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POM > international Management > Flashcards

international Management Flashcards

1
Q

In what setting do we study about a business in this chapter?

A

Global

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2
Q

In different country situations, POLC becomes more

A

challenging

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3
Q

As trade barriers fall, communication becomes faster and cheaper, and consumer tastes are converging, businesses become a more

A

unified global field

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4
Q

The reality of borderless companies means consumer can no longer

A

tell which country they are buying fom

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5
Q

What is international business?

A

Business activities of ay firm that

involve the movement of resources across national boundaries

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6
Q

What kinds of resources are moved across national boundaries?

A 
raw materials
semi-finished goods
finish goods
services
capital
people
technology
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7
Q

A firm in international business has to

A

export or import products from other countries

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8
Q

The world now is truly an integrated

A

global economy

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9
Q

In a global economy, more firms both large and small are becoming

A

international businesses

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10
Q

What is international management?

A

management of business operations conducted in more than 1 country

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11
Q

The basic management functions in a national or international company is the

A

is the same

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12
Q

What is an MNC?

A

corporation that owns businesses in 2 or more countries

receives more than 25% of its total sales revenue from operations outside the parent’s home country

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13
Q

What else does a MNC consist of?

A

subsidiaries
manufaturing facilities
throughout the world

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14
Q

How is a MNC managed?

A

integrated worldwide business system

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15
Q

What is a home country?

A

country in which an organisation’s HQ is located

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16
Q

What is a host country

A

A foreign country in which an organisation is conducting business

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17
Q

An international manager must assess the international

A

business environment

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18
Q

We must assess the international business environment for

A

opportunities
threats
manage different kinds of risks

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19
Q

What do the environmental factors determine in international business operations?

A

direction

purpose

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20
Q

What are the environments we look at?

A 
PEST
political-legal
Economic
social-cultural
technological
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21
Q

In political-legal environment, what must international firms deal with? What are their major concerns?

A

unfamiliar political systems
government supervision
regulations in international operations

political risk
political instability
laws and regulations of host country

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22
Q

What are political risks?

A

government actions or
politically motivated events

result in a company losing its assets
earning power or managerial control

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23
Q

Political risks can come in the form of?

A

Nationalisation
Expropriation
Acts of violence against MNC’s properties or employees

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24
Q

What is nationalisation

A

forced sale of MNC’s assets to local buyers

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25
Q

What is expropriation

A

local government seizes foreign-owned assets of MNCs, providing inadequate or no compensation

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26
Q

What is political instability

A

events which affect the operations of an international firm

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27
Q

What kinds of political instability are there

A

riots
revolutions
civil disorders
government upheavals

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28
Q

What do international firms need to learn about in the host country? What do they need to do?

A

laws and regulations that affect them

obey them

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29
Q

What host government laws are there?

A 
ownership
restrictions on operations
consumer protection
employment
product safety and standards
wages
taxation
product labelling
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30
Q

International firms must pay attention to key economic variables to reduce

A

economic risk

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31
Q

What are the key economic variables?

A 
economic development and growth
inflation rate
taxation rates
size and trend of foreign investment
infrastructure
resource and product market
quality and size of labour market
wage rates
exchange control
foreign exchange rates
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32
Q

The international firm needs to assess both current economic conditions and

A

forecast future conditions

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33
Q

The countries that they need to carry out economic assessment include countries they

A

operate in
sell to
purchase from

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34
Q

What is a country’s infrastructure?

A

the facilities needed to support economic activity

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35
Q

What do we assess in evaluating infrastructure?

A

cost of operations

ease of operations

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36
Q

What are examples of infrastructure?

A

transportation systems
communication systems
power plants
schools

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37
Q

What does a nation’s culture include?

A 
shared knowledge
social values
beliefs
language
religion
education
attitudes
social organisation
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38
Q

What do international managers face when they cross national boundaries to work in a culture different from their own?

A

difficulty

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39
Q

What does cultural and national differences influence?

A

attitudes

expectations

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40
Q

When attitudes and expectations differ in different cultures, what is affected?

A

work behaviour of individuals and groups in host country

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41
Q

Because of different cultures, what do managers need to develop?

