INTB 3355 Review
Negative effect of NAFTA:
Reduction in manufacturing jobs in the US
NAFTA stipulations
Removal of most tariffs and restrictions on trade between the US, Canada, and Mexico. Wide range of agreements on agricultural, textile, and automotive trade. Agreements on telecommunications and intellectual property. Mobility of workers. Environmental policies
European Parliament
Represents the people of Europe and is elected from member states.
The European Union's impact on international business:
Significant number of EU regulations have major impact in the US, Japan, China, and elsewhere, because of the EU's size and importance as a trading partner. EU standards tend to be advanced, especially in ecology and sustainability requirements. EU is the world's largest trading economy, a large source of FDI outflows, and the source for 26% of the world's total output.
specific
Small private life. Large public life
underlying values and principles
Stakeholder theory forces a business to address:
topography
Surface features, such as mountain ranges, divide the country into smaller regions with separate markets, each with its own culture and dialect. Ex: Afghanistan, Switzerland, Spain, China, and Colombia
true
T/F: According to anthropologist E. T. Hall, in LC culture societies, people tend to have many connections that endure
True
T/F: Culture affects all business functions.
true
T/F: Culture cannot be directly observed; we learn about it by observing the social world in which it exists
false
T/F: Deserts and tropical forests link markets, decrease the cost of transportation, and create concentrations of population.
true
T/F: In a globalizing world where information is increasingly more open, vast inequities may lead to unrest and violence
false
T/F: In stakeholder theory, profits are the primary driver in the process
false
T/F: In the United States, procurement often exists in a web of social relationships and friendships
false
T/F: Power distance is similar to inequality, but defined from above, not from below
true
T/F: Sustainability is local and global at the same time
True
T/F: The EU is a supranational body that has become a regional government.
true
T/F: The unspoken language includes aspects of work spaces
euro
The European Monetary Union (EMU) is an EU group that established the use of a common currency, the _____, in 16 of the EU member-countries.
International Development Association
The World Bank Group's two major institutions are the International Bank for Reconstruction and Development (IBRD) and the
EU
The _______ _______ has moved forward from economic to political integration
production
The assembly line is the product of minds socialized in a culture, in which the task receives primary focus
Security concerns
The main motivation behind the creation of the European Union was
Canada, Mexico, and US
The member countries of NAFTA are
Attitudes toward Time
2 aspects. Is primary focus on the past, present, or future. Whether actions are sequential(linear) or synchronous (polychronic)
Belgium, West Germany, France, Italy, Luxembourg, Netherlands.
6 core members in EU enlargement:
EU
6 countries/core members created the European Community (EC)
EU
A central bureaucracy is responsible for coordinating tax rates, labor, education, social, and legal systems for all members; while the European Central Bank develops monetary policy.
EU
A single currency, the euro, established to replace member-nations' currencies, and is used in 16 of the member states.
uncertainty avoidance
According to Hofstede, which of the following dimensions "ultimately refers to man's search for Truth" because it describes the extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations?
infrastructure
According to Michael Porter's factor conditions, which of the following is an advanced factor?
Positive effect of NAFTA:
Agricultural trade between Mexico and the US increased from 1994-2006
culture
Aspects of ______ are interrelated
ethnocentricity
Assuming one's own culture to be superior to other cultures is known as
The North-South Divide
Climatic conditions explain differences in human and economic development. also suggests that the greatest economic and intellectual development occur in less temperate climates. Which cause limitations on human energy and mental powers. Ex: occurs in northern Europe and US.
European commission
Consists of 27 commissioners, one from each member-nation.
Religion, politics, higher education, universal values, attitudes and beliefs, material culture, language, societal organization,
Culture includes
US migration policies and high corn subsidies for US farmers
Currently, Mexico's main concern regarding NAFTA are related to
European Court of Justice(ECJ)
Decides cases arising under the Treaty of Rome and subsequent agreements.
create concentrations of population
Deserts and tropical forests:
European Parliament
EU legislative body whose members are popularly elected from member nations.
Free trade area
Economic cooperation begins with an agreement to have this type of trade agreement. Ex: North American Free Trade Agreement (NAFTA) among Canada, Mexico, and U.S.
free trade area
Economic integration begins with a:
location, topography, climate, and natural resources.
Elements of geography include:(4)
sustainability
Environmental _____ is an economic state in which the demands placed upon the environment by people and commerce can be met without reducing the capacity of the environment to provide for future generations.
Negative effect of NAFTA:
Environmental concerns in Mexico's industrial areas
Common market
Essentially a single market, so barriers to trade, such as standards, borders, and taxes become common.
communication styles
Frameworks to compare cultures are based on the studies of national-level differences in values. Anthropologist E. T. Hall offers a classification of cultures based upon:
Implicit and indirect communication; context is critical/plays strong role, Polychronic (simultaneous activities, multitasking), Less verbally explicit communication, less written/formal information, More internalized understandings of what is communicated, Multiple cross cutting ties and intersections with others, Long term relationships, Strong boundaries-insider/outsider, Knowledge is situational, relational, Decisions/activities focus around personal face-to-face relationships, often around a central authority person , Used in Asia, Latin America, Middle East
High context Cultures:
Anthropologist E.T. Hall claims: Spend a lifetime in culture, or Undergo extensive cultural training and learn the language
How do business people learn about cultures?
production
How do people work in groups? How do groups acquire resources?
