MGT 370: Chapter 03 Assignment: Managing in a Global Environment

Deb's Auto Alarms has sold car alarms in the United States for 15 years. Owner Deborah Lefkowitz has read about the opportunities that globalization presents for businesses, and she is thinking about seeking entry to several international markets. She asks you for advice: "I've heard about free trade agreements among different groups of countries: World Trade Organization (WTO), the North American Free Trade Agreement (NAFTA), the European Union (EU), the Association of Southeast Asian Nations (ASEAN), Mercosur in Latin America, the African Free Trade Zone (AFTZ) . . . In general, it seems as though these agreements have had positive effects on economic growth, but they have also been controversial in some ways. What can you tell me about them?" Which of the following statements correctly describes the North American Free Trade Agreement (NAFTA)? (Check all that apply.)

-Businesspeople in the United States, Canada, and Mexico have mixed opinions about whether NAFTA has been a success. -NAFTA dramatically reduced tariffs on goods traded among the United States, Canada, and Mexico.

Carly interviews for the job—and she gets it! Her new boss says that what impressed him most was her global mindset, and he wants her to be a role model for other employees in the company. How can Carly best demonstrate how one acquires a global mindset? (Check all that apply.)

-Cultivating relationships with immediate coworkers from other cultures and people within and outside the organization in other countries -Expressing a consistent curiosity about world affairs and the international business environment

The United States was ranked 34 on the 2013 KOF Index, below many countries in Europe as well as Canada and Australia. The KOF Index of Globalization measures the three main dimensions of globalization: economic, social, and political. In addition to three indices measuring these dimensions, an overall index of globalization is calculated, as well as subindices referring to actual economic flows, economic restrictions, data on information flows, data on personal contact, and data on cultural proximity. (Source: KOF Index of Globalization. http://globalization.kof.ethz.ch/) Which of the following are examples of companies operating in a globalized world? Check all that apply.

-Dunkin' Donuts serves dry pork and seaweed donuts in China and grapefruit donuts in Korea. -Austria's Red Bull sponsors extreme sports events across Europe, North and South America, and Asia, making its drinks feel like a local presence while the company maintains a European look to its packaging. -San Francisco-based Airbnb used #OneLessStranger to spark an international social media campaign in which it asked its community of customers to perform random acts of hospitality for strangers, then share a video or photo of themselves with the person they helped.

The customers for mountain sports equipment mostly have high disposable incomes. However, imagine that Peter, Thomas, and Wim want to market some products to the bottom of the pyramid in mountainous countries like Nepal and Bhutan. What advice would you give them? (Check all that apply.)

-Recruit local people to work as salespeople and distributors. -Research what people with annual incomes of less than US $1,500 really need. -ssign R & D the project of developing gear that meets basic needs for warmth and dryness but can be manufactured inexpensively.

Talia lives in Houston, Texas. She has traveled to India several times and is interested in working for a multinational corporation (MNC) with a presence there. She hopes that by working for such a company, she'll first have an opportunity to transfer to a position in India and live there for an extended time and then be able to parlay that international experience into opportunities in other countries. Her research shows that MNCs with a significant presence in India include Nestlé, headquartered in Switzerland; PepsiCo, headquartered in the United States; Sony, headquartered in Japan; and Sun Pharmaceutical Industries, headquartered in India itself. Talia wants to do a lot more research on how these companies operate in India and on the nature of MNCs in general. If Talia is hired as a manager at an MNC, what can she can expect? (Check all that apply.)

-She and her colleagues will cultivate a global perspective and view the entire world as one market. -The corporate structure will integrate the activities of foreign affiliates. -Strategy will include finding raw materials and locating production wherever it is most profitable to do so.

You are negotiating a joint venture with the Oglala Lakota tribe in South Dakota to start a publishing house focusing on the fiction, memoirs, and academic scholarship of indigenous peoples worldwide. You come from the dominant low-context U.S. culture. You quickly become aware that the tribal leaders are seeking to build a relationship based on trust and will not do business until that is established. Based on this insight, you also expect that: (Check all that apply.)

-They may place a high value on the well-being of all the people who would be involved in the publishing enterprise, those people's families, and even the tribe as a whole -The nonverbal components of communication, such as where they meet, how they dress, and their body language, will be very important

When Peter Metcalf describes Black Diamond's manufacturing facility in China as a "greenfield project, he means that __________. Of all market entry strategies, this one carries the __________ risk.

