International Marketing

Price Controls

Essential products that command considerable public interest, such as pharmaceuticals, food, gasoline, and cars, are often subjected to price controls. 1. Such controls applied during inflationary periods can be used to control the cost of living.

Import Restriction

Selective restrictions on the import of raw materials, machines, and spare parts are fairly common strategies to force foreign industry to purchase more supplies within the host country and thereby create markets for local industry.

Cultural Imperatives

are the business customs and expectations that must be met and conformed to or avoided if relationships are to be successful. i. Successful business people know the Chinese word guanxi, the Japanese ningen kankei, or the Latin American compadre. All refer to friendship, human relations, or attaining level of trust ii. In those cultures which friendships are key to success, the businessperson should not slight the time required for their development

Cultural exclusives

are those customs or behavior patterns reserved exclusively for the locals and from which the foreigner is barred. i. Ex: A Christian attempting to act like a Muslim would be repugnant to a follower of Mohammed. Equally offensive is a foreigner criticizing or joking about a country's politics, mores, and peculiarities, even though locals may, among themselves, criticize such issues

Joint Ventures

are typically less susceptible to political harassment, and can be with locals, or other third-country multinational companies; in both cases, a company's financial exposure is limited. 1. Joint ventures with locals help to minimize anti-MNC feelings and a joint venture with another MNC adds the additional bargaining power of a third country

Political risk

assessment is an attempt to forecast political instability to help management identify and evaluate political events and their political influence on current and future international business decisions. i. Risk assessment is used to estimate the level of risk a company is assuming when making an investment and to help determine the amount of risk it is prepared to accept.

Decentralized Decisions

i. As businesses grow and professional management develops, there is a shift toward decentralized management decision-making. ii. Decentralized decision making allows executives at different levels of management to exercise authority over their own functions 1. This approach is typical of large-scale businesses with highly developed management systems, such as those found in the US 2. A trader in the US is likely to be dealing with middle management, and title or position generally takes precedence over the individual holding the job.

Committee or Group Making Decisions

i. Committees may operate on a centralized or decentralized basis, but the concept of committee management implies something quite different from the individual functioning of the top management and decentralized decision making arrangements. 1. Because Asian cultures and religions tend to emphasize harmony and collectivism, it is not surprising that group decision-making predominates here.

four heritages that form the bases for the majority of the legal systems of the world

i. Common Law- derived from English law and found in England, the US, Canada, and other countries once under English influence ii. Civil or Code Law- derived from Roman law and found in Germany, Japan, France, and non-Islamic and non-Marxist countries iii. Islamic Law- derived from the interpretation of the Koran and found in Pakistan, Iran, Saudi Arabia, and other Islamic states iv. A commercial legal system in the Marxist socialist economies of Russia and the republics of the former Soviet Union, Eastern Europe, China, and other Marxist-socialist states whose legal systems centered on the economic, political, and social policies of the state.

Back Translation

i. In back translation, the questionnaire is translated from one language to another, and then a second party translates it back into the original, and the two original language versions are compared. ii. It may not always ensure an accurate translation because of idioms in both languages

percentage of female directors on corporate boards

i. Norway- 21% ii. Sweden- 16% iii. US- 12% iv. Australia- 9% v. Britain- 7% vi. Germany- 6% vii. France- 5.5% viii. Singapore- 5% ix. Hong Kong- 4% x. Spain- 3% xi. Italy- 2% xii. Japan- 1% b. Evidence suggests that prejudice toward foreign women executives may be exaggerated and that the treatment local women receive in their own cultures is not necessarily an indicator of how a foreign businesswoman is treated

we should be able to meet 10 basic criteria in Adaptation

i. Open tolerance ii. Flexibility iii. Humility iv. Justice/fairness v. Ability to adjust to varying tempos vi. Curiosity/interest vii. Knowledge of the country viii. Liking for others ix. Ability to command respect x. Ability to integrate oneself into the environment

Parallel Translation

i. Parallel translation is used to overcome the problem of idioms in both languages. ii. In this process, more than two translators are used for the back translation; the results are compared, differences discussed, and the most appropriate translation selected.