Provide additional incentives for companies to reverse offshoring practices
How should the US react to the loss of manufacturing jobs?
EU
In 1993, EC members signed a treaty that established the _____ _______ with three areas of integration: economic community, foreign policy, and domestic affairs.
trade without discrimination
In WTO negotiations, members have established five basic principles on which the global trade system rests. Which of the following is the most-favored nation (MFN) principle?
There is no clear distinction between work life and private life.
In a diffuse culture
Attitudes toward Environment
In harmony with nature or in control of nature?
cultural support
In informal cognitive institutions, legitimacy is built on:
production
In procurement, sociocultural norms and rules structure the way the firm acquires resources
US
In procurement, sociocultural norms and rules structure the way the firm acquires resources. In which country does procurement often exist in transparency with price frequently driving the process?
Rewards of human resources:
In some cultures, individual effort is rewarded, while in others, group effort is more highly valued.
achievement
In the United States, the primary determinant of social status is
EU
In the ______ _______ there is more institutionalization, which is different from other regional organizations (NAFTA) that only focus on economic matters.
Positive effect of NAFTA:
Increased export manufacturing in Mexico
Positive effect of NAFTA:
Increased foreign direct investment (FDI) between the three countries
Positive effect of NAFTA:
Intra- North American trade has more than tripled since NAFTA's inception
complete economic integration
Involves a high degree of political integration, which requires member nations to surrender important elements of their sovereignty. Ex: the EU
Attitude towards status (social status) regarding human resources:
Is it earned through achievements, or result of family's social position
diffuse
Large private life. Small public life. No clear distinction between work life and private life
Hierarchical? Lateral? Paternalistic? Heroic?
Leadership traits/model:
US concerns with NAFTA:
Losing manufacturing jobs to Mexico
Explicit communication, direct and to-the-point, Monochronic (linear time, sequential activities; tangible, uses schedules), Rule oriented, people play by external rules, More knowledge is codified, public, external, and accessible, Sequencing, separation- of time, space, activities, relationships, More interpersonal connections of shorter duration, Knowledge is more often transferable, Task centered. Decisions/activities focus around what needs to be done, division of responsibilities. Used in North America
Low context cultures
NAFTA
Main goal- promoting economic growth by easing the movement of goods and services between the US, Mexico, and Canada.
European Central Bank (ECB)
Manages the euro to ensure the price stability of European markets, largely by managing interest rates. Makes decisions independent of member governments.
artifacts
Material culture is also referred to as:
Free trade area
Members have free trade among themselves but have their own trade restrictions with nonmember nations.
Negative effect of NAFTA:
Mexico affected by 2001 US recession
Negative effect of NAFTA:
Mexico productivity vs. real wages
Positive effect of NAFTA:
Mexico protected from financial instability in South America.
University scheduling patterns
Monochronic time is best illustrated by
tangible
Monochronic time is characterized as:
European Court of Justice(ECJ)
On EU matters, its authority supersedes that of the member-nations' national courts.
Factor conditions, Related and supporting industries, Demand conditions, Firm strategy, structure, and rivalry
Porter's Diamond Model- 4 Variables Affecting Competitive Advantage:(6)
Basic and advanced factors
Porter's Factor conditions:
Canada-US Free Trade Agreement (since 1989)
Precursor to NAFTA:
production
Production mangers have found that attitudes toward change can seriously influence the acceptance of new production methods.
NAFTA
The three countries have created one of the world's largest free trade zones
our own culture functions as a reference point
The use of frameworks is comparative:
equity
There are three characteristics of evolving sustainable business practices that are widely agreed upon: limits, interdependence, and:
Common market
To achieve this level of economic integration, members of this type of trade agreement establish common economic policies, which require a great deal of political will.
NAFTA
Trade in North America is now virtually tariff-free.
Universalism vs. Particularism (rules vs. relationships), Individualism vs. Communitarianism, Neutral vs. Affective (unemotional vs. emotional), Specific vs. Diffuse, Achievement vs. Ascription, Attitudes toward Time, Attitudes toward Environment
Trompenaars' framework (seven dimensions of culture):
Mexican concerns with NAFTA:
US migration policies. High corn subsidies for US farmers
marketing, human resources, production, accounting and finance, and leadership
What business functions does culture affect?(6)
Middle eastern (Qatar, Iran)
What countries do you consider the major players of our global oil industry today?
To coordinate multilateral monetary rules and their enforcement
What is the purpose of the International Monetary Fund (IMF)?
They provide inexpensive access to interior markets
What is the significant feature associated with inland waterways
Gallego, Spanish, Catalan, Euskera
What languages are spoken in Spain?(4)
40%
What percentage of world oil production is controlled by private companies?
More or less integration
What policy do you think the US should pursue relative to NAFTA?
