2/10/2015

StudyBlue printing of Global Exam 1

Global Exam 1
carly fuldauer Mon Feb 02 16:19:16 CST 2015

how has apple capitalized on the globalization of production?

-it's Chinese subcontractors can respond very quickly to requests from apple to scale production up and down (Switching from plastic
to glass on a last minute basis)
-Took china 15 days to find engineers and line workers
-clustering together of factories in China makes it easy to get parts
globalization
the shift to a more integrated and interdependent world economy
Globalization's three P's
-phenomenon: compressing time and space-Philosophy: converging expectations, inevitability of globalization
-process: The two key engines of globalization are the technology revolution and politico-economic liberalization
The growth of institutional barriers
two key facets of globalization
-globalization of markets
-globalization of production
globalization of markets
merging of historically distinct and seperate national makets into one huge global marekt-place
elements of globalization of markets
-falling barriers
- merging of historically distinct and seperate national makets into one huge global market-place: standardized products
-tastes are converging upon global norms: blue jeans, MTV, Coke, Starbucks, McDonalds
globalization of markets:
-most are not consumer markets, they are industrial goods that serve universal needs around the world (aluminum, oil, wheat,
aircrafts and financial assets)
difficulites of global markets
-Country-specific marketing strategies -Varied product mix (McDonalds sells different things in different countries)
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StudyBlue printing of Global Exam 1

globalization of production
sourcing of goods and services from locations around teh globe to take advantage of national differences in the cost and quality of
factors of production
Vizo and the market for Flat Panel TVs
-has fewer than 170 employees (focus on product design, sales and customer service)
-outsources most of its engineering work and all of its manufacturing and most of its logistics- finds cheapest
-sell most of their tvs at a large discount to retailers (costco)
-shift to flat pannel tvs have caused pain in sectors of the economy such as firms who make traditional tvs in high cost locations (U.S)
Emergence of global institutions
-manage, regulate adn police the global market place
-promote establishment of mulitnational treaties to govern the global business system
General Agreement on Tariffs and Trade (GATT) now the World trade Organization (WTO)
POLICING THE WORLD TRADING SYSTEM AND MAKING SURE NATION-STATES ADHERE TO TEH RULES MADE IN TRADE
TREATIES SIGNED BY THE WTO MEMBER STATES
-ESTABLISHMENT OF ADDITIONAL MULITNATIONAL AGREEMENTS
International Monetary Fund
maintain order in the international monetary system
world bank
promote economic development
united nations
commited to perserving peace through international cooperation and collective security
-develop friendly relations among nations
-cooperate in solving international problems
-promotiong respect for human rights
-center for harmonizing actions of nations
G20
studies, reviews, and promotes discussion (among key industrial and emerging market countries) of policy issues pertaining to the
promotion of international financial stability,
Drivers of Globalization
Macro factor: Declining trade and investment barriers
Macro factor: technological change
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2/10/2015

StudyBlue printing of Global Exam 1

-International Trade: exports g/s to consumers another country

-Foreging direct investment (FDI): a firm invests resources in business activities outside its home country
Changing demographics of global economy: Changing world output and world trade picture
-realitive decline of the U.S reflects the growing economic development and industralization of the world economy
-many of tomorrows economic opportunities may be found in the developing nations of the world along with the most capible
competitiors
Changing Demographics of the Global Economy: Changing foreign direct investment picture
-as barriers to the free flow of g/s/c fell and other countries increased their shares of would output, U.S firms began to invest across
national boarders.
-desire to disperse production to optimal locations and build a direct presence in major foreign markets
-stock of foreign direct investment decreased for U.S but increased for developing economies
stock of foregin direct investment
total cumulative value of foreign investments
generated by rich countries is declining
The changing demographics of the global economy: the changing nature of the multinational enterprise (business that has productive
activities in two or more countries)
-rise of non-U.S multinationals
-growth of mini-multinationals
China's Hisense- An emerging Multinational
-rapid product innovation (continually launch advanced, high-quality and competitively priced products
-grew rapidly in developing markets
-established overseas manufacturing subsidaries
-Established multiple R&D centers
Globalization Debate
Higher food prices Human rights \ Loss of sovereignty Taking advantage of environmental regulations.
Globalization Debate: Pros
Cheap labor ,cheap tech Increased consumer income Greater collaboration Higher quality products More choices Creates jobs
Develop innovation Interconnectedness/economic opportunities
Globalization in France
-McDonalds protest due to 100% terrifs placed by U.S government when France would not lift their ban on U.S hormone treated beef.
-Mondavi wine project protested as teh project was said to be a capalitist plot to enrich wealthy u.s shareholders at the cost of the
villagers and environment
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2/10/2015