P-Time or Polychronic Time

i. This is more dominant in high-context cultures, where the completion of a human transaction is emphasized more than holding to schedules. ii. It is characterized by the simultaneous occurrence of many things and by a "great involvement with people." iii. It allows for relationships to build and context to be absorbed as parts of high context cultures

Decentering

i. This method is a hybrid of back translation. ii. It is a successive process of translation and retranslations of a questionnaire, each time by a different translator. iii. In this process, the wording of the original instrument undergoes a change, and the version that is finally used and its translation have equally comprehensive and equivalent terminology in both languages.

M-Time or Monochronic Time

i. Typifies most North Americans, Swiss, Germans, and Scandinavians. ii. These Western cultures tend to concentrate on one thing at a time. iii. They divide time into small units and are concerned with promptness. iv. M-Time is used in a linear way, and it is experienced as almost tangible, in that one saves time, wastes time, bides time, spends time or loses time. v. Most low-context cultures operate on M-Time

qualitative research

if questions are asked, they are almost always open-ended or in-depth, and unstructured responses, that reflect the person's thoughts and feelings on the subject are sought. i. Qualitative research is used in international marketing research to formulate and define a problem more clearly and to determine relevant questions to be examined in subsequent searches.

Expanding the Investment Base

including several investors and banks in financing an investment in the host country. This approach has the advantage of engaging the power of the banks whenever any kind of government takeover or harassment is threatened. 1. This strategy becomes powerful if the banks have made loans to the host country.

key component in developing successful marketing strategies and avoiding marketing blunders in the international marketing environment

information is the key component in developing successful marketing strategies and avoiding major marketing blunders.

Lubrication

involves a relatively small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by law. i. The purpose of such a gift is to facilitate or expedite the normal, lawful performance of a duty by that official. 1. This practice is common in many countries of the world. 2. Ex: A small payment made to dock workers to speed up their pace so that unloading a tuck takes a few hours rather than all day is an example of lubrication.

Conciliation or mediation

is a nonbinding agreement between parties to resolve disputes by asking a third party to mediate differences. i. The function of the mediator is to carefully listen to each part and to explore, clarify, and discuss the various practical option and possibilities for a solution. ii. Not legally binding

NGO

is a nongovernmental organization, and are increasingly affecting policy decisions made by governments. i. Many are involved in peaceful protests, lobbying, and even collaborations with governmental organizations. ii. Many are also involved in mitigating much of the human misery plaguing parts of the planet.

Licensing

is a strategy that some firms' find eliminates almost all risks is to license technology for a fee. Licensing can be effective in situations in which the technology is unique and the risk is high.

Code law

is based on an all-inclusive system of written rules (codes) of law. b. Under code law, the legal system is generally divided into three separate codes: commercial, civil, and criminal. i. Code law is considered complete as a result of catchall provisions found in most code-law systems. 1. For ex: under the commercial code in a code-law country, the law governing contracts is made inclusive with the statement that "a person performing a contract shall do so in conformity with good faith as determined by custom and good morals".

Primary data

is data that is collected specifically for the particular research project at hand i. The researcher may question the firm's sales reps, distributors, middlemen, and/or customers to get appropriate market information using quantitative and qualitative data.

The "master of destiny" philosophy

is fundamental to US management thought. Simply stated, people can substantially influence the future; they are in control of their own destinies. i. This viewpoint also reflects the attitude that though luck may influence an individual's future, on balance, persistence, hard work, a commitment to fulfill expectations, and effective use of time give people control of their destinies. ii. They believe individual destiny is determined by a higher order and what happens cannot be controlled.

Top level management decision making

is generally found in situations in which family or close ownership gives absolute control to owners and businesses are small enough to allow such centralized decision making. 1. In many European businesses, such as those in France, decision-making authority is guarded by a few at the top who exercise tight control. 2. In other countries such as Mexico and Venezuela, where a semifeudal, land-equals-power heritage exists, management styles are characterized as autocratic and paternalistic

sovereign state

is independent and free from all external control; enjoys full legal equality with other states; governs its own territory; selects its own political, economic, and social systems; and has the power to enter into agreements with other nations.

