Management chapter 4

Today's companies compete in a _____

Borderless world

The Digitec company has recently decided to design and manufacture a laptop that retails for under $50, in an effort to make 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

All are emerging economies except:

Canada

knowing about the global environment and global business mentally understanding how cultures differ and interpret complex global changes

Cognitive dimension

Investing in other countries, enhancing roads and your facilities, high cost, high risk ex- if you want to produce closer to the foreign country like if you buy a facility in china and make phones there

Direct Investing

When a company produces in its parent country and ships it to another foreign country. Many companies get involved internationally by exporting. It is cheaper and less risky than building a facility over there but there are difficulties related to distance, govt regulations, and currencies

Exporting

Fifteen member states of the EU have adopted the rupee, as the single European currency

False

T/F A multinational corporation typically receives more than 25 percent of its total sales revenues from operations inside the parent's home country

False

T/F Culture Shock refers to a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and divide appropriate behavioral responses

False

T/F Ethnocentrism refers to a natural tendency of people to regard their own culture as inferior to other cultures

False

T/F German, Swiss, and American cultures are among the high-context cultures.

False

T/F 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

T/F The primary emphasis of polycentric companies is on their home countries

False

T/F 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

engaging in the international division of labor so that work activities can be done in countries with the cheapest sources of labor and supplies

Global Outsourcing/ offshoring

The ability of managers to appreciate and influence individuals, groups and organizations, and systems that represent different social, cultural, political, institutional, intellectual, and psychological characteristics

Global mindset

The extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries is Called _____

Globalization

Risk of loss of assets, earning power, or managerial control due to political based events or actions by host governments

Political Risk

Includes events such as riots, revolutions, or government upheavals that can affect the operations of an international company

Political instability

ability to behave in a way that builds trusting relationships with people different than you

Social Dimension

T/F An MNC is managed as an integrated worldwide business system

True

T/F 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

T/F Geocentric companies are truly world-oriented and favor no specific country

True

T/F Holy owned subsidies are NOT partner or joint ventures

True

Fromed from GATT global institution that monitors trade and has legal authority to settle disputes

WTO (world trade organization)

Companies that think ______ have a competitive edge

globally

emotional and affective aspect. Diverse thoughts and ways to act, willingness to take risks, self confidence to deal with the unpredictable

psychological dimension

3 Characteristics of MNCs

1.managed as an integrated worldwide business system 2.Controlled by one single management authority 3.top managers presumed to exercise a global perspective

How many companies signed on for negotiation when GATT was created in 1947?

23

large international firms that typically receive more than 25% of its total sales revenues from operations outside of the parents home country

MNCs

combined canada Mexico and the US into one single market in 1994

NAFTA

3 dimensions of a global mindset

cognitive, social, psychological