chapter 5

Question 1

planning ahead

Answer 1

• Discuss the implications of globalization for
  management and organizations
• Describe global corporations and the issues they face
  and create
• Define culture and identify ways to describe diversity in
  global cultures
• Identify the benefits of global learning for
  management and organizations

Question 2

Global economy

Answer 2

Resources, markets, and competition are worldwide in
scope

Question 3

Globalization

Answer 3

The growing interdependence among elements in the
global economy

Question 4

World 3.0

Answer 4

Balancing cooperation in the global economy with
national identities and interests

Question 5

Global management

Answer 5

Managing business and organizations with interests in more than one country

Question 6

Global manager

Answer 6

Is culturally aware and informed on international affairs

Question 7

International businesses

Answer 7

Conducting for-profit transactions of goods and services
across national boundaries

Question 8

why do businesses go gloab

Answer 8

• Customers
• Suppliers
• Capital
• Labour
• Risk

Question 9

Market entry strategies:

Answer 9

involve the sale of goods or
services to foreign markets but do not require expensive
investments

Question 10

Types of market entry strategies:

Answer 10

• Global sourcing
• Exporting
• Importing
• Licensing agreement
• Franchising
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Question 11

Joint venture:

Answer 11

co-ownership arrangement in which foreign
and local partners agree to pool resources, share risks, and jointly operate the new business

Question 12

Strategic alliance

Answer 12

International joint ventures are types
of global strategic alliances in which foreign and domestic
firms work together for mutual benefit. Partners in alliance
hope to generate more market penetration and profits by
cooperating than they would have been able to achieve
alone.

Question 13

Owned subsidiary:

Answer 13

A foreign subsidiary is a local operation
completely owned and controlled by a foreign firm. These
subsidiaries may be built from the ground up as agreenfield
venture.

Question 14

Global Sourcing

Answer 14

the process of purchasing materials or services
around the world for local use

Question 15

Exporting

Answer 15

selling locally made products in foreign markets

Question 16

Importing

Answer 16

buying foreign-made products and selling them
domestically

Question 17

Licensing Agreement

Answer 17

one firm pays fee for rights to make or sell
another company’s products

Question 18

Franchising

Answer 18

a fee is paid for rights to use another firm’s name,
branding, and methods

Question 19

Insourcing

Answer 19

refers to local job creation that results from
foreign direct investment

Question 20

types of insourcing

Answer 20

• joint ventures
• strategic alliances
• foregin subsidiares

Question 21

criteria for choosing a joint venture partner

Answer 21

• Familiarity with your firm’s major business
• Strong local workforce
• Values its customers
• Future expansion possibilities
• Strong local market for partner’s own products
• Good profit potential
• Sound financial standing

Question 22

global business environments

Answer 22

• Legal and political systems
• Trade agreements and trade barriers
• Regional economic alliances

Question 23

Legal and political systems

Answer 23

• Differing laws and practices regarding
• Business ownership
• Negotiation and implementation of contracts
• Foreign currency exchange
• Protection of intellectual property rights, e.g. counterfeit
  merchandise

Question 24

Political risk:

Answer 24

Potential loss in value of a foreign investment
due to instability and political changes in the host country

Question 25

Political risk analysis:

Answer 25

Forecast political disruptions that threaten the value of a foreign investment

Question 26

Trade Agreements and Trade Barriers

Answer 26

World Trade Organization * Most favored nation status * Tariffs: constitute taxes that governments impose on imports * Nontariff barriers * Protectionism

Question 27

Regional Economic Alliances

Answer 27

* NAFTA/USCMA – North American Free Trade Agreement * EU – European Union * APEC – Asia Pacific Economic Cooperation * ASEAN – Association of Southeast Asian Nations * SADC – Southern Africa Development Community

Question 28

Mutual benefits for host country and global corporation or MNC

Answer 28

* Shared growth opportunities * Shared income opportunities * Shared learning opportunities * Shared development opportunities

Question 29

Global corporation:

Answer 29

MNE (multinational enterprise) or MNC (multinational corporation) with extensive business operations in more than one foreign country

Question 30

Transnational corporation:

Answer 30

A global corporation that operates worldwide on a borderless basis – scale is much bigger

Question 31

Ethical challenges for Global Businesses:

Answer 31

* Corruption * Sweatshops * Child Labour * Conflict minerals

Question 32

Corruption

Answer 32

illegal practices that further one’s business interests (

Question 33

Child labour

Answer 33

employment of children for work otherwise done by adults (Nike in Pakistan)

Question 34

Sweatshops

Answer 34

employment of workers at very low wages for long hours in poor working conditions (Foxconn in China; Rana Plaza in Bangladesh)

Question 35

Culture

Answer 35

The shared set of beliefs, values, and patterns of behavior common to a group of people

Question 36

Culture shock

Answer 36

Confusion and discomfort a person experiences in an unfamiliar culture

Question 37

Cultural intelligence

Answer 37

The ability to adapt and adjust to new cultures

Question 38

Ethnocentrism

Answer 38

Tendency to consider one’s own culture as superior to others and not caring about others culture

Question 39

Stages in adjusting to a new culture

Answer 39

* Confusion * Small victories * The honeymoon * Irritation and anger * Reality

Question 40

Silent languages of culture:

Answer 40

* Context * Low context * High context * Space * Proxemics * Time * Monochronic * Polychronic

Question 41

Low context cultures

Answer 41

emphasize communication via spoken or written words

Question 42

High context cultures

Answer 42

rely on nonverbal and situational cues as well as on spoken or written words

Question 43

Monochronic

Answer 43

Monochronic cultures – people tend to do one thing at a time

Question 44

Polychronic cultures

Answer 44

Polychronic cultures – time is used to accomplish many different things at once

Question 45

Proxemics

Answer 45

Proxemics – study of how people use space to communicate

Question 46

Tight and Loose Cultures

Answer 46

* Strength of norms that govern social behavior * Tolerance for any deviation from norms

Question 47

Values and national cultures (Hofstede):

Answer 47

* Power distance * Uncertainty avoidance * Individualism-collectivism * Masculinity-femininity * Time orientation