Study guide practice D080 (Unit 4-6)

A company that is highly integrated globally tends

to use a standardized approach to its operations and products across different markets.

Indirect taxes: Value-added Tax (VAT):

type of consumption tax that is applied to the value added at each stage of production or distribution of a product or service. It is based on the increase in value that occurs at each stage of production, rather than the final sale price. In other words, VAT is a tax on the value added to a product or service at each stage of production or distribution, and the tax is paid by the end consumer. VAT is commonly used in Europe, Asia, and other parts of the world, and rates vary by country and by product or service.

Currency futures contracts

- Currency futures contracts are similar to forward contracts, but they are traded on exchanges. They are standardized contracts of the most commonly traded currencies such as the US Dollar that require the exchange of a specific amount of currency on a predetermined future date at a predetermined price. Currency futures contracts can provide a transparent market for currency exchange and allow companies to hedge against currency risk.

Currency option contracts

- Currency option contracts are agreements that give the buyer the right, but not the obligation, to buy or sell a specific amount of currency at a predetermined price on or before a specific future date. These contracts can be useful for companies that want to protect against currency risk while still maintaining flexibility. For example, a company can buy a currency call option to protect against currency appreciation, while still allowing it to benefit if the currency depreciates.

Currency risk

- Currency risk is the risk of loss due to changes in exchange rates. It can impact a company's financial performance and can be managed through financial hedging techniques, diversification of operations and financing sources, and adjusting pricing strategies. currencies fluctuate against each other every day, even hour to hour from the spot right (the current, right-now-on-the-spot exchange rate between two currencies.).

Currency swap contracts

- Currency swap contracts involve the exchange of one currency for another at the spot exchange rate, with an agreement to reverse the exchange at a predetermined future date. These contracts can be useful for companies that have a long-term need for a foreign currency and want to avoid the risk of currency fluctuations. For example, a company with a long-term loan denominated in a foreign currency can enter into a currency swap contract to lock in the exchange rate and eliminate the risk of currency fluctuations.

9. What are the challenges expatriates might encounter?

- Determining the appropriate length and location of an expatriate's assignment. - 33% failure of the expatriate to complete an assignment due to culture shock family and or political issues - Reverse Culture shock that expatriate employees experience upon repatriation

Franchising

- Obligates the parent firm to provide specialized equipment and/or services to the franchise (e.g., product specification and adaptation, pricing, promotion, and distribution strategies), a sometimes to fund some startup costs. Franchisee pays an annual fee, which is generally based upon sales generated and seed money provided for the venture. Low risk for the franchisor since the franchisee takes most of the risk (think of how the franchisor Hilton did not own most of the hotels during covid so it wasn't 100% their risk)

Political risk

- Political risk includes both Global and Country risk. Country risk is divided into Macro risk and Micro risk:

Egalitarian

- relating to or believing in the principle that all people are equal and deserve equal rights and opportunities.

At the other end of the spectrum are low power distance cultures, in which superiors and subordinates are more likely to see each other as equal in power. Countries found at this end of the spectrum include _________ and _________. To be sure, not all cultures view power in the same ways. In _______________, _______________, and _______________, for example, respect for equality is a warranty of freedom. Subordinates and managers alike often have the power to speak their minds.

Austria and Denmark In Sweden, Norway, and Israel

Latin America culture info

Latin America is another important market in the global economy. The business culture of Latin America differs throughout the region. A lot has to do with the size of a particular country, the extent to which it has developed a modern industrial sector, and its openness to outside influences and the global economy. Generally speaking, several common themes permeate Latin American business culture. Businesses typically are hierarchical in their structure, with decisions made from the top down. Developing trust and gaining respect in the business environment is all about forging and maintaining good relationships. This often includes quite a bit of socializing. Another important factor influencing the business culture is the concept of time. In Latin America, time is space. More often than not, situations take precedence over schedules. Many people unfamiliar with Latin American customs, especially those from highly time-conscious countries such as the United States, Canada, and those in Northern Europe, can find the lack of punctuality and more fluid view of time frustrating. It is more useful to see the unhurried approach as an opportunity to develop good relations. In most Latin American countries, old-world manners are still the rule, and an air of formality is expected in most business interactions and interpersonal relationships, especially when people are not well acquainted with one another. People in business are expected to dress conservatively and professionally and be polite at all times. Latin Americans are generally very physical and outgoing in their expressions and body language. They frequently stand closer to one another when talking than in many other cultures. They often touch, usually an arm, and even kiss women's cheeks on a first meeting. In business and social interactions, Latin America is overwhelmingly Catholic, which has had a deep influence on culture, values, architecture, and art. For many years and in many countries in the region, going back to days of Spanish and Portuguese colonialism, the Catholic Church had absolute power over all civil institutions, education, and law. However, today, the church and state are now officially separated in most countries, the practice of other religions is freely allowed, and Evangelical churches are growing rapidly. Throughout the region, particularly in Brazil, Indians and some black communities have integrated many of their own traditional rituals and practices with Christianity, primarily Catholicism, to produce hybrid forms of the religion.4 Throughout Latin America, the family is still the most important social unit. Family celebrations are important, and there is a clear hierarchy within the family structure, with the head of the household generally being the oldest male—the father or grandfather. In family-owned businesses, the patriarch, or on occasion matriarch, tends to retain the key decision-making roles. Despite the social and economic problems of the region, Latin Americans love life and value the small things that provide color, warmth, friendship, and a sense of community. Whether it is sitting in a café chatting, passing a few hours in the town square, or dining out at a neighborhood restaurant, Latin Americans take time to live.4

Tax havens

are countries with low tax rates and lax regulations that are used by companies to reduce their tax burden. Bermuda is a famous tax haven, which will attract international investment.

Angel investor

(for small companies) Angel investors are wealthy individuals who provide early-stage funding to startups and small companies in exchange for equity in the company. Angel investors may also provide advice, mentorship, and connections to help the company grow. Focus on small start ups.

Venture capital (VC)

(for small companies) Venture capital is a type of private equity financing provided by wealthy investors to startups and early-stage companies with high growth potential. VC firms typically invest in exchange for equity in the company, and may provide additional support and guidance to help the company grow. Hard to get funding anywhere else so venture capitalists who are willing to take more risks than traditional financers for the potential of a huge reward.

Wholly owned subsidiary

(highest risk) - Build and operate its own new facilities (also called greenfield plants) overseas. These wholly owned subsidiaries of a home country firms generally require large capital investment (making it the riskiest entry strategy). Such as Costco building a new Costco in China where they own 100% of it.

Exporting

(lowest risk) - easy since we only ship, can be done over the internet, competition is generally plenty, and the profit margins may not be high. Low control, low local knowledge, low risk and low investment. Potential negative environmental impact of transportation.

Cap and trade

- Carbon Tax Adopted by EU. Attempt to limit and reduce the amount of carbon dioxide that is emitted in the world. It adds a tax to a business based on the amount of carbon that they emit in their operations. Allocated a certain amount of carbon, they can sell it if they use less or buy if they need more.

Societal and cultural risk

- Societal and cultural risk relates to differences in cultural norms and values that can impact a company's operations and reputation in different countries. Such as ethnic, religious strife, or political movements. Such as a nationalistic movement.

Export Financing

- many are exclusive to exporting and the organizations, institutions that offer export financing specialize in export financing for international expansion as normal banks are sketched out by international loans as being too risky.

Long-term orientation refers to whether a culture has a long-term or short-term orientation. It resulted from the effort to understand the difference in thinking between the East and the West. Certain values are associated with each orientation. The long-term orientation values persistence, perseverance, thriftiness, and having a sense of shame. These are evident in traditional ___________ cultures. Based on these values, it is easy to see why a ___________ chief executive officer (CEO) is likely to apologize or take the blame for a faulty product or process.

