IMS Test 2

Cultural dimensions in advertising

1. Directness vs. indirectness (U.S. vs. Japan) 2. Comparison—banned in most countries 3. Humor does not translate well 4. Gender roles—what is appropriate differs by culture 5. Explicitness—cultures have different tolerance levels 6. Sophistication varies by culture 7. Popular vs traditional culture varies 8. Information content vs fluff

United Nations

193 countries dedicated to promote peace. Informal and Normative. Support for business: - Agreements of standards - Groundwork for investment, social problem, ... - Conferences dedicated to trade

Bretton Woods

1944 conference at which Allied nations' treasury and central bank representatives met to establish the International Monetary Fund and the World Bank

European Union (EU)

A body of 27 European countries committed to economic and political integration

Extraterritorial application of laws

A country's attempt to apply its laws to nonresidents and foreigners, and to activities that take place beyond its borders

Intellectual Property (IP)

A creative work or invention that is protectable by patents, trademarks, trade names, copyrights, and trade secrets

Corporate visual identity (CVI)

A firm's name, logo, slogan, graphics, color, and typeface that help identify the firm to consumers and other interested constituents

Patent

A government grant giving the inventor of a product the exclusive right to manufacture, exploit, use, and sell that invention or process country-specific, with different approaches to protection

Programmed-management approach

A middle-ground advertising strategy between globally standardized and entirely local programs

Trade Names

A name used by a merchant or manufacturer to designate and differentiate its products Protected under WIPO (UN) and TRIP (WTO)

Chapter 13: Marketing mix

A set of strategy decisions made about the product and its promotion, pricing, and distribution in order to satisfy the needs and desires of customers in a target market

Association of Southeast Asian Nations (ASEAN)

Agreement among Southeast Asian nations that began as a security agreement, grew to a free trade agreement, and is continuing toward a common market, known as AFTA

North American Free Trade Agreement (NAFTA)

Agreement that created a free-trade area among the United States, Canada, and Mexico.

Promotion

Any form of communication between a firm and its publics Strategy: Product | Message Same Same Same Diff Adapt Same Adapt Adapt ....

Trade secret

Any information that a business wants to hold confidential Most common type of IP protection

Religious Law

Based on religious document or source.

General Assembly

Body of UN made up of all member nations, each with one vote regardless of size, wealth, or power

Customary Law

Central to the very identity of many indigenous peoples and local communities. These laws and protocols concern many aspects of their life. Relate to use of and access to natural resources, rights and obligations relating to land, inheritance and property, conduct of spiritual life, maintenance of cultural heritage and knowledge systems, ...

Q141: Identify several of the major factors that may affect the quantity and quality of labor in a nation

Characteristics of the population as age, urbanization, immigrant labor availability, guest workers, brain drain, and unionization.

Q131: Discuss why international marketing managers may wish to standardize the marketing mix.

Cost savings of using the same product and promotional mix. Easier to control the program and less time needs to be spent on the marketing plan.

Common Market

Custom union that includes mobility of services, people, and capital within the union

Trademarks

Designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products

Q143: Compare recruitment and selection considerations for home-country, host-country, and third-country nationals as international company executives.

Differences: culture, language, ability, and experience 1) Ethnocentric: home country as reference 2) Multidomestic: often use polycentric staffing - using PCN for HQ and HCN for subsidiaries 3) Regional: mix HCN and TCN for key positions 4) Transnational: use geocentric staffing - select best for the job without considering national origin

Organisation for Economic Co-operation and Development (OECD)

- Group of developed countries dedicated to promoting their own and other nations' economic expansion - Provides research on economic and business topics, important for international business

Common Law

- relies on decisions made by judges in previous cases along with statutes and regulations made by legislatures. Precedents (earlier decisions) are part of the process, law is always in process. - judges decide on the meaning and constitutionality of statutes - tend to be more adversarial (problematic) than civil law system since they are more flexible - judge is charged with interpreting law

World Health Organization (WHO)

