Management Chapter 4 study guide
NAFTA (North American Free Trade Agreement)
Allows open trade between the US, Mexico, and Canada.
The Digitec company has recently decided to design and manufacture a laptop that retails for under $50, in a effort to make the information technology available to people in places like rural Africa and rural India. This is known as what type of strategy?
Bottom of the pyramid strategy
The three dimensions of global mindset are
Cognitive Dimension Psychological Dimension Social Dimension
A multinational corporation typically receives more than 25 percent of its total sales revenues from operations inside the parent's home country
False
Culture shock refers to a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses
False
Ethnocentrism refers to a natural tendency of people to regard their own culture as inferior to other cultures
False
Fifteen member states of the EU have adopted the rupee, as a single European currency
False
German, Swiss, and North American cultures are among the high-context cultures
False
Market risk is defined as the risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments
False
The primary emphasis of polycentric companies is on their home countries
False
The term top of the pyramid refers to the more than four billion people who earn the least, as defined by per capita income
False
The extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries is called?
Globalization
bottom of the pyramid (BOP) concept
Proposes that corporations can alleviate poverty and other social ills, as well as make significant profits, by selling to the world's poor.
An MNC is managed as an integrated worldwide business system
True
Business has become a unified, global field, and events and ideas that influence organizations in one country are likely to influence organizations in other countries as well.
True
Geocentric companies are truly world-oriented and favor no specific country
True
Large international firms typically are called multinational corporations.
True
Companies that think _______ have a competitive edge
globally
political instability
includes riots, revolutions, civil disorders, and frequent changes in government
WTO (World Trade Organization)
monitors international trade and has legal authority to arbitrate disputes on some 400 trade issues
Ethocentrism
natural tendency of people to regard their own culture as superior and to downgrade or dismiss other cultural values
high-context culture
people are sensitive to circumstances surrounding social exchanges
low-context culture
people use communication primarily to exchange facts and information
Globalization
refers to the extent to which trade and investments, information, social and cultural ideas, and political corporations flow between countries
Exporting
the company maintains its production facilities within the home nation and transfers its products for sale in foreign countries
Political Risk
the risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments
MNC (multinational corporation)
typically receives more than 25 percent of its sales revenues from operations outside the parents home country
global outsourcing (offshoring)
using suppliers outside the United States to provide labor, goods, or services
How many nations signed on for negotiation when GAT was created in 1947?
23
North America is a
Low- context culture
Characteristics of the MNC
Managed as an integrated worldwide business system in which foreign affiliates act in close alliance and cooperation with one another Ultimately controlled by a single management authority that makes key strategic decisions relating to the parent and all affiliates Presumed to exercise a global perspective
global mindset
ability of managers to appreciate and influence individuals, groups, organizations, and systems that represent different social, cultural, political, institutional, intellectual, and psychological characteristics
Today's companies compete in a
borderless world