.. Strategic Concerns: Q.
Final ( Chapter 14)
An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to
support decision making and control in an organization. In addition to supporting decision making, coordination, and control, information systems may
also help managers and workers analyze problems, visualize complex subjects, and create new products. It transforms raw data into useful information through
three basic activities: input, processing, and output. Essential for running and managing business : Information systems are the foundation for conducting
business today. In many industries, survival and even existence without extensive use of IT is inconceivable, and IT plays a critical role in increasing
productivity. Although information technology has become more of a commodity, when coupled with complementary changes in organization and management,
it can provide the foundation for new products, services, and ways of conducting business that provide firms with a strategic advantage. Six reasons why
information systems are so important for business today include: 1. Operational excellence: Business continuously seek to improve the efficiency of their
operations in order to achieve higher profitability. Walmart, the largest retailer on earth, exemplifies the power of information systems coupled with brilliant
business practices and supportive management to achieve world-class operational efficiency: (2) New products, services, and business models: A business
model describes how a company produces, delivers and sells a product or service to create wealth. Exp: apple ipad (3 )Customer and supplier intimacy: the
business strategy behind the technologies implemented in Disney's Operational Command Center is an excellent example of customer and supplier intimacy.
(4)Improved decision making: Verizon's implementation of a Web-based digital dashboard to provide managers with real-time information such as customer
complaints is an excellent example of improved decision making. (5) Competitive advantage: Dell Computer's use of information systems to improve
efficiency and implement "mass customization" techniques to maintain consistent profitability is an example of competitive advantage: (6) Survival: The use of
information systems because of necessity describes the business objective of survival. ** Business processes refer to the set of logically related tasks and
behaviors that organizations develop over time to produce specific business results and the unique manner in which these activities are organized and
coordinated. Developing a new product, generating and fulfilling an order, creating a marketing plan, and hiring an employee are examples of business
processes, and the ways organizations accomplish their business processes can be a source of competitive strength. **Identify three major new information
system trends: Three information system trends that are influencing the way businesses interact with employees, customers, suppliers, and business partners
include 1. Emerging mobile digital platforms : IPhones, iPads, Android tablets, and smartphones are not just gadgets or entertainment outlets. They represent
new emerging computing platforms based on an array of new hardware and software technologies. More and more business computing is moving from PC &
UPS:** What are some of the organizational, managerial, and social complementary assets that help make UPSs information systems so
successful? ANS: Organizational assets: Supportive organizational culture that values efficiency and effectiveness. Appropriate business model. Efficient
business processes. Decentralized authority. Distributed decision-making rights. Strong IS development team. Managerial assets: Strong senior
management support for technology investment and change. Incentives for management innovation. Teamwork and collaborative work environments.
Training programs to enhance management decision skills. Management culture that values flexibility and knowledge-based decision making. Social assets:
The Internet and telecommunications infrastructure. IT-enriched educational programs raising labor force computer literacy. Standards (both government and
private sector). Laws and regulations creating fair, stable market environments. Technology and service firms in adjacent markets to assist implementation.
** What strategic business objectives do UPSs information systems address? Operational excellence: UPS has maintained leadership in small-package
deliver services despite stiff competition from FedEx and the U.S. Postal System by investing heavily in advanced information technology. New products,
services, and business models: UPS launched a new Web-based Post Sales Order Management System (OMS) that manages global service orders and
inventory for critical parts fulfillment. Customer and supplier intimacy: Customers can download and print their own labels using special software
provided by UPS or by accessing the UPS Web site. Improved decision making: To further increase cost savings and safety, drivers are trained to use 340
Methods developed by industrial engineers to optimize the performance of every task from lifting and loading boxes to selecting a package from a shelf in
the truck. Competitive advantage: UPS is leveraging its decades of expertise managing its own global delivery network to manage logistics and supply
chain activities for other companies. ** What technologies are used by UPS? How are these technologies related to UPSs business strategy? ANS:
Technologies include handheld computers (DIADs), barcode scanning systems, wired and wireless communications networks, desktop computers, UPSs
central computer (large mainframe computers), and storage technology for the package delivery data. UPS also uses telecommunication technologies for
transmitting data through pagers and cellular phone networks. The company uses in-house software for tracking packages, calculating fees, maintaining
customer accounts and managing logistics, as well as software to access the World Wide Web. UPS has used the same strategy for over 90 years. Its strategy
is to provide the best service and lowest rates. One of the most visible aspects of technology is the customers ability to track his/her package via the UPS
Web site. Thus, the technology described in the scenario enables UPS to be more competitive, efficient, and profitable.
