Principles of MGT Chapter 2

Economic dimension

Overall health and vitality of the economic system in which the organization operates.

The Internal Environment

Owner:− Whoever can claim property rights to an organization• Board of directors:− Governing body that is elected by a corporation's stockholders and charged with overseeing the general management of the firm to ensure that it is being run in a way that best serves the stockholders' interests• Employees• Physical work environment:− Includes the actual physical environment and the work that people do

Task environment

Specific organizations or groups that affect the organization

Ethical Leadership

The basic premise behind ethical leadership is that because leaders serve as role models for others, their every action is subject to scrutiny

Corporate Governance

The board of directors of a public corporation is expected to ensure that the business is being properly managed and that the decisions made by its senior management are in the best interests of shareholders and other stakeholders

Internal environment

The conditions and forces within an organization

Whistle-blowing

The disclosure, by an employee, of illegal or unethical conduct on the part of others within the organization

Ethical compliance

The extent to which an organization and its members follow basic ethical standards of behavior

Legal compliance

The extent to which an organization complies with state, federal, and international laws

European Union (EU)

The first and most important international market system

General environment

The set of broad dimensions and forces in an organization's surroundings that determine its overall context

Social responsibility

The set of obligations that an organization has to protect and enhance the social context in which it functions

Organizational culture

The set of values, beliefs, behaviors, customs, and attitudes that helps the organization's members understand what it stands for, how it does things, and what it considers important

Culture

The values, symbols, beliefs, and language that guide behavior

Technological dimension

Methods available for converting resources into products or services Web based tech

Export restraint agreements

Accords to voluntarily limit the volume or value of goods exported to or imported from one another

Strategic alliance

A cooperative arrangement between two or more firms for mutual gain

Interest groups

A group organized by its members to attempt to influence organizations

Sarbanes-Oxley Act of 2002

A law that requires CEOs and CFOs to vouch personally for the truthfulness and fairness of their firms' financial disclosures

Quota

A limit placed on the number or value of goods that can be traded

Which strategy for entering new country markets do you recommend for Walmart?

Acquire existing business.

Most favored national (MFN) principle

A provision of GATT that stipulates that if a country extends preferential treatment to any other nation that has signed the agreement, then that preferential treatment must be extended to all signatories to the agreement

Economic community

A set of countries that agree to markedly reduce or eliminate trade barriers among member nations (a formalized market system)

Joint venture

A special type of strategic alliance in which the partners share in the ownership of an operation on an equity basis

Tariff

A tax collected on goods shipped across national boundaries

General Agreement on Tariffs and Trade (GATT)

A trade agreement intended to promote international trade by reducing trade barriers and making it easier for all nations to compete in international markets

Which of the following statements about culture are true?

-Culture can be maintained by rewarding and promoting people whose behaviors are desired. -A major way to shape culture is by bringing outsiders into important leadership positions.

Magna Clothes is considering Europe as the primary region for its international ventures. That would require Magna Clothes to become familiar with the European Union (EU) and its business practices. Which of the following statements accurately describe the European Union? Check all that apply.

-The purpose of economic communities such as the European Union is to decrease fees and tariffs, thereby increasing the exchange of goods and services across national borders. -The euro is the currency of the European Union, replacing the pound (Ireland), the franc (France), and the lira (Italy). -The European Union traces its roots back to 1957, when the Treaty of Rome was signed to promote economic integration among Belgium, France, Luxembourg, Germany, Italy, and the Netherlands.

Three basic goals of the WTO

1. To promote trade flows by encouraging nations to adopt nondiscriminatory and predictable trade policies 2. To reduce remaining trade barriers through multilateral negotiations 3. To establish impartial procedures for resolving trade disputes among its members

Regulator

A body that has the potential to control, legislate, or otherwise influence the organization's policies and practices

Strategic partner

Also called strategic ally. An organization working together with one or more other organizations in a joint venture or similar arrangement

Regulatory agencies

An agency created by the government to regulate business activities

Licensing

An arrangement whereby one company allows another company to use its brand name, trademark, technology, patent, copyright, or other assets in exchange for a royalty based on sales

Ethics

An individual's personal beliefs about whether a behavior, action, or decision is right or wrong

Competitor

An organization that competes with other organizations for resources

Supplier

An organization that provides resources for other organizations

World Trade Organization (WTO)

An organization, which currently includes 164 member nations and 20 observer countries, that requires members to open their markets to international trade and to follow WTO rules

Philanthropic giving

Awarding funds or gifts to charities or other worthy causes

Ethical behavior

Behavior that conforms to generally accepted social norms

Unethical behavior

Behavior that does not conform to generally accepted social norms

Importing

Bringing a good, service, or capital into the home country from abroad

External environment

Everything outside an organization's boundaries that might affect it

"Buy national" legislation

Gives preference to domestic producers through consent or price restrictions

Political-legal dimension

Government regulation of business, relationship between business and government

Disney invested approximately $4 billion to construct a Disney theme park and resort near Shanghai, China. What considerations were important to Disney in choosing its approach to international business? Check all that apply.

High degree of control over operations High willingness to accept risk

Organizational Leadership and Culture

Leadership practices and the culture of the organization define the social responsibility stance an organization and its members will adopt.

Kirin Brewery, Japan's largest producer of beer, allows the Eagle Brewery in England to manufacture beer to Kirin's specifications and market the beer as Kirin Beer. Kirin Brewery earns a royalty on the beer sold in England. Which approach to international business is Kirin Brewery using?

Licensing

Maquiladoras

Light assembly plants built close to the U.S. border and are given special tax breaks by the Mexican government

Exporting

Making a product in the firm's domestic marketplace and selling it in another country

Direct investment

When a firm builds or purchases operating facilities or subsidiaries in a different country

Customer

Whoever pays money to acquire an organization's products or services

Yum! Brands includes Pizza Hut, KFC, and Taco Bell. The variety of brands in the company makes it difficult to achieve ______________ .

a united culture

United States-Mexico-Canada Agreement (USMCA)

• Replaced the North American Free Trade Agreement (NAFTA) • An agreement between the United States, Canada, and Mexico to promote trade with one another

Culture can be maintained by:

• Rewarding and promoting people whose behaviors are consistent with the existing culture • Articulating the culture through slogans and ceremonies • To change culture, managers must have a clear vision of what they want to create

Ethics and Information Technology

− Individual rights to privacy − Privacy policy − Review and correction of information that has been collected