Int'l Business

Priyansh grew up in India, where caste systems have become less prevalent. Which of the following statements is true about a caste system?

A caste system is a rigid form of social stratification.

Common Law

A legal system based on custom and court rulings

Which of the following is a more attractive place to do business?

A nation with a market-based economic system

Facism

A political system headed by a dictator that calls for extreme nationalism and racism and has no tolerance for opposition

Which of these is a characteristic of a pure command economy?

All businesses are owned by the state.

Market Economy

All driven by the factors of production, land labor and capital. Driven by supply and demand. Owned by private people and industries, not the government. Monopoly is anti-market economy. It is a bad idea because it limits supply. Free and fair competition is crucial to market economy. Government intervention is what we have. We are not purely market economy. Government intervention is not a bad thing. They need to come in sometimes and help out or create regulations to control GDP. If we lose faith in our financial institutions, our economy will collapse. The government does own some of the means of production, land labor capital. They own the postal system, Medicare, Medicaid. General motors, American motors and someone else. GM was collapsing, and the government stepped in and helped.

Which of the following expresses one of the reasons why managing an international business is different from managing a purely domestic business?

An international business must find ways to work within the limits imposed by government intervention in the international trade and investment system.

Taboos

Behaviors that are deeply forbidden- very immoral behavior like incest and cannibalism- Big consequences

socialism

Best known form of collectivism. Land labor and capital is owned by the government. Carl Marks is considered the father of socialism. Socialism is a popular idea among young people but it is very bad and historically unsuccessful.

_____ are the accepted principles of right or wrong governing the conduct of businesspeople.

Business ethics

Karl Marx argued that _______

Capitalists take the value created by workers for their own use

Collectivism

China, totalitarianism (farthest) You as an individual do not matter. Society is what matters in all. The needs of society outweigh what the needs of an individual are. Communism was something to be feared. Communist nations- Soviet Union, NK, Vietnam, China, more. No such thing as a successful communist economy.

A ____________ law system is based on a detailed set of laws organized into codes

Civil

Culture

Customs, values, arts, social institutions and beliefs adopted by a society

________ refers to a set of moral principles, or values, that are used to guide and shape behavior?

Ethical system

International Trade

Exchange of goods and services on a global scale

Cultural differences have no effect on the way an international firm conducts its business around the globe. T/F

False

Entrepreneurs and business-owners of high uncertainty avoidance cultures will be more willing to take risks and make changes. T/F

False

Globalization resulted in a decrease in non-U.S. firms' investment across national borders. T/F

False

International businesses cannot gain economic advantages by making payments to corrupt government officials. T/F

False

Since the 1960s, a notable trend in the demographics of the multinational enterprise has been the rise of U.S. multinationals. T/F

False

Since the demise of communism in the late 1980s, the number of command economies has risen dramatically. T/F

False

The value systems and norms of a country have little influence on the costs of doing business in that country. T/F

False

Four basic groups of norms

Folkways Laws Mores Taboos

Confucianism

High moral standards High ethical conduct Loyalty to others

Which of the following is true about planned economies?

In a planned economy, the state owns all means of production.

Caste system

India has 4 casts in their society. You are born into a cast and you can never leave it. The very top is to be teaching. Next down is to be a public servant, police, fireman etc. Next is being a business man. The lowest is being an unskilled laborer.

________ refers to a philosophy that a person should have freedom in his or her economic and political pursuits.

Individualism

What determines a rich or poor country

Institutions 50% Culture 20% Geography 10%

The ________ is often seen as the lender of last resort.

International Monetary Fund

USA _______ necessarily dominant in investment anymore

Isn't

New World Order

Liberal democracy has triumphed and will become the final form or human government

________ enables managers to walk away from a decision that is profitable but unethical.

Moral courage

The social rules and guidelines that prescribe appropriate behavior in a particular situation are called

Norms

Societies/cultures are _____ limited by borders. Nations are _____ limited to just one culture.

Not Not

Totalitarianism

Not the same as communism. Actually anti-communism- Form of Government in which power is vested in a single individual who makes decisions in the best interest of him/her. They run the military.

Three risks as an international business person

Political risks Economic risks Legal risks

Political economy

Political, economic and legal system of a country. All are independent, but they influence each other

Theocracy

Religion runs the government. Middle-east. These are dangerous. Islam is the fastest growing religion today.

Laws

Same as the mores but with more consequences- real consequences

Which of the following aspects of Protestantism paved the way for the subsequent emphasis on individual economic and political freedoms?

The emphasis on individual religious freedom

Command economy

The government owns the factors of economy, land labor and capital. The government makes the decision of what is best for society. All the businesses are state owned. There is no incentive for any of the businesses to do anything better or become more efficient. If you can do the minimum and still get payed the same, why work hard? That is where this system gets bad.

Which of the following is true about the economic risks of doing business in a country?

The inflation rate in a country is an indicator of the economic risks of doing business in a country.

Which of the following statements pertaining to changes in the global economy of the 21st century is true?

The world is moving toward an economic system that is more favorable for international business.

Which of the following statements is true about trademarks?

Trademarks are designs and names by which businesses differentiate their products.

