MGMT 478 Ch.11

Organizations that conduct business operations across national borders are called​ ______.

multinational or international firms

Exports of goods and services from the United States account for

only 13 percent of U.S. gross domestic product.

Trade issues between RIM and countries in the Middle East related to data-encryption technologies are an example of which of the following types of governmental trade interventions?

promotion of acceptable practices abroad

which of the following identifies a major reason for companies like RIM to prosper in the global marketplace?

reduction of trade barriers

Protectionism

- Refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people. - The U.S. and China in early 2018 are imposing tariffs on each other's products imported.

What is the one form of communication that works the same​ worldwide?

the smile

The Global Challenge

America's economy is becoming much less American. A world economy and monetary system are emerging. Markets are shifting rapidly and in many cases converging in tastes, trends, and prices.

Communication Differences Across Countries

Americans sometimes come across as intrusive, manipulative, and garrulous; this impression may reduce their effectiveness in communication. Managers from the United States are much more action oriented than their counterparts around the world; they rush to appointments, conferences, and meetings—and then feel the day has been productive. U.S. managers often use blunt criticism, ask prying questions, and make quick decisions.

China's Business Climate

As the world's most populous country, China's economic output annually exceeds the United States. China ranks about 90th out of 190 countries in terms of doing business. China accounts for nearly one-third of the global market for cars. China has a relatively low ranking in ease of doing business because of human rights issues and substantial disregard for copyright, patent, and trademark rules of law.

Mexico's Business Culture

Employers seek workers who are agreeable, respectful, and obedient, rather than innovative, creative, and independent. Mexican employers are paternalistic, providing workers with more than a paycheck, but in return they expect allegiance.

A process of doing business​ worldwide, such that strategic decisions are made based on global profitability of the firm rather than just domestic​ considerations, is known as​ ______.

Globalization Globalization is a process of doing business​ worldwide, such that strategic decisions are made based on global profitability of the firm rather than just domestic considerations. A global strategy seeks to meet the needs of customers​ worldwide, with the highest value at the lowest cost.

Guanxi

In China, business behavior is based on "personal relations."

Wa

In japan, this term stresses group harmony and social cohesion

India's Business Climate

India ranks 130 in terms of ease of doing business. While it ranks the lowest among BRICS nations, India has made substantial progress in some areas.

The World Bank and the International Finance Corporation annually rank 189 countries in terms of their respective ease of doing business. In​ 2018, which country was rated as the overall​ best?

New Zealand

India's Business Culture

People in India do not like to say "no," verbally or nonverbally. Rather than disappoint you, they often will say something is not available, or will offer you the response that they think you want to hear, or will be vague with you. Indians prefer to do business with those whom they have established a relationship built upon mutual trust and respect. Punctuality is important. Indians generally do not trust the legal system and someone's word is often sufficient to reach an agreement.

High union density is found in all of the following countries​ EXCEPT:

Poland Poland's union membership is 12​ percent, which is below average. The four Nordic countries of​ Denmark, Sweden,​ Finland, and Norway have 67​ percent, 70​ percent, 74​ percent, and 52​ percent, respectively, of all employees as members of unions.

China's Business Culture

The Chinese rarely do business with companies or people they do not know. Your position on an organizational chart is extremely important in business relationships. Arriving late to a meeting is an insult and could negatively affect your relationship. Meetings require patience because mobile phones ring frequently and conversations tend to be boisterous.

Which of the following is NOT true of tax​ rates?

They have little impact on strategic decisions regarding where to acquire other firms. Tax rates are important in strategic decisions regarding where to build manufacturing facilities or retail stores or even where to acquire other firms. High corporate tax rates deter investment in new factories and provide strong incentives to avoid and evade taxes. Corporate tax rates vary across countries and companies.

As of 2018 which of the following countries had the highest corporate tax​ rate?