Essential role in the global governance of health and disease. Establish, monitor, enforcing international norms and standards

Guanxi Vs. Networking

Guanxi: Unique part of Chinese culture, used in place of legal/ formal rules, personal relationship need to be built before deal can be done Networking: Western business culture developed set distinct rules. No substitute for legal system. Distinction between business and personal relationships

Madrid Agreement of 1891

Made Madrid system more flexible, compatible with domestic legislation and intergovernmental organization

Security Council

Main peacekeeping body of UN, 15 members with 5 permanent members

Secretariat

Staff of UN, headed by the secretary-general

Q63: Discuss the general legal concerns in global business

Three areas (affect activities in international setting, not domestic): 1) Extraterritorial: apply laws outside its territory 2) Performance of Contracts: in case of disputes/ problems, it become complex because no ready resolution 3) Litigation: legal proceeding conducted to determine and enforce particular legal rights, can be complicated and expensive

Q142: Explain the relationship between competitive strategies (international, multidomestic, global, and transnational) and international human resource management approaches (ethnocentric, polycentric, regiocentric, and global).

Three competing forces (1: Achieve global integration, 2: Reduce costs, 3: respond to local differentiation) determine what alternative competitive strategy (home replication, multidomestic, global, transnational) IHRM policies determine what competive strategy to use.

Tort Law

Tort: An injury inflicted on another person, either intentionally or negligently Product liability: A standard that holds a company and its officers and directors liable and possibly subject to fines or imprisonment when their product causes death, injury, or damage Strict liability: - A standard that holds the designer or manufacturer liable for damages caused by a product without the need for a plaintiff to prove negligence in the product's design or manufacture

Q132: Distinguish among the total product, the physical product, and the brand name.

Total Product: its components can be alter as part of product adaptation Brand name: can stay the same while product change or vise versa

United Nations Solution to Performance Contracts

UN Convention on the International Sale of Good: specifies seller and buyer rights - applied automatically and ratified in most countries

Economic and Social Council (ECOSOC)

UN body concerned with economic and social issues such as trade, development, education, and human rights

International Court of Justice (ICJ)

UN body that makes legal decisions involving disputes between national governments

QA3: Describe the United Nations as an institution and its relevance to international managers.

UN is informal, normative based on moral principles and social obligation. Un has 5 main bodies: 1) General Assembly: voting forum 2) Security Council: peace and security 3) Economic and Social Council: trade, education, health, economic,... issues 4) International Court of Justice: international cases 5) Secretariat: headed by secretary-general, administrative arm of the UN

New Institutional Theory

Understanding of institutions as social constructs, a collection of norm that structure the relations of individual to one another

Incoterms

Universally accepted terms of sale that specify how the buyer and the seller share the cost of freight and insurance in an international transaction and at which point the buyer takes title to the goods. Ex: 1) FAS (free alongside ship) 2) CIF (cost, insurance, freight) 3) CFR (cost and freight)

trade-related intellectual property rights (TRIPS)

WTO agreement that protects copyrights, trademarks, trade secrets, and other intellectual property matter

Total product

What the customer buys, including the physical product, brand name, accessories, after-sales service, warranty, instructions for use, company image, and package

Cognitive Information Institution

Work through set of shared assumptions that shape meaning Collection of shared ideas that define reality by means of conceptual frameworks or schema. Often Explicit or tangible

Foreign Corrupt Practices Act (FCPA)

a law that prohibits U.S. corporations from making illegal payments to public officials of foreign governments to obtain business rights or to enhance their business dealings in those countries - May create comparative disadvantage for US companies - Does not prohibit grease

Treaties

agreements between countries. AKA: conventions, covenants, compacts, or protocols

Arbitration

alternative to court litigation, dispute is submitted, by agreement of the parties, to one or more arbitrators for a binding decision - Consensual, neutral, confidential, final and easy to enforce decision - Quicker, less expensive, more private

