TENTAP

Question 1

Which one of Ghemawat’s distances creates most challenges for Netflix in India?
1) ethnic 2) administrative 3) geographic 4) cultural 5) psychic

Answer 1

2 administrative

Question 2

If a respondent in Trompenaars’ study believes that it is wrong to testify in court against a friend, this indicates a high level of … (complete this sentence)
1)universalism
2)particularism
3)individualism
4)communitarianism

Answer 2

2)particularism

Question 3

A highly competitive process of selecting performers for the K-Pop groups is consistent with the following Hofstede’s cultural characteristic -… (complete this sentence)
1)high masculinity
2)high femininity
3)high power distance
4)high collectivism
5)high uncertainty avoidance

Answer 3

1)high masculinity

Question 4

Identify one co…[13:01, 15/12/2020] Toia LM: 18. Emirates Airline was a late entrant in the international airline industry. Which factors helped Emirates Airline to overcome the disadvantages of a late mover?
-Dubai and its geographical placement was helpful in developing routes to emerging markets in the eastern world and BRICS countries
-The fact that it was based far from Europe helped because of minimal aviation traffic
-Dubai is also surrounded by areas with huge populations
-Dubai has good weather that help Emirates in the sense that flights don ́t get cancelled or delayed because of the weather
-Huge support from the government

Answer 4

Dubai has good weather that help Emirates in the sense that flights don ́t get cancelled or delayed because of the weather

Question 5

Which organizational structure is suitable for MNC implementing multidomestic strategy?
1)worldwide area division structure
2)worldwide product division structure
3)international division structure
4)global matrix structure

Answer 5

1)worldwide area division structure

Question 6

Which one of the following entry modes proved to be more successful than others when Walmart expanded its operations abroad?
1)acquisition of small local companies
2)acquisition of large local companies
3)greenfield investments
4)franchising

Answer 6

2)acquisition of large local companies

Question 7

How should we characterize in terms of Herzberg’s theory of motivation those practices that have been proposed to improve employee retention at LG Display Wroclaw factory?
1)motivators
2)positive incentives
3)hygiene factors
4)satisfaction factors

Answer 7

3)hygiene factors

Question 8

The reluctance of Polish workers to attend company-organized events at LG Display Wroclaw outside of normal working hours reflects cross-national differences between Poland and South Korea in… (complete this sentence)
1)job design
2)work centrality
3)reward systems
4)goal setting

Answer 8

2)work centrality

Question 9

What type of ownership has significantly increased in the U.S. over the last 25 years?
1)founding family ownership
2)institutional ownership
3)employee ownership
4)state ownership
5)corporate cross-ownership

Answer 9

2)institutional ownership

Question 10

Which of the following is not considered in World Economic Forum studies as a pillar supporting an entrepreneurial ecosystem?
1)accessible markets
2)human capital
3)funding / financial resources
4)government & regulation
5)low level of corruption

Answer 10

5)low level of corruption

Question 11

The relationship between headquarters and subsidiaries is dependent on the strategy adopted by a multinational corporation. In which strategy is the dependence of subsidiaries on the headquarters is the lowest?
1)global
2)multidomestic
3)international
4)diversification

Answer 11

2)multidomestic

Question 12

Sustainability can facilitate firm access to all of the following resources except … (complete this sentence)
1)human resources
2)financial resources
3)government resources
4)natural resources

Answer 12

4)natural resources

Question 13

Which of the following is not a characteristic of the industries where the governments are more likely to rely on mandatory regulation to promote the adoption of sustainable practices
1)business-to-business industries
2)industries where the adoption of sustainable practices is associated with higher costs
3)industries where especially hazardous materials are used
4)industries where few companies are registered as B-corporations
5)industries where environmental NGOs are particularly influential

Answer 13

5)industries where environmental NGOs are particularly influential

Question 14

On Carlos’ first day as a study-abroad student, he was surprised to find that his instructor asked for student feedback and that at the end of class, the instructor went to lunch with some of the students. Using one of Hofstede’s cultural dimensions, characterize briefly the culture in which Carlos found himself during his studies abroad.

Answer 14

The culture in the foreign country scores low in the power distance dimension of Hofstede’s model. Low power distance societies have small gaps between the least and most powerful, the instructor in this example being a more powerful member of society. The school appears to have a flatter organizational culture with relatively equal relations between students and instructors.

Question 15

Provide examples from specific countries illustrating how government policies can determine the composition of the board of directors.

Question 16

What are the sources of Logoplaste’s competitive advantage over local packaging plants in foreign markets?

Answer 16

Lean entrepreneurial venture, with most staff locally recruited and each employee performing multiple functionsThey created an Innovative LAB with the mission to revolutionize the way clients procured packaging solutions.They created on-site units servicing a single client with machines set up inside own client ́s filler plant.

Question 17

London-based Time Out company opened its first physical marketplace in Lisbon. Is this choice consistent with the Uppsala model of internationalization? Why?

Answer 17

Despite Portugal not being England ́s neighbor country, Time Out Market in Lisbon was the first market that the company opened in 2014 and they saw how that went before deciding to open other markets in other cities which is consistent with the Uppsala model of internationalization.

Question 18

What are the three layers of Edgar Schein’s model of culture? Provide examples illustrating what we can find on each of these three layers when using Schein’s model to analyze an organizational culture.

Answer 18

Basic assumptions and beliefs like relationship to the environment or the inner values of individuals, espoused values such as the vision, the mission and the philosophy of the organization , and artifacts like technology and architecture.

Question 19

Explain why “market for corporate control” is less effective in disciplining senior management of state-owned enterprises.

Question 20

Which geographic factors contributed to the prominence of “born global” startups in the Israeli entrepreneurial ecosystem?

Answer 20

Israel small size was important because all major elements of the industry were concentrated in geographic proximity around tel Aviv, such as research universities, venture capital firms, military R&D and an international airport.

Israel’s small size played an important role in its high-the ecosystem. All major elements of the industry were concentrated in geographical proximity around Tel Aviv, including research universities, VC firms, military R&D, and an international airport. Its small size also provided a small market to experiment in, yet because the domestic market was insufficient to sustain a start-up’s growth trajectory, most ventures had to develop a global outlook early in their lifecycle.

Question 21

Which forces convinced Nike to switch its position during the 1990s from denying to accepting its responsibility for how Nike’s suppliers treat their employees?

Answer 21

The pressure from the MEDIA and from the population had an impact on this change in Nike. Although they weren ́t the only ones with criticisms about working conditions, their size, profitability and brand recognition made them a target and they felt that they needed to change.

Question 22

Information disclosed in corporate governance reports will depend on the country where the company operates and its regulations. However, there are common trends in corporate governance reports. What is the major recent trend in corporate governance reports?

Answer 22

The stakeholder agenda is the major trend in corporate governance reports.

Question 23

What could be the reasons for multinational companies to opt for hiring expatriates instead of local employees to conduct operations in a foreign subsidiary?

Answer 23

Expatriates already know how the company works and could transfer knowledge and skills.

They work closely to the subsidiary, distributors and agents to ensure that the new subsidiary understand the parent company ́s values, standards and culture.It is way better to have someone on the field trying to understand how everything works rather than employees who conduct overseas business from the headquarters. This helps companies to reduce risks and avoid mistakes

Question 24

How outsourcing is different from offshoring? What is the main advantage of opting for outsourcing?

Answer 24

Outsourcing is related to performing activities outside the boundaries of the firm. Moving operations to a third party.

Offshoring is related to performing activities within the firm but in locations abroad.With outsourcing we can reduce costs, combine the competitive advantage of different firms, concentrate on core activities and share some risks.

Question 25

What is globalization and what are its two dimensions?

Answer 25

it refers to the broadening and deepening of interactions and interdependences among individuals and organizations from different countries (Cohn, 2005) * Broadening: extension of economic and geographic linkages to encompass virtually all major societies and states * Deepening: An increase in the frequency and intensity of interactions

Question 26

What are the three main costs associated with globalization?

Answer 26

* Trade Costs (cost of moving goods) *Communication Costs (cost of moving ideas) *Face-to-face Costs (cost of moving people)

Question 27

What is the argument for open borders?

Answer 27

“The pie increases for everyone”

Question 28

What is the argument for maintaining borders?

Answer 28

A zero-sum game perspective

Question 29

What is absolute advantage?

Answer 29

The capability of one country to produce more of a product with the same amount of input than another country Produce only goods where you are most efficient, trade for those where you are not efficient Assumes there is an absolute advantage among nations – all countris are best at something “If someone can do it more cheaply than you, and you can do something more cheaply than them – then you should both make your respective goods and trade”

Question 30

What is comparative advantage?