Eastern, Japanese

Define expatriates

Expatriates are employees who are sent to work in a foreign country by their employer. For example, an American executive working in a branch office in China for a few years is considered an expatriate.

The transnational strategy is going to be _______ in global integration and _______ in local responsiveness

High, High

Standardization is going to be _______ in local responsiveness but _______ in global integration.

Low, High

Export strategy is going to have _______ global integration as well as _______ local responsiveness.

Low, low

Data Protection Officers (DPOs):

Some organizations must appoint a DPO to oversee compliance with GDPR.

The ________________ and ____________ societies are often labeled as individualistic. In the United States, individualism is valued and promoted—from its political structure (individual rights and democracy) to entrepreneurial zeal (capitalism). Other examples of high-individualism cultures include ____________ and the __________________________.

The United States and Northern European Australia and the United Kingdom

Describe the 3 production processes.

a) Make-to-order b) Mass production c) Mass customization

Disadvantages of team structure:

• Difficult to motivate individual employees when only team accomplishments are rewarded (free rider problem) • There is increased risk for interpersonal conflicts

What are the sources of finance used by large companies? cash

- Cash is a physical or digital form of currency used for transactions. It is the most liquid form of asset, and can be used to purchase goods, services, or other assets.

Describe standardization

- Used in international markets by a firm that are the same as those used in domestic market. Using the same product or marketing campaign in every single market that we're in.

In which power distance should a boss ask an employee what they think and feel about an idea or plan?

Low power distance

Repatriation

The process of transitioning employees back to their home countries

Decentralized Decision Making:

• Decision-making is pushed down to the managers who are closest to the work or client • Flexibility to meet local needs • Inconsistent decision making

Friends family or fools (FFF):

(for small companies) FFF financing refers to funding provided by friends, family members, or other informal investors who are willing to invest in the company based on personal relationships or trust. This type of financing may involve loans or equity investments, and may not be subject to the same regulations and requirements as other sources of finance.

Geographic compartmentalization

- each geography area has its own division such as North American division, Asian division, European division etc

Why has technology helped farmers?

Access to smartphones greatly helps agriculture as it helps POOR farmers understand crop pricing (able to check prices around the world to prevent being taken advantage of). Smartphones help with irrigation, understanding climate, what to expect and prepare for, and how much fertilizer to use based on acreage.

Show the connection between IFRS and IASB.

IFRS stands for International Financial Reporting Standards and is a set of accounting standards used in over 140 countries. The International Accounting Standards Board (IASB) is the organization responsible for setting and updating IFRS standards.

Economic divide (three stages of the digital divide)

The reduction in cost of technology, And this has allowed basically all populations to be able to afford some pretty good technology like cell phones and access to the Internet,

Local Responsiveness

is going to be the degree to which the company must customize its products and methods to meet conditions in other countries.

DBMS is

where all of our big data or any data that we have is stored. Its primary purpose is to organize and store the data in a way that makes it easy to retrieve the data.

Short Position means

you are expecting the stock to fall

Long position means

you expect a stock to rise

Advantages of Matrix structure:

• Allows team members to share information more readily across task boundaries. • Allow for specialization that can both increase depth of knowledge and assessing individuals according to project needs

Advantages of team structure:

• Increased creativity and productivity and mutual accountability • Generates a variety of expertise

b) Balance sheet approach for expatriates

• Keep employees on the home country salary structure and balance sheet • Give separate allopwances to account to country specific/assignment specific pay o Base pay remains the same regardless of location o Separate payments are added on, taken off, or modified based on location (ex: add on extra money if taxes are high in this location, or required extra pay by law, or lower pay if housing is low) Balance sheet approach is designed to ensure that expatriates are not financially worse off when working abroad than they would be if they were working in their home country. The expatriate's compensation package includes a variety of components, such as base salary, bonuses, benefits, and allowances, which are adjusted to reflect the cost-of-living differences between the home country and the host country. Additionally, the balance sheet approach considers expenses such as housing, education, and taxes, and seeks to ensure that the expatriate is not disadvantaged financially while on assignment. AKA ensuring they are not worse off by taking the expatriate assignment.

Disadvantages of a divisional structure:

• May not communicate well with each other, which may decrease flexibility and innovation • Cost, can lose out on some economies of scale

Disadvantages of functional compartmentalization:

• May not communicate with one another, potentially decreasing flexibility, and innovation. • Functional structures may also be susceptible to tunnel vision.

Advantages of functional compartmentalization:

• allows greater operations efficiency and specialization. • Each group of specialists can operate independently with management acting as the point of cross communication between functional areas.

In countries with low uncertainty avoidance, people are more willing to take on risks, companies may appear less formal and structured, and "thinking outside the box" is valued. Examples of these cultures are ____________, ___________, _____________, and, to a slightly lesser extent, the _____________. Members of these cultures usually require less formal rules to interact.

Denmark, Singapore, Australia, and, to a slightly lesser extent, the United States. Members of these cultures usually require less formal rules to interact.

Define the digital divide

Describes the discrepancy in access to information technology between populations (countries, regions), and divides between the haves and have-nots in technology based on who can afford it. Digital divide has three stages: The Economic divide, Usability Divide, and Empowerment divide

What are the significant cultural features in China and Latin American countries? How can these features impact business operation in those areas?

In China cultural features are: Things are going to get done in China through favors. So we're going to maybe go out after work and network to try and get to know people develop relationships where people can do a favor for me in exchange for a favor for them. Things get done via favors. Also known as Guanxi.

Describe glocalization and list an example.

Involves perusing a standardization strategy in foreign markets when possible and an adaptive one when necessary. We try to standardize and only adapt when needed. Such as mcdonalds being very similar in other countries but selling other items that the local culture prefers.

Why are nations motivated to build digital infrastructure?

Nations are motivated to build digital infrastructure because it can bring economic growth, create jobs, improve education and healthcare, enhance public services, and increase innovation and competitiveness. Digital infrastructure also helps to bridge the digital divide and provide equal access to information and opportunities for citizens.

In Japan it is common when doing business to:

Slightly bow, handshake. Do business with high ranking employees. No direct eye contact. Group oriented, seen as a country.

Macro risk

—Macro risks are related to the overall political and economic climate of a country, such as changes in government policies or instability in financial markets. Affects all company's in the country. Such as war, labor unrest, or civil war.

Micro risk

—Micro risks are specific to a company or industry, such as regulatory changes or expropriation of assets. Such as a ban of crypto companies. Or nationalizing of industry where the government takes over an industry - major micro risk.

Strategic Alliance (partnership)

- Marriages of convenience. Between two or more firms that stand to gain revenues (or market share) through cooperation with each other for specific reasons and for a given period. Any member can quit at any point making it a bit risky/challenging. Think of MGM points working with cruise companies to fill empty rooms on cruises using mgm points. Two separate companies working together.

virtual reality

- VR technology immerses users in a computer-generated environment, allowing them to interact with the simulated world. VR is used in various industries, such as gaming, education, and healthcare. For example, in the healthcare industry, VR is used to train medical professionals, simulate surgical procedures, and treat mental health conditions like PTSD.

Market compartmentalization

- focuses on markets, such as government customers or business customers. Each department focuses on that certain market.

Centralized decision making:

(ex: military, they take their orders from the president and pass down the commands) • Only top managers make decisions • Lower-level managers execute the directives • In-efficient decision making • Consistency (as everyone will be going off the same decision no matter the location)

Crowdsourcing/crowdfunding (raising capital)

(for small companies) Crowdfunding is a method of raising funds from a large number of people, typically through an online platform. Crowdfunding can take various forms, such as donation-based crowdfunding (where people contribute money without expecting anything in return), reward-based crowdfunding (where people receive a reward or product in exchange for their contribution), or equity-based crowdfunding (where people receive equity in the company in exchange for their contribution).

Direct distribution disadvantages

(insourcing) • More expensive in the beginning because it requires capital investment to set yup facilities and hire staff • Difficult to manage on a large scale. • Must deal with issues in areas such as shipping or government restrictions without experience. • Must have own logistics team and transportation

Direct distribution advantages

(insourcing) • The producer maintains control of the product, marketing, and costs. • A shorter channel means the product reaches the consumer faster. • It is less costly in the long term as profits do not need to be shared with intermediaries. • It enables stronger connection to the customer base

Indirect distribution advantages

(outsourcing) • There are no upfront costs if using existing distribution networks • Intermediaries have more knowledge of the markets (very important for foreign markets) • Intermediaries can use their expertise to speed up the process

Indirect distribution disadvantages

(outsourcing) • Must trust intermediaries to represent your brand and interact with customers • Intermediaries may develop sense of ownership over your products • An existing channel may carry competing products (no exclusive contracts with producers) • Intermediaries will be in control of the marketing efforts • Adds layers of cost and bureaucracy with more intermediaries

3-D printing

- 3-D printing is a technology that allows the creation of physical objects from digital models by adding successive layers of material. It has revolutionized manufacturing in various industries, such as aerospace, automotive, and healthcare. It's very useful for producing protypes since it was slow and expensive to make prototypes before 3D printers. For instance, in the aerospace industry, 3-D printing is used to create lightweight and complex parts for spacecraft. 3D printers are also popular in the prosthetics field to make custom limbs unique to each person.

BOTs

- A bot is a software application that performs automated tasks, such as answering customer inquiries, scheduling appointments, and processing payments. Bots are used in various industries, such as finance, e-commerce, and healthcare. For instance, in the healthcare industry, bots are used to schedule appointments, answer patient inquiries, and even provide mental health support.

International Joint Venture

- A business that is jointly owned (implies shared equity). Jointly operated by two or more firms (usually one from the host country). Pooling of resources (labor, capital, technology, and management) to penetrate a host country as well as foreign markets, generate and split profits, and share the commercial risk, The local partner will be most knowledgeable about the domestic, economic, cultural, and political environments. Example: WWE and UFC create a new company where they will each own each other.

Licensing

- A company or individual provides the foreign partner with the necessary means (patented technology, copyright, process, trademark, etc) to manufacture and sell its products in the target country for an annual license fee. No upfront. Cost. Need strong regulatory environment (IP and contract law) to ensure licensing agreement can be forced. Licensor has low risk since they are just selling the rights.

artificial intelligence

- AI refers to machines that can perform tasks that typically require human intelligence, such as learning, problem-solving, and decision-making. AI is used in many industries, including finance, healthcare, and retail. For example, in the retail industry, AI-powered chatbots can help customers with product recommendations and support. AI can learn from experience looking at data and patterns. Another example is the amazon warehouse bots.

Nonverbal (body) i. Gestures

- Body language such as gestures can also cause issues in business communication. Some gestures that are acceptable in one culture may be considered rude or offensive in another culture. For instance, in some cultures, pointing with your finger is considered rude, while in others, it is perfectly acceptable. A person who is not aware of these cultural differences may unknowingly offend their business partner and jeopardize the success of the communication.

bonds

- Bonds are a type of debt security issued by governments or corporations to raise capital. Investors who buy bonds are effectively lending money to the issuer and receiving interest payments in return. Bonds can be traded on the bond market and are typically less risky than stocks. Interest expenses are tax deductible as a business expense, making it cheaper than paying out dividends to equity holders as they are double-taxed.

equity (stocks)

- Equity, also known as stocks or shares, represents ownership in a company. Investors who buy stocks are buying a share of the company's ownership and are entitled to a portion of the company's profits (in the form of dividends) and voting rights in shareholder meetings. Stocks can be traded on stock exchanges and are typically riskier than bonds. More expensive form of finance since its not deductible. Also riskier since more owners, no idea how many people will buy, what the price is etc.

Eye contact

- Eye contact is another aspect of body language that can cause issues in business communication. In some cultures, maintaining eye contact is a sign of confidence and respect, while in others, it is seen as a challenge to authority. A lack of eye contact can be interpreted as a lack of interest or dishonesty in some cultures, while in others, it is seen as a sign of respect. Business people need to be aware of these cultural differences to avoid misunderstandings in business communication.

Explain how international corporate tax brackets influence global business decisions. Describe flat rate tax systems

- Flat rate tax systems are tax systems where all income is taxed at the same rate. Flat rate tax systems are advantageous to multinational companies because they provide a simple and predictable tax system that reduces the administrative burden and minimizes tax planning.

Companywide pay scales and policies for expatriates

- Global companies may have a standardized compensation policy that applies to all employees worldwide. This policy includes a base salary, bonuses, benefits, and allowances, and is typically adjusted for cost-of-living differences between countries.

Global Loans and Bonds

- Global loans and bonds are other sources of funding available from international sources. These may include syndicated loans, where multiple lenders pool their resources to finance a project, or international bond offerings, where a company issues debt securities that can be purchased by investors around the world. These financing options may provide lower interest rates and longer repayment terms than traditional bank loans, and may also offer greater flexibility in terms of financing structure and currency denomination than their domestic option offers.

Matrix Structure

- Groups people simultaneously by function and division. North American accounting people are all together, while all European accounting people are together. Each geographic area also has its own divisions for accounting, R&D etc. Or each product will have its own departments. The iphone has its own accounting unit and the ipad has its own for example.

Explain guanxi

- Guanxi refers to personal connections and networks that can be used to gain favors or advantages. In China, guanxi is often built on personal relationships and social interactions (networking), and it is considered essential for business success. Guanxi can impact business operations by influencing the way negotiations are conducted, the importance of building relationships, and the emphasis on hierarchy and respect. Relationships where people can do a favor for me in exchange for a favor for them.

Divisional Structure

- In a divisional structure, people are grouped together based on the product or service they provide, not the work they do. For example, a large corporation such as General Electric has divisions for electronics, transportation, and aviation, each with its own team of accountants, marketers, etc. People are grouped together to serve the needs of products, markets, or geographical regions.

Global Equity and motivation for companies to use it

- In terms of global equity and motivation for companies to use it, equity financing involves selling ownership shares in a company in exchange for capital. Company is going to go to the stock markets of the world and and sell their stock. Global equity financing allows companies to access funding from international investors and may provide additional benefits such as access to new markets, expertise, and resources. Small markets can go to developed markets in hopes to raise more money than they could in their home market. Involves foreign currency's and different rules, so its more complex.

block chain

- It allows transactions to occur without a middleman, without a bank and a paper trail. It's a platform technology. It gives customers the opportunity to store their information, such as credit card data in one single block. Blockchain can be used with biometrics such as the fingerprint to authorize payment from a credit card.

loans (raising capital)

- Loans are a type of debt in which a lender provides funds to a borrower, who agrees to repay the loan with interest over a set period of time. Loans can be secured (backed by collateral) or unsecured (based on the borrower's creditworthiness). Interest expenses are tax deductible as a business expense making it cheaper than paying out dividends to equity holders as they are double-taxed.