StudyBlue printing of Global Exam 1

Legal Outsourcing Case

-outsourcing to india because legal rates are much cheaper
-common law is favored b/c india trains many students in this
legal out sourcing case
-outsourcing lawyers to india because costs are much cheaper/hr
-common law

Case: An African Dynamo

-previously corruption was rampant and inflation was a problem, state owned most businesses. Prior to election ban on political
parties were lifted and restrictions to press removed.
-After rawlings election he started to libralize the economy.
-When they descovered oil, put laws in place to limit corruption from royalties
-now they are working on upgrading infrastructure to keep up with the booming economy
Communist Totalitarianism
-Deny many basic civil liberties to their populations
-Socialism can only be achieved through totalitarian dictatorship
Theocratic Totalarianism
-political power is monopilized by a party, group or individual according to religious principals
-most common is based on Islam
-State limits freedom of political and religious expression while the laws of the state are based on Islamic principals
Tribal Totaliarianism
-Political party represents interests of a particular tribe monopolizes power
Right Wing Totalitarianism
-Some individual economic freedom but restricts individual political freedom b/c it would lead to communism
-backed by military
Country Focus: Chavez Venezuela
-Venezuela was one of the most regulated economies in the world and state controls over business activities gave public officials
more opportunities to enrich themselves by demanding bribes in return for permission to expand operation or enter new lines of
business
-Oil market controlled their economy
Legal Systems: Common Law
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StudyBlue printing of Global Exam 1

-based on tradition, precedent and custom

-Tradition refers to a country's legal history
-Precedent-Cases that have come before courts in the past
-Custom: ways in which laws are applied in certain situations
**gives flexability
Legal Systems: Civil Law
detailed set of laws organized into codes
**no interpretation, only apply
**less flexibility
Legal Systems: Theocratic Law
based on religious teachings
Differences in contract law
-common law: tend to be detailed with all contingencies spelled out
-United Nations Convention on Contracts for the International Sale of Goods (CIGS): help with issues questioning which countries
laws to apply. Est uniform set of rules governing making and performance of commercial contracts betwn sellsers and buyers in
different nations.
-Countries have to adopt CIGS
Property Rights and Corrruption
Private action: theft, piracy, blackmail by private individuals or groups
Public action: public officials and government extort income, resources or the property itself from property holders.
Corruption in Nigeria
-Several competing ethnic, tribal and religious groups (totalitarianism and Islamisation)
-polititations gave out bribes by raiding the national treasury to reward allies
Copyrights
exclusive legal rights of authors, composers, playwrights, artists and publishers to publish and desperce their work as they see fit
Patent
inventor of new product/process exclusive rights for a defined period
Trademarks
designs and names, by which merchants/manufactuers designate and differentiate their products
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StudyBlue printing of Global Exam 1