Answer 30

David Ricardo (1817) Introduced the concept of “opportunity cost” instead of direct cost in free-trade arguments “Opportunity cost” is the amount of another good you must forgo in order to produce something A theory of comparative advantage suggests that countries should: Produce and export those goods and services for which it is relatively more productive than other countries Import those goods and services for which other countries are relatively more productive.

Question 31

Describe the values dilemma

Answer 31

What is fair? Arises because trade generates many outcomes that citizens evaluate on the basis of ethical principles and social values. Free trade advocates believe that open borders maximize economic efficiency, competitiveness and standards of living. Opponents point out that allowing markets to operate freely may allow economic considerations to dominate ethical considerations such as human rights and labor standards

Question 32

Describe the distributional dilemma

Answer 32

Who wins and who loses? Emerges from the propensity of trade to alter the distribution of income and wealth within a country Because these distributional consequences have such political implications, the state is more attentive to them than economic theorists are.

Question 33

Describe the sovereignty (state goals) dilemma?

Answer 33

Should we allow others to make and enforce rules over us? States and their people prefer to preserve their sovereignty to make their own decisions. States are wary that the interdependence implicit in cooperating with foreign actors may constrain independent action and threatens the autonomy

Question 34

What are the benefits of trade?

Answer 34

*Improves economic performance: efficient allocation of countries ́ resources, so increasing its productivity *Increase competition: stimulates industries to become more efficient and productive often by forcing less productive firms out of business and allowing more productive firms to expand. *Increases the transfer of foreign technologies that enhance productivity

Question 35

Describe and name Hofstede's model of national cultures

Answer 35

- Individuals VS collectivism Refers to whether a person primarily functions as an individual or as a member of a group Individualistic societies: each person emphasizes his or her own self-interest. Ex. Australia, Britain, Canada & the U.S. Collectivist societies: ties among individuals are important. Business is made in a group context. Ex. China, Panama, Japan & South Korea. -Power distance Refers to how a society deals with inequalities in power that exist among people. High power distance: Societies exhibit big gaps between the most and the least powerful. Top management tends to be autocratic, giving little autonomy to lower-level employees. Low power distance: Societies have small gaps between the most and least powerful. Ex. US & Scandinavia - Uncertainty avoidance Refers to the extent to which people can tolerate risk and uncertainty in their lives High uncertainty avoidance societies create institutions to minimize risk and ensure security. Stable careers & decisions are made slowly. Ex. Belgium, France & Japan Low uncertainty avoidance societies, managers are entrepreneurial and comfortable with risks. - Masculinity VS feminity Refers to society’s orientation based on traditional male and female values. Masculine cultures: value competitiveness, ambition assertiveness and the accumulation of wealth. Ex. Australia & Japan Feminine cultures: emphasizes nurturing roles, interdependence among people, and carfir for less fortunate people. Ex. Scandinavia - Long-term VS short-term orientation Long-term orientation: emhpasizes the long view in planning and living, focusing on years and decades. Ex. Asian cultures Short-term orientation: short term planning and living, focusing on the present. - Indulgence vs restraint Indulgent societies: encourage instant gratification, it is good to be free and do what your impulses tell you to do. Ex. North and Latin America Restraint societies: Regulate and control behavior based on social norms, life is perceived to be hard and duty is not freedom is the normal state of being. Ex. Asia and eastern Europe

Question 36

Describe and name the dimensions of Trompenaars framework of national cultures

Answer 36

- Universalism VS Particularism - Universalism – Ideas and practices can be applied everywhere (ex, Canada, US, Netherlands) Particularism – Circumstances dictate how ideas apply (ex. China, South Korea) -Individualism VS Communitarianism Individuals - “People as individuals”, stress personal and individual matters, great personal responsibility (ex. Canada, US, Japan) Communitarianism – People regard themselves as a member of a group. (Ex. Malaysia and Korea) -Neutral VS Emotional Neutral – Culture in which emotions are not shown. (ex. Japan & UK) Emotional – Emotions are expressed openly and naturally. (ex. People smile a lot, talk loudly etc. Ex. Mexico) -Specific VS Diffuse Specific – Large public space shared with others and small private space guarded closely. (Ex separation between work and personal life ex. Austria, UK, US) Diffuse – Public and private spaces are similar. (ex. Venezuela, China, Spain) -Achievement VS Ascription Achievement – People are accorded status based on how well they perform functions. (Ex. Austria, Switzerland and US) Ascription – Status based on who or what this person is. (Ex. China, Indonesia) -Sequential VS Synchronous Sequential – Only one activity at a time: Appointments kept strictly, follow plans (US) Synchronous – Multitask, appointments are approximate. (Ex. France, Mexico) -Inner-directed VS Outer-directed Inner-directed – People believe that they have control over outcomes. (Ex. US, Greece, Japan) Outer-directed – People believe in letting things take its own course. (China, Asian countries)

Question 37

What is needed for the market to function?

Answer 37

Laws and regulations (Ex. Property rights and business laws) Free trade barriers Platforms for market transactions (Ex. Shopping centers or online platforms) Payment system Ex. Selling a car second-hand Sellers need to prove their trustworthiness An independent third party solves the problem of the price question If both parties trust the third party, the market clears at prices that reflect its truw value

Question 38

What is culture?

Answer 38

It is the way through which we make sense of the world and, consequently, it shapes perceptions, rules and norms, beliefs, needs, likes/dislikes, and values

Question 39

What are perceptions?

Answer 39

they are framed Our frames are usually culturally determined We learn to see the world in a certain way based on our cultural background. Our assumptions act as filters and lead us to distort, block, and even create what we choose to see and hear

Question 40

How can institutions facilitate market transactions?

Answer 40

Through: Reducing information asymmetries Aligning incentives Reducing transaction costs Generating trust

Question 41

How can producers get access to capital in developed economics?

Answer 41

Paying with credit cards Loan from banks Venture capitalists Raising funds Issuing bonds Crowdfunding

Question 42

How can producers get access to capital in emerging economies?

Answer 42

In emerging economies (Bangladesh & India) : Borrow from family and friends Credit unios Trade credit Obtaining funds from the government Microfinance

Question 43

Describe the CAGE framework

Answer 43

Cultural: - Language - Ethnicity - Religion - Work systems - Traditions - Values Administrative: - Colonial ties - Trade agreements - Currency - Legal systems - Government policies - Political hostility - Corruption - Visa and work permit regulations Geographic: - Physical distance - Common land border - Time Zones - Climate - Landlockedness - Transportation - Communication Economic: - Per capita income - Cost of labor - Human resources - Economic size - Age and gender

Question 44

What is a MNC? (MNE/TNC)

Answer 44

Multinational Corporations (MNC) MNC have operating facilities with dedicated employees in more than one country A company without operating facilities abroad can sell its product to foreign customers Some authors suggest that to be considered a MNC you need to operate in more than two countries

Question 45

How can you compensate for the foreignness?

Answer 45

Offer something that local domestic companies cannot.

Question 46

How can added value arise?

Answer 46

Added value can arise from introducing something from a firms home country in a new market (Can be seen as an extension of a firms domestic competetive advantage) Added value can also arise from accessing in the new market something that would be valuable in the domestic market of this firm

Question 47

Describe the Uppsala model of entering foreign markets

Answer 47

Foreign target markets are selected primarily according to their proximity in terms of “physic distance” Physic distance reflects differences in language, culture, political systems, level of education, or level of industrial development The physical distance makes it harder to understand a foreign market According to the model: companies start investing in one or few neighboring countries rather than in a variety of countries simultaneously Investment is carried out cautiously, gradually, and according to manager’s learning progress As a result, the company is expected to follow a sequence from low to high commitment and to enter new markets successively greater physic distance

Question 48

What is the rational optimization approach?

Answer 48

An entering foreign markets approach by going after the market with the most appealing characteristics

Question 49

Name a few entry modes

Answer 49

Exporting Licensing & franchising Wholly owned subsidiaries (greenfield investments) Mergers and acquisitions Strategic alliances and joint ventures

Question 50

What are the determinants of entry mode choices made by firms?

Answer 50

Goals and objectives of the firm Degree of control desired regarding decisions, operations etc. The firm’s resources (financial, organizational, technological) - both strength & weaknesses The types of risk inherent in each proposed foreign venture Conditions in the target country (legal, cultural, economic circumstances) The nature and extent of competition from rivals that might enter the market later Availability and capabilities of partners in the market The value-adding activities the firms is willing to perform and what it will delegate to local partners Characteristics of the product or service

Question 51

How can entry modes be affected by prior entry experience?

