INTERNATIONAL BUSINESS AND TRADE Flashcards
(95 cards)
1
Q
Refers to the gradual integration and growing interdependence of national economies.
A
Globalization Market
2
Q
International business became widespread due to the growth of railroads, efficient ocean transport and the rise of large manufacturing and trading firm. It begun in 1830 and peaked around 1880.
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THE FIRST PHASE
3
Q
It begun in 1900 and was associated with the rise of electricity and steel production. This phase reached its height just before the great depression, a world-wide economic downturn that begun in 1929.
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THE SECOND PHASE
4
Q
Begun after the world wide II. A substantial pent-up demand was created for consumer as well as industrial product to rebuild Europe and Japan.
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THE THIRD PHASE
5
Q
It begun in 1980 and featured enormous growth in cross boarder-trade and investment.
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THE FOURTH PHASE
6
Q
DRIVERS OF GLOBALIZATION
A
- WORLDWIDE REDUCTION IN BARRIERS TO TRADE AND INVESTMENTS
- MARKET LIBERALIZATION AND ADOPTION OF FREE MARKET
- INDUSTRIALIZATION ECONOMIC DEVELOPMENT AND MODERNIZATION
- INTEGRATION OF WORLD FINANCIAL MARKETS
- ADVANCE TECHNOLOGY
7
Q
Technological Advances and Globalization
A
- Technological Advancement
- Information
- Communication
- Manufacturing
- Transportation
8
Q
DIMENSIONS OF MARKET GLOBALIZATION
A
- Integration and interdependence of national economies. (VALUE CHAIN)
- Rise of regional economic integration blocs. (NAFTA, APEC)
- Growth of global investment and financial flows. (BUY & SELL FOREX)
- Convergence of consumer lifestyles preferences.
- Globalization of production
- Globalization of services
9
Q
the sequence of value adding activities the firm performs in the course of developing, producing, marketing, and servicing a product.
A
Value Chain
10
Q
STAGES IN THE FIRM’S VALUE CHAIN
A
- RESEARCH
- PROCUREMENT (SOURCING)
- MANUFACTURING
- MARKETING
- DISTRIBUTION
- SALE SERVICE
11
Q
SOCIETAL CONSEQUENCES OF GLOBALIZATION
A
- CONTAGION: RAPID SPREAD OF MONETARY OT FINANCIAL CRISIS
- LOSS OF NATIONAL SOVEREIGNTY
- OFFSHORING
- RESHORING
- EFFECT ON THE POOR
- EFFECT ON SUSTAINABILITY AND NATURAL REOURSCES
- EFFECT ON NATIONAL CULTURE
12
Q
It is a value, beliefs, customs, arts and other products of human thought and works that characterized the people pf a given society.
A
Culture
13
Q
A situation or event in which a cultural mis understanding puts some human value at stakes.
A
Cross-cultural Risk
14
Q
DIMENSIONS OF CULTURE
A
- Values and Attitude
- Manners and Customs
- Perception of Time
- Perception of Space
- Symbolic Production
- Material Productions and Creative Expressions
- Education
- Social Structure
15
Q
represents persons judgements about what is good or bad, acceptable or unacceptable, important or unimportant and normal or abnormal.
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Values and Attitude
16
Q
are ways of behaving conducting oneself in public and business situations
A
Manners and Customs
16
Q
time is a strong influence in Business. It affects people expectations about planning, schedule, profit flow, promptness in arriving for works and meetings.
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Perception of Time
16
Q
We have our own personal space and feel uncomfortable if others violate it.
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Perception of Space
17
Q
- a symbol can be letters, colors or other characters that communicate a meaning
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Symbolic Productions
18
Q
2 Types of Communication
A
- Verbal Language
- Non-verbal Communications
18
Q
National languages, dialect and translation tend to complicate verbal communications. It is sometimes hard to find words to convey the same meaning in different language.
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Verbal Language
18
Q
artifacts, objects and technological systems that construct to function within their environment.
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Material Productions and Creative expressions
19
Q
refers to pattern of social arrangement and organized relationship that characterize a society.
A
Social Culture
19
Q
cultural values, ideas, beliefs and traditions are passed from one generation to the next generations.
A
Education
20
is unspoken and includes facial gesture and expressions.
Non-verbal Communications
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is a system of common beliefs or attitudes concerning a being or a system of thoughts that consider sacred, divine, moral codes, values, traditions, rituals associated with in this system.