United Arab Emirates

Which of the following is TRUE of U.S.​ culture?

an exceptionally high priority is placed on time, which is viewed as an asset

RIM's proprietary data-encryption software has been especially important to which of the following markets?

business users

When a firm expands globally by building larger facilities and gaining​ efficiencies, thereby allowing for higher sales volume and​ lower-price offerings, which advantage of going global is it​ realizing?

economies of scale

What stages of strategic management do global issues impact?

formulation, implementation, and evaluation

Globalization is important to many companies, including RIM, because

globalization will fuel overall growth

In countries such as​ Japan, China and South​ Korea, business relations operate within similar contexts containing​ ______.

good harmony and personal relations In​ Japan, for​ example, business relations operate within the context of​ Wa, which stresses group harmony and social cohesion. In​ China, business behavior revolves around​ guanxi, or personal relations. In South​ Korea, activities involve concern for​ inhwa, or harmony based on respect of hierarchical​ relationships, including obedience to authority.

Feng Shui

in china, this term refers to the practice of harnessing natural forces, which can impact how you arrange office furniture.

Indonesia's Business Climate

Indonesia is a democratic Pacific archipelago comprised of thousands of islands. Indonesia's currency is the rupiah and its economy is one of the fastest growing in Asia, behind China and the Philippines. Indonesia's GDP growth is 5 percent in 2017. The economic forecast for Indonesia is very bright.

Mexico's Business Climate

The country of Mexico is now the fourth-largest auto exporter in the world, behind Japan, Germany, and South Korea. Mexico auto industry now employs one of every six Mexican factory workers and comprises one third of all exports from Mexico. Foreign direct investment (FDI) in Mexico has surged to exceed $30 billion annually.

American Versus Foreign Business Culture

To be successful in world markets, U.S. managers must obtain a better knowledge of historical, cultural, and religious forces that motivate and drive people in other countries. For multinational firms, knowledge of business culture variation across countries can be essential for gaining and sustaining competitive advantage.

One trend in outsourcing is that​ ______ have become major suppliers of intellectual property.

china and india For more than a​ decade, U.S. and European companies have mostly insisted on keeping​ R&D activities​ in-house. However, an​ ever-growing number of firms are now outsourcing their product design to Asian developers. China and India have become important suppliers of intellectual property.

perhaps the greatest advantage of doing business globally is

gaining new customers

In​ China, business behavior revolves around​ ______.

guanxi

Japanese workers expect supervisors to alert them of changes privately rather than in a meeting. This is called​ ______.

nemawashio

Outsourcing

- Involves companies hiring other companies to take over various parts of their functional operations, such as human resources, information systems, payroll, accounting, customer service, and even marketing.

Global strategy

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

Corporate tax rates across countries

1) United Arab Emirates with 55 2) Argentina 35 3) France 33.33 4) India Germany Mexico Canada Italy China USA Finland Turkey Poland Singapore Romania 16 Ireland 12 Bulgaria 10 Bermuda 0 Caymen Islands 0 Anguilla 0 Turks and Caicos 0

Advantages of Global Business

1. 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. Multinational 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. 8. A firm's power and prestige in domestic markets may be significantly enhanced if the firm competes globally.

Disadvantages of Global Business

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. 3. Weaknesses of competitors in foreign lands are often overestimated, and strengths are often underestimated. 4. Language, culture, and value systems differ among countries, which can create barriers to communication. 5. Gaining an understanding of regional organizations is difficult. 6. Dealing with two or more monetary systems can complicate international business operations.

How many potential customers exist globally?

7 billion

The population of Earth recently exceeded ______.

7 billion

Inhwa

A South Korean term for activities that involve concern for harmony based on respect of hierarchical relationships, including obedience to authority.

Africa's Business Climate

About 30 African countries are considered democracies. Currencies in Africa are stabilizing and many countries are fund-raising to build modern highways, ports, and power grids. Many African and non-African companies are launching operations in Africa due to the rapidly growing middle class and an average GDP growth of 5 percent for the continent through 2020. McKinsey predicts that by 2025, 50 percent of Africa will be online.

