MGT 4230 test 1
Is the shift toward a more integrated and interdependent global economy a good thing?
Many experts believe that globalization is promoting greater prosperity in the global economy, more jobs, and lower prices for goods and services Others feel that globalization is not beneficial
what did Karl Marx think about capitalism/socialism
Marx argued that the few benefit at the expense of the many in a capitalist society where individual freedoms are not restricted
__________ refers to honorable and benevolent behavior considered the responsibility of people of high (noble) birth. In a business setting, it is taken to mean benevolent behavior that is the responsibility of successful enterprises.
Noblesse oblige - french term
___________ is seen as a way to stimulate gains in economic efficiency by giving new private owners a powerful incentive—the reward of greater profits—to search for increases in productivity, to enter new markets, and to exit losing ones
Privatization
A religious division in the eleventh century led to the establishment of two major Christian organizations—the ______ and the ______
Roman Catholic Church and the Orthodox Church
_______form the bedrock of a culture. They provide the context within which a society's norms are established and justified. They may include a society's attitudes toward such concepts as individual freedom, democracy, truth, justice, honesty, loyalty, social obligations, collective responsibility, the role of women, love, sex, marriage, and so on
Values
an ideal representative democracy has a number of safeguards that are typically enshrined in constitutional law. These include
(1) an individual's right to freedom of expression, opinion, and organization; (2) a free media; (3) regular elections in which all eligible citizens are allowed to vote; (4) universal adult suffrage; (5) limited terms for elected representatives; (6) a fair court system that is independent from the political system; (7) a nonpolitical state bureaucracy; (8) a nonpolitical police force and armed service; and (9) relatively free access to state information
Factors that have supported globalization in recent history...
- The collapse of communism in Eastern Europe export and investment opportunities - Economic development in China huge opportunities despite continued Communist control, China began opening relations to other countries because they wanted the technological advances they offered - Free market reforms and democracy in Latin America new markets and new sources of materials and production
microprocessor
- facilitates high-power, low-cost computing is perhaps the most important of these developments in technology - lowered the cost of global communication and the cost of coordinating and controlling a global organization
United Nations (UN)
- maintains international peace and security, develops friendly relations among nations, cooperates in solving international problems and promotes respect for human rights, and is a center for harmonizing the actions of nations
International Monetary Fund (IMF)
- maintains order in the international monetary system
World Trade Organization (WTO)
- polices world trading system and ensures nations adhere to the rules established in WTO treaties - making sure that members adhere to trade treaties In 2010, its 154 members accounted for 97% of world trade (as of July 2016 has 164 members)
Under the new agreement, known as the Trade-Related Aspects of Intellectual Property Rights (TRIPS), as of 1995 a council of the World Trade Organization is overseeing enforcement of much stricter intellectual property regulations. These regulations oblige WTO members to grant and enforce patents lasting at least ___ years and copyrights lasting ___ years after the death of the author. Rich countries had to comply with the rules within ____. Poor countries, in which such protection generally was much weaker, had _____ years of grace, and the very poorest have _____ years
1. 20 2. 50 3. one year 4. 5 years 5. 10 years
What is driving the move toward greater globalization? (2 major categories
1. declining trade and investment barriers 2. technological change - specifically dramatic improvements in communication, information processing, and transportation technologies
Two key facets of globalization are:
1. the globalization of markets 2. the globalization of production i. The sourcing of goods
Two important trends to consider for multinational enterprises are
1. the rise in non-U.S. multinationals 2. the growth in the number of mini-multinationals (easier to build international sales via the Internet)
In Heritage Foundation's index of economic freedom a country can score between__________ on each of these indicators. The higher a country's average score across all 10 indicators, the more closely its economy represents the _________
100 (most free) and 0 (least free) , pure market model
Collectively, the G20 represents _____ percent of global GDP and _____ percent of international global trade
90, 80
veil of ignorance
According to Rawls, valid principles of justice are those with which all persons would agree if they could freely and impartially consider the situation. Impartiality is guaranteed by a conceptual device that Rawls calls the veil of ignorance. Under the veil of ignorance, everyone is imagined to be ignorant of all of his or her particular characteristics, for example, race, sex, intelligence, nationality, family background, and special talents.
