Chapter 2- Outside- USA Strategic Planning

Guanxi

Chinese business relations stresses personal relationships

Wa

Japanese business relations stresses group harmony and social cohesion. requires that all members of a group agree and cooperate; this results in constant discussion and compromise

Newaswashio

Japanese workers expect supervisors to alert them privately of changes rather than informing them in a meeting.

International firms or multinational corporations

Organizations that conduct business operations across national borders. The social, cultural, demo- graphic, environmental, political, governmental, legal, technological, and competitive opportunities and threats that face these corporations are almost limitless, and the number and complexity of these factors increase dramatically with the number of products produced and the number of geographic areas served

Things to do before entering international markets

Scan relevant journals and patent reports, seek the advice of academic and research organizations, participate in international trade fairs, form partnerships, and conduct extensive research to broaden their contacts and diminish the risk of doing business in new markets. Obtain insurance from the U.S. government's Overseas Private Investment Corporation (OPIC). Document the number of different languages spoken has been done by the Summer Institute of Linguistics (SIL) International

Inhwa

South Korean business behavior stresses harmony based on respect of hierarchical relationships, including obedience to authority.

inversion

Whenever a U.S. firm acquires a foreign firm and adopts that firm's lower tax rate or establishes a holding company in a foreign country and adopts that firm's lower tax rate, the transaction

Tax rates in countries

are important in strategic decisions regarding where to build manufacturing facilities or retail stores or even where to acquire other firms.

East Asian countries

are market leaders in labor-intensive industries,

International operations

can be as simple as exporting a product to a single foreign country or as complex as operating manufacturing, distribution, and marketing facilities in many countries.

The United States requires

companies to pay the difference between lower foreign taxes and the U.S. corporate-tax rate of 35 percent when they bring their international earnings home. Thus, to avoid paying U.S. taxes on income made in other countries, many U.S. companies are cash-rich outside the United States, but cash-poor inside the United States, and they bring cash back to the United States only as needed.

American business

embodies individualism, achievement, competition, curiosity, pragmatism, informality, spontaneity, and doing more than expected on the job

global strategy

includes designing, producing, and marketing products with global needs in mind, instead of considering individual countries alone.

Brazil

offers abundant natural resources and rapidly developing markets

Germany

offers skilled labor and technology.

Globalization

process of doing business worldwide, so strategic decisions are made based on global profitability of the firm rather than just domestic considerations. seeks to meet the needs of customers worldwide, with the highest value at the lowest cost.

Protectionism

refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people

Mexican businesses

stress collectivism, continuity, cooperation, belongingness, formality, and doing exactly what is told

Northern European business relations

stresses a more participatory management style

Feng Shui

the art and science of organizing living spaces in order to harness natural forces

When firms design a product

they design it to be marketable in as many countries as possible

When firms manufacture a product

they select the lowest-cost source, which may be Japan for semiconductors, Sri Lanka for textiles, Malaysia for simple electronics, and Europe for precision machinery.