Financial and economic risks

- Measurements at the macro-economic (national) level. Financial and economic risks include unemployment rate, inflation rate, as well as interest rate risk and market risk. These risks can impact a company's financial performance and ability to access financing. To manage these risks, companies can use financial hedging techniques and diversify their operations and financing sources across different countries and currencies.

Describe tax brackets

- Tax brackets are tax systems where income is divided into different brackets, and each bracket is taxed at a different rate. Tax brackets can be advantageous to multinational companies because they allow for more progressive taxation that can reduce the tax burden for lower-income earners.

The Overseas Private Investment Corporation (OPIC)

- The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. government agency that provides financial products, such as loans, guarantees, and political risk insurance, to support U.S. businesses investing in developing countries. OPIC aims to promote economic development, strengthen democracy, and support U.S. foreign policy objectives by catalyzing private capital to address critical development challenges.

Acquisition

- The home country firm will purchase the host country firm and implement its own international business strategy. Viewed as a local company, has known and established operations. Fast entry! Example: Walmart bought the ecommerce company flipkart in India to gain market share fast. Similar to a brownfield venture, since our facilities are already there. Everything is already in place because we're using already existing facilities.

The transnational strategy

- The transnational strategy is really going to kind of try and get the best of both worlds by combining standardization and multi domestic together. The transnational strategy is going to be used when a company encounters significant cost pressure from its international competitors but must also offer products that meet the local customer needs. Difficult to maintain because the company needs to achieve economies of scale through standardization of what they can but also be flexible in responding to local conditions. Example: car manufacturer has a base model dashboard that can easily have the radio or speedometer in a different location to achieve economies of scale via mass production while being able to easily customize the layout for different regions even though everything else is the same for efficiencies.

Supercomputers

- These are high-performance computing systems (very fast) designed to process massive amounts of data in a short time. Supercomputers are used in industries such as healthcare, finance, and scientific research. For example, in the healthcare industry, supercomputers are used to analyze vast amounts of patient data to develop personalized treatments for diseases like cancer. Turns vast amounts of data into useful information. Also used to predeict earthquakes, lots of environmental studies, and scientific research.

Currency forward contracts

- This is a customized contract (meaning we need a middleman to complete the transaction) available for currencies that are less often converted. Currency forward contracts are agreements between two parties to exchange a specific amount of currency at a predetermined exchange rate on a future date. These contracts can help companies lock in a future exchange rate and protect against currency fluctuations. For example, if a company knows it will need to exchange currency in the future, it can enter into a forward contract to guarantee the exchange rate and eliminate the risk of currency fluctuations.

The standardization strategy

- We are going to be going to those different markets. We are going to be using the same products. And we're going to treat the world as one market with very little meaningful variation in our products and our approach. We're going to use one product, one marketing campaign, for all the markets. Standardization is going to be going into those different locations, creating a facility and just using the same products and the same marketing campaign. Standardization is going to be low in local responsiveness, but high in global integration. We create a facility in standardization, compared to export strategy where we only export..

The multi domestic strategy

- Where we customize products or processes to the specific conditions in each country. Management is centralized in the home country, but country managers are given latitude to make adaptations. Sacrifice scale efficiencies for responsiveness to local conditions. Country managers understand local laws, customs, and tastes, and they can decide how to best meet them. Multidomestic strategy is going to be high in local responsiveness, but low in global integration.

Legal risk

- big concerns is whether laws that are on the books are enforced. One area in particular that is a concern for international companies in this regard is intellectual property laws, lots of countries say they have those laws but they are not very well enforced (which is a legal risk). Such as Europe not stopping companies from stealing music and making songs the exact same.

Team Structure

- composed of people with complementary skills working together for a common purpose. About multiple teams of people with complimentary skills going head to head against each other, which will help drive innovation with their team structure competition. • Less hierarchical, with shared leadership and objectives • Often used by technical companies like google

Product compartmentalization

- groups people together to serve the needs of products, markets, or geographical regions (smart phones, computer, tvs each have their own division)

Functional/departmental structure (functional compartmentalization)

- groups people together who hold similar positions, perform similar tasks, or use the same kinds of skills. (Finance and accounting, marketing, R&D each have their own department with their own manager).

The Private Export Funding Corporation (PEFCO)

- is a non-profit corporation that provides medium- and long-term financing for U.S. exports. PEFCO issues tax-exempt and taxable securities to institutional investors, using the proceeds to provide fixed-rate financing to U.S. exporters and their foreign buyers. PEFCO is a cost-effective financing alternative for U.S. companies that may not have access to traditional sources of funding or who wish to diversify their funding sources.

The Japan External Trade Organization (JETRO)

- is a non-profit government-related organization that provides a wide range of support to promote trade and investment between Japan and other countries. JETRO offers various funding programs, such as investment and business matching services, financial assistance, and information on investment opportunities in Japan. JETRO also provides support for market research and business development for companies interested in expanding their operations in Japan.

The Export-Import Bank of the United States (Ex-Im Bank)

- is an independent federal agency that provides financing solutions, such as loans, guarantees, and insurance, to support U.S. exports and jobs. Ex-Im Bank assists American companies of all sizes to compete in the global marketplace by providing access to working capital, reducing risk, and offering financing terms that are often more favorable than those available in commercial markets.

Spot rate consists of two types of fluctuation: Transaction Risk

- risk that arises from the fluctuation of exchange rates between the time a transaction is entered into and the time it is settled. For example, if a company enters into a contract to purchase goods in a foreign currency, the spot rate at the time of settlement may be different from the rate at which the company initially entered into the contract, resulting in a gain or loss. Ex: if you buy a 100 euro good, let's say, and you are an American company on the day that you decide to buy that one hundred euro good, the exchange rate is 1.2 dollars to 1 euro. A 100 euro purchase will cost $120 at the time of making the transaction. Now, 90 days later when we have to pay the spot rate is now $1.40, so it actually costs us $140 for the 100 euro purchase. Its called transaction risk cause it has to do with sales, either selling or buying something.

Translation Risk

- translation risk has to do with multinational companies and their consolidated financial statements is just like a regular financial statement (IS, BS, Cashflow etc.). A consolidated financial statement is which is the risk that arises from the conversion of a foreign subsidiary's financial statements into the parent company's reporting currency, they must translate the foreign subsidiary numbers into the home country currency which will create a paper gain/loss that makes the subsidiary look better or worse than it did the day before. So, the fluctuating spot price can make the subsidiary look like it did better or worse than it actually is doing.

Ethnocentrism

A discussion of culture would not be complete without at least mentioning the concept of ethnocentrism The belief that one's own culture is most important . Ethnocentrism is the view that a person's own culture is central and other cultures are measured in relation to it. It is akin to one thinking that one's culture is the "sun" around which all other cultures revolve. In its worst form, it can create a false sense of superiority of one culture over others.

Differentiate Pull and Push models. a) Describe pull models and provide an example.

A pull model involves producing goods or services in response to customer demand. In this model, production is initiated only when an order is received, and the supply chain is designed to quickly fulfill customer orders. An example of a pull model is the make-to-order approach used by custom furniture makers who produce furniture only after a customer has placed an order. Or a someone ordering a subway sandwich

b) Describe push models and provide an example.

A push model involves producing goods or services based on forecasted demand via an automated schedule. In this model, production is initiated in anticipation of future demand, and the supply chain is designed to push products out to customers. An example of a push model is mass production of standardized products, such as smartphones or automobiles, or home depot stain.

Describe how banks investors and governments use financial statements.

Banks use financial statements to assess a company's creditworthiness and to make lending decisions. Investors use financial statements to evaluate the financial health and potential profitability of a company before making investment decisions. Governments use financial statements to regulate companies and ensure compliance with accounting and tax regulations.