Arbitration

rather than litigation, is the preferred method for resolving international commercial disputes. The usual arbitration procedure is for the parties involved to select a disinterested and informed part or parties as referees to determine the merits of the case and make a judgment that both parties agree to honor. i. Contracts and other legal documents should include clauses specifying the use of arbitration to settle disputes. ii. When all else fails, the final step to solve a dispute is litigation

Sovereignty

refers to both the powers exercised by a state in relation to other countries and the supreme powers exercised over its own members. 1. A state sets requirements for citizenship, defines geographical boundaries, and controls trade and the movement of people and goods across its borders. 2. Additionally, a citizen is subject to the state's laws even when beyond national borders.

Personal security and job mobility

relate directly to basic human motivation and therefore have widespread economic and social implications.

Low Context (explicit, emphasis on Content of Communication) WHAT IS ACTUALLY SAID

Swiss

Tax Controls

Taxes must be classified as a political risk when used as a means of controlling foreign investments. 1. In such cases, they are raised without warning and in violation of formal agreements.

biggest problem in sampling that researchers need to be aware of

The greatest problem in sampling stems from the lack of adequate demographic data and available lists from which to draw meaningful samples.

Triangulation

The key in using expert opinion to help forecast demand is triangulation, which is comparing estimates produced by different sources

Reliability of data

1. Available data may not have the level of reliability necessary for confident decision making for many reasons. Official statistics are sometimes too optimistic, reflecting national pride rather than practical reality, while tax structures and fear of the tax collector often adversely affect data. a. Although not unique to them less-developed countries are particularly prone to being both overly optimistic and unreliable in reporting relevant economic data about their countries.

Five steps to the research process

1. Define the research problem and establish research objectives. 2. Determine the sources of information to fulfill the research objectives. 3. Consider the costs and benefits of the research effort. 4. Gather the relevant data from secondary or primary sources, or both. 5. Analyze, interpret, and summarize the results. 6. Effectively communicate the results to decision makers.

Corruption Perception Index (CPI)

1. Denmark, Finland, and New Zealand, with scores of 9.4 out of a maximum 10 were considered to be the least corrupt. 2. Myanmar and Somalia, with scores of 1.4 were considered to be the most corrupt. (The US has a ranking of 7.3 as it moved from 7.5, now making it more corrupt than JAPAN!)

PDI = Power Distance Index

Business size, ownership, public accountability, and cultural values that determine the prominence of status and position (PDI) combine to influence the authority structure of business. i. In high-PDI countries such as Mexico and Malaysia, understanding the rank and status of clients and business partners is much more important than in egalitarian (low- PDI) societies such as Denmark and Israel. ii. In high-PDI countries, subordinates are not likely to contradict bosses, but in low-PDI countries, they often do.

questions that need to be asked and answered when it comes to effectively validating secondary data

1) Who collected the data? Would there be any reason for purposely misrepresenting the facts? 2) For what purposes were the data collected? 3) How (by what methodology) were the data collected? 4) Are the data internally consistent and logical in light of known data sources or market factors?

Comparability of data

1. In the US, current sources of reliable and valid estimates of socioeconomic factors and business indicators are readily available. In other countries, especially less developed, data can be many years out of date as well as having been collected on an infrequent and unpredictable schedule. a. There are generally no historical series with which to compare the current information

Expert Opinion

1. In this method, experts are polled for their opinions about market size and growth rates. Such experts may be the companies' own sales managers or outside consultants and government officials. a. The key in using expert opinion to help forecast demand is triangulation, which is comparing estimates produced by different sources.

Validity of data

1. Many countries have similarly high standards for the collection and preparation of data as hose generally found in the US, but secondary data, from any source (including the US) must be checked and interpreted carefully. a. In general, the availability and accuracy of recorded secondary data increase as the level of economic development increases. i. The exception is India.

