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With licensing,

a corporation (the licensor) in one country makes certain resources available to companies in another country (the licensee). These resources include technology, managerial skills, and patent or trademark rights.

In a joint venture,

a company shares costs and risks with another firm, typically in the host country, to develop new products, build a manufacturing facility, or set up a sales and distribution network.

Jerzy has made a tremendous amount of money selling his shoes, and Leon is very persuasive. Jerzy wants to have the maximum amount of control over his global business, and he is willing to assume a lot of risk to do so. He is considering opening up a completely new operation in Spain. Jerzy spends a lot of sleepless nights wondering how he is going to make sure he markets his product correctly in a country that he doesn't know

greenfield venture

Caralee's coworker Mohammed, who is Muslim, celebrates Ramadan for one month each year; during this time, he fasts from sunrise to sunset. Donuts and muffins are usually served at meetings in their company. Caralee is demonstrating ________ when she does not order snacks for meetings during Ramadan.

high cultural intelligence

In India, people tend to value ________ , because they are comfortable with inequality among people and organizations.

high power distance

The long-term orientation, found in China and other Asian countries,

includes a greater concern for the future and highly values thrift and perseverance.

A result of globalization is _________ countries, businesses, and people.

increasing interdependence of

multinational corporation (MNC)

Although the term has no precise definition, a multinational corporation (MNC) typically receives more than 25 percent of its total sales revenues from operations outside the parent's home country.

Which of the following companies has high uncertainty avoidance?

At Sipria Insurance, little has changed since the 1960s. Few employees even know how to use e-mail, and most business is conducted by telephone or in person with a simple handshake. Since Sipria caters exclusively to older people who are less likely to use the Internet, its practices work well for the company.

The economy is the largest on its continent and is projected to become the fourth largest in the world by 2050.

Brazil

uncertainty avoidance

Characterized by people's intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity.

Foreign companies selling their products and services increasingly encounter tough competition from local businesses

China

Recently, foreign companies have invested more in business in _______ than they spent anywhere else in the world

China

Carly interviews for the job—and she gets it! Her new boss says that what impressed him most was her global mindset, and he wants her to be a role model for other employees in the company. How can Carly best demonstrate how one acquires a global mindset? Check all that apply.

Cultivating relationships with immediate coworkers from other cultures and people within and outside the organization in other countries Expressing a consistent curiosity about world affairs and the international business environment

In research that included 116,000 IBM employees in 40 countries, Dutch scientist ________ identified four dimensions of national value systems that influence organizational and employee working relationships

Geert Hofstede

Which of the following companies has high power distance?

In Allegra Systems, all of the managers wear suits and ties, while all of the employees wear casual dress. Managers are asked to speak first in every meeting, and employees rarely contradict what they say.

This country is becoming a rising power in software design, services, and precision engineering

India

Which of the following companies has high individualism?

Ivana's Images has a reputation for being the best in the business. Sure, Ivana is difficult to work with—you wouldn't want her on your team—but she can do layout and design faster and better than anyone else. Ivana likes to work by herself, and she is happiest when she can prove that she is better than everyone.

Because global economies are interconnected, all of the following statements are true except:

Less-developed countries are less likely to feel the effects of a global economic crisis

Jerzy thinks that he would like to work closely with someone who really knows the Spanish market, and he is not concerned with maintaining high levels of control over his product. He is considering giving Leon the rights to use his shoe designs for a fee. This will keep Jerzy's costs down but still give his shoes a wider exposure.

Licensing

As a manager for a company that is looking to expand to Brazil, what should your company focus on? Check all that apply

Marketing products to Brazil's middle class Science and technology opportunities

Which of the following are ways in which globalization impacts companies? Check all that apply

Products can be manufactured in countries where labor costs are less and then sold at a more competitive price. Divisional headquarters may be in more than one country. A company can take advantage of an expanding foreign market when its domestic market is not growing.

The customers for mountain sports equipment mostly have high disposable incomes. However, imagine that Peter, Thomas, and Wim want to market some products to the bottom of the pyramid in mountainous countries like Nepal and Bhutan. What advice would you give them? Check all that apply.

Recruit local people to work as salespeople and distributors. Assign R & D the project of developing gear that meets basic needs for warmth and dryness but can be manufactured inexpensively. Research what people with annual incomes of less than US $1,500 really need.

Which of the following statements correctly describes the World Trade Organization (WTO)? Check all that apply.

The WTO promotes the enforcement of rules and regulations governing trade to reduce ambiguity in the business environment. One of the purposes of the WTO is to oversee international free trade agreements

global mind-set

The ability of managers to appreciate and influence individuals, groups, organizations, and systems that represent different social, cultural, political, institutional, intellectual, and psychological characteristics.

cultural intelligence (CQ)

The ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses.

If Talia is hired as a manager at an MNC, what can she can expect? Check all that apply

The corporate structure will integrate the activities of foreign affiliates. Strategy will include finding raw materials and locating production wherever it is most profitable to do so. She and her colleagues will cultivate a global perspective and view the entire world as one market

power distance

The degree to which people accept inequality in power among institutions, organizations, and people.