Religion
22
CULTURE’S EFFECT IN INTERANTIONAL BUSINESS AND TRADE
* Managing employee
* Communicating and interacting with foreign business partners
* Negotiating and structuring international business ventures.
* Developing products and services.
* Preparing advertising and promotional materials.
* Preparing for international trade fairs and exhibitions.
* Interacting with current and potentials customers from abroad
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MODELS AND EXPLANATIONS OF CULTURE
Cultural Metaphor
Low Context Culture
High Context Culture
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refers to distinctive traditions and institution that strongly associated with particular society.
Cultural Metaphor
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a culture that relies on elaborate verbal explanations, putting much emphasis on spoken words.
Low Context Culture
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a culture emphasizes mom verbal messages and views communication as means to promote smooth harmonious relationships
High Context Culture
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2 Types of Cultural Orientation
- Ethnocentric Orientation
- Polycentric Orientation
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using our own culture as the standard for judging other culture
Ethnocentric Orientation
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a host country mindset in which the manager develops a strong attachment to the country in which she or he conducts business.
Polycentric Orientation
30
is about doing the right things for the company, the employees, the community, the government, and the natural environment.
Ethical Behavior
31
4 Key Components of Ethical Behavior
* Ethics
* Corporate Social Responsibility (CSR)
* Sustainability
* Corporate Governance
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Moral principles and Values that govern the behavior of people, firms, and governments, regarding right and wrong.
Ethics
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Refers to operating a business in a manner that meets or exceeds the ethical, legal, and commercial expectations of customers, shareholders, employees, and the communities.
Corporate Social Responsibility (CSR)
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Means meeting humanity’s needs today without harming the ability of future generations to meet their needs.
Sustainability
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Is the system of procedures and processes by which corporations are managed, directed, and controlled
Corporate Governance
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a predicament concerning major conflicts among different interests when determining the most appropriate course of action is confounded by a set of solutions that are equally justifiable and often equally imperfect.
Ethical Dilemma
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the belief that ethical truths are not absolute but differ from group to group.
Relativism
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the belief that ethical behavioral standards are universal, and firms and individuals should seek to uphold them consistently around the world.
Normativism
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ETHICAL CHALLENGES IN INTERNATIONAL BUSINESS
* Corruption
* Bribery
* Unethical Management Practices
* Harmful Global Sourcing
* Illicit Products and Marketing
* Intellectual Property Infringement
40
the practice of obtaining power, personal gain, or influence through illegitimate means and usually occurs at others’ expense.
Corruptions
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HOW CORRUPTION ENCOUNTERED IN INTERANTIONAL BUSINESS
Bribery
Embezzlement
Fraud
Extortion and blackmail
Money laundering
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occurs when a person offers or gives another person a gift, cash, or favor to act dishonestly.
Bribery
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theft or misuse of funds typically placed in one’s care or belonging to one’s employer
Embezzlement
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involves wrongfully deceiving a person or another party to give up asset or cash.
Fraud
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involve threats of harm against another person or party unless payment is received or some other demand is met.
Extortion and Blackmail
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the concealment of the origins of funds obtained through illegal means.
Money Laundering
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UNETHICAL MANAGEMENT PRACTICES
* Harmful Global Sourcing
* Illicit Products and Marketing
* Intellectual Property Infringement
48
PIRACY AND COUNTERFEITING HURT THE WORLD ECONOMY IN VARIOUS WAYS
* International Trade
* Direct Investment
* Company performance
* Innovation
* Tax Revenues
* Criminal Activity
* The natural environment
* Natural Prosperity and wellbeing
49
Settings of Corporate Social Responsibility
* Workplace CSR
* Marketplace CSR
* Environmental CSR
* Community CSR
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focuses on the firm's employees and implies thoughtful approach to diversity, recruitment, salary, safety, health, and working conditions.
Workplace CSR
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emphasizes company interactions with customers, competitors, suppliers, and distributors.
Marketplace CSR
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refers to the firm's activities to minimize or eliminate the creation of pollutants as well as efforts to improve the natural environment.
Environment CSR
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accounts for the firm's activities aimed at benefiting the community and society.
