chp 11: global and international issues

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potential disadvantages of initiating, continuing or expanding business across national borders

1. Foreign operations could be seized by nationalistic factions. 2. Firms confront different and often little-understood social, cultural, demographic, environmental, political, governmental, legal, technological, economic, and competitive forces when doing business internationally. These forces can make communication difficult in the firm. 3. Weaknesses of competitors in foreign lands are often overestimated, and strengths are often underestimated. Keeping informed about the number and nature of competitors is more difficult when doing business internationally. 4. Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people. 5. Gaining an understanding of regional organizations such as the European Economic Community, the Latin American Free Trade Area, the International Bank for Reconstruction and Development, and the International Finance Corporation is difficult but is often required in doing business internationally. 6. Dealing with two or more monetary systems can complicate international business operations.

U.S. Foreign Corrupt Practices Act

Federal law that prohibits businesses from paying bribes to foreign government officials, political parties, or political candidates.

Potential advantages to initiating, continuing, or expanding international operations a

Firms can gain new customers for their products. 2. Foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets. 3. Foreign operations can allow firms to establish low-cost production facilities in locations close to raw materials or cheap labor. 4. Competitors in foreign markets may not exist, or competition may be less intense than in domestic markets. 5. Foreign operations may result in reduced tariffs, lower taxes, and favorable political treatment. 6. Joint ventures can enable firms to learn the technology, culture, and business practices of other people and to make contacts with potential customers, suppliers, creditors, and distributors in foreign countries. 7. Economies of scale can be achieved from operation in global rather than solely domestic markets. Larger-scale production and better efficiencies allow higher sales volumes and lower-price offerings. 8. A firm's power and prestige in domestic markets may be significantly enhanced if the firm competes globally. Enhanced prestige can translate into improved

nemaswashio

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

Globalization

a process of doing business worldwide, so strategic decisions are made based on global profitability of the firm rather than just domestic considerations.

strength of Brazil

abundant natural resources and rapidly developing markets

Summer Institute of Linguistics (SIL) International

document the number of different languages spoken

U.S. manager

have a low tolerance for silence

how does protectionism harm the economy

it inhibits trade among countries and invites retaliation

strength of east asian companies

market leaders in labor-intensive industries

strength of Germany

offers skilled labor and technology

Protectionism

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

What's the riskiest possible posture for any industry?

remaining a domestic competitor.

global strategy

seeks to meet the needs of customers worldwide, with the highest value at the lowest cost. includes designing, producing, and marketing products with global needs in mind, instead of considering individual countries alone.

feng shui

the practice of harnessing natural forces

Asian managers

view extended periods of silence as important for organizing and evaluating one's thoughts


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