Answer 51

Path dependency – firms often repeat entry modes they have pursued before, even if it is not the most appropriate one Learning from experience

Question 52

What are the low commitments (Home based) entry modes?

Answer 52

- Exporting - Licensing/Franchising

Question 53

Describe Exporting and its advantages VS disadvantages

Answer 53

Exporting: - Producing products or services in one country and selling/distributing them to customers in other countries - Usually the firm’s foreign entry strategy - Low risk, low cost, and flexible - Export channels: Independent distributor/agent VS firm’s own distributor abroad Advantages: No need to establish foreign operations Do not transfer competencies to foreign firms Easy to control operations Disadvantages: Costs (transportation, tariff) Limited learning opportunities Less responsive to local demands Ex: Microsoft software, Disney’s movies

Question 54

Describe Licensing and Franchising and its advantages VS disadvantages

Answer 54

Goverened by a contract that provides the focal firm a moderate level of control over the foreign partner. Typically involve exchange of intangibles (trademarks, intellectual, property, know-how" Advantages: Low-risk & low-cost Fast expansion When a target market is not of strategic interest Disadvantages: Limited control over licensee’s operations Lower profit Create potential competitors in other markets Ex: licensing – Lego, Franchising – McDonalds, Marriott

Question 55

Name the high-commitment entry modes

Answer 55

Foreign Direct Investment (FDI) - Wholly owned subsidiary (greenfield investments - Mergers and Acqusitions Strategic Alliances & joint ventures - Non equity strategic alliance - Equity strategic alliance - Joint venture

Question 56

Describe FDI

Answer 56

FDI involves establishing a presence in the foreign market by investing capital in property located aborad FDI entails risk and resource commitment Can be done through: wholly owned subsidiaries, acquisitions, equity-based collaborative ventures with foreign partners

Question 57

Describe Wholly Owned subsidiary (greenfield investments) and its advantages VS disadvantages

Answer 57

A firm sets up presence abroad – alone and from scratch Local knowledge and understanding of the market will have to come from within the firm or by hiring locals Takes time and substantial resources Advantages: High level of control over the subsidiary High profit potential Internal transfer of competencies and proprietary knowledge Disadvantages; High risk and capital investments Market access may be difficult Lack of local knowledge Host government may not allow (laws & regulations, corruption) Ex: Toyota North America, Philips USA

Question 58

Describe M&A's and its advantages VS disadvantages

Answer 58

Mergers(equal): assets of two previously separate companies are combined to establish a new legal entity Acquisitions: assets of the acquired company are absorbed by the acquirer and the target company disappears as a legal entity Real “mergers” are rare – usually there is a dominant party Advantages (Acquistions) Allows rapid global expansion opportunities Start foreign operations with a substantial market share Does not intensify competition Disadvantages: Could be expensive Complex regulation Difficult to obtain information Cultural differences Ex: Walmart & Woolco

Question 59

Describe Non-equity strategic alliances

Answer 59

Cooperation between firms is managed directly through contracts, without equity holdings or a new firm being created Detailed contracts are necessary

Question 60

Describe Equity strategic alliances

Answer 60

Cooperative contracts are supplemented by equity investments Why do firms invest in their alliance partners? Company A makes an investment in company B

Question 61

Describe Joint ventures

Answer 61

Cooperating firms invest in a new firm and share its profits Choosing partners - skills & resources Working with partners – are they contributing? Who is more dependent on success? Terminating joint projects – who will learn faster?

Question 62

What are the advantages VS disadvantages with Strategic Alliances & Joint ventures

Answer 62

Advantages: Share risks and resource requirements Opportunity to learn from partners Partners assets Often favored by host governments Disadvantages: Transfer of competencies to a potential competitor Difficult coordination (different culture, goals etc) Ex: Renault & Nissan. Cisco & Wipro

Question 63

Through which ways can firms locate value chain activities in countries with comparative advantage?

Answer 63

Aggregation: Some firms wish to integrate activities to develop global economies of scale and scope, creating efficiencies based on exploiting similarities (such as geographies or markets) rather than adapting to differences *Arbitrage: Some firms wish to integrate activities to exploit economic or other differences between national or regional markets, usually by locating separate parts of the supply chain in different places. Can be more than achieving cost efficiencies: firms may seek knowledge and innovation by locating near worldwide centers of excellence

Question 64

What is Porters diamond model?

Answer 64

The determinants of the competitive advantage of nations are: *Factor conditions: Natural resources and created factor conditions (skilled labor, scientific knowledge, and infrastructure) *Demand conditions: size and sophistication of domestic demand *Related and supporting industries: High-quality, internationally competitive suppliers and supporting industries *Firm strategy, industry structure, and rivalry: highly competitive domestic industry is preparing firms for facing foreign competitors

Question 65

What is corporate governance?

Answer 65

Is about the structure of rights and responsibilities among the parties with a stake in the firm Is about relationships of various stakeholders or constituents Who controls a company, and what types of mechanisms are used

Question 66

Name a few types of ownerships

Answer 66

Institutional investors Families The state Other corporations Banks Employees VC investors

Question 67

Why may managers have different interests than shareholders?

Answer 67

Growth, profitability, risk

Question 68

Why do we need corporate governance?

Answer 68

To make sure that managers act in the best interest of the shareholders

Question 69

How can we make sure that managers act in the best interests of the shareholders?

Answer 69

Alignment of interests Close monitoring

Question 70

Name the steps in Maslows hierarchy of needs and describe how it differs from Asian cultures

Answer 70

Psychological needs Safety Love/belonging Esteem Self-Actualization Asian cultures: In Asian cultures, individuals are inseparable from social groups and their needs are defined by thesesocial groups 1. Belonging (social) 2. Physiological 3. Safety 4. Selfactualization

Question 71

Describe Herzbergs two-type motivation factors

Answer 71

Motivation: job-content (intrinsic) factors associated with the job satisfaction Hygiene factors: Job-context (extrinsic) factors associated with job dissatisfcation

Question 72

Describe McClellands achievement for motivation

Answer 72

Need for achievement Need for affiliation Need for power (Need for avoidance)

Question 73

Describe the equity theory

Answer 73

Equity theory states that e mployees compare their contributions to the organization with what they get from their job (whether they are treated fairly). When people perceive that they are treated equitably, this will have a positive effect on their job satisfaction If people believe they aren’t being treated fairly (especially, relative to relevant others), they will be dissatisfied, leading to negative effects on job performance; they will attempt to restore equity

Question 74

What is the goal setting theory by Locke?

Answer 74

Managers and employees(together) must find what goals can produce the desired outcomes. One of the best ways is by using the SMART principle: Specific Measurable Attainable Relevant Time-based

Question 75

What are the conditions that may prevent effective monitoring?

Answer 75

Conflicts Social ties Lack of expertise Weak incentives to perform the monitoring function properly

Question 76

What happens when shareholders sell their shares?

Answer 76

Strong signal for the board to fire the CEO The firm becomes an attractive acqusition target

Question 77

What is CSR?

Answer 77

"the actions of a firm to benefit society beyond the requirements of the law and the direct interests of them firm” or “the actions that appear to further some social good, beyond the interests of the firm and that which is required by law”

Question 78

What could be the purpose of firms?

Answer 78

Exist to serve the customers Earn profits Solving social problems Generating value for shareholders

Question 79

What are the problems with sustainability motivation

Answer 79

Most companies would like to minimize their environmental impact, but they are under pressure to increase profitability Few companies are ready to sacrifice profits and thus sustainable practices will be widely adopted only if they can generate profits

Question 80

What are the forces of global integration?

Answer 80

- Economic - Technological - Perception VS reality of globalization

Question 81

What does broadening and deepening refer to in the context of globalization?

Answer 81

Broadening: extension of econmic and geographic linkages to encompass virtually all major societies and states Deepening: An increase in the frequency and intensity of interactions

Question 82

What is the "Golden Straitjacket"?

Answer 82

it refers to facilitating economic growth, individual countries must sacrifice some aspects of their economic sovereignty to global institutions

Question 83

What are the Friedman's "10 flatteners"

Answer 83

- Collapse of the Berlin wall (global embrace of capitalism) - Netscape (Internet) - Workflow software (machines communicate with other machines) - Uploading (collaborative online projects) - Outsourcing (activities to other firms) - Offshoring (production to other countries) - Supply-chaining (streamlining supply chain like Walmart does) - Insourcing (the reverse of outsourcing) - Informing (spreading information like Google) - Steroids (wireless internet, file sharing, etc)

Question 84

What are the three economic constraints on integration?