Globalization

The integration and interdependence of economic, technological, socio-cultural, and political systems across diverse geographic regions.

greenfield venture

The most risky type of direct investment is the greenfield venture, in which a company builds a subsidiary from scratch in a foreign country.

infrastructure

The physical facilities such as highways, airports, utilities, and telephone lines that support economic activities.

A wholly owned foreign affiliate is

a foreign subsidiary over which an organization has complete control.

Franchising is

a form of licensing in which a company provides its foreign franchisees with a complete package of materials and services.

Exporting is

a market entry strategy in which a company maintains production facilities within its home country and transfers products for sale in foreign countries.

Direct investing is

a market entry strategy in which the organization is directly involved in managing its production facilities in a foreign country.

Jerzy has the idea that one way of expanding would be to purchase Leon's already profitable shoe stores in Spain. Doing so will be costly, but it will give him an outlet for selling his shoes, and he will be able to maintain complete control over how the shoes are marketed. Jerzy believes that the risks he faces in Spain will be low, due to Spain's developed economy and commitment to a modernized infrastructure, but he is concerned about Spain's recent problems with Basque terrorists

aquisition

In India, the Swiss pharmaceutical company Novartis International AG is using its Arogya Parivar initiative to increase trust in conventional medicine among the very poor, thereby cultivating a market for its products. Novartis employs health educators to teach laypeople about disease, treatment, and prevention, and it also sends supervisors to assess each local area's needs and provide education to health care providers. It has accompanied this education effort with a different pricing structure, selling medications in smaller packages with smaller price tags. By cultivating this untapped market in a socially entrepreneurial way, Novartis seeks to increase its profits. The effort has been successful enough in India that the company has started similar programs in Kenya and Vietnam and has plans for Indonesia. Which concept is Novartis's marketing initiative based on?

bottom of the pyramid (BOP)

Learning Spanish or Chinese to communicate more effectively with colleagues and customers

cognitive

The bottom of the pyramid (BOP) concept proposes that

corporations can alleviate poverty and other social ills, as well as make significant profits, by selling to the world's poor.

Economic development

differs widely among the countries and regions of the world. Countries can be categorized as either developing or developed.

Taking pleasure in meeting people who speak a different language and have different viewpoints on the world

emotional

Global outsourcing, also called offshoring, means

engaging in the international division of labor so that work activities can be done in countries with the cheapest sources of labor and supplies

Some researchers distinguish among _________, which place emphasis on their home countries, _____________, which are oriented toward the markets of individual host countries, and __________, which are truly world-oriented

ethnocentric companies, polycentric companies, geocentric companies

A short-term orientation, found in Russia and West Africa,

is more concerned with the past and the present and places a high value on tradition and meeting social obligations.

The Japan-based multinational Sony engaged in a ________ when it partnered with Shanghai Oriental Pearl Group. Together, the two companies would make and market PlayStation consoles and games in China

joint venture

An MNC is _____ vulnerable to an economic downturn in a given national or regional economy, such as the United States or the European Union

less

When a company _______ technology to a company in another country, the foreign company can use that technology to make a product similar to the one the first company makes but using its own systems and name

licenses

Both men and women in Japan tend to subscribe to ________ values, prioritizing achievement, work, and material success. The culture of Sweden, on the other hand, is relatively ________ , and people generally prioritize relationships and quality of life.

masculine , feminine

Collectivism

means a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests

The North American Free Trade Agreement (NAFTA), which went into effect on January 1, 1994,

merged the United States, Canada, and Mexico into a single market.

In a high-context culture,

people are sensitive to circumstances surrounding social exchanges.

In a low-context culture,

people use communication primarily to exchange facts and information; meaning is derived primarily from words; business transactions are more important than building relationships and trust; and individual welfare and achievement are more important than the group.

Making eye contact because this conveys honesty in the other culture

physical

Smiling less because people in the other culture do not smile very often

physical

Under President Hugo Chávez, who held power from 1999 until his death in 2013, the government of Venezuela nationalized numerous petroleum industry facilities. Companies operating there faced __________ , because the government could have tried to force them to accept minority stakes in assets that they built.

political risk

If a company differentiates its operating style for the different countries in which it operates, it is a _______ organization. It is likely to staff key positions in foreign countries with local nationals

polycentric

Peter Metcalf describes Black Diamond as a ________, one that does not operate in "the American way" but does adjust "to be something slightly different" in Europe and Asia due to cultural differences. At the same time, management has employees visit the Utah headquarters where they are "immersed" in the company's unifying culture. Operating this way requires a ________ level of cultural intelligence (CQ).

polycentric company , high

Masculinity stands for

preference for achievement, heroism, assertiveness, work centrality (with resultant high stress), and material success.

Individualism

reflects a value for a loosely knit social framework in which individuals are expected to take care of themselves.

Femininity reflects the values of

relationships, cooperation, group decision making, and quality of life.

Carly is eager to tell the interviewer about the team she led of product managers from the United States, Latin America, and Europe. At first, team members were unsure of how to relate to each other, but she was able to find common ground and relate in a culturally sensitive way with each one. Which dimension of her global mindset would this experience show the interviewer?

social dimension

Ethnocentrism is

the belief that one's own group is inherently superior to other groups.

International management is

the management of business operations conducted in more than one country.

Political risk is

the risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments.