Chapt 8 Notes, Global Enterprise, Chapter 8, Chapter 8, Global Enterprise Textbook, Chapter 6 Notes, Global Enterprise, Chapter 6, Chapter 6, Global Enterprise Textbook, Chapter 6, Global Enterprise Textbook, Part 2, Chapter 9 Notes, Global Enterpris...
situational interviews P.242, C.9
A job interview where the candidate is asked to describe in specific and behavioral detail how he would respond to a hypothetical situation.
letter of credit P.156, C.6
A legal document issued by a bank at the importer's (or buyer's) request in which the importer promises to pay a specified amount of money when the bank receives documents about the shipment.
Financing sources C.6
A loan from a commercial bank. A loan from an intermediary, such as an export management company that provides short-term financing. A loan from a supplier, for which the buyer can make a down payment and ask to make further payments incrementally. A loan from the corporate parent. Governmental or other organizational financing.
Indirect Pay P.246, C.9
Everything from legally required programs to health insurance, retirement, housing, memberships, etc.
ISO/IEC 27000 P.151, C.6
Family of standards which helps organizations keep information assets secure. Using this family of standards helps manage the security of assets such as financial information, intellectual property, employee details or information
expatriate failure in US-headquartered multinational firms C.9
Family related problems in adjusting to another culture. Lack of personal or emotional maturity to function in a new country. Inability to handle larger overseas responsibilities.
Gainsharing C.9
It works better in relatively smaller organizations. Requires companies to have good performance metrics. Focus has to be on quantifiable results.
global brand P.292, C.11
The brand name of a product that has worldwide recognition. Some of the most recognized brands in the world include Coca-Cola, IBM, GE, and McDonald's.
human capital P.233, C.9
The collective sum of the attributes, life experiences, knowledge, inventiveness, energy, and enthusiasm that a company's employees choose to invest in their work.
Licensing Agreement P.143, C.6
Under this agreement, the multinational firm grants rights on its intangible property, such as a brand name or technical know-how, to a foreign company for a specified period of time
Incentive Pay P.246, C.9
A bonus paid when specified performance objectives are met. May inspire employees to set and achieve a higher performance level and is an excellent motivator to accomplish firm goals.
global start-up P.215, C.8
A business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries.
hybrid-disruption strategies P.203, C.8
A combination of new-market and low-end disruption strategies.
marketing mix P.288, C.11
A combination of the four Ps (product, price, promotion, and place) that can be customized for different countries.
Service-level agreements (SLAs) P.153, C.6
A contract that specifies the service levels that an outsourcer must meet when performing the service to ensure quality and performance
equity joint venture P.144, C.6
A contractual strategic partnership between two or more separate business entities to pursue a business opportunity together; each partner contributes capital and resources in exchange for an equity stake and share in any resulting profits.
Expatriate, For expatriates a typical pay package consists of: C.9
A cost-of-living allowance to protect the employee's purchasing power. A mobility premium of 5 percent to 15 percent of gross salary. A hardship allowance of up to 30 percent for employees moving to difficult areas. Reasonable costs for moving furniture. Schooling costs for children between four and eighteen years. Family support to cover language and cultural training and help for the spouse to find work. A one-off payment, usually of one month's salary, to cover miscellaneous expenses
tax haven P.145, C.6
A country that has very advantageous (low) corporate income taxes.
low-end disruptions P.202, C.8
A disruptive technology that appears at the low end of an industry offering and usually does not lure customers away until it improves and becomes better than the incumbent offering.
trademark P.265, C.10
A distinctive sign, which identifies certain goods or services as those produced or provided by a specific person or enterprise.
at-will employment doctrine P.241, C.9
A doctrine that stipulates that a contract of employment can be terminated by either the employer or the employee at any time for any legal reason. (In the United States, for example, it is illegal to fire an employee on the basis of gender or ethnicity.)
intrapreneurship P.218, C.8
A form of entrepreneurship that takes place in a business that is already in existence.
gainsharing P.249, C.9
A form of pay for performance in which an organization shares the financial gains with employees, such that employees receive a portion of the profit achieved from their efforts (sometimes called profit sharing).
bonus P.245, C.9
A form of variable pay where the employee earns additional compensation on the basis of achieved objectives.
business plan P.204, C.8
A formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals; it may also contain background information about the organization or team attempting to reach those goals.
innovation hub P.269, C.10
A geographic region that contains a cluster of company R&D centers, universities, and government research institutes in close proximity.
Customs P.154, C.6
A governmental agency that monitors imports and collects import duties on goods coming into the country
Special 301 report C.10
an annual review of the global state of IPR protection and enforcement issued by the USTR.
Opportunity Identification: What are the Levers That Lead to Opportunity Identification P.202, C.8
eliminate, reduce, create, and raise And kept the same
Strategic Human Resource Management (SHRM) C.9
ensures that people are a key factor in a firm's competitive advantage
Entrepreneurs are different from small business in that P.195, C.8
entrepreneurs often rely on innovation—new products, methods, or markets—to grow their business quickly and broadly
Compensation and Reward C.9
evaluating and paying employees on the basis of their performance.
Patent C.10
exclusive right granted for an invention, whether a product or a process, which must be industrially applicable, be new, and exhibit a sufficient "inventive step." It gives the owner monopoly over several years. Some companies obtain them mainly to license or sell them to others, thus making money from their inventions without having to manufacture or service anything themselves. Filing them is relatively inexpensive but defending a them can be very expensive.
Doing Business Project (The World Banks) C.8
looks at laws and regulations, but it also examines time and motion indicators. Beyond describing local business practices, one of the key objectives of this Project is to make it easier for entrepreneurship to flourish around the world. Among the most populated countries, it suggests it's easiest to do business in the US, the United Kingdom, Canada, Australia, and Thailand; the most difficult large countries are Côte d'Ivoire, Angola, Cameroon, Venezuela, Afghanistan, and the Republic of the Congo
lowest-investment production strategy C.11
makes products at the company's existing manufacturing facilities and exports them to new markets.
expatriate failure P.243, C.9
means that the expatriate returns to the home country before completing the international assignment
Time and Motion Indicators P.208, C.8
measure how long it takes to complete a regulatory goal (e.g., getting a permit to operate a business).
Pre-emoloyement assessment tests C.9
measure thinking styles, behavioral traits, and occupational interests.
USTR: US government's Office of the United States Trade Representative C.10
monitors intellectual property rights around the world o It evaluates countries and rates them on their enforcement of IP rights. o The Special 301 report is an annual review of the global state of IPR protection and enforcement issued by the USTR. o Countries with a bad track record in the area are put on a "Priority Watch List."
Ventures: Research suggests that new venture opportunities tend to fall into one of three categories P.202, C.8
new market disruptions, low-end disruptions, or hybrid
R&D: According to the Global Innovative Index, companies evaluate the following things when choosing among countries in which to locate R&D facilities: C.10
o A nation's institutions o A nation's investment in education o A nation's ICT infrastructure o The sophistication of the market o Business sophistication
IP Law C.10
owners are granted certain exclusive rights (intellectual property rights) to a variety of intangible assets.