Civil Law

based on codification, that is, a systematic collection of laws designed to cover all areas of concern and, hence, is bureaucratic (business of running an organization) - less adversarial (conflict) than common law (see below), since the role of the judge is to apply codified law rather than to interpret law, previous rulings, and tradition - court in a civil law environment is not a forum where two sides battle to demonstrate to a judge or jury who is right and who is wrong, as is the case with common law, where the judge is supposed to be impartial

African Union

continental body consisting of the 55 member states that make up the countries of the African Continent. African union Commission (AUC): opportunities for the development of youth in Africa

Comprehensive Nuclear Test Ban Treaty Organization (CTBTO)

international organization that will be established upon the entry into force of the Comprehensive Nuclear-Test-Ban Treaty, a Convention that outlaws nuclear test explosions

Q135: Discuss some of the effects the Internet may have on international marketing

makes more pricing information available, increases the possibilities of distribution, make the offering much more personal in terms of sizing and other variables.

Glocal advertising

movement toward middle of standardized-localized spectrum on advertising

Q136: Explain "glocal" advertising strategies.

to design an international program and then make local adjustments that local managers find necessary.

Normative Informal Institution

work through values and norms organizations that establish standards and propagate principles (UN, NGOS, social groups)

Reason for advertising increase

1. Cost savings 2. Quality more easily achieved 3. Brand image on regional level 4. Regionalization 5. Easily transmitted 6. Economies of scale

Chapter 6: Type of Legal System

1) Civil Law 2) Common Law 3) Religious Law

Q61: Describe the three types of legal systems.

1) Civil Law: collection of codes - bureaucratic (business run gov) 2) Common Law: precedent and interpretation. Complex and evolving 3) Religious law: religious texts - Koran, religious document - Saudi Arbia

5 Categories of Trademark

1) Fanciful: made-up words for trademark name (Exxon, Kodak) 2) Arbitrary: real words that are unrelated to product (Apple for computers) 3) Suggestive: named after a characteristic of product (Microsoft for software) 4) Descriptive: description of the product 5) Genetic: cannot be protected because too generic (Corn Flakes)

Criticism of the IMF

1) Forcing free-market policies on poor countries 2) Increasing poverty and political chaos (Bolivia, Indonesia, Thailand) Current IMF Issue: 1) Aids + mandatory advice to reduce budget deficit and inflation >>> Increase Poverty 2) IMF controlled by developed Western countries 3) IMF has strengthened economies of dictatorial regimes that become markets for multinations. 4) IMF making attempts to address these issues

QA2: Describe institutions, drawing on new institutional theory

1) Formal institution: law and regulation 2) Informal: custom and ideologies - Normative: values and norm - Cognitive: set of share assumptions that shape meaning

Four major forms of economic integration

1) Free trade area (no tariffs among members) 2) customs union (free trade + common external tariff) 3) common market (custom union + mobility of service, ppl, capital) 4) Complete integration (common market + common currency + additional economic/ political integration)

Complexity of IP Protection

1) Harmonization of patents (protection between countries) 2) Patent Trolls - lawyers and investors who buy patents that were mistakenly granted

Internet effects on types of goods

1) Industrial and luxury goods: supports standardization. 2) Capital goods: supports standardization. Bridging is communicating across these differences and building awareness of shared values. 3) Consumer goods: if low-priced, consumed in the same way and bought for the same reasons, supports standardization

Q64: Identify methods to protect intellectual property

1) Patents: exclusive right to manufacture, exploit, use, and sell 2) Trademarks: a shape, color, design, phrase, abbreviation, or sound for product differentiate 3) Trade names: name used to differentiate product 4) Copyrights: 5) Trade secrets: information that a business wants to hold confidential Protection: - UN's World Intellectual Property Organization (WIPO) - WTO's TRIP

Benefits of Economic Integration Agreements

1) Peace and Security 2) Single Market 3) High food and environment standard 4) Consumer Benefit 5) Human Rights 6) Global Power (Citizens benefits in working and traveling to other EU nations)