Availability of data

1. The quantity and quality of marketing-related data available on the US is unmatched in other countries (the data available on and in Japan is a close second) 2. Also, the another problem associated with the availability of data is researchers' language skills

Analogy

1. This method assumes that demand for a product develops in much the same way in all countries, as comparable economic development in each country occurs. a. Once a known relationship is established, the estimator then attempts to draw an analogy between the known situation and the country in questions. 2. Take caution in using this method though because the method assumes that factors other than the variable used are similar in both counties, such as the same tastes, taxes, prices, selling methods, availability of products, consumption patterns, etc.

Local-Content Laws

In addition to restricting imports of essential supplies to force local purchase, countries often require a portion of an product sold within the country to have local content, that is, to contain locally made parts.

Labor Problems

In many countries, labor unions have strong government support that they use effectively in obtaining special concessions from business. 1. Layoffs may be forbidden, profits may have to be shared, and an extraordinary number of services may have to be provided. 2. In fact, in many countries, foreign firms are considered fair game for the demands of the domestic labor supply.

how ownership of intellectual property rights is established in a common-law country.

In the US, a common-law country, ownership of IP rights is established by prior use—whoever can establish first use is typically considered the rightful owner.

Planned domestication

In those cases in which a host country is demanding local participation, the most effective long-range solution is planned phasing out, that is, planned domestication. 1. This method is not the preferred business practice, but the alternative of government-initiated domestication can be as disastrous as confiscation. 2. Planned domestication is, in essence, a gradual process of participating with nationals in all phases of company operations

Transparency International

Is an international organization called Transparency International (TI) is dedicated to "curbing corruption through international and national coalitions encouraging government sot establish and implement effective laws, policies, and anti-corruption programs". i. TI conducts an international survey of business people political analysts, ad the general public to determine their perceptions of corruption in 180 countries

High Context (implicit, emphasis, on context of communication)

Japanese, Arabian, Latin America, Spanish, English(uk), French, North America, Scandinavian, German

various deterrents to litigation

Most observers of lawsuits between citizens of different countries believe that almost all victories are spurious because the cost, frustrating delays, and extended aggravation. Other deterrents to litigation are as follows: i. Fear of creating a poor image and damaging public relations. ii. Fear of unfair treatment in a foreign court. (Fear that a lawsuit can result in unfair treatment, perhaps intentionally, is justifiable, because the decision could be made by either a jury or a judge not well versed in trade problems and the intricacies of international business transactions.) iii. Difficulty in collecting a judgment that may otherwise have been collected in a mutually agreed settlement through arbitration. iv. The relatively high cost and time required when bringing legal action. The Rheem Manufacturing Company, a billon-dollar manufacturer of heating and air conditioning systems, estimates that by using arbitration over litigation, it has reduced the time and cost of commercial-dispute resolution by half. v. Loss of confidentiality. Unlike arbitration and conciliation proceedings, which are confidential, litigation is public.

Political bargaining

Multinational companies clearly engage in lobbying and other sorts of political bargaining to avoid potential political risks. 1. Ex: Mattel issued an extraordinary apology to China over the recall of Chinese-made toys, saying the items were defective because of Mattel's design flaws, rather than faulty manufacturing.

Political payoffs

One approach in dealing with political vulnerability is the political payoff—an attempt to lessen political risks by paying those in power to intervene on behalf of the multinational company. 1. Political payoffs, or bribery, have been used to lessen the negative effects of a variety of problems, such as paying heads of state to avoid confiscatory taxes or expulsion, paying fees to agents to ensure the acceptance of sales contracts, and providing monetary encouragement to an assortment of people whose actions can affect the effectiveness of a company's programs are decisions that frequently confront MNCs and raise ethical questions a. It is illegal for US citizens to pay a bribe, even if it is a common practice in the host country.

strategies MNCs can take to minimize political vulnerability and risk

Relations between governments and MNCs are generally positive if the investment: 1) improves the balance of payments by increasing exports or reducing imports through import substitution; 2) uses locally produced resources; 3) transfers capital, technology, or skills' 4) creates jobs; and/or 5) makes tax contributions