Total Reward P.245, C.9
pay that includes an individual's base salary, variable pay, share ownership, and other benefit
intrapreneurs C.8
people within an organization that develop new products and services through innovation and resources. Works from within an organization Is typically the intraorganzation revolutionary
Outsourcing hidden costs C.6
product obsolescence, deterioration, spoilage, taxes, loss due to damage or theft, and increased administrative and business travel costs.
Doing Business Report P.208, C.8
provides a quantitative measure of all the regulations associated with starting a business
Export Working Capital Program (EWCP) C.6
provides loans for businesses that can generate export sales but don't have the working capital to purchase inventory or to stay in business during the long payment cycles. The maximum loan amount or line of credit for the EWCP is $5 million.
Project team C.9
usually full time for a particular project and their rewards include profit sharing, stock options, etc
Parallel team C.9
usually meet on a part-time basis, are interdepartmental and employees get a merit increase or recognition reward.
Automated Export System (AES) P.159, C.6
Used to file the necessary documentation required for exporting electronically
War for talent P.228, C.9
a term signifying the strategic importance of attracting top employees to work for your company
War for talent C.9
a term signifying the strategic importance of attracting top employees to work for your company.
Factor-driven economies C.8
are economies that are dependent on natural resources and unskilled labor. o The factors associated with them are infrastructure, education, macroeconomic stability, etc. o Angola, Bolivia, Bosnia and Herzegovina, Colombia, Ecu
Entrepreneurship: More and more people are considering, why? C.8
due to the uncertainties of corporate life.
Global Brand Advantage C.11
economies of scale in production and packaging, which lowers marketing costs while leveraging power and scope.
transitional economies
economies that are moving from being state-dominated to being market-based, C.9
at-will employment doctrine C.9
either party can break the relationship with no liability, provided there was no express contract for a definite term governing the employment relationship and that the employer doesn't belong to a collective
Contractual mode C.6
Involve the use of contracts rather than investment P.143
Global Startup Assement Phases C.8
(1) deciding if a firm should become a global start-up and (2) deciding what the firm needs to do to make that happen.
Talent Management benefits C.9
-Creating globally consistent talent-evaluation processes. -Achieving cultural diversity in a global setting. -Developing and managing global leaders.
Marketing mix of a company is determined by C.11
-Culture and local preferences -Economic level -What consumers can afford -Distribution channels and media
Performance of employees, there are six strategic areas where executives generally rate the performance of their employees C.9
-Financial performance -Operating efficiency -Customer satisfaction -Employee performance -Innovation and change -Community/environment issues
Innovation pillars (enable Innovation) C.10
-Institutions, -Human Capacity, -General and ICT (information and communication technology) -Infrastructure, -Market Sophistication, and -Business Sophistication.
Job description, effective suggestions C.9
-List the job requirements in bullet form, so that job seekers can scan the posting quickly. -Use common industry terms, which speak to knowledgeable job seekers. -Avoid organization-specific terms and acronyms, which would confuse job seekers. -Use meaningful job titles. -Use key words taken from the list of commonly searched. -Include information about the organization. -Highlight special intangibles and unusual benefits of the job and workplace. -Specify the job's location and provide links to local community pages.
War on talent, winning strategies C.9
-Multiple interviews to assess a candidate. -Understanding its market segment and then hiring. -Having other employees vote for or against trainees before confirmation.
Compensation Packages, Global firms must manage their compensation packages in five areas C.9
-Setting up a worldwide compensation package. -Compensation for a third-country national (TCN) -international benefits and related taxes -Pension plans. -Stock-ownership plans.
straight product extension C.11
-The advantage is that the company need not invest in new research. -Changes can be made to packaging based on local requirements. -Disadvantage is that products may not be suitable for local use
Intellectual Property (IP) how companies/ owners protect it and profit from it C 10
-They can choose to never reveal it—to create what is called a trade secret (e.g., Coca-Cola). -They can get a patent -They can get a copyright -Companies can get a trademark
Investment Strategies: Beyond contractual relationships, firms can also enter a foreign market through one of two investment strategies, which are: P.143, C.6
1) a joint venture or 2) a wholly owned subsidiary
Hybrid reward systems according Nancy Katz (2 systems) C.9
1. Features a base rate of pay for individual performance that increases when the group reaches a target level of performance. 2. The pay-for-performance rate also increases when the target is reached; but every team member must reach a target level of performance before the higher pay rate kicks in.
Markets, two kinds that exist C.11
1. Gray Market 2. Counterfeit Market
Entry Modes: When deciding which mode of entry to choose, companies should ask themselves two key questions: P.147, C.6
1. How much of our resources are we willing to commit? 2. How much control do we wish to retain?
Export and Import Transactions: What are the three documents required for getting paid in export/import transactions? P.157, C.6
1. Letter of credit 2. Bill of lading 3. Draft (or bill of exchange)
HRM: What are the Four Key Elements of HRM P. 234, C.9
1. Selection and Placement 2. Job Design 3. Compensation and Rewards 4. Diversity Management
Expatriate: What are 4 predictors of a manager's ability to succeed as an expatriate
1.Self-orientation. 2.Others orientation 3.Perceptual ability 4.Cultural toughness. P.243, C.9
sight draft P.158, C.6
A bill that is due to be paid upon receipt (i.e., when it is "seen").
time draft P.158, C.6
A bill that is payable 30, 60, 90, or 120 days in the future.
carbon footprint P.151. C.6
A measure of the impact that activities like transportation and manufacturing have on the environment, especially on climate change. Includes daily activities, such as using electricity or driving, because of the greenhouse gases produced through burning fossil fuels for electricity, heating, transportation, and so on. The higher the carbon footprint, the worse the impact on the environment.
new-market disruption P.203, C.8
A new-market disruption targets noncustomers rather than low-end customers, thus creating a new market that was previously ignored by the dominant players of the existing market.
Balanced Scorecard P.251, C.9
A performance-management tool that helps managers define the performance categories that relate to the company's strategy.
venture capitalists P.207, C.8
A person or investment firm that makes venture investments and brings managerial and technical expertise as well as capital to their investments.
exporter P.154, C.6
A person or organization that sells products and services in foreign countries that are sourced from the home country.
importer P.154, C.6
A person or organization that sells products and services that are sourced from other countries.
entrepreneur P.195, C.8
A person who engages in entrepreneurship.
Social entrepreneurs P.199, C.8
A person who founds an organization (either for-profit or nonprofit) whose focus is to implement innovative solutions to societal problems. Social entreprenurs aim to create large-scale social change through the ventures they create.
expatriate P.243, C.9
A person who is living in a country other than his or her home (native) country.
intrapreneur P.218, C.8
A person within an established business who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation
succession planning P.237, C.9
A process whereby an organization ensures that employees are recruited and developed to fill each key role within the company.
Stock Options P.246, C.9
A right to buy a piece of the business that may be given to an employee to reward excellent service. Most options can only be exercised at a future date, ensuring that employees remain with the company and contribute to its success. An employee who owns a share of the business is far more likely to go the extra mile for the operation.
process P.271, C.10
A series of linked activities (steps, tasks, or subprocesses) that produce an intended result.