Foreign Environmental Forces

1) Sociocultural forces: reflect consumer preferences 2) Legal forces exert significant impact on marketing decisions 3) Economic forces affect pricing, packaging, production 4) Physical forces such as climate and terrain often require adjustment in product and production

Standardization Mix vs Adaptation Mix vs New Mix In new Market

1) Standardization: is less costly, and allows for longer production runs (economies of scale and learning). Standardized corporate visual identity creates consistent image 2) Adaptation: often required. Marketing principle centers on needs of buyer, not seller. Localization often practiced. 3) New mix: might be required for significant local penetration

Type of IP

1) Utility - useful invention or process, and it gives the patent holder 20-year protection against use by others 2) Design - A design pattern is for an aesthetic, non-useful creation, and it runs for 14 years 3) Plan - The plant patent is for innovations among growing things, such as mutants (genetically modified foods) and hybrids, and it runs for 20 years

International Framework for IP Protection

1) World Intellectual Property Organization (WIPO) - UN 2) Trade-Related Aspects of Intellectual Property Rights (TRIPS) - WTO 3) Anti-Counterfeiting Trade Agreement (ACTA) - Freestanding

Copyright

Exclusive legal rights of authors, composers, creators of software, playwrights, artists, and publishers to publish and dispose of their work

Q145: Identify some of the challenges and opportunities of an expat position.

Expat: employees to work in foreign country for growth (personal and professional). Movement up IC's hierachy - Expat might have unclear performance objective - Family of expats may find adjustment to foreign position difficult

Q146: Describe some of the complications of compensation packages for expatriate executives.

Expatriate manager: - Complicated due to fluctuation in currency exchange rate/ inflation. - Most contains salaries, allowances, and bonuses

QA6: Identify the types of trading blocs by their level of economic integration, with examples.

Four forms of economic integration: 1) Free Trade Area: tariffs abolish. Ex: NAFTA 2) Custom Union: free trade + external tariff 3) Common Market: custom union + mobility of service, people, and capital. Ex: Mercosur 4) Complete Integration: common market + common currency and economic/ political integration Current integration: - Africa faced difficulties but endure - EU successfully helped the instability of the recent financial crisis

Antonio Guterres

General Assembly listened to Security Council to appoint Guterres as the Secretary-General (Former Prime Minister of Portugal) Former: Ban Kimoon of Korea. Since 2007

World Trade Organization (WTO)

Goal: to reduce trade barriers International organization that establishes and implement rules of trade between nations

QA4: Describe the purposes of the two monetary institutions, the IMF and the World Bank.

IMF: workable monetary system in the interest of all nation. Articles of Agreement: 1) promote international monetary cooperation 2) facilitate expansion/ growth of trade 3) promote exchange stability 4) assist the establishment of multilateral system of payment 5) make fund's resources available for balance of payments correction 6) shorten duration of member balance payment World Bank: includes IBRD and IDA, lends money for development project in middle-income and credit worthy poor countries. Also lends low-interest loans for low-income country

Most-favoured Nation (MFN)

In UN term: treat everyone equally - treating everyone as "most-favored" trading partners. Used to be unequal: Past have MFN treaties that set up exclusive trading clubs.

Q133: Compare the way consumer and industrial products and services are modified for international sale.

Industrial products: contains little/ no *cultural input*, leading to few personal preferences. Ex: concrete Consumer products: reflect personal preferences. Ex: Clothing. However, the preferences can also be the same globally. Ex: LV luxury purses.

Formal Institution

Influence behavior through laws and regulation

Informal Institution

Influence behavior through norms, values, customs, and ideologies Types: Normative and Cognitive

International Monetary Fund (IMF)

Institution that fosters global monetary cooperation, financial stability, international trade, high employment and sustainable economic growth, and reduction of poverty

World Bank

Institution that lends money for development projects focused on reducing poverty - Nonprofit cooperative to fund development - 2 Major and 3 minor institutions International Bank for Reconstruction and Development (IBRD or World Bank): focus on middle income International Development Association (IDA): focus on poorest via interest-free loans and grants

QA1: Explain the importance of major international institution to business decision-makers

Institutions exist to limit and direct choices for decision maker and firm by simplifying the external environment. It (as formal or informal (normative or cognitive) establish rules, way of acting/ thinking.