Answer 84

- Trade costs (cost of moving goods) - Communication costs (cost of moving ideas) - Face-to-face costs (cost of moving people)

Question 85

What is globalization backlash?

Answer 85

A populist movement that questions many of the assumptions of the mutual benefits to trade, open borders and immigration

Question 86

What is great power politics?

Answer 86

Growing contestation between sovereign countries and blocs over who shall set and enforce the rules of world politics and trade

Question 87

What are the forces that impose constraints on globalization?

Answer 87

Social and political factors that reinforce the importance of national borders

Question 88

What is the theory of absolute advantage

Answer 88

- Capability of one country to produce more of a product with the same amount of input than another country - Produce only goods where are most efficient, trade for those where you are not efficient - Assumes there is an absolute advantage balance among nations - all countries are best at something

Question 89

What happens if one country has an absolute advantage in both products?

Answer 89

- No trade should occur (theory of absolute advantage) - Countries should specialize in the goods for which they have a relative advantage, and thus a lower opportunity cost, and then trade (comparative advantage)

Question 90

How does trade improve economic performance and competition?

Answer 90

- Trade improves economic performance not only by allocating a countrys resources to their most efficient use, but also by making those resources more productive in what they are doing - Trade and investment increase competition in a way that stimulates industries to becomes more efficient and improve their productivity, often by forcing less productive firms out of business and allowing more productive firms to expand

Question 91

How does culture shape us?

Answer 91

- Our perceptions - Rules and norms - What we do - Our needs - What we consume - Our beliefs - Our perceived friends and enemies - Our preferences - Our values

Question 92

I think that the most important innovation that nike introduce in the 1970s was …. a)New design of athletic shoes b)New ampporch to marketing c)New approach to manufacturing d)New management style

Answer 92

b and c

Question 93

Who started criticizing nike for using “sweatshops” (all did it but who were first)? a)Customers b)NGOs c)Media d)Labor union activists e)Goverment

Answer 93

D (they did this because they were scared that the jobs in US were lost because all were moved to cheaper locations)

Question 94

What do you think is the most serious problem with using factories in southeast asia? A)Low wages = are they low if you compare with the wages in the country? B)Poor working conditions C)High risk of life-threatening accidents D)Excessive degree of control over workers E)Corporations with oppressive political regimes

Answer 94

b and c

Question 95

What salireies should be paid to employees at factories supplying nike? A)Pay salaries coles to average for similar jobs in the same country B)Pay salaries sufficient to cover the cost of living for employees and their family (how do you calculate this?) C)Employees in poor countries should receive the same amount the employees in more affluent countries receive for the same job D)Supplying factories can determining salaries on their own as long as legal requirement regarding minimum pat are satisfied

Answer 95

B and D

Question 96

Describe the cultural iceberg

Answer 96

Culture is very similar to an iceberg. It has some aspects that are visible and many others that can only be suspected, guessed, or learned as you grow to understand cultures. Like an iceberg, the visible part of culture is only a small part of a much larger whole. Above the surface (arts, language, dress, celebrations, foods, behaviors) Below the surface (Roles, beliefs, perceptions, status, traditions, status, rules, values)

Question 97

Who do you think should assume the role of establishing the standards for decent wages and working conditions at factors supplying nike A)Nike B)Government of the country where factories C)are located US government D) Industries associated of athletic shoe producers

Answer 97

D

Question 98

Describe Edgar Schein's model of culture

Answer 98

- Artifacts (what can be seen) - Norms and values - Basic assumptions

Question 99

Describe how cultural values is different in U.S, Japan and the Arab countries

Answer 99

U.S. 1. freedom 2. independence 3. self-reliance 4- equality 5. individualism 6. competition 7. efficiency 8. time 9. Directness 10 Openness Japan: 1. Belonging 2. Group harmony 3. Collectiveness 4.. Age 5. Group consensus 6. Cooperation 7. Quality 8. Patience 9. Indirectness 10. Go-between Arab countries 1. Family security 2. Family harmony 3. Parental guidance 4. Age 5. Authority 6. Compromise 7. Devotion 8. Patience 9. Indirectness 10. Hospitality

Question 100

What kind of questions can Hofstedes cultural framework answer?

Answer 100

- How much in(equality) should there be among us - How afraid are we of the unknown - How dependent are we on our family - How should a man/woman feel? - Do we focus on the future, the present or the past? - May we have fun or is life a serious matter?

Question 101

Describe individuals VS collectivism and give examples of countries that are characterized by each

Answer 101

It refers to whether a person primarily functions as an individual or as a member of a group individualistic (self interest, competition) Ex. Australia, the U.S., Canada Collectivist (strong ties, business is conducted in group context, conformity) Ex: China, Panama, Japan , South Korea

Question 102

Describe Power distance and give examples of countries with high and low power distance

Answer 102

How a society deals with inequalities in power that exist among people High power distance (big gaps between the most and the least powerful, autocratic management, low autonomy to lower-level employees) Ex: Guatemala, Malaysia, Philippines Low power distance (small gaps between the most and least powerful, flat organizations, equality between managers and workers)

Question 103

describe Uncertainty avoidance and give examples of countries with low and high uncertainty avoidance

Answer 103

It refers to the extent to which people can tolerate risk and uncertainty in their lives High uncertainty avoidance (create institutions to minimize risk, stable careers, decisions are made slowly) Low uncertainty avoidance (managers are entrepreneurial and comfortable with risk, fast decisions, ok to change jobs) Ex: Ireland, Jamaica, U.S

Question 104

Describe Masculinity VS femininity and give examples. of such cultures

Answer 104

It refers to society's orientation based on traditional male and female values Masculine cultures (competitiveness, ambition, assertiveness, career and earning money) Ex: Australia, Japan Feminine cultures (interdependence, caring) Ex: Scandinavia

Question 105

Describe Long-Term VS short-term orientation and give examples of such cultures

Answer 105

It describes the degree to which people and organizations defer gratification to achieve long-term success Long-term orientation (long view in planning, focusing on years and decades, traditions, hard work, education, and discipline) Ex. Asian cultures Short-term orientation (short view in planning, today, flexibility) Ex. U.S , western countries

Question 106

what is CSR

Answer 106

Corporate social responsibility (CSR) can be defined as the actions of a firm to benefit society beyond the requirements of the law and the direct interests of the firm

Question 107

Describe Indulgence VS Restraint, and give examples of such cultures

Answer 107

It captures the freedom to satisfy one's natural needs and desires within a society Indulgent (encourage gratification, be free, follow impulses) Ex. North & Latin America Restraint (regulate and control, life is hard and there is no freedom in the normal state of being) Ex. Asia, Africa

Question 108

What CSR should be about:Views from Ghana

Answer 108

A global perspective that respects local culture Building local capacity leaving a positive legacy Empowerment and ownership Teaching skills to employees and enabling communities to be self-sufficient Filling-in when the government falls short Giving access to information CSR requires creation of partnerships

Question 109

What CSR should be about: Views from Thailand

Answer 109

The bigger the company, the greater the obligation Environmental damage mitigation and prevention Transparency Consumer protection Changing people’s attitudes towards the environment Youth and gender issues

Question 110

“Explicit” CSR in the U.S. versus “implicit” CSR in Europe

Answer 110

About 15-20 years ago, many large U.S. companies were already talking about various CSR initiatives but relatively few European companies back then described their social programs as CSR Matten & Moon (2008) argued that European companies are not less socially responsible, it’s just that their social programs are not framed as CSR Large companies in Europe traditionally accepted their obligation to collaborate with the government in efforts to increase social welfare and protect the environment but only recently began to describe this as CSR

Question 111

Describe Universalism VS Particularism

Answer 111

Universalism: ideas can be applied everywhere (Ex. Canada, U.S, Netherlands) Particularism: circumstances dictate how ideas are applied (China, South Korea)

Question 112

Describe Individualism VS Communitarianism

Answer 112

Individualism: people as individuals, stress personal and individual matters (Canada, U.S, Japan) Communitarianism: people regard themselves as a member of a social group (Malaysia, Korea)

Question 113

Describe how CSR acts in local and global markets

Answer 113

Local: strategy- How do I understand and manage societal expectations and contracts? How do I manage multiple stakeholders and non-market demands in my business model? moral- To what extent do values matter for corporate and managerial decision-making? How do I communicate and manage corporate and individual values? global: strategy- How do I operate across communities that place conflicting social and political demands on business organizations? moral- How do I operate across communities that possess different social values and ethics? When should I adapt my values to local customs? When should I not?