Starbucks Case: Intellectual Property

Starbucks sued an imitator for trademark violations in china
-the courts seem to be signaling a shift forward greater protection of intellectual property rights
Human Development Index
based on life expectancy, education attainment and if avg income are sufficent to meet basic needs of life in a country
Broader Conceptions of Development: Amartya Sen
development should assesed less by material output and more by capabilities and ops that people enjoy
-HDI
Emerging Property rights in China
-land holders have the right to automatic renewal of leases after 30-70 year terms and must be fairly compensated if the land is
required for other purposes. Gives landholders same protection of property as the state.
**state still owns land and doesn't give peasants marketable ownerships rights to land that they farm
States in transition
many totalitarian regimes failed to deliver economic progress to the majority of their population new technologies have broken down
the ability of the state to control access to uncensored information economic advances have led to the emergence of prosperous
middle and working classes who demand democratic reforms
States in Transition: Deregulation
involves removing legal restrictions on the free play of markets, the est. of private enterprises and the manner in which private
enterprises operate
States in Transition: Privatzation
transfers ownership of state property to private investors
States in Transition: LEgal System
protects property rights and the machinery to enforce that system
New World Order and Global Terriorism
Muslims feel a need to return to Islamic ideas, practices and institutions to provide the compass and the motor of modernization
Implications of A changing economy
-markets taht were formaly off-limits to western businesses are now open: big copetition

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StudyBlue printing of Global Exam 1

Managerial Impliations of doing business internationally: POLITICAL RISK

- The likelihood that political forces will cause drastic changes in a country's business environment that adversely affects the profit
and other goals of a business enterprise
Doing Business in forign markets implications to managers: Economic Risk
the likelihood that economic mismanagement will cause drastic changes in a country's business environment that adversely affects
the profit and other goals of a business enterprise
Doing Business in forign markets implications to managers: Legal Risk
the likelihood that a trading partner will opportunistically break a contract or expropriate property rights
Implications for managers: Doing business in foreign markets: Benefits
-function of the size of market, PP of consumers and their likely future wealth
-Likely have economic growth
Implications for managers: Doing business in foreign markets: Costs
Corruption, lack of infrastructure, legal costs
Overall attractiveness
based on balancing the benefits, costs and risks associated with doing business in that country
The Polish Surprise
-poland's economy actually grew during the finanial crisis
-major exporter
-keeps public debt in check which also lead to investor confidence
-Benifited from the economic stimulus in Germany
-but unemployent rate is high , regulations make it difficult to do business in poland-- they are taking steps to fix this though
Norms
Mores, Folkways
Nation-State
political creations that can contain a single culture or several cultures
Society
group of people who share a common set of values and norms

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Determinants of Culture
-Prevailing political and economic philosophies
-A society's social structure
-Dominant religion, language
-education
Religious Ethical Systems: Islam
all-embracing way of life that governs one being
Religous ethical systems: Hinduism
focuses on the importance of achiving spiritual growth and development
Religoius and eithical systems: Buddhism
Stresses spiritual growth and the afterlife rather achivement while in this world
Religious and ethical systems: Confucianism
Teaches importance of attaining personal salvation through right actions
what is a high context language?
non verbal expressions are more important than verbal expressions
Low-context Language
one in which people state things directly and explicitly
Hofstede:
-Power Distance
-Individualism Vs Collectivism
-Uncertanity Avoidance
-Masculinity vs. Feminity- relationship betwee gender and work roles
Universalism Vs. Particularism
Universalism: focus more on rules than relationship (U.S)
Particularism: Focus on relationship more than rules (China)
Specific Vs. Diffuse
Diffuse: Overlap work with personal life
Spacific: Work and personal lives seperate

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2/10/2015

StudyBlue printing of Global Exam 1

Neutral Vs. Emotional

Neutral: Control emotions (buyer)
Emotional: Find ways to express emotions (seller)
Achivement Vs. Ascription
Achievement: you are what you do. Value performance no matter what you do. (U.S)
Ascription: Valued for who you are. Power and title matter. (Japan)
Sequential Time Vs. Synchronous Time
Sequential-Puncuality, planning. Happen in order.
Synchronous-view plans and commitments as flexible. Several projects at once
Internal Direction vs. Outer Direction
Internal: People believe they can control their environment to achieve goals
Outer: Environment controls them

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