Economic integration

Integration on economic and political levels

Public international law

Law that governs relationships between governments

Private international law

Law that governs relationships between individuals and companies that cross international borders Ex: A contract between businesses in two different countries. Public international law governs a dispute between two countries over trade subsidies.

Q65: Discuss the standardization of laws among nations.

Laws standardization is underway but progressing slowly

Competition laws or Antitrust laws

Laws that prevent inappropriately large concentrations of power and its abuse through price- fixing, market sharing, and monopolies

Litigation

Legal proceeding conducted to determine and enforce particular legal rights through the court system - Complicated and expensive

Q66: Describe the impacts of the national-level legal forces in the areas of competition, trade, tort, ethics, and accounting

National-level legal forces can have a significant impact on the practice of business 1) Competition Laws: Prevent large concentration of economic power and impact business directly (price fixing, market sharing, monopoly). Ex: U.S antitrust laws *per se* - there is no need to show harm; the practice itself is illegal 2) Trade Obstacles: tarrifs, quotas, insurance requirements ... 3) Tort law: strict liability in USA 4) FCPA, OECD ..: no bribery and transparency 5) Accounting: US SEC and FASB follows standards known as generally accepted accounting principles (GAAP) while Europe follows International Accounting Standards Board (IASB) AKA International Financial Reporting Standard (IFSB).

Performance of Contracts

No worldwide court has the power to enforce its decrees. Worldwide courts (like UN International Courts of Justice) rely on voluntary

Rule of Law

Opposite to political dictatorship or a powerful elite. When a country's legal system is based on the rule of law, foreign investment is encouraged because investors know their interests will be protected.

QA5: Discuss the resources of the Organisation for Economic Co-operation and Development and the World Trade Organization.

Organisation for Economic Cooperation and Development (OECD): extensive research on variety of international business and economic subjects - individual country survey. Those research then use for business people to understand new market World Trade Organization (WTO): reduce trade barriers, member composed of major trading countries. Enforced rules and intellectual properties rights

Chapter A: Institutions

Organizations that a group, society, or culture construct to provide stability and meaning to social lift, a collection of norms that regulate the relations of individuals to each other - Provide a way to resolve conflict before it reaches hostility - Provide infrastructure for trade

Advertising

Paid, nonpersonal presentation of ideas, goods, or services by an identified sponsor

Common Market of the Southern Cone (MERCOSUR/ MERCOSUL)

Presently a South American customs union of Argentina, Paraguay, Brazil, ....

Q137: Define pricing and distribution strategies.

Pricing strategy: considers segments, competitors, industries, market conditions, and costs Distribution: how the product reaches the end user.

International Labor Organization (ILO)

Primary goal is to improve working conditions, living standards, and the fair and equitable treatment of workers in all countries - Many gov does not resources or expertise to monitor those standards >>> governance gaps

Q134: Identify the product strategies that can be formed from three product alternatives and three kinds of promotional messages.

Promotion strategies can be formulated by combining: same, adapted, and new product/ message

Q62: Describe the rule of law and its sources

Rule of law: laws over political dictatorship/ elite is the basis for a country legal system. Promote foreign investment because of more protection in investment, protect human rights of local, increase concern of global companies. Sources of law: 1) Domestic Laws of nations 2) International treaties: UN, WTO. Conventions, covenants (consensus agreement), compacts, and protocols.

Q144: Distinguish among the training and development considerations for home-country, host-country, and third-country nationals as international company executives.

Solution: training in cons PCNs: + Have knowledge of IC - Lack knowledge and experience with foreign country HCNs: + Have knowledge of foreign country - Lack knowledge of IC TCNs: - Lacks both IC and culture knowledge - Vary in skills > pick appropriate skills depends on the person