BD built the plant and owns it completely, highest

In India, the Swiss pharmaceutical company Novartis International AG is using its Arogya Parivar initiative to increase trust in conventional medicine among the very poor, thereby cultivating a market for its products. Novartis employs health educators to teach laypeople about disease, treatment, and prevention, and it also sends supervisors to assess each local area's needs and provide education to health care providers. It has accompanied this education effort with a different pricing structure, selling medications in smaller packages with smaller price tags. By cultivating this untapped market in a socially entrepreneurial way, Novartis seeks to increase its profits. The effort has been successful enough in India that the company has started similar programs in Kenya and Vietnam and has plans for Indonesia. Which concept is Novartis's marketing initiative based on?

Bottom of the pyramid (BOP)

The agricultural and mining sectors are growing rapidly.

Brazil

Foreign companies selling their products and services increasingly encounter tough competition from local businesses.

China

Jerzy wants to keep his overall costs down and to enter into the international marketplace slowly and carefully. He is considering the use of countertrade, where he would send his shoes to Spain in return for high-quality Spanish cowhides.

Exporting

__________ have a truly global orientation and do not prioritize individual national cultures or markets. The number of such companies is growing.

Geocentric companies

Which Company Has a Long-Term Orientation?

Hikooki Flight is a Japanese plane manufacturing company. Mr. Hikooki is a planner, and he knows what the company will be doing 25 years from now. He is constantly reminding his employees about the importance of creating efficient and reliable products so that the company does not need to do rework.

IT services and software design are often offshored here.

India

In thinking about it, Jerzy realizes that he and Leon could create a shoe-manufacturing facility in Spain. Doing so would certainly require a large outlay of money, but Jerzy thinks that with his expertise in shoe design and Leon's expertise in navigating Spanish management and business practices, they could create a partnership that has true synergy.

Joint Venture

Which Company Has High Uncertainty Avoidance?

Last week, Swanita approached her boss in tears. "But I've been sitting at the same desk for 20 years!" she exclaimed. "How will I be able to do my work if you put me all the way across the office from the people I'm supposed to support?"

Because global economies are interconnected, all of the following statements are true except:

Less-developed countries are less likely to feel the effects of a global economic crisis.

Jerzy thinks that he would like to work closely with someone who really knows the Spanish market, and he is not concerned with maintaining high levels of control over his product. He is considering giving Leon the rights to use his shoe designs for a fee. This will keep Jerzy's costs down but still give his shoes a wider exposure.

Licensing

This map shows the countries that are part of __________ highlighted in green. (Note: Highlighted countries will appear dark gray if you have red-green color blindness.)

NAFTA

__________ are oriented toward the cultures and markets of the individual countries in which they do business, so their operations have different characteristics from country to country.

Polycentric companies

Carly is eager to tell the interviewer about the team she led of product managers from the United States, Latin America, and Europe. At first, team members were unsure of how to relate to each other, but she was able to find common ground and relate in a culturally sensitive way with each one. Which dimension of her global mindset would this experience show the interviewer?

Social dimension

According to the 2013 KOF Index of Globalization, based on 2010 data, __________ is not among the 25 most globalized countries.

The United States

Which Company Has High Femininity?

The fishermen in the small salmon fishing cooperative of Kodiak Island, off the coast of Alaska, routinely help each other by sharing information on where fish are biting, providing each other with materials for boat repairs, and sharing the profits from their catches. In addition, the fishermen on Kodiak Island donated almost 13,000 pounds of salmon to a nearby village with a 25% unemployment rate.

The Japan-based multinational Sony engaged in __________ when it partnered with Shanghai Oriental Pearl Group. Together, the two companies would make and market PlayStation consoles and games in China.

a joint venture

__________ company emphasizes its home country culture throughout its operations, and it tends to staff key positions abroad with expatriates from its home country operations.

an ethnocentric

Reading several British newspapers to understand the perspectives of one's UK counterparts on world events and popular culture

cognitive

Seeking out new ethnic restaurants and trying new dishes with unknown ingredients

emotional

A U.S. company is engaged in __________ when it contracts with a call center in India to handle technical support requests from its customers.

global outsourcing

Because they can move assets and jobs from country to country, MNCs typically __________ over the economies, politics, and culture of the countries in which they do business.

have influence

Chile has improved the efficiency of its capital spending on roads, bridges, and other__________ by hiring professional civil servants in its National Public Investment System.

infrastructure

Both men and women in Japan tend to subscribe to __________ values, prioritizing achievement, work, and material success. The culture of Sweden, on the other hand, is relatively __________, and people generally prioritize relationships and quality of life.

masculine, feminine

Stéphane is from France, where organizations tend to be hierarchical. If he has low cultural intelligence, he may __________ a U.S. company that has a flat structure and uses self-managed teams.

not adapt to

In India, people tend to value high __________, because they are comfortable with inequality among people and organizations.

power distance