INTB 3355 Review

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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)


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