international Management Flashcards
(127 cards)
1
Q
In what setting do we study about a business in this chapter?
A
Global
2
Q
In different country situations, POLC becomes more
A
challenging
3
Q
As trade barriers fall, communication becomes faster and cheaper, and consumer tastes are converging, businesses become a more
A
unified global field
4
Q
The reality of borderless companies means consumer can no longer
A
tell which country they are buying fom
5
Q
What is international business?
A
Business activities of ay firm that
involve the movement of resources across national boundaries
6
Q
What kinds of resources are moved across national boundaries?
A
raw materials semi-finished goods finish goods services capital people technology
7
Q
A firm in international business has to
A
export or import products from other countries
8
Q
The world now is truly an integrated
A
global economy
9
Q
In a global economy, more firms both large and small are becoming
A
international businesses
10
Q
What is international management?
A
management of business operations conducted in more than 1 country
11
Q
The basic management functions in a national or international company is the
A
is the same
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
13
Q
What else does a MNC consist of?
A
subsidiaries
manufaturing facilities
throughout the world
14
Q
How is a MNC managed?
A
integrated worldwide business system
15
Q
What is a home country?
A
country in which an organisation’s HQ is located
16
Q
What is a host country
A
A foreign country in which an organisation is conducting business
17
Q
An international manager must assess the international
A
business environment
18
Q
We must assess the international business environment for
A
opportunities
threats
manage different kinds of risks
19
Q
What do the environmental factors determine in international business operations?
A
direction
purpose
20
Q
What are the environments we look at?
A
PEST political-legal Economic social-cultural technological
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
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
23
Q
Political risks can come in the form of?
A
Nationalisation
Expropriation
Acts of violence against MNC’s properties or employees
24
Q
What is nationalisation
A
forced sale of MNC’s assets to local buyers
25
What is expropriation
local government seizes foreign-owned assets of MNCs, providing inadequate or no compensation
26
What is political instability
events which affect the operations of an international firm
27
What kinds of political instability are there
riots
revolutions
civil disorders
government upheavals
28
What do international firms need to learn about in the host country? What do they need to do?
laws and regulations that affect them
| obey them
29
What host government laws are there?
```
ownership
restrictions on operations
consumer protection
employment
product safety and standards
wages
taxation
product labelling
```
30
International firms must pay attention to key economic variables to reduce
economic risk
31
What are the key economic variables?
```
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
```
32
The international firm needs to assess both current economic conditions and
forecast future conditions
33
The countries that they need to carry out economic assessment include countries they
operate in
sell to
purchase from
34
What is a country's infrastructure?
the facilities needed to support economic activity
35
What do we assess in evaluating infrastructure?
cost of operations
| ease of operations
36
What are examples of infrastructure?
transportation systems
communication systems
power plants
schools
37
What does a nation's culture include?
```
shared knowledge
social values
beliefs
language
religion
education
attitudes
social organisation
```
38
What do international managers face when they cross national boundaries to work in a culture different from their own?
difficulty
39
What does cultural and national differences influence?
attitudes
| expectations
40
When attitudes and expectations differ in different cultures, what is affected?
work behaviour of individuals and groups in host country
41
Because of different cultures, what do managers need to develop?
Cultural sensitvity
42
What is cultural sensitivity
ability to anticipate and accommodate behavioural differences in different societies
43
For a higher chance of successful international mangers, what do firms have to do?
Pay attention to language
Cross cultural training
dealing with family issues
44
For technology, different countries have different
levels of technology
45
Different levels of technology affects the
nature of markets
| ability of companies to conduct business
46
To increase their technology in their own country, they promote
technological transfer by encouraging FDI (foreign direct investment)
47
How do countries entice international firms to build new factories in their countries
tax and other incentives
48
Some countries have a condition for companies if they want to transfer technology and operate there. What is it?
they must be eager to access their resources
| consumer
49
What are some technological factors?
Maturity of technology
technological advancements
role of the internet
government spending on info-communication technologies
50
Why do companies go international?
To gain access to more reliable or cheaper resources
to increase market share
to avoid foreign tariffs and import quotas
51
What kind of companies venture overseas to find cheaper resources? What is the resource?
Manufacturing
| labour
52
What kind of companies go international to find more reliable and cheaper raw materials?
Petroleum
| mining industries
53
What does it mean to increase market share?
To continue growing
54
Why does a company expand into international markets?
to continue growing
| enhance competitive position in industry
55
Why do governments use tariffs or import quotas?
to protect domestic business concerns
56
What can overcome barriers like tariffs or import quotas?
direct investment
57
what is a tariff
a type of trade barrier in the form of
| customs duty, tax, levied mainly on imports
58
What is an import quota
a type of trade barrier on the amount of a product that can be imported over a given period of time
59
How do companies enter international markets?
```
Exporting
Licensing
Franchising
Joint ventures
Wholly-owned subsidiaries
```
60
'How companies enter international markets' is also known as
market entry strategies
61
What is the most common way of doing business abroad?
exporting
62
What is exporting
company maintains its production facilities in home country
| transfer its products for sale to foreign markets
63
What are the advantages of exporting?
market product in other countries at small expense, limited risk
64
Why is exporting also less expensive?
no commitment of capital to building plants in host country
65
What are the disadvantages of exporting?
