SEVI 4583 Exam 3

what are some questions that are crucial for effectiveness

-are rewards based on individual performance, team performance or both -what factors come into play with team based pay -what role can recognition play

describe what virtual teams are

-communicate via technology -lacks richness of face to face communication -most teams meet face to face at launch and during crises

what are some of the assessment instruments to assess global leadership competencies

-cross cultural adaptability inventory -intercultural development inventory -global competencies inventory -global executive leadership inventory

what are the 8 steps in kotters change model

-increase urgency -develop the guiding team -develop change vision and strategy -communicate vision for buy-in -empower broad based action by removing obstacles -generate short term wins that are rewarded -dont let up -make the change stick through leadership development and succession

why does foreign currency exchange occur?

-less risky to do business in own currency -vehicle currency used for international trade or investment -intervention currency used to intervene in foreign markets

what is the chart to formulate competitive strategies

-pressure to reduce costs -pressure for local adaptation global strategy transnational multidomestic home replication

what is BOP

-record of a country's transactions and flow of capital in and out of the country payments to other countries= debit payments from other countries=credit current account=tangibles capital account=financial assets and liabilities official reserves=imports and exports of gold

what does developing global leadership skills require

-strong training in business fundamentals and international business -knowledge of history, geography, and political science -training in language and culture

what are 5 areas to consider when establishing a balance of team and individual rewards

-the nature of the task -stability of team membership -national cultures of team members -labor laws affecting employee compensation -available reward options

what are the different methods of planning

-top down: begins at highest level and continues downward -bottom up: begins at lowest level and continues upward -iterative: repetition is bottom up or top down until all differences have been reconciled

what are lewin's three stage process in his change model

-unfreezing: overcoming inertia and preparing people for change -moving: moving the proposed behavior into practice, confusion -refreezing: when new behaviors are accepted and institutionalized or rejected

what are the 4 competencies to achieve competitive advantage?

1. create value customers are willing to pay 2. rare 3. difficult to imitate 4. allow the firm to be organized to fully exploit the competitive potential of these competencies

what are the steps to successful scenario planning?

1. determine area, scope, and timing of the decisions with greatest relevance 2. research conditions and trends 3. examine drivers that will determine outcome of stories you are building 4. construct multiple stories of what could happen next 5. play out impact of each possible future 6. examine answers and look for similarities 7. monitor

what are 4 overlapping dimensions of complexity between global leadership and domestic leadership

1. multiplicity 2. interdependence 3. ambiguity 4. dynamism

what are the 6 leadership styles in project GLOBE

1. performance oriented 2. team oriented 3. participative 4. humane 5. autonomous 6. self protective

what are the 4 elements in organizational design?

1. product and technical expertise 2. geographic expertise 3. customer expertise 4. functional expertise

define performance measures

1. success in obtaining and applying required resources 2. effectiveness of personnel performance 3. progress toward mission, vision, and objectives in a manner consistent company's values

what is the global leadership expertise development

GLED emphasizes the process by which expertise is developed begins with antecedents for development of global leaders put into 4 categories: -individual characterisitics -cultural exposure -global education -project novelty

what is a disadvantage of top down planning

It restricts initiative at lower levels of the organization

what is the map-bridge-integrate model

MBI used to understand cultures of team members -mapping lets team members discuss differences and similarities

what are currencies that can fluctuate freely

USD british pound yen euro

a fixed peg currency arrangement means that

a country's exchange rates fluctuate around a fixed rate within a narrow band (1%)

organizations dont just go global one day because it requires

a game plan and stratefy

The triffin paradox refers to what occurs when

a national currency that is also a reserve currency runs a deficit

what is a global mindset

a set of ideas and attitudes that combine an openness and awareness of diversity -intellectual intelligence -global emotional intelligence

what is competitive advantage?

ability of a company to achieve and maintain a competitive position and generate higher profit than competitors

purchasing power parity

adjusting exchange rates so they have equivalent purchasing power

companies controlled by other companies, in which less-than-majority owners may exercise control by a variety of means, both those involving stock ownership and those involving non-ownership mechanisms, are known as

affiliates

what is time horizon

agreement on short, medium, and long term plans

conventional fixed-peg arrangement

allows domestic currency to fluctuate WITHIN 1% on anchor currency

step 1

analyze external environment

step 2

analyze internal environment

value chain analysis

assesses where and to what extent value is added

what are reserves?

assets help by a nations central bank used to back up government liabilities

what is exchange rate forecasting

assumption that current market prices fully reflect all info

describe change and culture

attitude toward change is influenced by culture change requires ability to communicate across cultural borders

what is known to be the most discreet financial institution in the world?