Higher levels of bribery

have been found in low-income nations and nations with a communist past, both aspects of the political economy. i. Additionally, higher levels of bribery have been found in collectivistic (IDV) and high power distance (PDI countries)

normative US cultural concepts are based

a. "Master of destiny" viewpoint b. Independent enterprise as the instrument of social action c. Personnel selection and reward based on merit d. Decisions based on objective analysis e. Wide sharing in decision making f. Never-ending quest for improvement g. Competition producing efficiency

US business is on a "never-ending quest for improvement"

a. A key value underlying the American business system is reflected in the notion of a "never-ending quest for improvement". The US has always been a relatively activist society; in many walks of life, the prevailing question is "can it be done better?" i. Thus management concepts reflect the belief that change is not only normal but also necessary, that nothing is sacred or above improvement. ii. The merit on which one achieves advancement is frequently ties to one's ability to make improvements

"at the top of the list" of political issues concerning foreign businesses

a. At the top of the list of political issues concerning foreign businesses is the stability or instability of prevailing government policies. i. Governments might change or new political parties might be elected, but the concern of the multinational corporation is the continuity of the set of rules or codes of behavior and the continuation of the rule of law—regardless of which government is in power. ii. A change in government, whether by election or coup, does not always mean a change in the level of political risk.

why much of secondary research that is provided by foreign governments is suspect when it comes to the reliability of data

a. Available data may not have the level of reliability necessary for confident decision making for many reasons. Official statistics are sometimes too optimistic, reflecting national pride rather than practical reality, while tax structures and fear of the tax collector often adversely affect data. b. Although not unique to them less-developed countries are particularly prone to being both overly optimistic and unreliable in reporting relevant economic data about their countries.

US government's policy toward MNCs that are confronted with bribery situations

a. Briber poses problems for the marketer at home and abroad, because it is illegal for US citizens to pay a bribe even if it is a common practice in the host country. b. Political payoffs may offer short-term benefits, but in the long run, the risks are high, and bribery is an untenable option.

Marxist-Socialist

a. Central European countries such as Czech Republic and Poland had comprehensive codified legal systems before communism took over. i. After WWII, the moved toward a legal model with grater ease than some others have. ii.. Russia and most of the republics of the former Soviet Union and China have had to build from scratch an entire legal system. b. Under the premise that law, according to Marxist-Socialist Tenet, is strictly subordinate to prevailing economic conditions, such fundamental propositions as private ownership, contracts, due process, and other legal mechanisms have had to be developed. i. However, in regards to political and economic growth, Russia is moving towards a more democratic system and China is attempting to activate a private sector within a mixed economy in socialist legal framework. Ex: China's attempt to control what goes on in Chinese cyberspace by applying the States Secrets law to the internet and the definition of a state secret is so broad that it can cover any info not cleared for publication with the relevant authorities

Hall's high-context/low-context continuum

a. Edward Hall goes on to say, "In some cultures...messages are explicit; the words carry most of the information. In other cultures...les information is contained in the verbal part of the message since more is in the context." b. Hall places 11 cultures along a high-context/low-context. i. Communication in a high-context culture depends heavily on the contextual (who says it, when it is said, how it is said) or nonverbal aspects of communication, whereas the low-context culture depends more on explicit, verbally expressed communication

green marketing

a. Green marketing laws focus on environmentally friendly products and product packaging and its effect on solid waste management. i. Germany has passed the most stringent green marketing laws that regulate the management and recycling of packaging waste.

"Corruption Define"

a. In former communist countries where Marxism was an important part of the educational system for many, profits can be seen as a kind of corruption. b. What is essential to Americans, such as individualism can be seen as corruption (The Japanese have an expression, "The nail that sticks up gets hammered down,"). i. Before Enron and WorldCom crises, to most Americans, the word corruption meant bribery. Now in the domestic context, fraud has moved to the more prominent sport in the headlines.

why it is that many firms engaged in foreign marketing do not make decisions with the benefit of all the pertinent information that is out there?

a. Many firms engaged in foreign marketing do not make decisions with the benefit of the information listed. This is because cost, time, and human elements are critical variables. i. Some firms have neither the appreciation for information nor adequate time or money for the implementation of research.