Total Quality Management (TQM) P.296, C.11
A set of management practices initially introduced by W. Edwards Deming. The focus of ______ is increasing quality and reducing errors in production or service delivery. It consists of systematic processes, planning, measurement, continuous improvement, and customer satisfaction.
high-performance work system (HPWS) P.231, C.9
A set of management practices that attempts to create an environment within an organization in which the employee has greater involvement and responsibility.
country-of-origin effect P.296, C.11
A situation in which consumers use the country where a product was made as a barometer for evaluating the product's quality. Their perceptions of the country influence whether they perceive the product favorably or unfavorably and thus whether they'll purchase the product.
social network P.273, C.10
A social structure made of nodes (which are generally individuals or organizations) that are connected by ties; a set of relationships among people.
disruptive technology P.202, C.8
A technology that can make prior technologies obsolete
Action C.8
A vital component of entrepreneurship ; there is no substitute for it
Outsorcuing C.11
Advantages are efficient processes and access to specialized equipment too costly to be shipped. India has long been a favorite location for outsourcing services. Disadvantage is "hidden costs" like costs of telecommunications, additional facilities, delays, redundancy, etc.
Centralized-marketing organizational structure, advantages and disadvantages C.11
Advantages are speed, consistency and economies of scale. Disadvantage is that marketing isn't tied to local knowledge
Multi sourcing advantages and disadvantages C.11
Advantages: More flexibility in times of disruption Negotiating lower rates by pitting one supplier against another Disadvantages are: Less uniform quality across suppliers Less influence with each supplier Higher coordination and management costs
Soul sourcing advantages and disadvantages C.11
Advantages: Price discounts based on higher volume Rewards for loyalty during tough times Exclusivity brings differentiation Greater influence with a supplier Disadvantages are: Higher risk of disruption Supplier has more negotiating power on pric
promotion P.286, C.11
All the activities that inform and encourage consumers to buy a given product, including advertising (whether print, radio, television, online, billboard, poster, or mobile), coupons, rebates, and personal sales.
born-global firm P.215, C.8
Also commonly called a global start-up, a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries
bottom of the pyramid (BOP) P.274, C.10
Also known as the base of the pyramid, the market represents the four billion to five billion people living on less than $2 per day, typically in emerging economies.
job evaluation P.246, C.9
An analysis of the internal value of a job that is intended to identify how critical a given job is to the success of the organization.
Global Entrepreneurship Monitor (GEM P.212, C.8
An annual assessment of the national level of entrepreneurial activity across countries, started as a partnership between London Business School and Babson College.
Workforce Scorecard P.251, C.9
An application of the Balanced Scorecard concept to an organization's human capital to identify and measure the behaviors, skills, mind-sets, and results required for the workforce to contribute to the company's success.
cash in advance P.158, C.6
An arrangement in which the exporter requires payment from the importer before shipping the goods.
open account P.158, C.6
An arrangement in which the exporter ships the goods and then bills the importer.
angel investors P.207, C.8
An affluent individual who provides capital for a business start-up.
export management company (EMC) P.142, C.6
An independent company that performs for a fee or commission the duties a firm's own export department would execute, such as handling the necessary documentation, finding buyers for the export, and taking title of the goods for direct export.
third-country national (TCN) P.245, C.9
An individual who is a citizen of neither the parent company's home country nor the host country and who is hired to work in the host country.
knowledge spillover P.270, C.10
An informal exchange of ideas among individuals that helps individuals understand the state of the art in their field.
Japan External Trade Organization (JETRO) P.159, C.6
An organization that assists foreign companies in exporting their products to Japan by providing free-market entry information and business-partner matching as well as some subsidies. Also works to attract foreign direct investment into Japan.
Overseas Private Investment Corporation (OPIC) P.159, C.6
An organization that helps US businesses invest overseas, particularly in developing countries, by providing direct loans and loan guarantees to projects that meet its guidelines. OPIC also provides exporters' insurance
Export-Import Bank of the United States (Ex-Im Bank) P.160, C.6
An organization that helps exporters who have found a buyer, yet the buyer is unable to get financing for the purchase in their own country. Can provide credit support (i.e., loans, guarantees, and insurance for small businesses) that cover up to 85 percent of the transaction's export value.
strategic human resources management (SHRM) P.231, C.9
An organizational approach to human resources management (HRM) with a concern for the effects of HRM practices on firm performance.
talent management P.237, C.9
Anticipating the need for human capital and setting a plan to meet it.
trade secret P.264, C.10
Any confidential business information which provides an enterprise with a competitive edge.
product P.285, C.11
Any physical good or intangible service that is offered for sale.
Nonmonetary pay P.246, C.9
Benefits that don't involve tangible value
BRIC counties C.11
Brazil, Russia, India, China
BRIC Countries P.259
Brazil, Russia, India, and China are collectively known as:
invention P.261, C.10
Brings an idea into tangible reality by embodying it as a product or process.
Importing P.141, C.6
Buying goods and services from foreign sources and bringing them back into the home country. Importing is also known as global sourcing.
Global sourcing P.150, C.6
Buying raw materials, components, or services from companies outside the home country.
global sourcing P.297, C.11
Buying the raw materials or components that go into a company's products from around the world, not just from the headquarters' country.
Product C.11
Can differ from country to country if a company chooses to adapt its product to local tastes or to create a new product specifically for local tastes. Thus, Starbucks introduced a green tea Frappuccino in China.
Learning and Leadership C.9
Can the company respond to uncertainty and learn and adapt to change quickly?
Basic Pay P.246, C.9
Cash wages paid to the employee. Because paying a wage is a standard practice, the competitive advantage can only come by paying a higher amount.
Trade secret example C.10
Coca Cola
Intrapreneurial Organziaton Forms C.8
Coexistence or structural separation
counterfeit markets P.290, C.11
Commerce areas where vendors purposely deceive buyers by altering products and then selling them as branded products at a bargain cost.
gray markets P.290, C.11
Commerce areas where, because of price differences across countries, consumers are able to cross international borders to legally purchase products at lower prices than in their home country.
Seed money C.10
Companies encourage intrapreneurs to propose new ideas and solutions, rewarding them with __________ to develop and grow their ideas.
Promotion C.11
Companies often customize them to use images and wording that resonate with local markets.
Get a Pipeline of new products P.263
Companies undertake R&D to:
Distributors C.6
Companies use them because distributors know the local market. However, it is hard to monitor how much a distributor favors a firm's product.
Expatriate, Indicators that one should be hired C.9
Company-specific technology or knowledge is important. Confidentiality in the staff position is an issue. There is a need for speed. Work rules regarding local workers are restrictive. Corporate strategy is focused on global integration.
HRM, important questions that need to be a answered C.9
Competence. Does the company have the required knowledge, skills, and abilities to implement its strategy? Consequence. Does our company have the right measures, rewards, and incentives in place to align people's efforts with the company strategy? Governance. Does the company have the right structures, communications systems, and policies to create a high-performing organization? Learning and Leadership. Can the company respond to uncertainty and learn and adapt to change quickly?
Born Global (AKA Global Startup) Characteristics C.8
Complement the products or capabilities of other global players. Take advantage of global IT infrastructure. Exploit a combination of exporting and foreign direct investment
entrepreneurial process P.200, C.8
Consists of (1) identifying entrepreneurial opportunities (2) planning and preparing the venture, and (3) resourcing the venture and taking action.
indirect channel P.287, C.11
Contains one or more intermediaries between the consumer and the producer. These intermediaries can include distributors, wholesalers, agents, brokers, retailers, international freight forwarders, and trading companies.