Question 114

Describe Neutral VS Emotional

Answer 114

neutral: a culture in which emotions are not shown Ex. Japan and UK Emotional: emotions are expressed openly and naturally Ex. Mexico

Question 115

The Shared Value debate

Answer 115

Can you always do good (create social value) and at the same time do well (create business value)?

Question 116

Describe Specific VS Diffuse

Answer 116

Specific: Large public space shared with others and small private space guarded closely. Clear seperation between work and personal life (U.K & U.S) Diffuse: Public and private spaces are similar, public space is guarded. (Venezuela, China, Spain)

Question 117

Describe Achievement VS Ascription

Answer 117

Achievement: People are accorded status based on how well they perform (Austria, Switzerland) Ascription: Status is based on who or what this person is (Venezuela, Indonesia)

Question 118

How making a business green can lead to profitability

Answer 118

boost revenue: Companies expect customers to pay premium prices for green products How much premium are customers willing to pay for consuming green products? Do customers know which companies use more sustainable practices? Reduce costs: Some green technologies reduce costs Streamlined operations consume less energy, water, and other inputs – consuming less resources implies lower costs of operation Examples from Walmart: Centralized control over lighting and heating of stores reduces electricity consumption facilitate access to resources: Facilitating access to financial resources by appealing to investors Facilitating access to human resources by appealing to current and potential employees Facilitating access to gov-t controlled resources

Question 119

Describe sequential VS synchronous

Answer 119

Sequential: Only one activity at a time, appointments kept strictly, follow plans as laid out (U.S) Synchronous: multi-task, appointments are approximate (France, Mexico)

Question 120

Describe Trompenaars Inner-directed VS Outer-directed culture theory

Answer 120

Inner-directed: people believe that they have control over the outcomes (U.S, Switzerland, Greece) Outer-directed: people believe in letting things take its own course (China, Asian countries)

Question 121

What's included in the micro-level framework for managing across borders?

Answer 121

People - Employees mobility. Are our workforce willing to work abroad? - How to link relationships, incentives and information flows to bring people together? - Hire locals or have expatriates? - How to transfer knowledge and expertise among subsidiaries? - Which leadership style should be more effective? Customers - Do customers in the host country have particular tastes? Which aspects of that culture will affect consumer behavior? - Which segment to target in that country? - Are customers in this country open to innovation and to digital channels? - Do they prefer online or physical stores? - Do they value quality or value for money? Operations - What are the conditions of the host country that may affect manufacturing? (labor costs, work conditions). Do they have the knowledge needed? - Which parts of the value chain should we integrate and which should we outsource? - How conditions in terms of infrastructure may impact the distribution of products? Strategy - Where to enter? And when? - How to enter? Alone or with a partner? - Adaptation to local markets or integration/standardization? - Which organizational structure? - How to guarantee the same corporate culture everywhere? - Where to locate headquarters, R&D facilities?

Question 122

What are the aspects of free trade?

Answer 122

Benefits - greater availability of cheaper goods because everything will be produced where it can be made least expensively Negative side - manufacturing workers as factories move to countries like Mexico and China with lower labor costs, making them loose their jobs

Question 123

Describe and name the factors of how culture affects management

Answer 123

- Safety VS risk (risk averse or risk taking) - Centralized VS Decentralized decision making (who makes the decisions) - Informal Procedures VS Formal procedures - Individual VS group rewards - High organizational loyalty VS low organizational loyalty (if you identify strongly with the firm) - Cooperation VS Competition (what is encouraged?) - Short-term VS Long-term Horizons (short-range goals such as profit or long-range goals such as market share) - Stability VS Innovation

Question 124

what is a Market-based ecosystem

Answer 124

A market-based ecosystem is a framework that allows private sector and social actors, often with different traditions and motivations, and of different sizes and areas of influence, to act together and create wealth in a symbiotic relationship

Question 125

Why do trade wars start? How do other countries react?

Answer 125

Mainly to protect the national industry, other countries react with retaliation. Examples: US --> China: US unilaterally imposed tariffs on a range of Chinese products US --> Canada: US unilaterally imposed tariffs on steel and aluminium

Question 126

Components of the market-based ecosystem

Answer 126

Large local firms MNCs Small and medium enterprises Micro-enterprises Cooperatives Non-government organizations (NGOs)

Question 127

8 pillars that support an entrepreneurial ecosystem

Answer 127

Accessible markets Funding and finance Regulatory framework and infrastructure Major universities as catalysts Human capital / workforce Support systems Education & training Cultural support

Question 128

What are the consequences of trade wars?

Answer 128

When protecting the national industry and workers, it usually backfires as retaliatory tariffs increase exportation costs This ends up by hurting business, workers at home and abroad as well as governments themselves, US & China example where the government had to spend billions to overcome the losses of this Trade War

Question 129

How to better protect workers and limit offshoring?

Answer 129

Through negotiation & cooperation

Question 130

IM risk mitigation steps?

Answer 130

* Identify alternative supply sources * Evaluate alternate manufacturing locations * Assess FTAs and FTZs * Evaluate supply chain

Question 131

what is "born Global"

Answer 131

business organisations that, from inception, seek to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries

Question 132

which market dose born global firms often enter?

Answer 132

born global firms often originate in emerging economies and target markets in developed economies

Question 133

What is culture?

Answer 133

* Norms, behaviors and artifacts - visible, tangible (clothing, food, music, office layouts, dress code, how people talk in meetings) * Personal values and attitudes - less visible, but can be talked about (interpretations of words/gestures, core values of an organization) * Cultural values and assumptions - usually not visible at all, often held subconsciously, rarely (if ever) questioned in everyday life (human nature, nature of relationships, relationship with the nature, how we deal with time)

Question 134

What are institutions and what do they do?

Answer 134

Institutions are: Rules and procedures Formal - laws and regulations Informal - patterns of behavior, moral codes - Defines how the game of business is played while firms are the players What do they do?: facilitate market transactions through: - reducing information asymmetries - Aligning incentives - reducing transaction - Laws - Regulations - Behaviors

Question 135

What is microfinance?

Answer 135

Microfinance refers to the financial services provided to low-income individuals or groups who are typically excluded from traditional banking. Most microfinance institutions focus on offering credit in the form of small working capital loans, sometimes called microloans or microcredit

Question 136

what is Bottom of Pyramid markets and how to serve BOP markets

Answer 136

term in economics that refers to the poorest two-thirds of the economic human pyramid, a group of more than four billion people living in abject poverty. how to serve: Design of products should account for limitations associated with low skills and poor infrastructure Educate customers how to use products Products should maintain functionality in extreme conditions (noise, dust, heat, etc.) Convenience of user interface Develop methods of accessing potential customers in hard-to-reach locations Focus on designing platforms that allow incorporation of new product features

Question 137

Henry Chesbrough: Embracing the open innovation model

Answer 137

Open innovation is the use of “purposeful inflows and outflows of knowledge to accelerate innovation internally while also expanding the markets for the external use of innovation"

Question 138

What are alternative options to fund and develop a business? (less developed countries)

Answer 138

- Borrow from family and friends - Credit unions - Trade credit from business partners - Microfinance

Question 139

What is Edgar Schein's model of culture?

Answer 139

Starting from the most visible in the outer circle The explicit artifacts and products of the society: - Logos - Office layout - Organizational structure - Dress code The norms and values that guide the society: - HR Practices - CSR initiatives - Compliance The implicit, basic assumptions that guide people's behavior: - Organization values - Stakeholders vs shareholders

Question 140

what is corporate governance

Answer 140

the structure of rights and responsibilities among the parties with a stake in the firm

Question 141

How would the power distance apply within a given organization? A. Employees are hoping to rise to higher levels and increase their power within the company. B. Employees accept that their supervisor and other company officials have much more power than they do. C. Employees prefer to gain power within the company individually rather than as a group. D. Employees are uncomfortable with the fact that they don’t have enough power.

Answer 141

B?

Question 142

How can get funds to develop a business in a developed economy?

Answer 142

- Paying with a credit card - Loan from bank - Venture capitalist - Raising funds through public offering of shares at stock exchanges - Issue bonds - Crowdfunding

Question 143

Jane started working in a new company, and the manager promotes working in groups by appraising the group result rather than individual results. Which society does the manager possibly come from? A. Collectivistic B. Mixed C. Feminine D. Individualistic

Answer 143

A

Question 144

Types of ownership

Answer 144

Ownership by (multiple) institutional investors Family ownership State ownership Ownership by other corporations banks VC investors

Question 145

What are institutional voids?