"Competition is crucial for efficiency"

a. Most fundamental to Western management practices is the notion that competition is crucial for efficiency, improvement, and regeneration. Gordon Gekko put it most banally in the movie Wall Street: "Greed is good." i. Adam Smith in his Wealth of Nations wrote one of the most important sentences in the English language: "By pursuing his own interests he frequently promotes that of the society more effectually than when he really intended to promise it."

what kind of American companies seem to be most vulnerable when it comes to political sensitivity in foreign markets?

a. Products that have or are perceived to have an effect on the environment, exchange rates, national and economic security, and the welfare of people (and particularly children) or that are publicly visible, subject to public debate, or that are associated with their country of origin are more likely to be politically sensitive. i. Ex: Fast food restaurants, which are intended to be visible, have often been lightning rods for groups opposed to foreign companies. ii. Ex: Health is often the subject of public debate, and products that affect or are affected by health issues can be sensitive to political concern. b. The EU has banned hormone treated beef for more than a decade (and GM foods)- genetically modified

secondary data

a. Secondary data is data collected by an agency or individual other than the one conducting research; often useful in market research. Ex: Include public records, census, etc.

EU and US trade dispute over bananas

a. The US (brands such as Dole and Chiquita) turned to its own government for help. The government agreed that unfair trade barriers were damaging their business, and 100 percent tariffs on selected European imports were levied. b. A settlement was finally reached that involved high tariffs on Latin America bananas and quotes (with no tariffs) on bananas from Europe's former colonies.

which US agency is the principle one that supports US business abroad ?

a. The US government is motivated for economic as well as political reasons to encourage American firms to seek business opportunities in countries worldwide, including those that are politically risky. i. The Department of Commerce (DOC) is the principle agency that supports business abroad.

what sorts of entities that the World Court can adjudicate disputes for?

a. The World Court can adjudicate disputes between governments, whereas disputes between a company and a government, and between two companies, must be handled in the courts of the country of one of the parties involved or through arbitration.

"Islamic" law

a. The basis for Shari'ah (Islamic law) is interpretation of the Koran. b. It encompasses religious duties and obligations, as well as the secular aspect of law regulating human acts. i. Broadly speaking, it defines a complete system that prescribes specific patterns of social and economic behavior for all individuals 1. It includes property rights, economic decision-making, and types of economic freedom. 2. THE OVERRIDING OBJECTIVE OF THE ISLAMIC SOCIAL SYSTEM IS JUSTICE

two distinct complications that impact international marketing research

a. The first complication is, that information must be communicated across cultural boundaries. i. That is, executives in Chicago must be able to "translate" their research questions into term that consumers in Guangzhou, china, can understand. Then the Chinese answers must be put into terms (i.e. reports and data summaries) that American managers can comprehend. b. The second complication is that environments within which the research tools are applied are often different in foreign markets. i. Which means, rather than acquire new and exotic methods of research, the international marketing researcher must develop the capability for imaginative and deft applications of tried and tested techniques in sometimes totally strange milieus.

what companies with registered trademarks in the US should learn form the McDonald's trademark case in Japan ?

a. The problem of inadequate protective measures taken by the owners of valuable assets stem from a variety of causes. One of the more frequent errors is assuming that because the company has established rights in the US, the will be protected around the world or that rightful ownership can be established, should the need arise. i. This assumption was the case with McDonald's in Japan, where enterprising Japanese registered its golden arches trademark. ii. Only after a lengthy and costly legal action with a trip to the Japanese Supreme Court was McDonald's able to regain the exclusive right to use the trademark in Japan. iii. After having to "buy" its trademark for n undisclosed amount, McDonald's maintains a very active program to protect its trademarks

which principle of international law is relevant to the question of jurisdiction of US law over acts committed outside the territorial limits of the US.