7. How does culture influence performance evaluation?

Culture can influence performance evaluation in several ways, including the criteria used to evaluate performance, the importance placed on different aspects of performance, and the way feedback is given. For example, in some cultures, personal relationships are more important than results, while in others, the opposite is true. In addition, the way feedback is given can also vary, with some cultures valuing direct, honest feedback, while others prefer more indirect and subtle feedback.

What is culture in global business and Hofstede's six cultural dimensions

Culture refers to the values, beliefs, customs, behaviors, and artifacts shared by a group of people. Culture is something we learn through everyday interactions with the ones we interact with. Hofstede's six cultural dimensions are as follows: 1. Power distance 2. Individualism vs collectivism 3. Masculinity vs femininity 4. Uncertainty avoidance 5. Long-term vs short-term orientation 6. Indulgence vs restraint

Describe multinational production and its connection to decentralized production.

Decentralized production is often used by multinational corporations as a way to manage their operations across different countries. By distributing production activities across different locations, companies can take advantage of local resources, including labor, raw materials, and infrastructure, while also reducing transportation costs and improving responsiveness to local market conditions. For example, a multinational automobile manufacturer may have production facilities in several countries, each specializing in different aspects of the production process. One facility may focus on the assembly of engines, while another may specialize in the production of body panels. By decentralizing production in this way, the company can take advantage of local expertise and resources while maintaining consistent quality across its global operations.

Explain derivatives

Derivatives are financial instruments that derive their value from an underlying asset or benchmark, such as stocks, bonds, currencies, or commodities. There's a contract for what the price will be, so there is no uncertainty of wondering what the spot price will be. Derivatives are derived from the spot rate. Derivatives can be used for hedging purposes or for speculative purposes, such as betting on the future price movements of an asset. Common types of derivatives include futures contracts, options, swaps, and forwards.

Describe the Child Online Privacy Protection Act (COPPA) and how it is applied in business.

Enforced by FTC, requires companies that are collecting information from children under the age of 13 to in good faith, try to determine if the user is under 13, because if they are, then they must have parental approval before they can collect that information about that child.

Explain GAAP and IFRS.

GAAP and IFRS are two accounting standards used by companies to prepare their financial statements. While they share some similarities, there are several key differences between them:

Describe the differences between GAAP and IFRS and where they are applied.

GAAP is for the United States while IFRS is for international. The differences between GAAP and IFRS lie primarily in their approach to accounting for certain transactions and events. For example, GAAP generally requires the use of the historical cost method for valuing assets, while IFRS allows the use of fair value. GAAP also has specific rules for revenue recognition and leases that differ from IFRS. Companies that operate globally may need to prepare financial statements using both GAAP and IFRS to comply with local regulations.

Show the connection between GAAP and FASB.

GAAP stands for Generally Accepted Accounting Principles and is a set of accounting standards used in the United States. The Financial Accounting Standards Board (FASB) is the organization responsible for setting and updating GAAP standards.

GAAP stands for

Generally Accepted Accounting Principles and is a set of accounting standards used primarily in the United States. GAAP provides specific rules and guidelines for financial reporting, such as the use of the historical cost method for valuing assets and recognizes the importance of detailed disclosures in financial statements. FASB sets rules for GAAP. Standardization enables diverse organizations and parties to communicate effectively.

Describe the risks associated with investing financing and foreign exchange in global business

Global business involves, various risks that companies must manage to succeed. These risks can be categorized as political, legal, societal and cultural, and financial and economic risks.

Global integration

Global integration is going to be the degree to which the company is able to use the same products. Global integration refers to how a company standardizes its products, services, and operations across different countries. This can help the company achieve economies of scale and reduce costs, as it can produce and distribute its products more efficiently. A company that is highly integrated globally tends to use a standardized approach to its operations and products across different markets.

Explain hedging

Hedging refers to a risk management strategy that involves taking an offsetting position in a financial instrument to minimize or eliminate potential losses from adverse price movements. It is a way for companies and investors to protect themselves against unpredictable market fluctuations that can negatively impact their business or investments. "not betting it all on one horse"

Multidomestic strategy is going to be _______ in local responsiveness but _______ in global integration.

High, Low

Define host country nationals. Provide examples

Host country nationals are employees who are hired from the local population in the host country. For example, a Chinese employee working in a branch office in China is considered a host country national.

Explain the cultural features in Latin American societies. Be sure to explain the concept of time

In Latin American societies, the concept of time is often viewed as more flexible and fluid than in Western cultures. Punctuality may not be as highly valued, and people may be more comfortable with interruptions and unexpected changes in plans. This is because relationships are highly valued in Latin American cultures, and time is often seen as a resource that can be negotiated and exchanged for social benefits. In business settings, building trust and establishing personal connections through socializing and small talk may be necessary before discussing business matters, which can lead to a slower pace of business. Understanding these cultural norms and expectations around time and socializing is important for successful business operations in Latin America.

IFRS stands for

International Financial Reporting Standards and is a set of accounting standards used in over 140 countries outside the United States. IFRS emphasizes the use of fair value accounting, where assets and liabilities are valued based on current market prices and focuses on presenting financial statements that are clear and understandable to a global audience. IFRS is set by the IASB. Harmonization and unification of various accounting standards used throughout the world. Relevant due to increased international investments, gives us more options to know how to invest internationally, such as a US company issuing stock in Europe- makes IFRS relevant.

The three concerns expressed by the Miniwatts Marketing Group are:

Internet penetration rates: This refers to the percentage of the population that has access to the internet. The group is concerned about low penetration rates in certain regions, which may limit the effectiveness of online marketing campaigns. Infrastructure: The group is concerned about the quality and availability of infrastructure, including internet connectivity and electricity, which may limit the ability of people in certain regions to access and use online services. Language barriers: The group is concerned about the diversity of languages spoken in different regions, which may make it difficult to create effective online marketing campaigns that are culturally relevant and resonant with local audiences.

People who have high uncertainty avoidance generally prefer to avoid conflict and competition. They tend to appreciate very clear instructions. At the office, sharply defined rules and rituals are used to complete tasks. Stability and what is known are preferred to instability and the unknown. Company cultures in these countries may prefer low-risk decisions, and employees in these companies are less willing to exhibit aggressiveness. ____________ and ____________ are often considered clear examples of such societies.

Japan and France

Masculinity versus femininity is how society views traits that are considered masculine or feminine, respectively. This value dimension refers to how a culture ranks on traditionally perceived "masculine" values: assertiveness, materialism, and less concern for others. In masculine-oriented cultures, gender roles are usually crisply defined. Men tend to be more focused on performance, ambition, and material success. They are tough and independent personas, whereas women cultivate modesty and quality of life. Cultures in _____________ and ________________are examples of masculine-oriented cultures.

Japan and Latin America

high power distance cultures openly accept that a boss is "higher" and, as such, deserves more formal respect and authority. Examples of these cultures include

Japan, Mexico, and the Philippines. In Japan or Mexico, the senior person is almost a father figure and is automatically given respect and usually loyalty without questions.

On the other hand, in collectivist societies, group goals take precedence over individuals' goals. Basically, individual members render loyalty to the group, and the group takes care of its individual members. Rather than giving priority to "me," the "us" identity predominates. Of paramount importance is pursuing the common goals, beliefs, and values of the group as a whole—so much so, in some cases, that it is nearly impossible for outsiders to enter the group. Cultures that prize collectivism and the group over the individual include ____________, _____________, ___________, __________, and ________ nations.