Answer 145

Institutional voids are the gaps that exist in specific markets that serve as roadblocks/barriers to the ideal interactions and transactions of buyers and sellers.

Question 146

Why do we need corporate governance?

Answer 146

To make sure that managers act in the best interests of shareholders

Question 147

Why managers may have different interests than shareholders?

Answer 147

Growth Profitability Risk

Question 148

One of the groups of the International Management course got 20 for the final report. Part of the group expressed their happiness quite loudly and immediately started planning the party for the evening, and another part of the group members calmly thanked and started leaving the classroom. Difference in which cultural dimension can we identify in this example? A. Masculinity B. Long-term orientation C. Indulgence D. Uncertainty avoidance

Answer 148

A

Question 149

what is the diffrence Concentrated vs. diffused ownership

Answer 149

Ownership concentration is a significant internal governance mechanism in which owners can control and influence the management of the firm to protect their interests

Question 151

How can you add value through arbitrage?

Answer 151

By exploiting economic or other differences between national or regional markets, usually by locating separate parts of the supply chain in different places You could also seek knowledge and innovation by locating near worldwide centers of excellence (silicon Valley) Ex: Nike took advantage of differences in standards and wages to produce cheaper sneakers in Indonesia Walmart saved billions by buying goods from China

Question 152

Describe the CAGE framework

Answer 152

It's a framework used to identify and prioritize the differences between countries that companies must address when developing cross-border strategies. Culture: * Beliefs, values and social norms that shape behavior of individuals and organizations: religious, race / ethnicity, language and social norms * Traditionalism Administrative: * Historical and political associations: colonial links, free trade agreements * Corruption * Common regional blocs, common currency * Political hostility * Non-market / closed economy * Weak institutions Geographic * How far two countries are from each other, contiguity (land border), physical size, access to the ocean, topography and time zones * Differences in climate * Geographic size and remoteness * Weak transportation or communication links Economic * Consumer income, cost of labor, availability of resources, infrastructure, organizational capabilities * Differences in cost or quality of natural resources, financial resources, HR

Question 153

How can a firm add value through aggregation?

Answer 153

By creating efficiencies based on exploiting similarities among geographies or markets rather than adapting to differences Ex. Xerox centralized its purchasing, first regionally, later globally, to create a substantial cost advantage

Question 154

What are the pros and cons of global integration?

Answer 154

Pros: - benefit from differences in comparative advanatages across nations - Increased bargaining power - economies of scale - lower fixed and overhead costs - global learning and R&D Cons: - Difficult - High transport costs - High import duties

Question 155

Pressures for globalization?

Answer 155

To pursue growth * Determined by population growth and product replacement To pursue efficiency * Larger revenues, larger asset base * Economies of scale or economies of scope To pursue knowledge * Faster product and process innovation * Lower cost of innovation * Reduced risk of competitive preemption Customer needs and preferences * Follow and adapt to globalizing customers Competition * First-mover advantage

Question 156

Content Theories of Motivation and Process Theories of Motivation

Answer 156

Content Theories of Motivation Explain work motivation in terms of what arouses, energizes, or initiates employee behavior (Maslow, Herzberg, McClelland) Process Theories of Motivation Explain work motivation by how employee behavior is initiated, redirected, and halted (equity, goal-setting, Expectancy)

Question 157

How does the Ukraine/Russia conflict impact global supply chains?

Answer 157

- Fail to obtain parts from Ukraine (BMW, Porsche) and Russia - price increases - scarcity of energy - Uncertainties -

Question 158

Ghemwat: Managing Differences

Answer 158

*Some firms wish to integrate activities around the world to develop global economies of scale and scope (aggregation). *Some firms wish to integrate activities to take advantage of national differences in knowledge or cost (arbitrage) *At the same time, firms need to adapt to local rules, markets and customers (adaptation).

Question 159

Give an example of a company that has used an adaptation

Answer 159

McDonald’s in India Missteps: * non-beef dry burger * soggy French fries * salad sandwiches * protests against use of meat Successful steps: * division of the vast geographical region into manageable areas * JVs with local entrepreneurs * development of the local supply chain * local R&D development * division of vegetarian and non-vegetarian areas

Question 160

Aggregation example

Answer 160

Whirpool * Market presence in every major country in world * 1989 – acquisition of the European operation base of Philips * Appliance joint-venture in Mexico * Manufacturing and marketing base in Asia * Created common system and global processes, like crossregional exports * Several functions became global: procurement, technology and product development, branding

Question 161

Arbitrage example

Answer 161

Indian companies invest in Latin America * Lock up supplies of energy and minerals, oil and natural gas * Outsourcing technological facilities * High level of investment in the local economy, opposite to China

Question 162

What is International Market Due Diligence?

Answer 162

involves analyzing foreign markets for their potential size, accessibility, cost of operations, and buyer needs and practices to aid the company in deciding whether to invest in entering that market. Analysis of the potential market’s: * Size * Accessibility * Cost of operations * Buyer needs and practices Elements * Regional differences * Understanding local consumers * Differentiation and capability, corporate fit * Industry dynamics

Question 163

Describe the differences between the home replication strategy, multidomestic strategy, and the global strategy

Answer 163

Home replication: All (same) production processes in each country Multidomestic: Specific production process in each country Global strategy: Divide the parts of the production process in the country where it is the most beneficial

Question 164

What are the main differences between outsourcing and offshoring?

Answer 164

Outsourcing * Performing activities outside the boundaries of the firm / move operations to a third party (an expert) * Concentrate on your core activities * It combines the competitive advantage of different firms * Firms typically outsource activities such as: IT services, contact center, accounting * Downside is that you may loose capabilities … the third party may become you competition * Do not outsource part of your R&D is your IP is not protected or to avoid bad reputation that may result from poor quality (Service legal agreements to avoid lower quality) * It may be complex to manage the relationship Offshoring * Performing activities within the firm but in locations abroad/ it is primarily a geographic activity * Production goods (relocation of factories / services (Indian IT industry) * Reduce costs for the seller and the price for the consumer * Provide jobs in developing countries * Because of the existence of high imported tariffs and transportation costs * It is a way of entering new markets * May loose quality Combination: * Moving operations to a third country and abroad * Frees up domestic producers to concentrate on innovation and other high-value activities * Less costs * Public opposition * Exposed to political / regulation instability * Difficult to control

Question 165

What is Porter's diamond model?

Answer 165

It is a model that emphasizes the competitive advantage of an industry or business that makes it work better than other competitors in a region or country - Demand conditions (size and sophistication) - Related and supporting industry (high quality) - Factor conditions ( natural resources, skilled labor, infrastructure) - Strategy, structure, and rivalry (high competitive domestic industry)

Question 166

How do you attain Multinational Competitive Advantage

Answer 166

Seeking new markets (to extend existing competitive advantages) * Does the company have a competitive advantage that can work abroad? * Need to analyze whether key sources of competitive advantage can be transferred to a particular country * Example: Walmart opening stores in China Develop worldwide competitive advantage (to seek new sources of competitive advantage) * Can the company go abroad to develop a worldwide competitive advantage? * Need to analyze the degree to which the value chain can be integrated around the world to develop global sources of competitive advantage * Example: Walmart buys many of its products from China

Question 167

Why do companies need expats?

Answer 167

* To start up operations, * To provide technical expertise * To maintain financial control over the operation * To gives most promising managers the opportunity to gain international experience to prepare them for higher positions * To maintain control and ensure organizational coordination * When managerial talent is not available in host country * Company does not see the foreign operations in host country endure * The conviction that the company needs to appear foreign * Selection of managers from one group of the population in the country may alienate others

Question 168

Why do employees want to be expats?

Answer 168

* Linked with career development * The challenge * Better conditions (to the person and family)

Question 169

What are the determinants of entry mode choice?

Answer 169

- Goals and objectives - Control - Resources and capabilities - Risk - Conditions in the target country - Competition - Partners - Value adding activiteis - Strategic importance - Characteristics of the product or service

Question 170

Why do alliances fail?