Priority Watch List C.10
Countries with a bad track record in the area are put on this
DARPA C.10
Created the internet
product invention P.295, C.11
Creating an entirely new product for a given local market. In this strategy, companies go back to the drawing board and rethink how best to design a product for a specific country or region.
Reverse Innovation C.11
Creating products for new and emerging markets often resulting in radical innovations. This leads to new and better products that can be used in the home country as well.
Intellectual property (IP) P.264, C.10
Creations of the mind, such as inventions, literary and artistic works, and symbols, names, and images used in commerce.
Entry modes: Irrespective of the kind of entry chosen, some factors that remain essential are: C.6
Cultural and linguistic differences Quality and training of local contacts and/or employees Political and economic issues Experience of the partner company
PC Revolution P.261
DARPA's creation of the Internet (known at its inception as ARPAnet) and Xerox PARC's Ethernet and graphical-user interface (GUI) laid the foundations for the
Supply Chain Management Activites C.11
Demand management Procurement Inventory management Warehousing and material handling Production planning and control Packaging Transportation management Order management Distribution network design Product-return management
reverse innovation P.296, C.11
Designing a product for a developing country and bringing that innovation back to the home country.
certificate of origin P.156, C.6
Documentaion that declares the country from which the product originates.
export declaration P.155, C.6
Documentation that provides the contact information of both the exporter and the importer (i.e., buyer) as well as a full description, declared value, and destination of the products being shipped.
insurance certificate P.156, C.6
Documentation that shows the amount of insurance coverage on the goods and identifies the merchandise.
Consequence C.9
Does our company have the right measures, rewards, and incentives in place to align people's efforts with the company strategy
Competence C.9
Does the company have the required knowledge, skills, and abilities to implement its strategy?
Governance C.9
Does the company have the right structures, communications systems, and policies to create a high-performing organization?
factor-driven economies P.214, C.8
Economies that are highly sensitive to world economic cycles, commodity price trends, and exchange rate fluctuations; typical in countries that compete on the basis of unskilled labor and natural resources.
Innovation-driven economies P.214, C.8
Economies that are typical in countries that compete on business sophistication and innovation.
efficiency-driven economies P.214, C.8
Economies that are typical in countries that compete on the basis of production processes and increased product quality.
Management P.261
Edison's 1,093 patents had less to do with individual genius and more to do with _____________ genius:
Direct Pay P.246, C.9
Employee's base wage
freight forwarder P.155, C.6
Entity that typically prepares the documentation, suggests shipping methods, navigates trade regulations, and assists with details like packing and labeling.
social entrepreneur C.8
Entrepreneurs who launch nonprofit ventures for social causes are often referred to as: Note: o They look for and implement innovative solutions to societal problems. o They implement the same strategies as entrepreneurs.
Bootstrapping P.206, C.8
Exploiting a new business opportunity with limited funds.
distributors P.142, C.6
Export intermediaries who represent the company in the foreign market.
Export and Import transactions: The main parties involved in export and import transactions are the: P.154, C.6
Exporter, Importer, and Carrier.
secured financing P.158, C.6
Financing granted against collateral, which can be the imported/exported goods.
Wholly owned subsidiary C.6
Firms may want to have a direct operating presence in the foreign country, completely under their control. To achieve this, a company can establish a new ______________
GE P.261
For fifty years following the early twentieth century, ____ was awarded more patents than any other firm in America
Groups and Teams: What are some pay structures for groups and teams
Gainsharing Team Based Pay P.249, C.9
innovation P.261, C.10
Generates revenue from a product or process.
Open innovation P.272, C.10
Generating new business ideas through input from employees beyond a company's R&D department and even going outside the firm to enlist contributions from experts, customers, suppliers, and competitors.
R&D: companies undertake R&D to C.10
Get a pipeline of new products
Bonuses P.246, C.9
Gifts given occasionally to reward exceptional performance or for special occasions. Bonuses can show that an employer appreciates its employees and ensures that good performance or special events are rewarded. Most bonuses are developed using specific measurable criteria.
Bonuses P.246, C.9
Gifts given occasionally to reward exceptional performance or for special occasions. They can show that an employer appreciates its employees and ensures that good performance or special events are rewarded. Most are developed using specific measurable criteria.
franchising P.143, C.6
Granting rights on an intangible property, like technology or a brand name, to a foreign company for a specified period of time and receiving a royalty in return.
Social Networks C.10
Have played a very large role in innovation and innovative thinking. Software tools that promote social networking are even more important when companies expand internationally, because it will be hard for innovation teams to personally know all the employees
Talent Management effective techniques C.9
Hiring from outside to avoid training costs. Sending employees for short-term training programs more frequently.
process innovation P.271, C.10
Implementing a new or significantly improved process.
Documentation C.6
Importing and exporting require lots of it It enables trade between entities who do not know each other. It provides a common framework and process.
Equity joint venture and non equity joint venture differences, C.6
In a nonentity joint venture, there is no contribution of capital to form a new entity P.144, C.6
Product invention C.11
In this strategy companies need to rethink the how to design a product. There is a need to understand market requirements. The focus is to give low-cost but good quality products. Ex. P&G designed a diaper for emerging markets that cost the same as a single egg. Such a price would make the diaper affordable in emerging-market countries.
Free riders P.250, C.9
Individuals or firms that benefit from a shared resource or the actions of others without paying or contributing their fair share of the costs.
user-led innovation P.273, C.10
Innovation by consumers and end users, who are using (or want to use) the product in new ways beyond what the company originally intended
What's the difference between invention and innovation P. 261
Invention brings an idea into reality by embodying it as a product or system. An innovation converts a new idea into revenues and profits
safety stock P.302, C.11
Inventory the company holds to help ensure that it won't run out of products if there is a delay or crisis in a distant manufacturing region
Process Innovation C.10
Is an innovation in the way a company does any process is a new way of doing things—the implementation of a new or significantly improved activity or set of activities. This includes significant changes in techniques, equipment, or software.
Global market research C.11
Is important in understanding the market's culture and social trends, b/c these factors impact which products consumers will like and which advertising appeals will resonate with them.
Invention C.10
Is the creation of a new idea embodied in a product or process
(OPIC): What is the most useful tool of the Overseas Private Investment Corporation (OPIC) P.159, C.6
It can provide financing in countries where conventional financial institutions often are reluctant or unable to lend on such a basis P.159
Value of the documentation is P.154, C.6
It enables trade between entities who don't know each other since the parties are able to trust each other b/c the documentation provides a common framework and process to ensure that each party will do what they say in the import/export transaction.
US Bureau of Customs and Border Protection (CPB) C.6
It has the dual goals of facilitating the transport of goods while ensuring safety and security.
Product adaptation C.11
It helps in catering to emerging markets where product preferences may be different from developed markets. Ex. Nokia made its mobile phones for India dust-resistant.
Countertrade disadvtages C.6
It is associated with command economies during the Cold War. There is a potential risk of receiving inferior goods. It is advisable only for large firms.
Strategic Human Resource Management (SHRM) C.9
It is not simply a function of the human resources (HR) department. It needs the involvement of all managers and executives.