Japan, Singapore, Korea, Mexico, and Arab nations

In contrast, feminine cultures are thought to emphasize "feminine" values: concern for all, an emphasis on the quality of life, and an emphasis on relationships. In feminine-oriented cultures, both genders swap roles, with the focus on quality of life, service, and independence. The ______________________ cultures rank as feminine cultures, as do cultures in ________________ and _________________. The _____________________ is actually more moderate, and its score is ranked in the middle between masculine and feminine classifications. For all these factors, it is important to remember that cultures do not necessarily fit neatly into one camp or the other.

Northern European. Switzerland and New Zealand. The United States

What is an organizational structure?

Organizational structures are the formal system of tasks and authority. It's going to show the relationships of control, how businesses are going to coordinate their actions and use resources to achieve organizational goals.

What is outsourcing and insourcing?

Outsourcing is the practice of hiring external companies or individuals to perform certain business functions or processes that would otherwise be handled internally. Insourcing is the opposite of outsourcing and involves bringing in-house functions or processes that were previously outsourced. Insourcing is where the company develops all the outputs.

List the reputable primary and secondary sources for learning about foreign cultures.

Primary sources - Our primary sources are going to be where we talk to people who have firsthand account of the culture. Examples: • Talking to employees who have lived or worked abroad • Talk to executives who have traveled to other countries • Training programs • Consulting firm Secondary Sources - Reading!!!! • U.S. Department of Commerce's country commercial guide • We can also refer to lots of other printed, peer reviewed, edited documents put together by people, again, who are very familiar with the culture.

In _______________, _______________, and much of _______________, power is an integral part of the social equation. People tend to accept relationships of servitude. An individual's status, age, and seniority command respect—they are what make it all right for the lower ranked person to take orders. Subordinates expect to be told what to do and will not take initiative or speak their minds unless a manager explicitly asks for their opinion.

Southern Europe, Latin America, and much of Asia,

Explain the connection between standardization and economies of scale.

Standardization uses the same processes and products/services which will lead to great potential to save costs using economies of scale to lower costs.

What is supply chain? Define supply chain and supply chain management. include key supply chain activities in your answer.

Supply chain refers to the series of interconnected entities, activities, and resources involved in the production, delivery, and distribution of goods and services from suppliers to customers. Supply chain management involves the coordination and management of these activities and resources to optimize efficiency, reduce costs, and improve customer satisfaction. Key supply chain activities include procurement, production planning, inventory management, transportation and logistics, and customer service.

Describe Acceptable Use Policy (AUP) and provide an example.

The AUP, acceptable use policy, is privacy and security at the individual level. An Acceptable Use Policy (AUP) is a set of rules and guidelines that define how an organization's computer network and resources can be used. It outlines acceptable and unacceptable behaviors and activities on the network, as well as the consequences of violating the policy. Examples: • Employees may use company computers and networks only for work-related purposes. • Employees may not access or share offensive or inappropriate content on company networks or devices.

Describe the 4th industrial revolution

The Fourth Industrial Revolution (4IR) is a term that describes the blurring of the lines between physical, biological (people power, in other words), and digital. Technology allows for lower costs, no longer limited to our geographical footprint, and its easier to staff

Describe General Data Protection Regulation (GDPR) and its features

The General Data Protection Regulation (GDPR) is a data protection and privacy regulation implemented by the European Union (EU). It aims to protect the personal data of EU citizens by setting standards for how organizations collect, process, store, and share personal data from domestic and international companies. The key features of GDPR include: Extraterritorial scope: GDPR applies to all organizations that process personal data of EU citizens, regardless of where the organization is located. Consent: Organizations must obtain explicit and informed consent from individuals to collect and process their personal data. Data subject rights: Individuals have the right to access, rectify, erase, and restrict the processing of their personal data. Data portability: Individuals have the right to receive their personal data in a structured and machine-readable format. Data breach notification: Organizations must notify individuals and data protection authorities within 72 hours of a data breach. Privacy by design and default: Organizations must implement data protection measures and privacy principles into their systems and processes from the outset.

Explain the conditions where each tax system is advantageous to multinational companies.

The choice between flat rate tax systems and tax brackets will depend on the specific circumstances of the multinational company, such as the industry, location, and business model. For example, companies that generate a significant portion of their income from intellectual property may benefit from a flat rate tax system, while companies with a large workforce may benefit from a tax bracket system.

How is expatriate's compensation package determined in global business?

The compensation package for expatriates is usually determined through a combination of factors, including companywide pay scales and policies, and the balance sheet approach. Are we going to keep them on the home country salary structure or are we going to put them on the host country salary structure? Must account for income taxes, housing, goods and services, base salary, overseas premium, legal requirements for pay in other countries.

6. How does culture influence staffing strategies? a) Describe the ethnocentric HR strategy and explain the advantages and disadvantages of this strategy.

The ethnocentric HR strategy is a staffing approach where the company's policies and procedures are designed based on the parent country's culture. In this approach, key positions are filled with individuals from the parent country, and other employees are primarily from the host country. The advantages of this approach include a unified corporate culture, a strong emphasis on the parent company's objectives, and effective control over subsidiary operations. Example would be Costco opening in China and using United States managers (where Costco is located). However, the main disadvantage is that it can create resentment and a lack of motivation among host-country employees, who may feel that they are being treated unfairly. We're going to take the same H.R. policies that are used in the home country and then use them in our foreign subsidiaries by using home country managers overseas.

c) Describe the geocentric HR strategy and explain the advantages and disadvantages of this strategy.

The geocentric HR strategy is a staffing approach where the company's policies and procedures are designed based on a global or international culture. In this approach, key positions are filled with individuals from anywhere in the world, and other employees are from a variety of nationalities. The advantages of this approach include a truly global approach to business, with the ability to take advantage of the best talent from around the world, and a flexible approach to business operations. Geocentric is kind of like modern commercials where we are having people give input from all over the world. The main disadvantage is that it may be difficult to develop a cohesive corporate culture, with the potential for conflicts between local and global objectives.

Explain the global trend in tax rates and the reasons for it.

The global trend in tax rates is towards a flat tax for companies which results in a lower rate to be more competitive. Many countries have moved away from brackets over to a flat tax rate system for corporate taxes and the United States, in fact, is one of those countries. The US did this in 2018 to encourage foreign companies to do business here.

Describe the polycentric HR strategy and explain the advantages and disadvantages of this strategy.

The polycentric HR strategy is a staffing approach where the company's policies and procedures are designed based on the host country's culture. Foreign subsidiaries are given control over hr policies and decision making. In this approach, key positions are filled with individuals from the host country, and other employees are primarily from the host country. The advantages of this approach include a better understanding of the local culture and customs, greater sensitivity to local needs, and the ability to develop a more independent and self-sufficient local workforce. The main disadvantage is that it may create a fragmented corporate culture, with the potential for conflicting objectives between headquarters and subsidiaries.

In Latin American countries significant cultural features are:

They're much more laid back when it comes to time available and have an attitude of there is always tomorrow, so no need to rush. They like to develop personal relationship first. Not concerned with starting on time or getting right to business. Very concerned with hierarchy. Only conducting business with the highest ranking person who is there.

Define third-country nationals

Third-country nationals are employees who are from a country other than the home or host country, but who are sent to work in the host country. For example, a German employee working in a branch office in China is considered a third-country national.

Explain indulgence vs restraint.

This dimension describes the extent to which a society indulges in the pursuit of pleasure and enjoyment. Indulgent cultures prioritize personal enjoyment and pleasure, while restrained cultures emphasize self-control and discipline. Examples of indulgent cultures include the United States, Denmark, and Mexico, while examples of restrained cultures include China and Japan

Explain the differences of long-term and short-term orientation and provide examples of each.