```
exporters face problem
physical distances
government regulations
foreign currencies
cultural differences
```
66
What is licensing?
agreement
| licensee pays licensor
67
What is the payment that licensee pays called?
royalty payments
68
After paying, what is the licensee allowed to do?
produce its product
sell its services
use its brand name in a specific foreign market
69
What are the advantages of licensing?
avoid trade barriers
| does not have to commit substantial financial resource to develop foreign markets
70
What is the disadvantages of licensing?
diminished ability to enforce/control the quality of product by licensee
71
The disadvantage is that Licensees can eventually become
competitors
72
What is franchising
special form of licesning
73
What does the franchisor provide franchisees with?
a standard package
74
The standard package that franchisees are given include
products
marketing
management systems
75
These systems that franchisors provide with have proven themselves
successful in the home coutnry
76
In what industries are franchising successful.?
fast-food
hotel
retailing
recreational services
77
What are the advantages of franchising?
franchisor relieved the costs and risks of opening a foreign market on its own
build global presence quickly
78
What are the disadvantages of franchising
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
What is a joint venture?
establishing a firm
| jointly owned by 2 or more firms in host country
80
What do the joint owners do together?
develop new products
build a manufacturing facility
set up a sales and distribution network
81
What is the advantage of joint venture?
benefits from local partner's knowledge of host country
| cost and risks of opening up in foreign market is shared by local partner
82
Things that the local partner can know about in a host country are
```
competitive conditions
culture
language
political systems
business systems
```
83
What is the disadvantage of a joint venture?
risks losing control of technology to partner
| conflicts and battles for control
84
There are conflicts and battles for control in a joint venture if
goals and objectives of partners change
| take different view of what the strategy should be
85
What is a wholly owned subsidiary?
operation on foreign soil
| totally owned and controlled by company with HQ outside host country
86
How can wholly-owned subsidiaries be established?
acquisitions
| start-ups
87
What are the advantages of wholly-owned subsidiaries?
reduces risk of losing control over firm's technological competence
exercise tight control over operations in different countries
88
what is the disadvantage of a wholly-owned subsidiary?
most costly method of serving a foreign method
89
Why is a wholly owned subsidiary costly?
bear full costs and risks of setting up overseas operations
90
What is planning?
basic process
select goals
determine how we achieve them
91
The typical goals of a domestic business and MNC are
survival
| profit and growth
92
However, the goals of an MNC may clash with the goals of
economic and political systems of host countries
93
Most countries' goals include
improved standards of living
trained workforce
full employment
steady economic growth
94
It is good when the goal of MNC and goal of country
overlap
95
It is bad when the MNC is not achieving the goals at the
rate expected by host country
96
For MNCs, how are strategic plans developed?
originated in home country
| formulated through intensive communication with international divisions
97
For MNCs, how are tactical plans developed?
delegated to international divisions
98
In organising, what must the organisation structure be designed to do?
meet needs of international environment
99
What are the international organisational structures?
international division
worldwide functional divisions
worldwide product divisions
geographical reions
100
What is an international division?
separate division is create to which all foreign subsidiaries report
101
What is a worldwide functional divisions
manager in charge of a particular function has worldwide responsibility
102
What is a worldwide product division
manager is responsible for particular product categories worldwide
103
What is geographical region
divided into regional divisions
| subsidiaries reporting to appropriate division according to location
104
What is leading
influencing people
| guiding activities of organisational members
105
What activities are involved in leading
motivating
communicating
managing teamwork
106
why is influencing people in international companies more complex?
culture factor
107
How do international managers become successful in leading?
acquire working knowledge of languages used in host countries
understand their attitudes
understand the needs that motivate the peopl
108
Why is acquiring a working knowledge of the languages used in host countries important?
influencing activities involve communication
109
In different attitudes, managers have to be
flexible in adapting to the prevailing attitudes of the host country people
110
In developed countries,
people's basic needs are fairly well satsified
| managers satisfy esteem and self-actualisatoin
111
In developing countries, managers need to
appeal to basic human needs
112
What is controlling?
process of comparing
actual performance with standards
taking corrective action
113
Why is controlling complicated in MNC,
geographical separation of foreign subsidiaries
increased distance, difficult for managers in home country to keep watch on operation
114
What is required for managers to have the knowledge to make timely and proper decisions?
extensive management information system
115
What kinds of cultures are there?
high context
| low context
116
the context is also known as the
social environment
surroundings
in which business transaction takes place
117
the level of context shows the emphasis on
social environment
118
In high context cultures, people use communication to
build personal social relationships
119
In high context cultures , what is valued?
trust and relationship
| welfare and harmony
120
In low context culture, people use communication to
exchange facts and information
121
What is important in a low context culture?
business transactions
| individual welfare and achievement
122
In a high context interation, more times is required before business partner feels
comfortable in talking about business dealings
123
What countries have high-context cultures?
Asian
Arab countries
Latin America
African
124
What may be expected in high context cultures?
gifts
125
Low-context cultures tend to be
American
| Northern European
126
In a low-context culture, it is unethical to
receive gifts to seal the business deal
127
What do low-context people need to do with high-context people?
suppress their impatience
| devote time to establish personal social relationships