bank for international settlements

arbitrage

buying and selling instantaneously to make profit with no risk

tacit knowledge

cant express clearly in words, difficult to transmit

what are leading teams

characterized by a high level of diversity, geographic dispersion, and virtual rather than face to face interaction 3 main activities: -establishing the team -coaching the team -setting team norms

fiscal policies

collecting and spending of money by the government

what are subsidiaries

companies controlled by other companies through ownership of enough voting stock to elect a majority of the voting members on BOD

what are affiliates

companies controlled by other companies, but less than majority owners may exercise control by a variety of means -both involving stock ownership and non-ownership mechanisms

what are matrix organizations

composed of one or more superimposed organizational structures to mesh product, regional, functional, and other expertise -disadvantage is its multiple reporting relationships have kept most worldwide companies from adopting it

to be effective, a company's international strategy must be

consistent among all the functions and activities of the company

monetary policies

control amount of money in circulation

exchange arrangement with no separate legal tender

country adopts the currency of another

in which type of currency arrangement would a currency be readjusted periodically at a fixed, preannounced rate

crawling peg (periodically!!)

crawling peg

currency adjusted periodically at a fixed preannounced rate against the indicator currency

managed floating

currency fluctuates while the authorities intervene behind the scene

what is the gold standard?

currency in terms of fixed amount of gold -Sir Newton 1717

crawling band

currency is readjusted against the indicator currency to maintain fluctuation margins around a central rate

what is the triffin paradox?

currency that is also reserve currency will eventually run a deficit -lack of confidence in reserve currency and crisis

what are fixed exchange rates?

currencys value is tied to the value of another currency or gold

when designing the structure of an IC, the element a company considers while it assesses population groups is

customer expertise

step 3

define company's business and mission

what is a mission statement

defines the organization's purpose and scope

most significantly for the international manager, the balance of payments reveals

demand for a country's currency (and potential changes in its economic environment)

what is a vision statement

describes if organization can acquire competencies and implement strategy

what is organizational design?

determines how a company should be organized to be efficient and effective - way to take advantage of specialization of labor -coordinating firm's activities to meet objectives

research indicates that many CEOs feel that a prerequisite for global industry dominance is

developing a company global mindset

explicit knowledge

easy to communicate via words, pictures, etc

companies rely on a mission statement to determine where it is going in the future, how it will get there, and whether or not goals are achieved

false (strategic plan)

what is global functional structure

few international companies organized by function at top level

describe function in international division structure

few international companies organized by function at top level used by companies with narrow and highly integrated product mix (oil companies)

Connor works at the headquarters of FiberNet Corp. He receives bimonthly reports that reveal if surplus funds are available. It is then Connor's job to determine how those funds should be allocated. What type of report would provide Connor with this information?

financial

what are different types of reporting

financial technological about market opportunities political and economic

todays organizations have to be

flexible and more dynamic -focus on adaptability

what is the right stuff model

focuses on global leaders that have the right stuff in terms of what they learned and what they can do as leaders result of interaction and partnership between the leader and the organization

what is the bank for international settlements?

for central bankers - builds cooperation in order to foster monetary and financial stability -most discrete financial institution in the world

step 6

formulate strategies

what is found at the base or bottom level of the pyramid of global leadership

global knowledge

what is bid price

highest priced buy order currently in the market

Melanie is known at work for being the manager with the greatest concern for the well-being of others. Which leader style does she possess?

humane

Madison Enterprises is an international corporation that sells sporting equipment and has had regional units for the past ten years. Recently, the company acquired an international business that specializes in skincare products for athletes. Madison Enterprises has brought that company in and retained its product division setup. What type of structure does Madison Enterprises now use?

hybrid

three types of taxation

income value added witholding

what are some of the reasons for complexity in globalization

increased multiplicity increased interdependence increased ambiguity

financial forces a government can exert

inflation and interest rates

changes in the way corporate planning is done today include

interaction with important customers, distributors, and suppliers

international fisher effect

interest rate differences will reflect the change in exchange rates

value chain

interlinked activities that add value to final product or service

what type of organization design is not as common today

large organizations

what are some differences between leaders and managers

leader innovates- manager administrates leader develops- manager maintains leader challenges status quo-manager accepts it leader originates- manager imitates leader inspires- managers controls

what is the law of one price concept

like products will have like prices

what is ask price

lowest priced sell order currently in the market

when selecting the manager for the new global team, the company wanted to find someone who understood the importance of developing relationships with co-workers, vendors, and suppliers. which of the traits identified by aperian global does this represent?

make connections

step 7

make tactical plans

Caroline works in Asia for an affiliate of Sheppard Electronics based in Oklahoma. She has learned that a large geographic sector in Asia would benefit from the company's master recharging station and shares that information with headquarters in her monthly report. Which aspect of reporting does this reflect?