This dimension describes the extent to which a society values long-term planning and persistence over short-term gratification. Long-term oriented cultures emphasize perseverance and thrift, while short-term oriented cultures value immediate results and gratification. Examples of long-term oriented cultures include China and Japan, while examples of short-term oriented cultures include the United States, Mexico, and Denmark.

Explain the differences between masculine and feminine cultures and provide examples of each.

This dimension describes the extent to which a society values traditional masculine traits such as competitiveness and achievement, versus traditional feminine traits such as cooperation and caring. Masculine cultures value heroism, assertiveness, material rewards for success, and achievement, while feminine cultures value caring for the weak, modesty, Quality of life, and cooperation. Masculine Cultures likely have clearly defined gender roles, feminine does not define gender roles. Examples of masculine cultures include Japan, Mexico, China, and United States, while examples of feminine cultures include Denmark.

Explain the differences between individualistic and collectivist cultures and provide examples of each.

This dimension describes the extent to which people prioritize individual goals over the goals of the group. (asks "I" or "we"). Individualistic cultures prioritize individual freedom (take care of only themselves and immediate family, prefer to be left alone), while collectivist cultures emphasize the importance of the group. Examples of individualistic cultures include the United States and Denmark while examples of collectivist cultures include China, Japan, and Mexico. Ants are very collectivist creatures for example by bringing back food to the group.

Define Power distance. Explain the differences between high and low power distance cultures and provide examples

This dimension describes the extent to which power is distributed unequally in a society. High power distance cultures accept and expect unequal distribution of power, whereas low power distance cultures strive for equality. Examples of high power distance cultures include India, Japan, China, and Mexico, while examples of low power distance cultures include United States, and Denmark. Low power is not concerned with rank, title or authority, low power may call their managers by their first name. High power thinks power is important, such as Indian parents preferring their kids to be doctors.

Define transfer pricing

Transfer pricing is the price that one subsidiary charge another subsidiary when they basically transfer inventory. The company will try to charge a price that minimizes the profit of a subsidiary that's located where corporate taxes are high and they'll maximize profit for a subsidiary located in a country that has a low corporate tax rate. This will maximize total profit for the company as a whole using transfer pricing (subsidiaries are kind of like separate companies so they can charge each other to put the tax code in their favor). Companies cannot just make up any price, must make sense from a market standpoint (market price that you could sell) or the IRS will come knocking.

Describe the various types of products adaptation

Used in international markets by a firm that are different from those used in domestic market. every single market, every single product marketing campaign, is going to be unique and we're going to make modifications.

China Culture info

You have been introduced to some of the broad cultural differences that you might encounter in different countries. Now take a closer look at the culture of an important player in international commerce: China. Many companies are eager to penetrate the emerging consumer market in China but struggle to maneuver through the cultural expectations. One of the most important cultural factors in China is the concept of guanxi (pronounced guan-shi), which is loosely defined as a connection between two or more unequal parties that includes an exchange of favors. China is a relationship-based society, where relationships extend well beyond the personal side, also driving business. With guanxi, a person invests in relationships much like one would invest in capital. In a sense, it is akin to the Western phrase "You owe me one." When conducting business in China, businesses might need to seek out a relationship in order to gain access to more influential decision-makers. At its best, guanxi can help foster strong, harmonious relationships with corporate and government contacts. On the other hand, it can encourage bribery and corruption. Whatever the case, companies without guanxi will not accomplish much in the Chinese market. Many companies address this need by entering the Chinese market in a collaborative arrangement with a local Chinese company.

Fronting loans involve using

a third-party lender to disguise a loan between related companies for tax purposes. These practices can impact the tax payment for companies by reducing their tax liability and increasing their profits. However, they can also lead to tax audits and legal penalties if not done properly. Basically they are administered by a bank to have a parent company loan the subsidiary some money and the parent gains some tax benefits by fronting loans and it helps out the subsidiary as well

Describe the 5 ways supply chain management improves customer value.

a) Cost reduction: Effective supply chain management can reduce costs throughout the supply chain, resulting in lower prices for customers. b) Improved quality: Supply chain management can ensure consistent quality throughout the supply chain, resulting in higher-quality products for customers. c) Faster delivery: Supply chain management can reduce lead times and increase delivery speed, resulting in faster delivery times for customers. d) Increased flexibility: Supply chain management can increase flexibility in responding to changes in customer demand or market conditions, resulting in more tailored and responsive products and services for customers. e) Enhanced sustainability: Supply chain management can promote environmentally and socially responsible practices, resulting in products and services that are more sustainable and socially responsible.

Explain the 3 company culture training methods and provide examples. (See Lesson 35)

a) Documentary training: This training method involves the use of videos, documentaries, and other multimedia tools to educate employees about different cultures. These tools provide a visual representation of various cultural practices and can be used to highlight differences in communication styles, social norms, and other cultural aspects. An example of documentary training is using a video to educate employees about business etiquette in Japan. b) Cultural simulation training: This training method involves creating simulated environments that replicate the cultural practices and norms of different cultures. This type of training can include role-playing activities, case studies, and other experiential learning exercises (such as games) that help employees gain a deeper understanding of different cultural contexts and what is apropriate. An example of cultural simulation training is conducting a role-playing activity to simulate a negotiation with a business partner from a different cultural background. c) Field simulation: This training method involves immersing employees in real-world cultural contexts by sending them to different countries to work with local teams, visit customers, or attend trade shows. This type of training provides employees with hands-on experience working in a foreign culture and helps them develop cross-cultural competencies such as adaptability and cultural awareness. An example of field simulation is sending employees to a trade show in China to learn about the local market and business practices.

Describe the considerations for relocating production facilities.

a) Growth (high growth potential) - search for high-growth areas such as emerging economies. For example, the automotive industry has been challenged by low sales growth and declining margins in mature markets. The world's automotive assemblers want to capture market share and the fastest-growing markets. They want their chosen suppliers to be with them so that they can sell them locally for cheap shipping costs in a growing economy. b) Government incentives - To get special deals or tax breaks for doing business makes it a desirable location. Malaysia, for example, established a multimedia super corridor which offers tax breaks, for desirable facilities and modern infrastructure and other factors such as uninterrupted power supply and connections to transportation infrastructure c) Costs - reducing costs such as input costs, environmental regulations, interest rates and trade policy is another powerful driver for manufacturing relocation. For example, a shoe producer may relocate from the United States to Indonesia, where rubber and labor is inexpensive. d) Innovation - innovation is important as manufacturers continue to move eastward. Procter and Gamble, for example, moved away from high tech automation intensive production processes and develop low cost, low tech, labor intensive diaper manufacturing in a Vietnam facility for emerging markets, the company formed a network of 150 low cost machine builders who could supply manufacturing equipment to its Vietnam factory The equipment was not at the same level as its U.S. based manufacturing equipment, but the company realized the reengineered process could be used in other countries and in other product lines..

Describe the risks associated with outsourcing and connect the reasons for insourcing.

a) Loss of control - Outsourcing can lead to a loss of control over business processes and operations, which can result in reduced quality or service levels, and the inability to respond quickly to changes in the market or customer demands. We are unable to monitor performance to ensure high standards and finishing on time. b) Loss of innovation - Outsourcing may result in a loss of innovation within a company, as external providers may not have the same level of knowledge or understanding of the company's products, services, or industry as internal staff. In addition making changes can be extremely time-consuming and require contract negotiation as we outsourced it. c) Loss of organizational trust - Outsourcing can lead to a loss of trust within an organization, as employees may feel that their jobs are being outsourced or that the company is not investing in its workforce. It can cause deep psychological trust issues between employees and employer relationships as that relationship was breached. d) Higher than expected transaction costs - As the level of contractual complexity increases, production schedules may be disrupted or contractual disagreements may develop. If outsourcing contracts inappropriately or incorrectly detail work specifications, third party companies may be tempted to behave opportunistically, such as using subcontractors or by charging unforeseen, unwarranted price increases to exploit the purchasing companies' dependency.