Cultural Differences between U.S. and Foreign Managers

Americans place an exceptionally high priority on time, viewing time as an asset. Many foreigners place more worth on relationships. Personal touching and distance norms differ around the world. Americans generally stand about three feet from each other when carrying on business conversations, but Arabs and Africans stand about one foot apart. Family roles and relationships vary in different countries. Business and daily life in some societies are governed by religious factors. Many cultures around the world value modesty, team spirit, collectivity, and patience much more than competitiveness and individualism, which are so important in the United States. Eating habits differ dramatically across cultures. Rules of etiquette vary and managers must learn the rules of others. Americans often do business with individuals they do not know, unlike businesspersons in many other cultures.

What is a distinguishing feature of U.S. business culture?

Americans are particularly receptive to a participative management style

Business Climate Across Countries

Ease of doing business rankings based on how easy it is to: - start a business - deal with construction permits - register property - get credit - protect investors - pay taxes - trade across borders - enforce contracts - resolve insolvency - get electricity

Which​ country's rate of female participation in the labor force is quite low because of an expectation that females act as the primary caretakers of their​ families?

India India's rate of female participation in the labor force is about 35​ percent; this is quite​ low, especially considering that women make up about 42 percent of college graduates in India. Even Indian women with a college degree are expected to care for their​ husbands, children, and elderly parents while their careers take a back seat.

Of the BRICS​ countries, which had the lowest rating from The World​ Bank's annual report​ "Doing Business​ 2017: Equal Opportunity for​ All"?

India The World​ Bank's annual report​ "Doing Business​ 2017: Equal Opportunity for​ All" reported that India moved up only one spot to 130 from 131. Among the BRICS​ nations, Brazil​ (123), Russia​ (40), India​ (130), China​ (78), and South Africa​ (74), India was ranked​ lowest; however, India has made substantial progress in some​ areas, such as electricity​ connections, but has slipped in other​ areas, such as payment of taxes and enforcing contracts.

High corporate tax rates in foreign countries can significantly deter investment in which of the​ following?

New Factories Tax rates are an important strategic consideration regarding where to build manufacturing facilities or retail​ stores, or even where to acquire other firms. High corporate tax rates deter investment in new factories while providing corporations incentives to avoid and evade taxes.

Who is the exemplary strategist who is trying to convert all smokers globally to a new smokeless tobacco product that is much safer even than​ e-cigarettes?

The CEO of Philip Morris

Japan's Business Culture

The Japanese place great importance on group loyalty and consensus, a concept called Wa. When confronted with disturbing questions or opinions, Japanese managers tend to remain silent.

Nemaswashio

U.S. managers in Japan have to be careful about this phenomenon, whereby Japanese workers expect supervisors to alert them privately of changes rather than informing them in a meeting.

Mexican businesses seek workers who are​ ______.

agreeable, respectful and obedient In​ general, Mexican employers seek workers who are​ agreeable, respectful, and obedient rather than​ innovative, creative, and independent.​ Typically, when visitors enter a Mexican​ business, they are met with a​ cordial, friendly atmosphere. This is because Mexicans desire harmony rather than conflict.

According to the video, what is the focus of Chapter 11?

comparing and contrasting business culture and climate across countries as relevant in strategic management

Which of the following political barriers has RIM faced in the Middle East?

differences in views on privacy that have threatened business investments

Which of the following is true regarding differences across cultures of which U.S. managers should be especially​ aware?

eating habits vary dramatically across cultures Eating habits differ dramatically across cultures. For​ example, belching is acceptable in some countries as evidence of satisfaction with the food that has been prepared. Chinese culture considers it good manners to sample a portion of each food served.

​______ is when a U.S. firm moves part or all of its manufacturing back to the U.S.

reshoring Reshoring refers to U.S. companies moving a portion of their manufacturing back to the United States. Many U.S. companies plan to reshore in​ 2018-2020 to take advantage of new U.S. tax​ laws, to get products to market​ faster, to respond rapidly to customer​ orders, to save from reduced transportation and​ warehousing, and to improve quality and protection of intellectual property.

If a company does not want wage rates to​ increase, which strategic decision might be impacted by the prevalence of labor unions in​ Europe?

where to locate stores The existence or prevalence of labor unions across Europe can be an important factor in many strategic decisions—such as where to locate stores or factories—because companies often prefer to avoid​ unions, which raise wage rates.