market opportunities

what do free floating exchange rates rely on

markets, governments may intervene

an organization in which top-level divisions are required to heed input from a staff composed of experts from another organizational dimension in an attempt to avoid the double reporting difficulty of a matrix organization but still mesh two or more dimensions is known as

matrix overlay

what is a hybrid organizational structure

mixture of organizational forms at the top level -introduces a new and different product line that management believes is best handled by worldwide product division

what is the bretton woods system?

monetary system from 1945-1971, par value based on gold and US dollar -fixed exchange rates -reserves -triffin paradox -SDR

what are mintzbergs global leadership roles

monitor spokesperson liason leader negotiator innovator decision maker change agent

global leaders confront increased ambiguity because

much of the information they receive is difficult to give meaning to

what is the challenge with finding global leaders

must have cultural understanding and adaptability and be able to work with diverse individuals

according to mintzberg and others, the roles of the global leader include

negotiator and change agent

exchange rate fluctuations are best described as

not yet fully understood by economists

what is strategic planning?

organization determines where it's going in the future, how it will get there, and how it will assess the extent to which it has achieved its goals -provides opportunities and threats

after acquiring two new foreign affiliates, Henson Manufacturing created a new organizational chart to indicate where formal authority would lie within the organization, this organizational chart is an indication of

organizational structure

a value added tax is actually a sales tax that is

paid in stages along the process from raw materials to consumer

stabilized arrangement

pegged exchange rate within a horizontal band allows domestic currency to fluctuate within MORE than 1% on anchor currency

what is international strategy

plan that guides a firms choices about resources and achieving objectives

what are some facilitation tools for implementing strategic plans

policies: broad guidelines issued by upper management to assist lower managers in handling issues procedures: ways of carrying out a particular task

what are sales forecasts

prediction of future sales performance

what is a budget

projection of revenues and expenses

pros and cons for bretton woods monetary system

pros: fixed rate, good for trade growth cons: led to BOP deficit, government liability to foreign central bank, reduced gold reserves

pros and cons for the floating monetary system

pros: flexible, responsive to market, huge volume cons: causes swinging currency values

Pros and Cons of the gold monetary system

pros: simple, trusted, discipline cons: impractical, large trade flows, costly

step 5

quantify goals

what are some current organizational trends?

redesigning structure, hierarchy, business systems to improve efficiency virtual corporation: coordinates economic activity to deliver value using untraditional resources horizontal corporation: lateral decision process, horizontal networks, strong corporate wide business philosophy

what are the two important things strategic planning relies on

reduce costs and improve efficiency

fisher effect

relationship between real and nominal interest rates

describe product in international division structure

responsibility for global line and staff ops, worldwide ops, avoids duplication

describe region in international division structure

responsible for all activities, reports to CEO, simplifies task of directing worldwide ops, for countries with low or stable tech content

what is the international division structure?

responsible for all non home country activities - as overseas operations grow companies favor based on product, region, function, customer class

what are strategic business units

self contained business entity with clearly defined market and competitors, and has ability to carry out its business missions by a single manager -zappos, amazon

step 4

set corporate objectives

what is SDR?

special drawing rights -unit of account for the IMF and other international organizations

SDR refers to

special drawing rights, an international reserve asset

what is the par value?

stated value

standardization is common in research and development and manufacturing but not in ________

strategy formulation

going global relies on

success environmental needs

what are floating exchange rates?

supply and demand that allow currency values to float against one another -8 types

how did disney change their organization design

switched from having a lot of operations to more focus on technological innovations and consumer choice and convenience

what is social loafing

tendency of some people to put forth less effort when they are members of a group

the time horizon of a strategic plan will vary according to

the age of the firm and the stability of its market

what is leadership

the behaviors and processes required for organizing a group of people to achieve a common goal

currency board arrangement

the currency of another country is the same amount as domestic amount at fixed rate

describe what size and age means for an IC

the longer a company has been an IC, the more experienced executives it will have that served abroad -more decisions made at headquarters

Managers of international companies that are attempting to develop a competitive advantage face a formidable challenge because

time, talent, and money are scarce

how is strategic planning done

top management allows ideas to surface from anywhere -has become less structured with shorter documentation

what is matrix overlay

top-level divisions are required to heed input from a staff composed of experts from another organizational dimension to avoid double-reporting but still mesh dimensions

the GLED model of global leadership development assumes that outcomes are influenced by a

transformational process

Sir Isaac Newton established the price of gold in 1717 in terms of British currency? T/F

true

an evolving structure for an international organization over time is normal, as the company's involvement in foreign markets increases over time

true

in which stage of kurt lewins change model does a company prepare employees for change

unfreezing

what is the central reserve/national currency conflict?

us dollar most used since end of WW2 holding large amounts of US dollars means they'll eventually lose value (tiffin paradox)

an assessment conducted on the chain of interlinked activities of an organization or set of interconnected organizations, intended to determine where and to what extent value is added to the final product or service is known as

value chain analysis