Countertrade C.6
It is useful when a country limits the profits that can be taken out of a country. It is useful when countries are unable to pay in hard cash alone. Companies across industries engage in countertrade.
Open innovation C.10
It takes R&D beyond research lab to customers and partners. Allows people outside a company—including university researchers, experts, suppliers, and partners—to contribute ideas and solutions for new products or service One method by which a company can manage and run open innovation is to use a contest or "challenge" method to generate new ideas from employees. Its advantages are listed below: -Reduced cost of R&D (pay for results, not failed attempts) -Faster product development time (saves time because concurrent teams work on solving the problem) -Access to experts from around the world -Bigger breakthroughs due to greater connectivity · The US government uses this approach to reward innovative solutions.
Overseas Private Investment Corporation (OPIC) C.6
It was established as an agency of the US government in 1971. OPIC helps US businesses invest overseas, particularly in developing countries. It provides medium- to long-term funding through direct loans and loan guarantees to eligible investment projects
Private Export Funding Corporation (PEFCO) C.6
It was formed in 1970 to assist in financing US exports by supplementing the financing available from commercial banks and other lenders.
Distribution Strategies that a company may follow to market C.11
Joint-venture with a local partner Acquire a local company Build its own distribution channel (Which strategy the company chooses depends on its timetable for volume in the market, local foreign-ownership laws, and the availability of suitable partners or acquisition targets.)
Innovation Hubs are know for C.10
Knowledge spillover
decentralized-marketing organizational structure P.293, C.11
Local regional headquarters have the power to make marketing decisions affecting their region.
R&D: Having a network of smaller R&D centers in various parts of the world benefits C.10
Lower costs Tap local talent Develops products for new markets
Place C.11
Many emerging countries may lack national retail chains, which means that companies may need to sell their products through a much more fragmented system of small storefronts or kiosks
Baby Boom Generation C.9
Many sources have been warning that the US workforce will shrink in the second and third decades of the twenty-first century as the ______________________ (those born between 1945 and 1961) reaches retirement age. There will be a need to have an adequately trained workforce to replace it.
JETRO offers free services such as C.6
Market-entry information Business partner matching Expert business consulting (through bilingual business consultants who're Experts in various industries) Access to a global network of executives and advisors
Exporting Benefits C.6
Market—access to new markets Money—access to foreign currency Manufacturing—manufacture and buy source materials in higher volumes
Specially trained innovation teams C.10
One way that large multinationals manage the challenge of globally distributed innovation activities is through
stock-out P.302, C.11
Means that there is no more stock of the company's product. The product is unavailable to customers who want to buy it.
Countertrade, Some of the reasons that companies engage in countertrade are: C.6
Mitigating the risks of price movements Mitigating the risks of currency-exchange-rate-fluctuations Repatriating profits
Asia P.262
Most US and European Fortune 1000 companies have R&D centers in
Local hires, the following are indicators 4th at of the need for a local hire C.9
Need to interact with local customers, suppliers, employees, or officials is paramount. Corporate strategy is focused on multidomestic or market-oriented operations. Cost is an issue. Immigration rules regarding foreign workers are restrictive. Large cultural distances between the host country and candidate expatriates
Pay system elements C.9
Non-monetary pay—intangible benefits Direct pay—base wages Indirect pay—legally required programmes Basic pay—cash wages Incentive pay—bonus Stock options—a piece of business given to the employee for exceptional work Bonuses—gifts to reward exceptional performance
The United States P.263
Of all the countries in the world, _____________remains the largest investor in R&D. 1/3 of all spending on R&D comes from here
Pricing C.11
Offers several nuances when applied to international products. There are several challenges in making products affordable in emerging markets
intrapreneurial organization P.219, C.8
One that seeks to systematically promote the spirit of intrapreneurship in targeted parts of the organization
Teams: What are the 3 types of teams
Parallel teams Project teams Partnership teams P.249, C.9
SBA's Export Working Capital Program (EWCP) P.159, C.6
Provides loans for businesses that can generate export sales but don't have the working capital to purchase inventory or to stay in business during the long payment cycles
license P.154, C.6
Purchased permission to export goods from a country.
Vertical integration C.6
Purchasing a local supplier
Outsourcing Advatages C.6
Reduction in costs by moving labor to a lower-cost country. Speeding up of the pace of innovation. Funding development projects that would otherwise be unaffordable. Liberating expensive home-country-based engineers and salespeople from routines tasks. Putting a standard business practice out to bid in order to benefit the company.
Service Level Agreements (SLAs) include: C.6
Scope of services—frequency, quality, timing Cost of service Communications—dispute-resolution, reporting and governance, key contacts Performance—improvement objectives
Intrapreneuring: Why You Don't Have to Leave the Corporation to Become an Entrepreneur provides ten commandments for intrapreneurs: By Gifford Pinchot, ten commandments C.8
See Chapter 8, I notes. P.8 of notes
Expatriate, The predictors of a manager's ability to survive as an expatriate rest on the following: C.9
Self-orientation—attributes of self-esteem and confidence. Others orientation—ability to interact effectively with the host nation. Perceptual ability—ability to understand the behaviour of another community. Cultural toughness—ability to adjust to a different culture.
offshoring P.303, C.11
Setting up operations in a low-cost country for the purpose of hiring local workers at lower labor rates. Offshoring differs from outsourcing in that the firm retains control of the operations and directly hires the employees
Lagging indicators C.9
Show what a company has achieved (retrospective)
Brands purpose C.11
Signals trust
Sourcing Methods C.11
Sole Sourcing And Multi sourcing
Global Competitiveness Index (GCI) P.212, C.8
System that ranks nations quantitatively according to a weighted index of twelve assessed pillars: (1) institutions, (2) infrastructure, (3) macroeconomic stability, (4) health and primary education, (5) higher education and training, (6) goods-market efficiency, (7) labor-market efficiency, (8) financial-market sophistication, (9) technological readiness, (10) market size, (11) business sophistication, and (12) innovation.
straight product extension P.294, C.11
Taking the company's current products and selling them in other countries without making changes to the product.
R&D: The single largest investor in R&D C.10
The U.S
Global Competitiveness Index (GCI) C.8
The WEF ranks national competitiveness in the form of a ______________. It has twelve indices: o Institutions o Infrastructure o Macroeconomic stability o Health and primary education o Higher education and training o Goods-market efficiency o Labour-market efficiency o Financial-market sophistication o Technological readiness o Market size o Business sophistication o Innovation
price P.285, C.11
The amount of money that the consumer pays for the product.
commercial or customs invoice P.155, C.6
The bill for the goods shipped from the exporter to the importer or buyer.
copyrights P.264, C.10
The body of laws that grants authors, artists, and other creators protection for their literary and artistic creations, which are generally referred to as "works."
four Ps P.285, C.11
The four key elements of marketing—product, price, promotion, and place.
outsourcing P.303, C.11
The company delegates an entire process (e.g., accounts payable) to the outsource vendor. The vendor takes control of the operations and runs the operations as they see fit. The company pays the __________ vendor for the end result; how the vendor achieves the end result is up to the vendor.
outsourcing P.152, C.6
The company delegates an entire process (e.g., accounts payable) to the outsource vendor. The vendor takes control of the operations and runs the operations as they see fit. The company pays the outsource vendor for the end result; how the vendor achieves the end result is up to the vendor.
product adaptation P.294, C.11
The company strategy of modifying an existing product in a way that makes it a better fit local needs.
war for talent P.237, C.9
The competition between organizations to attract and retain the most able employees.
bill of lading P.155, C.6
The contract between the exporter and the carrier, authorizing the carrier to transport the goods to the buyer's destination; acts as proof that the shipment was made and that the goods have been received.