Answer 170

- Incompatibility - Incongruent goals - Opportunistic behavior (being too dependent on the partner) - Inability to adapt to changing conditions - Culture clash - Partner not keeping promises Ex: Suzuki & VW

Question 171

integration/ adaptation framework

Answer 171

Degree of Production Integration Degree of Production adaptation low low = home replication high high = transnational low adaptation high integration =global standardization high adaptation low integration = Multidomestic Localization

Question 172

What is required by the Securities and Exchange Commission (SEC) for publicly traded companies to report? (in the US)

Answer 172

Business * An overview of the company’s main operations, including its products and services (i.e., how it makes money) Risk factors * Any and all risks the company faces or may face in the future. The risks are typically listed in order of importance Selected financial data * Specific financial information about the company over the last five years. The company’s recent performance Management’s discussion and analysis *Of financial condition and results of operations. This gives the company an opportunity to explain its business results from the previous fiscal year Financial statements and supplementary data * The company’s audited financial statements: income statement, balance sheets, and cash flows. And, a letter from the company’s independent auditor certifying the scope of their review

Question 173

What is usually included in corporate reports?

Answer 173

Mandatory information to disclosure will depend on the country, but there are common aspects (and common trends): * How a company communicates in its annual report reflects how committed it is to transparency and accountability to its stakeholders, as well as to regulatory compliance. * The quality of a company’s corporate reporting is a real indicator of a board’s commitment to transparency and its fundamental sense of accountability to all its stakeholders. Corporate reporting provides companies with the opportunity to tell stakeholders their story. The strategic report should provide information around a company’s strategy and its performance against that strategy. Good corporate reporting is characterized by one underlying quality: accountability. How ? By creating a clearer strategic narrative which identifies what is really important to them, and why.

Question 174

What is KPIs?

Answer 174

Key Performance Indicators (KPIs) are the measures which the board uses to monitor strategic success

Question 175

What is the reporting dilemma?

Answer 175

* balancing the needs of shareholders and other stakeholders The dilemma: On one side, there is pressure from the government, regulators and special interest groups to show how the company is engaging with and considering its stakeholders in its actions and, on the other, there are investors wanting to know the company’s strategic plans, future ambitions and how it measures success

Question 176

What is CSR?

Answer 176

“Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.” Stakeholders: * Employees * Customers * Suppliers * Government * Communities * Investors/Shareholders

Question 177

Name some CSR initiatives.

Answer 177

* environmental management * eco-efficiency, * responsible sourcing, * stakeholder engagement, * labour standards and working conditions * employee and community relations, * social equity, * gender balance, * human rights, * good governance, * anti-corruption measures.

Question 178

Which characteristics of Walmart's business model have been essential for its success in the US market? Which countries were the entry most successful and why? Which countries were the least successful and why?

Answer 178

- Low cost & low price how? - Increase value -added -> increase willingness to pay or-> lower the cost - They sell the same international products as other retailers which further generates low costs and prices - Large scale of operations Most successful - (Mexico Canada & UK) - Attain relationships with suppliers - No language barriers - low distance - acqusition of already well-known established companies and mergers Least successful - Germany & North Korea - Laws and regulations - No partners - Hard to replicate the LPED

Question 179

What are the different meanings of CSR in different societies?

Answer 179

most salient approaches to CSR today may be regarded as Anglo-Saxon. (1) they impose certain assumptions about what CSR means based on theoretically developed measurement scales; (2) they often share the instrumental perspective on CSR as a business case; and (3) they do not consider that a particular understanding of CSR can come through a “local adaptation”, rooted in factors significant to a certain society. *interpretations of the CSR concept reflect the importance of country-specific political, cultural, and social elements *Religion also plays a role

Question 180

Consumers responses to MNCs non-CSR practices?

Answer 180

*Boycott *Anger *Disgust *Contempt Business managers should then take the consumer moral foundations into account when establishing a crisis response strategy: full apology, and acceptance of responsibility, for an issue of labor rights violations at an MNC’s global supply chain. --> Accepting responsibility suppresses development of emotional anger.

Question 181

K-Pop case: How do cross-national cultural differences create barriers for the international expansion of K-Pop?

Answer 181

- Language - Strict control by the agencies over the artists - Force the success (plastic surgeries, height) - Different demand in different countries - Was better provided by video

Question 182

CSR impact on business?

Answer 182

CSR practices: * Positively influence the quantity of innovation * Reduce financing costs * Create highly loyal and more price-inelastic customer base * Increase trust between employees and managers * Increase productivity of employees

Question 183

What is ESG investing?

Answer 183

* Environmental, social and governance (ESG) Investing is a strategy to invest money in the companies that strive to make the world a better place. * Companies are rated based on ESG scores (0 – 100, the higher, the better)

Question 184

Logoplaste case: What is ehe business model of Logoplaste? And what was the pros VS cons of it?

Answer 184

- Hole in the wall business model - supplied packaging from factories installed directly on the client's site pros: - no transportation cost - Reduced capex - reduced emissions - Just-in-time supply - Long term relationship - Better control cons: - no economies of scale - asset-specific, high dependence on specific customer

Question 185

Logoplaste case: How can the international presence be a source of competetive advantage for Logoplaste?

Answer 185

Stronger reputation of the company with international operations Innovation lab Multi-point relationships with customers

Question 186

How do Donald Trump’s policies with respect to foreign trade and foreign investments affect Harley-Davidson?

Answer 186

- Negatively as tariffs were put on raw material such as steel and aluminum which were used to build the bikes - As a result, EU put tariffs on Harley Davidson motorcycles, which increased the prices of them in Europe - They wanted to off-shore to Japan put it met critics (as an American brand should not produce its products anywhere else than the us.)

Question 187

Case: China's national oil companies Why do Chinese state-owned companies make acquisitions abroad?

Answer 187

Get access to raw materials Get access to information Establishing relationships that China would benefit from Get access to advanced technologies, new markets and natural resources. Investment in electric car companies(even though uncertain return), national security, health care, schools, airlines, solar power companies, public transportation,

Question 188

Case: Emirates What are the strengths of Emirates’ Dubai-based hub-and-spoke model? What are the weaknesses?

Answer 188

Strengths: - They gain competitive advantage in one region and can develop from that - It’s easier to keep control if everything is centralized - As they made Dubai a new destination for due to transits , the government made dubai even more attractive - As they brand themselves as a long-distance flight company they can host most flights and as Dubai is in the very center they can provide transits there Weaknesses: - Hard to reach certain destinations such as America - You get limited to one specific place - You miss out on other routes that does not cross your hub

Question 189

Would you characterize the strategy of the major Australian wine producers as multidomestic, global, or transnational? Why?

Answer 189

Major Australian wine producers pursue the global strategy since they do not modify product characteristics for sales in different countries and their international operations (mostly, export operations) are under centralized coordination from Australia.

Question 190

Lufthansa is a member of STAR alliance among several airlines from different countries. What does it mean that STAR is a non-equity alliance?

Answer 190

= It means that STAR alliance is based on contractual relationships, members of this alliance are not connected by equity / ownership relationships.

Question 191

Porter’s Diamond Model describes how firms’ origins in a specific country may create competitive advantages. List Porter’s determinants of the competitive advantage of nations

Answer 191

= factor conditions = demand conditions = related and supporting industries = strategy, structure, and rivalry in the domestic industry

Question 192

What are the differences between state-owned & private companies?

Answer 192

* Set up by government/private people * Controlled by government/private individuals * Aim is to provide essential service to people/ make profit * Losses/profits borne by government/private individuals →economic growth comes from entrepreneurs risking their own money →private ownership better than state owned regarding performance of company →partial privatization allows state to retain control and vote in critical decisions – less profitable but more stable →depends on investor – stability or profitability

Question 193

Case: China's National Oil Companies What are the advantages VS disadvantages of state-owned companies?

Answer 193

* Essential services at cheaper and affordable rates * No aim of making profits * Government can control certain strategic sectors of economy→water, energy supply e.g. * Possible high rate of corruption * Political and state interference can harm productivity * Negative work attitude as company is not their own

Question 194

What could have been the solutions for LG Display to handle their high turnover rate in Wroclaw?