Chap 2: ** Business Process: A business process is a logically related set of activities that defines how specific business tasks are performed, and it represents a
unique way in which an organization coordinates work, information, and knowledge. Managers need to pay attention to business processes because they
determine how well the organization can execute its business, and they may be a source of strategic advantage. There are business processes specific to each of
the major business functions, but many business processes are cross-functional. Information systems automate parts of business processes, and they can help
organizations redesign and streamline these processes. Information technology enhances business processes by: Increasing efficiency of existing processes :
Automating steps that were manual. Enabling entirely new processes :Change flow of information. Replace sequential steps with parallel steps. Eliminate
delays in decision making. Support new business models. ** TPS: Transaction processing systems (TPS) are computerized systems that perform and record
daily routine transactions necessary in conducting business they serve the organizations operational level. The principal purpose of systems at this level is to
answer routine questions and to track the flow of transactions through the organization. At the operational level, tasks, resources, and goals are predefined and
highly structured. Managers need TPS to monitor the status of internal operations and the firms relationship with its external environment.TPS are major
producers of information for other types of systems. Transaction processing systems are often so central to a business that TPS failure for a few hours can lead to
a firms demise and perhaps that of other firms linked to it. ** Describe the characteristics of management information systems (MIS) and explain how
MIS differ from TPS and from DSS. Ans: 1. MIS provide middle managers with reports on the organizations current performance. This information is used
to monitor and control the business and predict future performance. 2. MIS summarize and report the companys basic operations using data supplied by TPSs.
The basic transaction data from TPS are compressed and usually presented in reports that are produced on a regular schedule. 3. MIS serve managers primarily
interested in weekly, monthly, and yearly results, although some MIS enable managers to drill down to see daily or hourly data if required. 4. MIS generally
provide answers to routine questions that have been specified in advance and have a predefined procedure for answering them. MIS Differ: MIS differs from
TPS in that MIS deals with summarized and compressed data from the TPS.While MIS have an internal orientation, DSS will often use data from external
sources, as well as data from TPS and MIS. DSS supports what-if analyses rather than a long-term structured analysis inherent in MIS systems. MIS are
generally not flexible and provide little analytical capabilities. In contrast, DSS are designed for analytical purposes and are flexible. ** DSS: DSS provide
sophisticated analytical models and data analysis tools to support semistructured and unstructured decision-making activities. 2. DSS use data from TPS, MIS,
and external sources, in condensed form, allowing decision makers to perform what-if analysis. 3. DSS focus on problems that are unique and rapidly
** Collaboration is working with others to achieve shared and explicit goals. It focuses on task or mission accomplishment and usually takes p lace in a
business, or other organizations, and between businesses ** Social business is part of an organizations business structure for getting things done in a new
collaborative way. The goal of social business is to deepen interactions with groups inside and outside a company to expedite and enhance information-
sharing, innovation, and decision-making. Collaboration and social business are important because: Changing nature of work., Growth of professional
work, Changing organization of the firm, Changing scope of the firm, Emphasis on innovation, Changing culture of work and business. Social business
tools can allow a business to connect with its stakeholders, such as customers, and collect feedback from those stakeholders. It also allow a business to
market their products and services using social media.
**Individualism- primacy of the rights and role of the individual; promotes the rights of the individual over those of society. This proposes that managers
have the right to make economic decisions mostly free of rules and regulations. Shape marketplace with idea of laissez faire. Those that support individualism
also support the idea that government should not interfere in business affairs. Individuals are presumed to be self-regulating in promoting economic prosperity
and growth, acting fairly and justly to maximize personal performance without threatening the welfare of society. Under an individualistic paradigm (e.g., the
United States), political officials and agencies play a limited role in society. The relationship between government and business tends to be adversarial;
government may intervene in the economy to deal with market defects, but generally it promotes marketplace competition. Collectivism- primacy of the
rights and role of the community; encourages the government to interfere to improve the welfare of the group at the expense of the individual. Pertaining to
ethics, collectivism takes a utilitarian approach. For business, this means that the ownership of assets, the structure of industries, the conduct of companies,
and the actions of managers must improve the welfare of society. Group members accept responsibility for making decisions that will benefit everyone.
Countries taking a collectivist orientation hold that government will intervene in market situations to ensure that business practices benefit society. Eg. China
offers clear example of a collectivist orientation in a large society.** A legal system is the mechanism for creating, interpreting, and enforcing the laws in a
specified jurisdiction. Modern legal systems are composed of constitutional law which preserves an open and just political order, criminal law which
safeguards the social order, and civil and commercial laws which promote fairness. Common law originated in the UK and is based upon tradit
ion, judge-made precedent, custom, and usage; therefore, courts play an important role in interpreting the law. Civil law originated with the Romans and is
based upon a detailed set of laws that comprise a code that includes rules for conducting business; therefore, courts play an important role in applying and is
based upon tradition, judge-made precedent, custom, and usage; therefore, courts play an important role in interpreting the law. Civil law based on a
systematic and extensive codification of laws. Such systems often charge political officials with responsibility for specifying accessible and written codes of
law that apply to all citizen. Theocratic law is based upon religious precepts; ultimate legal authority is conferred upon religious leaders who govern society.
The best example is Islamic law, or Sharia, which is based on the Koran. Customary Law: itself in the wisdom of daily experience or great spiritual or
philosophical traditions. Customary law may play a significant role in matters of personal conduct. Mixed System: emerges when two or more legal systems
are used within a single country. Political risk reflects the expectation that the political climate in a country will change in such a way that a firms operating
position or investment value will deteriorate. The following types of political risk range from the least to the most destructive. Systemic Political Risk
** The rule of man: legal rights come from the individual who has the power to impose them & associated with a totalitarian system. The principle places
ultimate power in the hands of one person, making his word and will( and whim) law, no matter how unfair, unjust or nonsensical. The rule of law: Systematic
and objective laws applied by public officials who are held accountable for their administration. Associated with a democratic system. Rule of law prevails in
wealthier, Westernized countries, but the rule of man is in place in many emerging economies. In the past, it was typical for managers to avoid countries where
the rule of man dominated, but slow growth in countries dominated by the rule of law is forcing managers to reconsider this approach. . **IDENTIFICATION
AND DYNAMICS OF CULTURES: 1. The nation as a point of reference: Each nation has certain human, demographic, and behavioral Characteristics
that give it a national identity people share values, language, and race. Laws governing business apply along national lines. Problems using a country-by-
country approach individual differences within a country, similarities link groups from different countries 2. Cultural formation and dynamics: Value
systems set early in life, but may change Values may change due to choice or imposition cultural imperialism IB increases change in cultures and
governments. 3. Language as a cultural stabilizer: Culture spreads rapidly when people from different areas speak the same language Stronger adherence to
a culture if it does not share its language with other peoples English, French, and Spanish are widespread most of IB conducted in English 4. Religion as a
cultural stabilizer : Religion has a strong influence on values Specific beliefs may affect business not all nations that practice the same religion have the
same constraints on business , where rival religions vie for political control, resulting strife may disrupt business. ** Social Stratification Systems : People
fall into social stratification systems according to group memberships that in turn determine a persons degree of access to economic resources, prestige, social
relations and power. Ascribed group : memberships are defined at birth and are based on characteristics such as gender, family, age, caste and ethnic, racial, or
national origin. Acquired group memberships are based on ones choice of affiliations, such as political party, religion and professional organizations. Social
stratification affects both business strategy and operational practices. 1. Role of Competence. Some nations base a persons eligibility for jobs and promotions
primarily on competence, but in others, competence is of secondary importance. 2. Gender based Groups. There are strong country specific differences in
attitudes toward males and females, as well as vast differences in the types of jobs regarded as male or female 3. Age basedGroups. Many cultures assume age
and wisdom are correlated thus, they usually have a seniority based system of advancement. 4. Family based: In societies where there is low trust outside the
family (e.g.,China and southern Italy), small family run companies are generally more successful than large firms. 5. Occupation. In every society certain
occupations are perceived as having greater economic and social prestige than others. ** Motivation : countries differ in how much people are motivated to
work and why :
. ** International Business: International business consists of all commercial transactionsincluding sales, investments, and transportationthat take place
between two or more countries. The goal of private businessis to make profits. Government business may or may not be motivated by profit. Studying
international business is important because 1. Most companies either are international or compete with international companies. 2. Modes of operations may
differ from those used domestically. 3. The best way of conducting business may differ by country. 4. An understanding helps you make better career decisions.
5. An understanding helps you decide what governmental policies to support. Why companies engage in IB: To expand sales pursuing international sales
increases the potential market and potential profits. To acquire resources may give companies lower costs, new and better products, and additional
operating knowledge. To diversify or reduce risks - international operations may reduce operating risk by smoothing sales and profits, preventing competitors
from gaining advantage.. ** WHY INTERNATIONAL BUSINESS DIFFERS FROM DOMESTIC BUSINESS: Manager in international business must
understand social science disciplines and how they affect all functional business fields. 1. Political Policies: Often determines where and how business can take
place. 2. Legal Policies: Each country has its own laws regulating business. Agreements among countries set international law. 3. Behavioral / Cultural
Factors: The interpersonal norms of a country may necessitate a companys alteration of operations. Exp: The best outcome of a baseball game Japan: tie,
U.S.: win 4. Economic Forces: Economic explain country differences in costs, currency value, and market size 5. Geographical Influences: Natural
conditions affect what can be produced and where. **Globalization refers to the widening set of interdependent relationships among people from different parts
of a world that happens to be divided into nations. The term sometimes refers to the elimination of barriers to international movements of goods, services,
capital, technology, and people that influence the integration of world economies. 7 factors : 1. Increase in and expansion of technology: The advancement in
communication and transportation is also a major factor in increase in and expansion in technology. Total population are more involved in developing product
rather than producing them. 2. Liberalization of cross-border trade and resource movements: To protect its own industries there is restriction across borders for
goods and service. There is an restriction that set limits on IB activities because regulations can change at any time and also contribute to a climate of
uncertainty. 3. Development of services that support international business
desktop machines to these mobile devices. Managers are increasingly using these devices to coordinate work, communicate with employees, and provide
information for decision making. 2. The growing business use of big data: Businesses look for insights from huge volumes of data from Web traffic-mail
messages, social media content, and machines (sensors) that require new data management tools to capture, store, and analyze. 3. The growth of cloud computing:
The strength of cloud computing and the growth of the mobile digital platform allow organizations to rely more on telework, remote work, and distributed decision
making. This same platform means firms can outsource more work, and rely on markets (rather than employees) to build value. ** Characteristics of Digital firm:
Significant business relationships with customers, suppliers, and employees are digitally enabled and mediated. Core business processes are accomplished through
digital networks spanning the entire organization or linking multiple organizations. Key corporate assetsintellectual property, core competencies, and financial
and human assetsare managed through digital means. They sense and respond to their environments far more rapidly than traditional firms. They offer
extraordinary opportunities for more flexible global organization and management, practicing time-shifting and space-shifting. ** IT: Information technology
(IT) consists of all the hardware and software that a firm needs to use in order to achieve its business objectives. Data management technology consists of the
software governing the organization of data on physical storage media. Networking and telecommunications technology, consisting of both physical devices and
software, links the various pieces of hardware and transfers data from one physical location to another. Computers and communications equipment can be connected
in networks for sharing voice, data, images, sound, and video. A network links two or more computers to share data or resources,such as a printer. The Internet is a
global network of networks that uses universal standards to connect millions of different networks with nearly 3 billion users in over 230 countries around the
world. intranet An internal network based on Internet and World Wide Web technology and standards. Private intranets extended to authorized users outside the
organization are called extranets, and firms use such networks to coordinate their activities with other firms for making purchases, collaborating on design, and
other interorganizational work. The World Wide Web is a service provided by the Internet that uses universally accepted standards for storing, retrieving,
formatting, and displaying information in a page format on the Internet. ** Complementary assets: Assets required to derive value from a primary investment.