A small country is short on cash for much needed infrastructure development projects. It could go to the World Bank for assistance. T/F

True

Building an organizational culture that places a high value on ethical behavior requires incentive and reward systems that reward people who engage in ethical behavior. T/F

True

Deregulation involves the establishment and operation of private enterprises. T/F

True

Ethical dilemmas are situations in which none of the available alternatives seems ethically acceptable. T/F

True

GNI per person figures can be misleading because they don't consider differences in the cost of living. T/F

True

In a market economy, a supply restriction occurs when a single firm monopolizes a market. T/F

True

It may be more costly to do business in relatively primitive or undeveloped economies because of the lack of infrastructure and supporting businesses. T/F

True

Most of the world's ethical systems are the product of religions. T/F

True

One concern frequently voiced by those opposed to globalization is that falling barriers to international trade destroy manufacturing jobs in wealthy advanced economies such as the United States and Western Europe. T/F

True

One of the biggest dangers confronting a company that goes abroad for the first time is the danger of being ill-informed. T/F

True

Social responsibility refers to the idea that businesspeople should favor decisions that have both good economic and social consequences. T/F

True

Supporters of globalization believe that tougher environmental regulations and stricter labor standards are a natural aspect of economic progress. T/F

True

Today, nearly every nation in the world belongs to the United Nations. T/F

True

Unusual in a successful culture to find two or more main languages. T/F

True

Individualism

USA, Democracy. You and I do matter more than the collective. Our freedom to do what we want matters. If each of us are successful with our freedoms, then we as a society will be successful. Individual freedom and social expression are what comes with this. Society is best served by letting the individual succeed.

Social structure

Upper, middle and lower class (economically).

The ________ was created in 1944 by 44 nations that met in Bretton Woods, New Hampshire to promote economic development.

World Bank

In the early 20th century, communist differed from social Democrats in that communist believed in

a strategy of revolutionary action

Values

abstract ideas of what a group of people think is right

Countries adopting market-based systems had more continuous economic growth than those ______

adopting command economies

Opponents of globalization argue that falling trade barriers

allow firms to move manufacturing activities to countries with lower wage rates.

An American executive of a multinational home-furnishings chain finds that one of the company's production units in Philippines employs children to work in its factories. However, most of the children employed at the factory are orphans who will be sold as forced labor or pushed into prostitution if they lose their jobs. The executive finds that all the available alternatives seem ethically unacceptable. In this example, the American executive faces

an ethical dilemma.

Foreign direct investment occurs when a firm invests resources in

business activities outside its home country.

Historically, command economies were found in ________ countries, where collectivist goals were given priority over individual goals.

communist

Which of the following factors contributed to the Great Depression of the 1930s?

countries progressively raising trade barriers against each other

Globalization has enabled organizations to reduce their costs of production by

creating manufacturing units in developing countries.

Innovation and entrepreneurial activity help increase economic activity by

creating new products and markets.

Mores

dependent on the understanding of right and wrong- being truthful- some consequences

The role of the government in a market economy involves

encouraging vigorous free and fair competition among private producers

Which of the following actions was implemented in the Uruguay Round, finalized in December 1993?

establishment of the World Trade Organization

The belief in the superiority of one's own culture is known as

ethnocentrism.

Amazon.com was the earliest, major online bookstore, which allowed it to generate brand awareness and have a significant presence in the market. Amazon.com had a head start on later entrants to the online bookstore market. In this example, Amazon.com has ________ advantages.

first-mover

A typical American value is an expectation that people have a right to live the way they want. Values are defined as

ideas about what a group believes to be good, right, and desirable.

Globalization critics argue that the decline in unskilled wage rates is due to the

migration of low-wage manufacturing jobs offshore.

The ethical obligations of a multinational corporation toward employment conditions, human rights, corruption, and environmental pollution are

not always clear-cut.

An international business is defined as

one that implements homogenous practices across countries.

The benefits, costs, and risks associated with doing business in a country are a function of that country's

political, economic, and legal systems.

Which of the following is a reason managers working abroad in multinational firms may behave in a manner that is unethical?

psychological and geographical distances of a foreign subsidiary from the home office

The purpose of the U.N.'s Millennium Development Goals that were established in 2000 was to

reduce the number of people living in extreme poverty.

In the case of command economies, deregulation involves

removing price controls.

Norms

social rules and guidelines that tell us what's okay in a certain situation

Moore's Law

the observation that computing power roughly doubles every two years.

Globalization

the process by which businesses or other organizations develop international influence or start operating on an international scale.

Jonathon's family makes a point to sit down to dinner together every night. This is an example of folkways, which are characterized as

the routine conventions of everyday life.

The stock of foreign direct investment refers to

the total cumulative value of foreign investments as a percentage of the country's GDP.

The government of Iran is ruled by religious figures and they ensure that citizens adhere to Islamic teachings. Iran is a ________ law system.

theocratic

Democracy

there is not a pure democratic country anywhere. Representative democracy is what most nations have today. We vote for a representative. 93% of people think Congress is doing a bad job.

Newly privatized entities often have little incentive to restructure their operations to become more efficient when

they continue to receive subsidies from the state.

Which of the following is a reason for the spread of democracy?

totalitarian regimes failing to deliver economic progress to the majority of their populations

cross-culture literacy

understanding how the culture of a country affects the way business is practiced

Folkways

very basic every day courtesies- opening the door- no consequences

Market economy

your success or failure is determined by you.