A

Cultural sensitvity

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42
Q

What is cultural sensitivity

A

ability to anticipate and accommodate behavioural differences in different societies

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43
Q

For a higher chance of successful international mangers, what do firms have to do?

A

Pay attention to language
Cross cultural training
dealing with family issues

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44
Q

For technology, different countries have different

A

levels of technology

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45
Q

Different levels of technology affects the

A

nature of markets

ability of companies to conduct business

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46
Q

To increase their technology in their own country, they promote

A

technological transfer by encouraging FDI (foreign direct investment)

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47
Q

How do countries entice international firms to build new factories in their countries

A

tax and other incentives

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48
Q

Some countries have a condition for companies if they want to transfer technology and operate there. What is it?

A

they must be eager to access their resources

consumer

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49
Q

What are some technological factors?

A

Maturity of technology
technological advancements
role of the internet
government spending on info-communication technologies

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50
Q

Why do companies go international?

A

To gain access to more reliable or cheaper resources
to increase market share
to avoid foreign tariffs and import quotas

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51
Q

What kind of companies venture overseas to find cheaper resources? What is the resource?

A

Manufacturing

labour

52
Q

What kind of companies go international to find more reliable and cheaper raw materials?

A

Petroleum

mining industries

53
Q

What does it mean to increase market share?

A

To continue growing

54
Q

Why does a company expand into international markets?

A

to continue growing

enhance competitive position in industry

55
Q

Why do governments use tariffs or import quotas?

A

to protect domestic business concerns

56
Q

What can overcome barriers like tariffs or import quotas?

A

direct investment

57
Q

what is a tariff

A

a type of trade barrier in the form of

customs duty, tax, levied mainly on imports

58
Q

What is an import quota

A

a type of trade barrier on the amount of a product that can be imported over a given period of time

59
Q

How do companies enter international markets?

A 
Exporting
Licensing
Franchising
Joint ventures 
Wholly-owned subsidiaries
60
Q

‘How companies enter international markets’ is also known as

A

market entry strategies

61
Q

What is the most common way of doing business abroad?

A

exporting

62
Q

What is exporting

A

company maintains its production facilities in home country

transfer its products for sale to foreign markets

63
Q

What are the advantages of exporting?

A

market product in other countries at small expense, limited risk

64
Q

Why is exporting also less expensive?

A

no commitment of capital to building plants in host country

65
Q

What are the disadvantages of exporting?

A 
exporters face problem
physical distances
government regulations
foreign currencies
cultural differences
66
Q

What is licensing?

A

agreement

licensee pays licensor

67
Q

What is the payment that licensee pays called?

A

royalty payments

68
Q

After paying, what is the licensee allowed to do?

A

produce its product
sell its services
use its brand name in a specific foreign market

69
Q

What are the advantages of licensing?

A

avoid trade barriers

does not have to commit substantial financial resource to develop foreign markets

70
Q

What is the disadvantages of licensing?

A

diminished ability to enforce/control the quality of product by licensee

71
Q

The disadvantage is that Licensees can eventually become

A

competitors

72
Q

What is franchising

A

special form of licesning

73
Q

What does the franchisor provide franchisees with?

A

a standard package

74
Q

The standard package that franchisees are given include

A

products
marketing
management systems

75
Q

These systems that franchisors provide with have proven themselves

A

successful in the home coutnry

76
Q

In what industries are franchising successful.?

A

fast-food
hotel
retailing
recreational services

77
Q

What are the advantages of franchising?

A

franchisor relieved the costs and risks of opening a foreign market on its own
build global presence quickly

78
Q

What are the disadvantages of franchising

A

lacks ultimate control, depends on franchisees’ commitment and performance
considerable effort put into developing an appropriate training manual which must be adapted for cultural differences

79
Q

What is a joint venture?

A

establishing a firm

jointly owned by 2 or more firms in host country

80
Q

What do the joint owners do together?

A

develop new products
build a manufacturing facility
set up a sales and distribution network

81
Q

What is the advantage of joint venture?

A

benefits from local partner’s knowledge of host country

cost and risks of opening up in foreign market is shared by local partner

82
Q

Things that the local partner can know about in a host country are

A 
competitive conditions
culture
language
political systems
business systems
83
Q

What is the disadvantage of a joint venture?

A

risks losing control of technology to partner

conflicts and battles for control

84
Q

There are conflicts and battles for control in a joint venture if

A

goals and objectives of partners change

take different view of what the strategy should be

85
Q

What is a wholly owned subsidiary?

A

operation on foreign soil

totally owned and controlled by company with HQ outside host country

86
Q

How can wholly-owned subsidiaries be established?

A

acquisitions

start-ups

87
Q

What are the advantages of wholly-owned subsidiaries?

A

reduces risk of losing control over firm’s technological competence
exercise tight control over operations in different countries

88
Q

what is the disadvantage of a wholly-owned subsidiary?

A

most costly method of serving a foreign method

89
Q

Why is a wholly owned subsidiary costly?

A

bear full costs and risks of setting up overseas operations

90
Q

What is planning?

A

basic process
select goals
determine how we achieve them

91
Q

The typical goals of a domestic business and MNC are

A

survival

profit and growth

92
Q

However, the goals of an MNC may clash with the goals of

A

economic and political systems of host countries

93
Q

Most countries’ goals include

A

improved standards of living
trained workforce
full employment
steady economic growth

94
Q

It is good when the goal of MNC and goal of country

A

overlap

95
Q

It is bad when the MNC is not achieving the goals at the

A

rate expected by host country

96
Q

For MNCs, how are strategic plans developed?

A

originated in home country

formulated through intensive communication with international divisions

97
Q

For MNCs, how are tactical plans developed?

A

delegated to international divisions

98
Q

In organising, what must the organisation structure be designed to do?

A

meet needs of international environment

99
Q

What are the international organisational structures?

A

international division
worldwide functional divisions
worldwide product divisions
geographical reions

100
Q

What is an international division?

A

separate division is create to which all foreign subsidiaries report

101
Q

What is a worldwide functional divisions

A

manager in charge of a particular function has worldwide responsibility

102
Q

What is a worldwide product division

A

manager is responsible for particular product categories worldwide

103
Q

What is geographical region

A

divided into regional divisions

subsidiaries reporting to appropriate division according to location

104
Q

What is leading

A

influencing people

guiding activities of organisational members

105
Q

What activities are involved in leading

A

motivating
communicating
managing teamwork

106
Q

why is influencing people in international companies more complex?

A

culture factor

107
Q

How do international managers become successful in leading?

A

acquire working knowledge of languages used in host countries
understand their attitudes
understand the needs that motivate the peopl

108
Q

Why is acquiring a working knowledge of the languages used in host countries important?

A

influencing activities involve communication

109
Q

In different attitudes, managers have to be

A

flexible in adapting to the prevailing attitudes of the host country people

110
Q

In developed countries,

A

people’s basic needs are fairly well satsified

managers satisfy esteem and self-actualisatoin

111
Q

In developing countries, managers need to

A

appeal to basic human needs

112
Q

What is controlling?

A

process of comparing
actual performance with standards
taking corrective action

113
Q

Why is controlling complicated in MNC,

A

geographical separation of foreign subsidiaries

increased distance, difficult for managers in home country to keep watch on operation

114
Q

What is required for managers to have the knowledge to make timely and proper decisions?

A

extensive management information system

115
Q

What kinds of cultures are there?

A

high context

low context

116
Q

the context is also known as the

A

social environment
surroundings
in which business transaction takes place

117
Q

the level of context shows the emphasis on

A

social environment

118
Q

In high context cultures, people use communication to

A

build personal social relationships

119
Q

In high context cultures , what is valued?

A

trust and relationship

welfare and harmony

120
Q

In low context culture, people use communication to

A

exchange facts and information

121
Q

What is important in a low context culture?

A

business transactions

individual welfare and achievement

122
Q

In a high context interation, more times is required before business partner feels

A

comfortable in talking about business dealings

123
Q

What countries have high-context cultures?

A

Asian
Arab countries
Latin America
African

124
Q

What may be expected in high context cultures?

A

gifts

125
Q

Low-context cultures tend to be

A

American

Northern European

126
Q

In a low-context culture, it is unethical to

A

receive gifts to seal the business deal

127
Q

What do low-context people need to do with high-context people?

A

suppress their impatience

devote time to establish personal social relationships

POM (16 decks)

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