Council of the European union
When the council meets, the minister who represents the specific area being discussed serves as the representative of the member-nation
Canada
Which member country is most interested in renegotiating NAFTA energy trade agreements?
Less written/formal information
Which of the following is a high context attribute
informality
Which of the following is important in a small-power-distance environment
oil
Which of the following is projected to remain the world's dominant energy source, with reductions seen after 2020?
UK
Which of the following was not among the 6 founding members of the European Union?
Economic
Which type of intregation came first in the history of the European Union?
It resulted in the world's first negotiated agreement among independent nations to support trade through monetary institutions
Why is Bretton Woods significant?
free trade area
Within this type of trade agreement, restrictions remain on: the movement of services (accounting, insurance, legal services), people (labor), and capital.
biomass
_____ is a category of renewable energy fuels based on photosynthesis, the process through which plants transform the sun's energy into chemical energy.
shale
_____, from which oil can be extracted, is fissile rock composed of laminated layers of claylike, fine-grained sediment.
kyoto protocol
_____, the United Nations Framework Convention on Climate Change, calls for nations to work together to reduce global warming by reducing their emissions of the gasses that contribute to it.
accounting
_______ controls directly relate to the culture's assumptions about the basic nature of people
Guanxi
________ is a Chinese institution that describes a type of relationship similar to a combination of social capital and mentoring.
Porter
________ suggests that competitively successful countries are the ones that have the most favorable "diamonds"4 aspects/variables
EU
a body of 27 European countries committed to economic and political integration.
Porter's Diamond
a model that considers four aspects of a country's economic environment that affect its competitive position.
general assembly
acts by adopting resolutions that express the will of the member-nations
Customs union
an agreement/collaboration that adds common external tariffs to the FTA. Ex: Southern African Customs Union, Common Market of the South, and the Andean Community
Free trade area
area in which tariffs among members have been abolished, but each member nation maintains its own external tariffs, those to countries in the rest of the world.
EU
began as a common market for the coal and steel industries. (Europe)
formal controls
compliance through rules and sanctions
informal controls
compliance through social norms
ascription
consider who a person is by family lineage, age, or other attributes.
Culture
consists of the individual worldviews, social rules, and interpersonal dynamics characterizing a group of people set in a particular time and place.
particularist
context determines which rules apply to whom. Tend to be relationship-based
Accounting and finance
controls are based on the perception of trust in people.
European Court of Justice(ECJ)
court that rules on issues related to EU policies.
NAFTA
created a free trade area among Canada, Mexico, and the US.
Common market
created when a customs union lifts restrictions on the mobility of services, people, and capital among the member nations.
culture
defines the boundaries of different groups
Neutral vs. Affective (unemotional vs. emotional)
describes display of emotion in a culture.
Specific vs. Diffuse
describes the social patterns for public and private life amongst cultures.
Leadership function
does leadership integrate a group of people or is it to provide direction for a collection of individuals?
Canadian concerns with NAFTA:
energy trade policies
Free trade area
first stage of economic integration
complete economic integration
fourth stage of economic integration
culture
includes everything: aesthetics, attitudes & beliefs, religion, material culture, language, societal organization, education, laws & political structures.
topography
includes surface features, such as mountains, plains, deserts, and bodies of water that can both hinder and aid physical distribution. creates differences in economies, cultures, politics, and social structures. creates different language groups which require special marketing adjustments.
Complete economic integration
integration on economic and political levels.
culture
is learned; we are not born with it
culture
is shared, patterned, and mutually constructed through social interaction
Geographical Proximity
major reason for trade between nations, and plays a role in the formation of trading groups. knowledge of the country is likely, delivery faster, freight costs and service costs lower.
climate
meteorological conditions including temperature, precipitation, and wind that prevail in a region. sets the limits on what people can do, physically and economically.
affective
much more expressive (emotional)
uncontrollable
physical elements of location are _________.
Preferred Leadership Styles
relationship between leader and followers
Council of the European union
represents the member states and is the primary policy-setting institution of the EU.
European Commission
responsible for/administers the EU's day-to-day operations.
achievement
reward what you do
universalist
rules apply to everyone/all. Tend to be rules-based
customs union
second stage of economic integration
European Central Bank (ECB)
sets and implements EU monetary policy.
Hall's framework (low and high context cultures)
simple, but powerful. based on communication styles and the role of context
Achievement vs. Ascription
status based on what a person does vs. who a person is.
communitarianism
the group benefits from actions
individualism
the individual benefits from actions
context
the relevant environment; beyond explicit communication
common market
third stage of economic integration
advanced factors
those a country can readily mold (Ex: labor force and infrastructure)
basic factors
those that a country inherits (Ex: mountains and natural resources)
marketing
to develop effective marketing campaigns, the marketer has to understand the foreign market the firm is selling into
human resources
what are the local sociocultural motivators of employees in a culture?
marketing
what motivates people to buy and what do they prefer to buy?
location
where a country is located, who its neighbors are, and how its capital and major cities are situated. builds political and trade relationships
neutral
withhold emotional expression (unemotional)