After _______ advanced Western countries began removing trade and investment barriers
WWII
Amartya Sen
believed development should be assessed less by material output measures such as GNI and more by capabilities and opportunities people enjoy ex. HDI development requires removal of major impediments to freedom
economic implications of islam
cannot earn profit through exploitation of others, hold properties as "trustees" rather than owners
Critics of globalization/Supporters of Globalization
Critics claim jobs in advanced economies are being lost to low-wage nations Supporters claim while some jobs may be lost, the economy as a whole is better off - countries specializing in the production of those goods and services that they can produce most efficiently, - while importing goods and services that they cannot produce as efficiently, and that in doing so, all countries will gain
The shift toward a market-based economic system involves:
Deregulation Privatization The creation of a legal system to safeguard property rights
changes in political and economic systems of the world
collectivism and individualism that defined the twentieth century is less in evidence today. The West won the Cold War, and Western ideology is now widespread. Although command economies remain and totalitarian dictatorships can still be found around the world, the tide has been running in favor of free markets and democracy.
democracy is often a ___________ of economic growth
consequence
Improvements in transportation such as_______________ and the development of ____________ have also facilitated the growth of globalization
containerization, super freighters
The body of law that governs contract enforcement.
contract law
There may be, in other words, a slow but steady convergence occurring across different cultures toward some universally accepted values and norms: This is known as the ________________
convergence hypothesis relationship network
visible indicator of economic mismanagement
country's inflation rate. Another is the level of business and government debt in the country.
according to rawl's theory of justice when people operate under the viel of ignorance they would unanimously agree on what two principles of justice
each person is permitted the maximum amount of basic liberties compatible with a similar liberty for others one basic liberty is ensured inequality in basic social goods is to be allowed only if such inequalities benefit everyone
the WTO is responsible for...
facilitating the establishment of additional multinational agreements between WTO member states
The Uruguay Round
further reduced trade barriers; extended GATT to cover services as well as manufactured goods; provided enhanced protection for patents, trademarks, and copyrights; and established the World Trade Organization to police the international trading system
In Huntington's thesis, _________ is a product of the tension between civilizations and the clash of value systems and ideology.
global terrorism
Because the religion emphasizes spiritual rather than individual achievement, the drive for entrepreneurial behavior that is so common among Protestants for example, is not present. So, a devout Hindu may not see promotion or additional responsibilities as being desirable.
hindus
multinational enterprise
is any business that has productive activities in 2 or more countries
Many business executives argue that the high costs of ________________ make American businesses less competitive in the global marketplace
liability insurance
three values central to the Confucian system of ethics are of particular interest:
loyalty, reciprocal obligations, and honesty in dealings with others.
Global institutions
manage, regulate, and police the global market place promote the establishment of multinational treaties to govern the global business system ex. World Trade Organization (WTO) and the International Monetary Fund (IMF), World Bank, United Nations
the DOHA agenda
member states of the WTO staked out an agenda, it includes cutting tariffs on industrial goods, services, and agricultural products; phasing out subsidies to agricultural producers, reducing barriers to cross border investment and limiting the use of antidumping laws
Stakeholder analysis involves a certain amount of what has been called ______________. This means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder. For example, when considering outsourcing to subcontractors, managers might need to ask themselves how it might feel to be working under substandard health conditions for long hours.
moral imagination
Trade-Related Aspects of Intellectual Property Rights (TRIPS)
new agreement of WTO regulations oblige WTO members to grant and enforce patents lasting at least 20 years and copyrights lasting 50 years after the death of the author. Rich countries had to comply with the rules within a year. Poor countries, in which such protection generally was much weaker, had five years of grace, and the very poorest have 10 years.26 (For further details of the TRIPS agreement, see Chapter 7.)