a. The question of jurisdiction of US law over acts committed outside the territorial limits of the country has been settled by the courts through application of a long-established principle of international law, the "objective theory of jurisdiction". i. This concept holds that even if an act is committed outside the territorial jurisdiction of US courts, those courts can nevertheless have jurisdiction if the act produces effects within the home country. The only possible exception may be when the violation is the result of enforced compliance with local law.

how effective arbitration has been and what seems to drive its' success ?

a. This history of International Chamber of Commerce (ICC) effectiveness in arbitration has been spectacular. i. An example of a case that involved arbitration by the ICC concerned a contract between an English business and a Japanese manufacturer. 1. The English business agreed to buy 100,000 plastic dolls for 80 cents each. On the strength of the contract, the English business sold the entire lot for $1.40 per doll. Before the dolls were delivered, the Japanese manufacturer had a strike; the settlement of the strike increased costs, and the English business was informed that the delivery price of the dolls had increased form 80 cents to $1.50. The English business maintained that the Japanese firm had committed to make delivery 80 cents and should deliver at that price. a. Each side was convinced it was right. i. The Japanese, accustomed to code law, felt that the strike was beyond their control (an act of God) and thus compliance with the original provisions of the contract was excused. ii. The English, accustomed to common law, did not accept the Japanese reason for not complying because they considered a strike part of the normal course of doing business and not an act of God. 1. The ICC appointed an arbitrator who heard both sides and rules the two parties would share proportionately in the loss. ii. More than 120 countries have ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, the courts signatory countries automatically uphold foreign arbitral awards issued in member countries.

Lester Thurow introduced the term "communitarian"

a. Thurow distinguished between the British-American "individualistic" kind of capitalism and the "communitarian" form of capitalism in Japan and Germany. b. This business system in the latter two countries are typified by cooperation among government, management, and labor, particularly in Japan. i. Contrarily, adversarial relationships among labor, management, and government are more the norm in the UL, and particularly the US ii. In less individualistic cultures, labor and management cooperate—in Germany labor is represented on corporate boards, and in Japan, management takes responsibility for the welfare of the labor force. iii. Because the welfare of the workforce matters more to Japanese and German firms, their sales revenues are more stable over time.

how jurisdiction is generally determined when international commercial disputes arise?

a. When international disputes must be settled under the laws of one of the countries concerned, jurisdiction is determined in one of three ways: 1) on the basis of jurisdictional clauses included in contracts. 2) on the basis of where a contract was entered into, or 3) on the basis of where the provisions of the contract where performed.

Nationalism

can best be described as an intense feeling of national pride and unity, an awakening of a nation's people to pride in their country. i. This pride can cake an anti-foreign business bias, where minor harassment and controls of foreign investment are supported, if not applauded. ii. Economic nationalism has as one of its central aims the preservation of national economic autonomy, in that residents identify their interest with the preservation of sovereignty of the state in which they reside.

Subornation

generally involves giving large sums of money—frequently not properly accounted for—designed to entice an official to commit an illegal act on behalf of the one offering the bribe.

The word security

is somewhat ambiguous, and this very ambiguity provides some clues to managerial variation. i. To some, security means a big paycheck and the training and ability required for moving from company to company within the business hierarchy. ii. For others, it means the security of lifetime positions with their companies iii. And to others, it means adequate retirement plans and other welfare benefits "European companies, particularly in the more hierarchical (PDI) countries, such as France and Italy, have a strong paternalistic orientation, and it is assumed that individuals will work for one company for the majority of their lives"

Confiscation

is the seizing of a company's assets without payment. i. Two notable confiscations of US property occurred when Fidel Castro became the leader in Cuba and later when the Shah of Iran was overthrown. ii. CONFISCATION IS THE MOST SEVERE POLITICAL RISK

common law

is tradition, past practices, and legal precedents set by the courts through interpretations of statutes, legal legislation, and past rulings. b. Common law seeks "interpretation through the past decisions of higher courts which interpret the same statutes or apply established and customary principles of law to a similar set of facts". i. Common law is recognized as not being all-inclusive 1. Steps are being taken in common-law countries to codify commercial law even though the primary basis of commercial law is common law, that is precedents set by court decisions. a. Ex: An example of the new uniformity is the acceptance of the Uniform Commercial Code by most states in the US

