.S.T stand for?
Political Economic Social Technological
91
What is PEST analysis used for?
evaluate the external environment Breaks down opportunities and threats from SWOT analysis into PEST analysis
92
What does each part of PEST analysis look at?
Political - government policy, changes in legal requirements, changes in government ownership Economic - changes in economic activity, changes in wage rates / income distribution, changes in exchange rates Social - change in demographics, changing attitudes, changes in social structure Technological - development of new products, processes, and automation,
93
What is Porters five forces model used for?
analyze the attractiveness of a particular industry
94
What are the five forces in porters five forces model?
Supplier power Buyer power Threat of entry Threat of substitutes Industry rivalry
95
What is industry rivalry in porters 5 forces model?
the number and strength of your competitors product differentiation
96
What is supplier power in porters 5 forces model?
how much power do suppliers hold? can they increase their price easily? even if you can switch suppliers, must consider how expensive that would be more suppliers = less supplier power
97
what is buyer power in porters 5 forces model?
how easy it is for buyers to switch to a new competitor the less buyers = more buyer power buyers switching costs buyers information
98
what is threat of substitution in porters 5 forces model?
the likelihood of customers finding a different way of doing what you do cheaper, better, or both
99
what is threat of new entry in porters 5 forces model?
barriers to enter the market weak entry barriers = high threat of entry strong / high entry barriers = low threat of entry
100
What is porter diamond theory used for?
to help understand the competitive advantage that nations or groups possess
101
What are the four points of porters diamond theory?
Firm strategy, structure, and rivalry Country factor endowments Domestic demand conditions Related and supporting industries

INTB 2200 (2 decks)

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