International trade
occurs when a firm exports goods or services to consumers in another country
Foreign Direct Investment
occurs when a firm invests resources in business activities outside its home country - During the 1920s and 1930s, many nations erected barriers to international trade and FDI to protect domestic industries from foreign competition
General Agreement on Tariffs and Trade, or GATT
over 100 nations negotiated further decreases in tariffs and made significant progress on a number of non-tariff issues - the GATT was replaced by the WTO
Moore's Law
predicts that the power of microprocessor technology doubles and its cost of production falls in half every 18 months
the globalization of _________ refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of labor, energy land and capital
production
The World Bank
promotes economic development by making loans to cash-strapped nations wishing to make significant infrastructure improvements like building dams or roads. -World Bank gives inexpensive loans to bring technology and globalization to underdeveloped companies
The concept of reciprocal obligations is important. Confucian ethics stresses that superiors are obliged to reward the loyalty of their subordinates by bestowing blessings on them. If these "blessings" are not forthcoming, then neither will be the loyalty. This Confucian ethic is central to the Chinese concept of guanxi, which refers to relationship networks supported by reciprocal obligations.55 Guanxi means relationships, although in business settings it can be better understood as connections. Today, Chinese will often cultivate a guanxiwang, or "_______________," for help. Reciprocal obligations are the glue that holds such networks together. If those obligations are not met—if favors done are not paid back or reciprocated—the reputation of the transgressor is tarnished, and the person will be less able to draw on his or her guanxiwang for help in the future.
relationship network
determinants of culture
religion social structure political philoshopy economic philosophy education language
Containerization:
science behind loading and unloading shipments
containerization
science behind loading and unloading shipments
Lower trade barriers help companies view the world as a ____________ and establish production activities in optimal locations around the globe
single market
the long-run monetary benefits of doing business in a country are a function of the (4 things)
size of the market, the present wealth (purchasing power) of consumers in that market, and the likely future wealth of consumers
world's six most important national sources of foreign direct investment —
the United States, the United Kingdom, Germany, the Netherlands, France, and Japan
Globalization of markets -
the merging of historically distinct and separate national markets into one huge global marketplace In many markets today, the tastes and preferences of consumers in different nations are converging upon some global norm - easier to buy items throughout the world Coca Cola, Starbucks, Sony PlayStation, and McDonald's hamburgers, IKEA furniture
Globalization of production
the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor energy, land, and capital) Goal: lower overall cost structure or improve the quality or functionality of their product and gain competitive advantage Boeing (35% of jet made by japanese companies) BMW and Vizio
The stock of foreign direct investment definition and recent trend
total cumulative value of foreign investment, generated by rich industrial countries is declining - developing countries like India and China are increasingly receiving FDI
The______ includes dimensions for support for democracy; tolerance of foreigners and ethnic minorities; support for gender equality; the role of religion and changing levels of religiosity; the impact of globalization; attitudes toward the environment, work, family, politics, national identity, culture, diversity, and insecurity; and subjective well-being
world value system (WVS)
Critics of globalization say what about the economic power
Another concern voiced by critics of globalization is that today's increasingly interdependent global economy shifts economic power away from national governments and toward supranational organizations such as the World Trade Organization, the European Union, and the United Nations
The trend away from distinct national economic units and toward one huge global market is known as a. Internationalization b. Economic integration c. Globalization d. Privatization
C!
The largest recipient of FDI is______
China
critics/supporters of free trade
Critics argue free trade encourages firms from advanced nations to move manufacturing facilities offshore to less developed countries with lax environmental and labor regulations Supporters claim tougher environmental regulation and stricter labor standards reflect economic progress as countries get richer as a result of globalization, they raise their environmental and labor standards free trade does not lead to more pollution and labor exploitation, it leads to less ex. Mexico was cheap labor, people would outsource there, but now is no longer the case because standard of living improved
Group of 20 (G20)
Established in 1999, the G20 comprises the finance ministers and central bank governors of the 19 largest economies in the world, plus representatives from the European Union and the European Central Bank. Collectively, the G20 represents 90 percent of global GDP and 80 percent of international global trade.