Community CSR
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Endorsers of Sustainability
- Economic Development Experts
- Environmentalists
- Human Rights Activists
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SUSTAINABLE BUSINESS PRACTICES
* Beneficial agricultural processes
* Water conservation
* Air quality protection
* Reduced energy and fuel consumption
* Increased use of solar and development energy
* Improved work process
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TYPES OF SUSTAINABILITY INTERESTS
- Economic Interest
- Social Interest
- Environmental Interest
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refers to the firm’s economic impact on the localities where it does business.
Economic Interest
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refers to how the firm performs relative to societies and social justice, often termed in hiring.
Social Interest
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refer to the extent of the firm’s contribution to preserving environmental quality, commonly known as environmental impact.
Environment Interest
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THE ROLES OF CORPORATE GOVERNANCE
(a) a set of values that serve as a guide for employees; and
(b) a set of ground rules for guiding behavior, which include criteria for acceptable decision-making, used by all employees.
61
ETHICAL STANDARD APPROACHES FOR CORPORATE GOVERNANCE
- Utilitarian Approach
- Rights Approach
- Fairness Approach
- Virtue Approach
- Common good Approach
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* Provides the most good or the least harm.
* Produces the greatest balance of good over harm. (to customers, employees, shareholders, the community, and the natural environment)
Utilitarian Approach
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* Protects and respects the moral rights of everyone involved.
* Based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved
Rights Approach
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Treats everyone equally and fairly.
Fairness Approach
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Emphasizes virtues that provide for the full development of our humanity.
Virtue Approach
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* Emphasizes the welfare of the entire community or nation.
* Asks what action contributes most to the quality of life of all affected people
Common Good Approach
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institutionalizing appropriate behavior in the organization’s culture so it becomes part and parcel of strategy.
Going deep
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continues effort to understand how CSR and sustainability affect every aspect of the firm’s operations worldwide.
Going Wide
69
requires the firm to examine its global operations to identify and improve local issues.
Going Local
70
FRAMEWORK FOR MAKING ETHICAL DECISIONS
1. Identify the problem
2. Examine the facts
3. Create alternatives
4. Implement course of action
5. Evaluate results
71
The belief that national prosperity is the result of a positive balance of trade, achieved by maximizing exports and minimizing imports.
Mercantilism
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Relative absence of restrictions to the flow of goods and services between nations.
Free Trade
73
The idea that a country benefits by producing only those products it can produce using fewer resources.
Absolute Advantage Principle -
74
It may be beneficial for two countries to trade with each other as long as one is relatively more efficient at producing a product needed by the other.
Comparative Advantage Principle
75
an economic theory that explains international trade based on differences in factor endowments between countries.
Factor proportions theory and the Leontief Paradox
76
trade was growing fastest among industrialized countries with similar factors of production.
International Product Cycle Theory
77
an economic theory that explains international trade based on differences in factor endowments between countries.
New Trade Theory
78
DETERMINANTS OF NATIONAL COMPETITIVENESS
- Demand conditions
- Firm Strategy, Structure and rivalry
- Factor Conditions
- Related Supporting Industries
- Industrial Cluster
79
nature of home-market demand for specific products and services.
Demand conditions
80
nature of domestic rivalry and conditions in a nation that determines how firms are created, organized, and managed.
Firm Strategy, Structure and rivalry
80
is a proactive economic development plan a government launched to build or strengthen a particular industry, often implemented in collaboration with the private sector.
National Industrial Policy
80
a concentration of businesses, suppliers, and supporting firms in the same industry located at a particular geographic location, characterized by a critical mass of human talent, capital, or other factor endowments.
Industrial Cluster
81
FEATURES OF NATIONAL INDUSTRIAL POLICIES
* Tax incentives
* Monetary and fiscal policies
* Educational systems
* Infrastructure
* Legal and regulatory systems
81
nation’s resources such as labor, natural resources, and advanced factors as capital, technology, entrepreneurship, advanced work force skills, and know-how.
Factor Conditions
81
these are innovative start-ups that initiate international business soon after their founding.
Born Global Firms
81
presence of clusters of suppliers, competitors, and skilled workforce.
Related Supporting Industries
82
integrates country-based theories with firm-based theories to determine national competitiveness
MICHAEL PORTER’S DIAMOND MODEL
83
was developed by the scholars in the 1970s to describe how companies expand abroad.
internationalization process model
84
emphasized FDI is the preferred entry strategy of MNEs.
FDI-BASED EXPLANATIONS
85
refers to the total value of assets that MNEs invest abroad.
FDI STOCK