Bribery

is voluntary offered payment by someone seeking unlawful advantage. Ex: If a CEO of a company offers a government official payment in exchange for the official incorrectly classifying imported goods so the shipment will be taxed at a lower rate than the correct classification would require

Expropriation

is where the government seizes an investment but makes some reimbursement for the assets. Often the expropriated investment is nationalized; that is, becomes a government-run entity.

The "Invisible hand"

justifies competitive behavior because it improves society and its organizations. i. Competition among salespeople (ex: for sales contests) is a good thing because it promotes better individual performance, and consequently, better corporate performance. c. When companies compete, society is better off.

The Foreign Corrupt Practices Act (FCPA)

makes it illegal for companies to pay bribes to foreign officials, candidates, or political parties. i. Stiff penalties can be assessed against company officials, directors, employees, or agents found guilty of paying a bribe or of knowingly participating in or authorizing the payment of a bribe.

Extortion

occurs if payments are extracted under duress by someone on authority from a person seeking only what he or she is lawfully entitled to. Ex: If a finance minister of a country demanded heavy payments under the threat that a contract for millions of dollars would be voided.

Domestication

occurs when host countries gradually cause the transfer of foreign investments to national control and ownership through a series of government decrees that mandate local ownership and greater national involvement in a company's management. i. The ultimate goal of domestication is to force foreign investors to share more of the ownership, management, and profits with nationals than was the case before domestication.

Adaptation

or at least accommodation, is a key concept in international marketing, and willingness to adapt is a crucial. It is required in small matters as well as large ones. In fact, seemingly insignificant situations are often the most crucial.

Affirmative acceptance

or open tolerance, may be needed as well. Through affirmative acceptance, adaptation becomes easier because empathy for another's point of view naturally leads to ideas for meeting cultural differences.

Litigation

or otherwise lawsuits, is avoided in public courts for many reasons. Most observers of lawsuits between citizens of different countries believe that almost all victories are spurious because the cost, frustrating delays, and extended aggravation that these cases produce are more oppressive by far than any mater comparable size. i. One authority suggests that to settle a dispute four steps should be taken: first try to placate the injured party; if this does not work, conciliate, arbitrate, and finally, litigate.

Cultural Electives

relate to areas of behavior or customs that cultural aliens ma wish to conform to or participate in but are not required. i. In other words, following the custom in question is not particularly important but is permissible. Ex: One need not greet another man with a kiss (a custom in some countries), eat foods that disagree with the digestive system (so long as the refusal is gracious), or drink alcoholic beverages (if for health, personal, or religious reasons). iii. A cultural elective in one country may be a cultural imperative in another country. Ex: In some cultures, ne can accept or tactfully and politely reject an offer of a beverage, whereas in other cases, the offer of a beverage is a special ritual and to refuse it is an insult.

three fundamental forms of government put forth by the ancient Greeks

rule by one, rule by few, and rule by many.

Exchange Controls

stem from shortages of foreign exchange held by a country. 1. When a nation faces shortages of foreign exchange and/or a substantial amount of capital is leaving the country, controls may be levied over all movements of capital or selectively against the most politically vulnerable companies to conserve the supply of foreign exchange for the most essential uses.

quantitative research

usually a large number of respondents are asked to reply either verbally or in writing to structured questions using a specific response format (such as yes/no) or to select a response from a set of choices. i. Questions are designed to obtain specific responses regarding aspects of the respondents' behavior, intentions, attitudes, motives, and demographic characteristics. ii. Quantitative research provides the marketer with responses that can be presented with precise estimations. 1. Ex: Information gathered through surveys, interviews, mail, telephone, and Internet.