Answer 194

* Training (for managers & employees) * Better workplace initiatives (canteen meetings, sports, etc.) * Showcase of final products * Talking buses or screen panels * Bring locals in addition to expats into management team * Surveys to track satisfaction of employees * Not only concentrating on hygiene factors but also motivating factors

Question 195

Name the reasons for poor performance LG Display had in Poland

Answer 195

* High turnover rate→lack of trust & dissatisfaction * High defect ratio→problems in communication between Korean and polish management * Low production/operation rate→lack of motivation & low satisfaction →organizations concerned about increasing productivity →elimination of employee’s problems leads to elimination of production problems – still other reasons possible as non-functional equipment or unsuitable technology →problems associated with cross-national differences

Question 196

Name the sources of competetive advantage for Emirates

Answer 196

* Governmental support→state owned – strong incentives to support it o Low airport fees o Lower taxes o Low interest loans * Geographic locations – between Europe & Asia * Lower labor costs→no unions in UAE * Relatively young and efficient aircraft fleet - Good wheather conditions which limited cancellations

Question 197

Describe the strategy of Emirates

Answer 197

* Different strategy than other airlines→focusing on premium experience instead of reducing prices * Emirates offering mostly long-haul flights→customers willing to pay more * Focus on wealthy customers * Premium strategy in order to differentiate from established airlines * Special attention to emerging markets because they are underserved * Sponsoring various premium and high-class sport events * Global advertising strategy

Question 198

Describe the business model of Walmart

Answer 198

* Huge scale of operations * Supply chain management effectiveness o IT o Distribution network o Stores build around warehouses * Low salaries and limited benefits + no unions * Good relationships with suppliers→Walmart often most important distribution channel for suppliers→ability to negotiate low prices

Question 199

Describe Walmart's strategy

Answer 199

* One-shop solution * Convenience for customer & operational efficiency * Standardized products in every store * High volumes of sale with low margin per unit→large number of sales generates huge revenue * Operations costs lowered to minimum

Question 200

Describe the business challenges for Time Out

Answer 200

* Putting more emphasis on bringing information online instead of printed * Revenue streams: o Advertising o Licensing fees o Commission for organizing live events o Sales of printed magazines o Commission for click-through sales * Licensing of magazine→not everywhere self-published →advantage of having local expertise in every published city →publishing were many events are happening →presence in many countries – customer from one place consumes also in another place * Establishing time out markets in North America→cultural differences rather low + knowledge of market as their publishing there for many years * Customization regarding concerts, events, art exhibitions to adapt sth. local →balance between customizing and standardizing

Question 201

Describe the key characteristics of Time Out Market Lisbon

Answer 201

* Why Lisbon? – open culture, increase in tourism, lower costs, climate good for tourism * High variety and quality of food * No reservation, no dress code * Novel, interesting experience * Convenient location * Mix of high-scale restaurants and middle-scale restaurants * Expectations of high scale restaurant→might expect better service * Expectations of food-court→might complain about waiting times →in advertisements put emphasis on entertainment that goes beyond food by concert hall, cooking academy, art exhibitions – but in realty majority just there for food

Question 202

What were the liabilities created by foreign markets for Logoplaste?

Answer 202

* Administrative differences * Cultural differences * Language differences * Access to funding→harder to get fundings →Competitive advantages can compensate for the liability of being a foreigner

Question 203

Why was Logoplaste expanding to new markets?

Answer 203

* Expansion because of limited demand in Portugal * Following their customers to new countries→on-site production * Logoplaste started to expand to countries with low geographical and cultural difference→learning process and increase distance by time * Better supplier for existing customers & get new customers

Question 204

Case: Logoplaste Name the advantages and disadvantages of on-site/through the wall:

Answer 204

* No transport costs * Better relationship with customer * Customization is easier * Reduced CO2 Emissions * No inventory * JIT delivery * Increased SC effectivity * Very depending on customer (demand) * Higher cost of adding new customer * No economies of scale

Question 205

Describe the characteristics of the U.S market for Harley Davidson

Answer 205

* Good market share – but decreasing * Most important market for HD * High brand loyalty * Large bikes – not convenient for everyday use * High pricing →not many US competitors but many global competitors – no time to relax

Question 206

Describe the business model of K-Pop

Answer 206

* Perfection through years of training * Training to get predictable results * Large management companies→enormous control of every part of talent- development system * Performers learning different languages * Development of skills of performer * Easy to imitate (→China) * Dissatisfaction of performers * Large investments upfront →perfecting individuals based on market preferences you already know

Question 207

describe the key-characteristics of K-Pop from customers point of view:

Answer 207

* Mix languages to target local audiences * Well-developed choreography * High quality of perform/video * Video with appealing elements of Asian culture * “likeable” behavior * Rotation of leading performers * Group of “members” with different types * niche popularity due to language and taste differences * repetition that might be boring in the long term→similarity * Mix of styles may become lack of uniqueness

Question 208

Which adjustments in its product (video on demand) and business model (how the company operates) can improve Netflix’s performance in the Indian market?

Answer 208

* Offering cheaper payment plan * Offering more local content * New ways of accessing content

Question 209

Which challenges Netflix is likely to face in the Indian market?

Answer 209

* Internet infrastructure problems and absence of robust broadband system * Existing strong online streamers like Hot Star or Eros + cable TV providers * Possible unwillingness of Indian population to pay for subscription fee * More than 15 official languages in India * Different customer market than in America & Europe

Question 210

What advantages or disadvantages does Netflix have in the Indian market?

Answer 210

* Netflix largest global player with settled partnerships * Large R&D budget * High quality product * Large range of international films * High-cost subscription * Less local content * No free content * Non-Indian company like Hot Star→must adapt to culture

Question 211

What makes the Indian market attractive for Netflix?

Answer 211

* India second largest population country in the world →huge potential customer base * Increase in wealth → more disposable income & spending * Penetration of internet and smartphone usage increased over time * Liberal country→no barriers for market entry

Question 212

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Answer 212

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Question 213

What is a functional structure?

Answer 213

This is also referred to as a bureaucratic organizational structure and breaks up a company based on the specialization of its workforce. Most small-to-medium-sized businesses implement a functional structure. Dividing the firm into departments consisting of marketing, sales, and operations is the act of using a bureaucratic organizational structure.

Question 214

What is the divisional or multidivisional organizational structure

Answer 214

a company that uses this method structures its leadership team based on the products, projects, or subsidiaries they operate. A good example of this structure is Johnson & Johnson. With thousands of products and lines of business, the company structures itself so each business unit operates as its own company with its own president.

Question 215

Describe a flat structure

Answer 215

Flatarchy, also known as a horizontal structure, is relatively newer, and is used among many startups. As the name alludes, it flattens the hierarchy and chain of command and gives its employees a lot of autonomy. Companies that use this type of structure have a high speed of implementation

Question 216

Describe the Matrix structure

Answer 216

This structure matrixes employees across different superiors, divisions, or departments. An employee working for a matrixed company, for example, may have duties in both sales and customer service.

Question 217

Describe the Home replication strategy (International division structure)

Answer 217

often known as “international” or “export”strategy, emphasizes the international replication of the home country-basedcompetencies such as scale of production, distribution efficiencies, andbrand power. In manufacturing, this is usually manifested in an exportstrategy. In services, this is often done through licensing and franchising. It isrelatively easy to implement and usually the first one adopted for globalventures. 1. CEO 2. a. Domestic Division A b. Domestic Division B c. Domestic Division C d. International - Europe - Africa - Asia - Latin America

Question 218

Describe the Multidomestic (World-wide area division)

Answer 218

Localization (multi-domestic) strategy - an extension of the home replication strategy and -focuses on a number of foreign countries/regions -each of which is regarded as a stand-alone “domestic” market worthyof attention and adaptation. Headquarters - North American area - European area - Latin America area - Middle east area - Africa area

Question 219

Describe the Global Standardization strategy (worldwide product division strucuture)

Answer 219

- the opposite of the multi-domestic strategy - development and distribution of standardized products worldwide in order toreap the maximum benefits from low-cost advantages Headquarters 1. Worldwide product group or division A 2. Worldwide product group or division B .- Area 1 (domestic) - Area 2 (International) 3. Worldwide product group or division C

Question 220

Describe the Transnational strategy (Global matrix structure)

Answer 220

aims to capture “the best of both worlds” by endeavoring to be both cost efficient and locally responsive. In addition, thischoice also facilitates global learning and diffusion of innovations Headquarters - Area 1 - Area 2 - Area 3 - Product Division A - Product division B - Product division C

Question 221

What are the three Multipolar World recommended approaches

Answer 221

*The Values Dilemma: Multinationals could create internal codes of conduct (e.g., Nike), create industry associations (e.g., Apparel Industry Partnership) or create market-based credentialing programs (e.g., certified Fair-Trade coffee) * The Distributional Dilemma: States could protect or support those most hurt from global trade while still allowing some jobs to compete in the open market *The Sovereignty Dilemma: States could give up sovereignty on some issues to create global rules while maintaining sovereignty on others

Question 222

What is competitive advantage?

Answer 222

a prolonged benefit gained from developing and implementing a unique value-adding strategy that is not imitated by current or potential rivals. A firm possesses a sustainable competitive advantage when it consistently earns higher profits than other firms in its industry.