Knowledge spillover C.10
The cross-pollination of ideas that takes place when employees of one firm talk with employees of another simply because of their proximity and frequenting the same local restaurants, events, or transportation stops; (Innovation Hubs are known for this)
barter P.149, C.6
The direct exchange of one good for another, with no money involved.
Licensing and franchising difference P.143, C.6
The difference is that the franchiser provides a bundle of services and products to the franchisee.
draft (or bill of exchange) P.157, C.6
The document by which the exporter tells the importer to pay a specified amount at a specified time. It is a written order for a certain amount of money to be transferred on a certain date from the person who owes the money or agrees to make the payment.
carrier P.154, C.6
The entity handling the physical transportation of the goods, such as UPS, FedEx, and DHL.
intellectual property rights (IPR) P.264, C.10
The exclusive rights granted to owners for their intangible assets under intellectual property law.
Contractual basis - through licensing, franchising, management contracts, or turn key projects
The fewer the resources (i.e., money, time, and expertise) the company wants (or can afford) to devote, the better it is for the company to enter the foreign market on a _______ P.147, C.6
Theories for rewarding employees C.9
The first theory advocates rewarding individual performance, through plans such as commissions-sales schemes and merit-based pay. The second theory believes that organizations should reward team performance, without regard for individual accomplishment.
World Intellectual Property Organization (WIPO) P.267, C.10
The global nongovernmental organization tasked with coordinating and marshalling efforts to harmonize intellectual property rights among countries and regions.
Licensing P.143, C.6
The granting of permission by the licenser to the licensee to use intellectual property rights, such as trademarks, patents, brand names, or technology, under defined conditions.
centralized-marketing organizational structure P.293, C.11
The home-country headquarters retains decision-making power for marketing in all countries.
Research and development (R&D) P.261, C.10
The intertwined processes of research (to identify new knowledge and ideas) and development (turning the ideas into tangible products or processes).
coexistence or structural separation P.228, C.8
The intrapreneurial organization can take on one or a combination of two forms:coexistence or structural separation P.220
Silk Road P.141, C.6
The land and water trade routes that covered more than four thousand miles and connected the Mediterranean with Asia.
Licensing C.6
The licenser is paid a royalty on each unit produced and sold. Companies choose this because it does not require huge investments. It gives low potential returns because profits need to be shared
place P.286, C.11
The location at which the company offers its products for sale.
ISO 9000 certification (ISO means International Organization for Standardization) P.151, C.6
The mark of good quality around the world. It developed uniform standards for quality guidelines
Secured Financing P.158, C.6
The most common method of raising new money
contract manufacturing P.152, C.6
The outsourcing of manufacturing.
licensing P.266, C.10
The owner of an asset granting the right to use the asset to another while continuing to retain ownership of the asset; an important way of creating value with assets
documentation P.154, C.6
The official forms that must be presented to satisfy the import and export regulations of countries and for payment to be processed.
Supply-chain management P.304, C.11
The planning and management of all activities involved in sourcing and procurement, conversion, and logistics. It includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers, and integrates supply-and-demand management within and across companies.
Job design P.235, C.9
The process of combining tasks to form a whole job while taking into account issues of the health and safety of the worker
market segmentation P.289, C.11
The process of dividing a larger market into smaller markets that share a common characteristic, such as age, gender, income level, or lifestyle.
bias for action P.207, C.8
The propensity to act or decide without customary analysis or sufficient information.
To Share R&D Costs P.263
The reason for the collaboratory strategy is:
Entrepreneurship P.195, C.8
The recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures.
social capital P.273, C.10
The resources—such as ideas, information, money, and trust—that one is able to access through one's social network.
exporting P.141, C.6
The sale of products and services in foreign countries that are sourced or made in the home country.
channel of distribution P.287, C.11
The series of firms or individuals who facilitate the movement of the product from the producer to the final consumer.
direct channel P.287, C.11
The shortest channel of distribution, consisting of just the producer and the end consumer. The consumer buys the product directly from the producer.
factoring P.158, C.6
The situation in which an exporter sells a time draft at a discount to an intermediary (often a bank) that will pay the exporter immediately and then collect the full amount from the importer at the later date.
countertrade P.148, C.6
The situation in which companies trade goods and services for other goods and services; actual monies are only involved to a lesser degree, if at all.
counterpurchase P.149, C.6
The situation in which the seller receives cash contingent on the seller buying local products or services in the amount of (or a percentage of) the cash
applied research P.261, C.10
The systematic work to gain knowledge to meet a specific need
Project Teams P.249, C.9
a temporary team, that meets full-time for the life of the project
Safety and facilitation were met through three interrelated initiatives after September 11th:
The twenty-four-hour rule, requiring advanced information prior to loading. An automated targeting system to evaluate all inbound freight. Sophisticated detection technology for scanning high-risk containers
basic research P.261, C.10
The work of scientists and others who pursue their investigations without commercial goals, focusing on unraveling the secrets of nature and finding new knowledge.
Exporting Risks C.6
There may be better local production. The distributor can choose to switch to a cheaper product. Consumers may prefer a local producer to a foreign one.
Certificate of Origin C.6
They are required for import duties.They are lower for a country designated the "most favored nation."
ISO 14000 standards P.151, C.6
This certification shows that the company works to minimize any harmful effects it may have on the environment.
Dot-Com Era (From 1990's) P.195, C.8
This period shaped the expectations and perceptions of an entire generation of potential entrepreneurs. It's when everyone wanted to be an entrepenuer
R&D: who was the famous scientist and founder of Edison General Electric Company (today's GE), to be the first to bring management discipline to R&D. C.10
Thomas Edison
pay for performance P.248, C.9
Ties pay directly to an individual's performance in meeting specific business goals or objectives.
sole-source P.297, C.11
To buy raw materials, components, or services from one supplier exclusively, rather than buying from two or more suppliers.
Government: why have they played a large role in R&D C.10
To fund research for military applications war efforts
Innovation P. 262
also includes new product and service combinations
The Department of Defense P.263
What government agency provides more funding than all the nations of the world except China and Japan?
vertical integration P.144, C.6
When companies purchase a local supplier for direct control of the supply
War on talent C.9
Winning the ___________ means that companies need to attract the right workers;
Workforce scorecard key sequential elements C.9
Workforce mind-set and culture Workforce competencies Leadership and workforce behaviors Workforce success
Entrepreneur P.195, C.8
a French word that means "to undertake." (In the business world, this term applies to someone who wants to start a business or enterprise)
guanxi P.146, C.6
a connection based on reciprocity
Bias for Action C.8
a just-do-it-and-contemplate-later mentality
Team based pay C.9
a manager motivates all members to achieve goals as a unit
Opportunity Levers identification include the following C.8
a. New-market-creation strategies that are designed to eliminate, reduce, create, or raise some previously assumed dimension of product/market supply and demand. b. New-market-disruption strategies that are designed to allow a firm that has created a new market to grow into a dominant player in a new but huge industry. c. Low-end-disruption strategies that identify a business that will let you shift customers from a high-cost-to-serve to a low-cost-to-serve business model.