Explain the advantages of outsourcing.

a) Lower costs - Outsourcing can often lead to lower costs due to economies of scale of large suppliers and the ability to access cheaper labor in other countries. b) Greater flexibility - Outsourcing can provide greater flexibility in terms of scaling operations up or down, as well as the ability to quickly access specialized skills or expertise when needed. In addition we have the option to use competition to pick a better/best supplier. c) Enhanced expertise - Outsourcing can provide access to expertise and skills that may not be available in-house, especially in areas such as IT or marketing. d) Greater discipline - Outsourcing can help improve discipline and efficiency within a company by providing clear performance metrics and accountability for outsourced functions. e) Focus on core activities - Outsourcing non-core functions can allow a company to focus on its core activities and strategic goals, leading to improved competitiveness and profitability. Such as mr beast outsourcing video editing he can focus on making the best videos possible.

Describe the considerations for locating production facilities.

a) Shipping - Shipping costs are an important consideration, and the value-to-weight ratio of the product can play a significant role. Products with a high value-to-weight ratio, such as electronics, or diamonds are typically produced in centralized facilities and shipped to customers as they have lower transportation costs which allows the company to have fewer production facilities and use the export strategy. Products with a low value-to-weight ratio, such as sports drinks, may be produced in decentralized facilities closer to the customer since shipping costs are expensive. b) Workforce - The availability of a skilled workforce is crucial to the success of production facilities. The location of the facility should be in an area where there is a sufficient pool of potential employees with the necessary skills. Why silicon valley is so popular. c) Costs (fixed costs and breakeven) - Fixed costs, such as land, building, and equipment costs, are an important factor when considering the location of production facilities. Additionally, it is important to consider breakeven costs, which can be affected by factors such as labor costs, taxes, and utility costs. The lower the fixed costs the lower the breakeven point will be as we will need a smaller investment amount. A lower Minimum efficient scale means that the company will be able to achieve economies of scale at lower levels of production with lower levels of fixed costs as it lowers the amount of investment needed by choosing an area or plant that is cheaper. d) Community - The impact of production facilities on the local community should be taken into account, including factors such as the availability of infrastructure and the impact on the local environment. In addition the different cultures can cause issues. e) Country factors - The country in which the facility is located can affect factors such as labor laws, regulations, and political stability. It is important to consider these factors when choosing a location for production facilities. f) Business environment - The overall business environment in the location should also be considered, including factors such as the ease of doing business, financial incentives, availability of financing, and intellectual property protections. g) Market impressions - The location of production facilities can also affect market impressions of the company and its products. For example, companies may choose to produce products in certain locations to take advantage of the reputation for quality associated with those locations.

Smartphone technology is important to the world's agricultural sector because it

can improve agricultural productivity, increase access to markets and information, and provide real-time data on crop yields, weather patterns, and soil conditions. Farmers can use smartphones to access agricultural apps, receive weather alerts, and connect with buyers and sellers in real-time. This can help small farmers to increase their income and improve their livelihoods. Additionally, smartphone technology can facilitate the adoption of precision agriculture techniques, which can reduce waste, increase efficiency, and minimize environmental impacts.

A company that is highly responsive locally tends to

customize its approach to each market to meet local needs.

Usability divide (three stages of the digital divide)

even after people can afford technology, perhaps for the first time, that technology is rather complicated and sometimes they don't understand how to use it even after they can afford it.

Define uncertainty avoidance

explain the differences between high and low uncertainty avoidance cultures and provide examples of each., This dimension describes the extent to which a society tolerates ambiguity and uncertainty. High uncertainty avoidance cultures have a low tolerance for ambiguity and prefer clear rules and guidelines and are "risk fearing" and have rigid codes of belief and behavior. While low uncertainty avoidance cultures are more comfortable with ambiguity and unpredictability. Low uncertainty avoidance are "Risk loving" and encourage creativity and new unorthodox approaches. Examples of high uncertainty avoidance (risk fearing) cultures include Japan and Mexico while examples of low uncertainty avoidance cultures (risk loving) include United States, China, and Denmark.

3. How can verbal language and body language cause issues in business communication? Use examples to illustrate. a) Verbal

i. Different languages - Different languages can cause issues in business communication when the parties involved do not speak the same language. It can lead to misunderstandings and misinterpretations of messages, which can be detrimental to the success of the business communication. For example, a company trying to enter a new market in a foreign country may face communication challenges if they don't speak the language of the target market.

Direct distribution is

insourcing (we produce it), Under a direct distribution strategy, by comparison, all of these functions are done by the producer. They directly pruduce it ourselves

Empowerment divide (three stages of the digital divide)

not using it to the full potential of the technology. They may be using something like 10 percent of the functionality of a technology, that technology that they've paid for. Most difficult divide to solve.

Indirect distribution is

outsourcing (someone else produces it), indirect distribution strategy involves the use of third party intermediaries such as agents, wholesalers and retailers to move products from the producer to the final consumer.

The GDPR has significant implications for organizations that handle

personal data of EU citizens. Organizations must comply with strict rules regarding data protection and privacy or face heavy fines and other penalties for non-compliance. The GDPR has also led to increased awareness and concern about data privacy among individuals and organizations worldwide.

The Enterprise Resource Planning system is a system that

pulls together data from all over the company no matter where it originated, so that each person in each department has the data they need to do their job. An enterprise resource planning system is about integrating the data. It is a collection of all the applications needed to run an organization.

Management Information Systems

run ad hoc custom reports and standard stored reports for the use of management so that management can make timely, informed decisions daily.

The short-term orientation values tradition only to the extent of fulfilling social obligations or providing gifts or favors. These cultures are more likely to be focused on the immediate or short-term effects of an issue. Not surprisingly, the ___________________ and the __________________ rank low on the long-term orientation.

the United Kingdom and the United States

Goods & Services Tax (GST):

type of value-added tax that is applied to the supply of goods and services in a country. It is a comprehensive tax that covers all stages of production and distribution. GST is a destination-based tax, meaning that the tax is collected in the country where the final consumer purchases the goods or services. GST is used in several countries, including Canada, Australia, and India, and rates vary by country and by product or service. The implementation of GST is usually done to simplify the tax system, eliminate multiple taxes, and boost revenue collection for the government.

Export Strategy

using the same product, same strategies, same marketing approach in all of the different markets that we're in. Not interested in global expansion. We simply export products (the same products) for all markets. Export strategy is going to have low global integration as well as low local responsiveness.

Same language

—same words different meaning: Even when parties speak the same language, the same words can have different meanings in different cultures. For instance, the word "yes" can mean agreement in one culture but mean acknowledgment in another. Such misunderstandings can cause confusion and negatively impact business

Divisional Structure advantages:

• Groups people together to serve the needs of products, markets, or geographical regions. • Greater operational flexibility • Concentrate efforts and expertise • Failure of one division does not directly threaten the other divisions • In the multidivisional structure, subsidiaries benefit from the use of the brand and capital of the parent company

Disadvantages of matrix:

• Increased complexity when employees assigned to both function and project managers. • Higher manager to worker to manager ratio which can cause loyalty conflicts and raise costs • Blurred authority can result in reduced agility in decision making and conflict resolution.