Originally established to formulate a coordinated policy response to financial crises in developing nations, in 2008 and 2009 it became the forum though which major nations attempted to launch a coordinated policy response to the global financial crisis that started in America and then rapidly spread around the world, ushering in the first serious global economic recession since 1981
G20
globalization
Globalization refers to the trend towards a more integrated global economic system
Heritage Foundation's index of economic freedom
Heritage Foundation's index of economic freedom is based on 10 indicators, including the extent to which the government intervenes in the economy, trade policy, the degree to which property rights are protected, foreign investment regulations, taxation rules, freedom from corruption, and labor freedom.
Hindu beliefs
Hindus believe in reincarnation, or rebirth into a different body, after death. Hindus also believe in karma, the spiritual progression of each person's soul. A person's karma is affected by the way he or she lives. The moral state of an individual's karma determines the challenges he or she will face in the next life. By perfecting the soul in each new life, Hindus believe that an individual can eventually achieve nirvana, a state of complete spiritual perfection that renders reincarnation no longer necessary. Many Hindus believe that the way to achieve nirvana is to lead a severe ascetic lifestyle of material and physical self-denial, devoting life to a spiritual rather than material quest.
In return for offering loans the IMF
IMF requires nation-states to adopt specific economic policies aimed at returning their troubled economies to stability and growth. These requirements have sparked controversy. Some critics charge that the IMF's policy recommendations are often inappropriate; others maintain that by telling national governments what economic policies they must adopt, the IMF, like the WTO, is usurping the sovereignty of nation-states.
Aristotle philosophy on indivdualism
In contrast to Plato, Aristotle argued that individual diversity and private ownership are desirable. In a passage that might have been taken from a speech by contemporary politicians who adhere to a free market ideology, he argued that private property is more highly productive than communal property and will thus stimulate progress. According to Aristotle, communal property receives little care, whereas property that is owned by an individual will receive the greatest care and therefore be most productive.
In the 1960s... BY 2008...
In the 1960s: the U.S. dominated the world economy and world trade picture. U.S. multinational companies were powerful, and because of the Cold War, a significant portion of the world was off limits to the Western companies. By 2008: U.S. accounted for only 20.7% Other developed nations experienced a similar decline Rapid economic growth now in countries like China, India, and Brazil
The_________ has made it possible for even small companies to play a role in the global economy.
Internet
countries with highest GNI per capita as of 2012
JASS Japan Austrailia Switzerland Sweden
What are the implications of technological change for the globalization of markets?
Low cost communications networks help create electronic global marketplaces Low cost transportation enable firms to create global markets, and facilitate the movement of people from country to country promoting a convergence of consumer tastes and preferences - Ecuador for example, has become a global supplier of roses thanks to falling transportation costs that make it possible to ship flowers while they're still fresh. Similarly, television networks like MTV and CNN are received in many countries and are contributing to the development of a sort of global culture that transcends national borders.
What are the implications of technological change for the globalization of production?
Lower transportation costs make a geographically dispersed production system more economical and allow firms to better respond to international customer demands ex. Suppliers have real time access to Dell's order flows, and can then adjust their production accordingly. Dell uses inexpensive airfreight to transport its products to meet demand as needed. The company maintains a customer service operation in India where English speaking personnel handle calls from the U.S.
GM adopted what came to be called the__________ principles, named after _________________, a black Baptist minister and a member of GM's board of directors. Sullivan argued that it was ethically justified for GM to operate in South Africa so long as two conditions were fulfilled. First, the company should not obey the apartheid laws in its own South African operations (a form of passive resistance). Second, the company should do everything within its power to promote the abolition of apartheid laws. Sullivan's principles were widely adopted by U.S. firms operating in South Africa. Their violation of the apartheid laws was ignored by the South African government, which clearly did not want to antagonize important foreign investors.
Sullivan, Leon Sullivan
_________ instrument is designed to address the notion that a leader's effectiveness is contextual
The Global Leadership and Organizational Behavior Effectiveness (GLOBE)
What happens when firms do not accept the United Nations Convention on Contracts for the international sale of goods
When firms do not wish to accept the CIGS, they often opt for arbitration by a recognized arbitration court to settle contract disputes. The most well known of these courts is the International Court of Arbitration of the International Chamber of Commerce in Paris, which handles more than 500 requests per year from more than 100 countries