Cultural toughness C.9
ability to adjust to a different culture.
Others orientation C.9
ability to interact effectively with the host nation.
Perceptual ability C.9
ability to understand the behaviour of another community.
Global sourcing advantages C.11
access to higher quality or lower prices.
Diversity Managment C.9
actively appreciating and using the different perspectives that all employees bring to the workplace.
Basic Research C.10
advances the knowledge of science without an explicit, anticipated commercial outcome.
Sensitivity: five areas where employees need to show it C.9
age, ethnicity, sexual orientation, health, personal issues (children, pregnancy, police records, etc.)
Foreign markets C.11
are not copies of American markets and products for these markets need to be adapted and adjusted. Some characteristics of consumers in these markets are: -Fast rising income levels of the middle-classes are creating a cast pool of disposable income. -There are millionaires everywhere and they want the same products as their Western counterparts. -There are many B2B (business to business) opportunities
Team Members C.8
are selected on the basis of their skills and capabilities
Transactional metrics C.9
are the easiest to measure and include counting the number of new people hired, fired, transferred, and promoted
Proximity C.10
attracts the best workers and stimulates innovation through the crosspollination of ideas.
Self orientation C.9
attributes of self-esteem and confidence.
Corporate R&D P.260
began in the United States with Thomas Edison and the Edison General Electric Company he founded in 1890
Market Segmentation: not all citizens of a country can be marketed uniformly b/c C.11
besides demographic differences there may be regional differences within each country as well.
Price discrepancies C.11
between markets can cause the development of gray markets.
Multi sourcing C.11
buying raw materials, components, and services from multiple sources.
Entrepreneurial Ventures C.8
can big, small, and medium and operate at a local or global level.
Intraorganzation revolutionary C.8
challenging the status quo and fighting to change the system from within
Selection tools C.9
cognitive tests, personality inventories, and behavioral-traits assessments
entrepreneurship c.8
concerned with starting something new It become popular during the 'dotcom' era
intrapreneurship c.8
concerned with starting something new, like a new product or service, in an existing, established business
Global Brand Disadvantage C.11
consumer needs differ across countries, as do legal and competitive environments.
The WCO, established in 1952 as the Customs Co-operation Council (CCC) P.155, C.6
created a framework that calls for cooperation between the customs administrations of different countries
Counterfeit markets C.11
deceive customers into buying what they think is a branded product at a bargain price.
R&D is undertaken by companies in order to C.10
develop new products and services that will help them to grow and expand their operations.
Situational interviews C.9
focus on past experience or future situations.
Partnership Team C.9
formed around joint ventures with profit sharing as the most common pay structure.
technological P.262
growth in gross national product per worker is due more to ________________ progress than to mere capital investment.
EMCs C.6
handle the necessary documentation, find buyers for the export, and take title of the goods for direct export
The World Economic Forum (WEF) C.8
has another set of surveys and an index according to which countries are grouped in the following categories: o Factor-driven economies o Efficiency-driven economies o Innovation-driven economies
Efficiency-driven economies C.8
have well-established higher education and training, efficient goods and labor markets, sophisticated financial markets, a large domestic or foreign market, and technological readiness. o They compete on production and product quality. o Argentina, Brazil, Chile, China, Croatia, Dominican Republic, Hungary, etc
JETRO: The current goal of JETRO is to P.159, C.6
help Japan attract foreign direct investment (FDI) as part of its overall economic strategy.
Structural-separation approach C.8
if managed properly these can perform like the best venture-capitalist operations; the disadvantage is that it is actually a form of diversification and isolated from the rest of the organization.
Pay per performance can reward C.9
individual performance or team performance—or a combination of the two.
Work team C.9
individuals meet daily to achieve goals with members getting a skill-based pay.
Diversity Management P. 235, C.9
involves actively appreciating and using the differing perspectives and ideas that individuals from around the world bring to the workplace
ISO 9001:2008 certification C.6
is a "seal of quality" that is trusted around the world.
Global Entrepreneurship Monitor (GEM) C.8
is a research program begun in 1999 o It shows that entrepreneurial countries experience higher economic growth. o There are systematic differences between countries in regard to national characteristics that influence entrepreneurial activity.
World Intellectual Property Organization (WIPO) C.10
is a specialized agency of the United Nations that works to harmonize the intellectual property laws of countries around the world. Its concerns are to: o Harmonize national intellectual property legislation and procedures. o Provide services for international applications for industrial property rights. o Exchange intellectual property information. o Provide legal and technical assistance to developing and other countries. o Facilitate the resolution of private intellectual property disputes. o Marshal information technology as a tool for storing, accessing, and using valuable intellectual property information.
Automated Export System (AES) C.6
is available to companies of all sizes. By filing the documents electronically, entrepreneurs get immediate feedback if there are any errors in their paperwork and can make the corrections right away. The process begins by filing the export document. If all the necessary information has been provided, the entrepreneur or business gets a confirmation message with approval. If there have been errors, the error message explains the omission or erroneous information so that it can be corrected.
HRM C.9
is becoming increasingly important in organizations because today's knowledge economy requires employees to contribute ideas and be engaged in executing the company's strategy. is becoming a strategic partner by identifying the skills that employees need and then providing employees with the training and structures needed to develop and deploy those competencies. All of its elements need align with the company's strategy so the right employees are hired for the right jobs and rewarded properly for their contributions to furthering the company's goals. Selecting the right employees and placing them in the right positions within the company is a key (HRM) function and is vital to a company's success.
Bill of Lading C.6
is issued by the carrier transporting the merchandise, proves that the exporter has given the carrier the merchandise and that the carrier owns title to the merchandise until paid by the importer
Money C.8
is often one of the scarcest resources for entrepreneurs. o However, too much money sometimes hampers innovation and can be a problem.
Pay C.9
is the "total reward" that includes an individual's base salary, variable pay, share ownership, and other benefits.
Export Express loan program C.6
is the most flexible program available to small businesses. The funds that small businesses obtain through this program can be used to pay for any activity that will increase exports. Small businesses can get loans or lines of credit of up to $250,000
Contract Manufacturing C.6
is the outsourcing of manufacturing. Companies have less control over manufacturing. It makes companies vulnerable to variability.
Global Delivery Model, (GDM) P.194, C.8
is the strategy of breaking a task into small parts, and distributing them where the best talent is available and the maximum value will be generated with the least amount of acceptable risk.
Contractual entry modes: What are the two main types? C.6 P.143
licensing & franchising
Outside Investments C.8
o Angel investor—an affluent individual who provides capital for a business start-up. o Venture capitalist—a person or investment firm that makes venture investments and brings managerial and technical and capital to the investment. o Insurance companies o Public and private pension funds
entrepreneur myths C.8
o Entrepreneurs are born, not made. o Entrepreneurs make more money. o Being original is essential. o It takes a lot of money to start a business. o Entrepreneurs must be risk takers. -These often emphasizing their luck and ability to take risks.
Business Plan Contents C.8
o Executive summary—key points o Company description—capabilities and goals o Products and services o Market analysis—need and demand o Proprietary position—patents o Marketing and sales plan o Management team o Operations plan o Finances
Coexistence Approach Obstacles C.8
o False starts and failures. o Resistance from established beliefs. o New ventures can threaten existing businesses beyond simply being different. o Too many resources.
R&D: challenges executives face in managing R&D facilities in different parts of the world C.10
o How to assess the value of a new idea. o How to encourage collaborations across geographical locations and functions. o Managing the complexity of global R&D projects.
Dot Com Era C.8
o Internet ventures became popular. o It also made venture capitalism easily accessible.
Government can (relating to R&D) C.10
o It can offer grants to universities and research. o It can also offer contracts to corporations for research in specific areas. o It often provides tax incentives for companies investing in R&D (e.g., Australia). o It also aids innovation by investments in infrastructure that supports new technologies (e.g., China). o It also sets high targets that require a great deal of innovation (e.g., the US government's mission to the moon
Innovation Hubs C.10
o It creates a dense social network. o It is characterised by a good talent pool. o Promotes repeated interactions among people. o Encourages competition. o Facilitates new technological breakthroughs.
Opportunity Identification Levers C.8
o New markets can be created based on innovations in these four areas. o Often the fifth characteristic is what differentiates ventures that work from those that do not. People actually are less willing to change than entrepreneurs would like to believe.
Bootstrapping Types C.8
o Owner financing o Sweat equity o Minimization of accounts receivable o Joint utilization o Delaying payment o Minimizing inventory o Subsidy finance o Personal debt o Crowdfunding
Innovation-driven economies C.8
o They compete on business sophistication and innovation. o Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Israel, etc
entrepreneur C.8
o They rely on innovation. o They have high levels of skill and energy. o They are passionate about an idea and plan how to put it into action. -They do not have a buffer between mistake and failure - build for-profit and nonprofit ventures. .-are sometimes seen as people of very high aptitude who pioneer change. -Webster's defines this as as "one who organizes, manages, and assumes the risks of a business or enterprise - the challenger from outside the firm
HRM and culture C.9
often impacts local HRM practices in a variety of ways like pay packages, hiring, and termination.
New Entrants C.8
often use low-end entry to gain a foothold to move into the attractive market once their products or services improve. Overtime they produce quality products based on customer feedback and satisfaction
Entreprenuership takes place through some combo of C.8
opportunity identification, the venture's preparation and plan, and the resources that convert the venture plan into action
IP Protection C.10
owners are given the opportunity to license or sell their innovations to others, which can be an important way of creating value with these assets.
PEFCO (the Private Export Funding Corporation) P.160
provides medium- to long-term loans if they are secured against nonpayment under an appropriate guarantee or insurance policy issued by Ex-Im Bank or for certain small-business export loans under a guarantee issued by the SBA
FDI: What are the ways companies can make FDI P.159, C.6
purchasing the assets of a foreign company; investing in the company or in new property, plant, or equipment; participating in a joint venture with a foreign company, which typically involves an investment of capital or know-how.
Make or buy P.237, C.9
rather than developing new talent internally, companies can hire from the outside when they need to tap specific skills (Train or Hire)
R&D: It's desirable to encourage R&D for C.10
reasons of economic growth as well as national security.
FDI P.159, C.6
refers to an investment in or the acquisition of foreign assets with the intent to control and manage them
workplace diversity p.235, C.9
refers to the variety of differences between people in an organization.
Price C.11, P.3 I Notea
represents a special challenge when companies sell to emerging markets because consumers' income levels in these countries are much lower than in developed countries. In addition, the channel of distribution often gets longer when companies sell to international markets.
Workforce scorecard C.9
requires a change in perspective, from seeing people as a cost to seeing people as the company's most important asset to be managed—human capital.
Bureau of Customs and Border Protection (CBP), what are the primary missions of them P.154, C.6
security and trade facilitation (Prior to 911 it was to simply move goods through customs quickly and efficiently to facilitate international trade)
Pay levels C.9
should reflect the value of each type of job to the company's overall success
Leading indicators C.9
show where an organization is headed (prospective)
User led innovation C.10
shows how breakthrough innovations can originate from outside the research and development (R&D) lab, coming from users who are passionate about an idea
Global Innovation Index C 10
shows the level of innovation of any country.
Intrapreneurship: Whereas entrepreneurship is concerned with starting new businesses, intrapreneurship is concerned with P.193, C.8
starting something new, like a new product or service, in an existing, established business
Intermediaries C.6
such as freight forwarders and export management companies (EMC), provide companies with expert services so that the firms don't have to build those capabilities in-hou
applied research P.261
systematic study to gain knowledge or understanding necessary to determine the means by which a recognized and specific needmaybemet
Innovation C.10
takes a new idea and commercializes it in a way that enables a company to generate revenue from it.
Partnership Teams P.249, C.9
teams formed around a joint venture or strategic alliance.
Parallel Teams P.249, C.9
teams that exist alongside(parallel to)an individual's daily team
licensing IP rights C.10
the IP owner gives permission to use the IP but retains ownership of the IP.
PEFCO: Unlike JETRO, OPIC, and Ex-Im Bank, PEFCO is P.160, C.6
the Private Export Funding Corporation (PEFCO) is a private-sector organization.
The Starting Point
the biggest difference between strategy in existing firms and new ventures is P.201, C.8
technological readiness P.214, C.8
the capacity to harness existing technologies
Human Capital P.252, C.9
the collective sum of the attributes, life experiences, knowledge, inventiveness, energy, and enthusiasm that a company's employees choose to invest in their work
structural-separation approach C.8
the firm sets up an internal new-venture division. It is designed to achieve any one of the following objectives: o Create a high-growth new venture that the firm can sell off through an IPO at a significant profit. o Create and retain a new business that will fuel growth and foster corporate renewal.
SBA's Export Express Loan Program
the funds small businesses obtain through this program can be used to pay for any activity that will increase exports P.158, C.6
Selection and placement C.9
the need to acquaint new employees with their responsibilities and organizational expectations.
Coexistence Approach C.8
the new venture activities are conducted within an existing business or business unit; its basic features are: -Bringing new business to life. -Assembling resources and capabilities. -Meeting production and sales goals
Job design C.9
the process of combining tasks to form a whole job taking into account issues of health and safety.
Equity joint venture challenge C.6
to find the right partner and also to prevent it from becoming a competitor in the future.
Global human resource outsourcing (HRO): P.233, C.9
when it comes to the HR department, "anything that is administrative or transactional is going to get outsourced,"
crowdfunding P.207, C.8
which is fundraising, where proof of concept is supported by the general masses instead of a few with deep pockets
Succession Planning C.9
which refers to the process of recruiting and developing employees to ensure the company's key roles are filled. -Many companies fail to create an effective succession plan. -Sometimes companies use outdated methods that don't accurately predict required skills.
Exporting, who facilities it? P.142, C.6
• Distributors • Export Management Company (EMC)
Business Plan C.8
• Once the product is launched and financing secured, an entrepreneur should make a
Exporting, why do companies do it? P.142, C.6
• it's the easiest way to participate in global trade • it's a less costly investment than the other entry strategies • it's much easier to simply stop exporting than it is to extricate oneself from the other entry modes