Firms supporting technology investments with investment in complementary assets receive superior returns. Example: Invest in technology and the people to make
it work properly. Complementary assets include: Organizational assets, for example: Appropriate business model. Efficient business processes. Managerial
assets, for example:Incentives for management innovation, Teamwork and collaborative work environments. Social assets :The Internet and telecommunications
infrastructure and Technology standards
changing; procedures for arriving at a solution may not be fully predefined. 4. DSS are designed so that users can work with them directly; these systems include
interactive, user-friendly software. ** ESS: Executive support systems help senior managers address strategic issues and long-term trends, both in the firm and in
the external environment. 1. ESS address nonroutine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a
solution. 2. ESS provide a generalized computing and communications capacity that can be applied to a changing array of problems. 3.ESS are designed to
incorporate data about external events, such as new tax laws or competitors, but they also draw summarized information from internal MIS and DSS. 4. ESS are
designed for ease-of-use and rely heavily on graphical presentations of data. **Enterprise systems integrate the key business processes of an organization into a
single central data repository. This makes it possible for information that was previously fragmented in different systems to be shared across the firm and for
different parts of the business to work more closely together. Business benefits include: 1. Information flows seamlessly throughout an organization, improving
coordination, efficiency, and decision making. 2. Gives companies the flexibility to respond rapidly to customer requests while producing and stocking only that
inventory necessary to fulfill existing orders. 3. Increases customer satisfaction by improving product shipments, minimizing costs, and improving a firms
performance.4. Improves decision making by improving the quality of information for all levels of management. That leads to better analyses of overall business
performance, more accurate sales and production forecasts, and higher profitability. ** Supply chain management (SCM) systems help businesses better manage
relationships with their suppliers. Objective of SCM: SCM helps organizations achieve great efficiencies by automating parts of these processes or by helping
organizations rethink and streamline these processes. SCM is important to a business because through its efficiency it can coordinate, schedule, and control the
delivery of products and services to customers. Business benefits include: 1. Decide when and what to produce, store, and move 2. Rapidly communicate orders 3.
Track the status of orders 4. Check inventory availability and monitor inventory levels 5. Reduce inventory, transportation, and warehousing costs 6. Track
shipments 7. Plan production based on actual customer demand. 8. Rapidly communicate changes in product design. Customer relationship management (CRM)
systems enable a business to better manage its relationships with existing and potential customers. Business benefits include: CRM systems provide information to
coordinate all the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention.
This information helps firms identify, attract, and retain the most profitable customers; provide better service to existing customers; and increase sales.
CRM systems consolidate customer data from multiple sources and provide analytical tools for answering questions . CRM tools integrate a businesss customer-
related processes and consolidate customer information from multiple communication channels, giving the customer a consolidated view of the company.
changing; procedures for arriving at a solution may not be fully predefined. 4. DSS are designed so that users can work with them directly; these systems include
interactive, user-friendly software. ** ESS: Executive support systems help senior managers address strategic issues and long-term trends, both in the firm and in
the external environment. 1. ESS address nonroutine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a
solution. 2. ESS provide a generalized computing and communications capacity that can be applied to a changing array of problems. 3.ESS are designed to
incorporate data about external events, such as new tax laws or competitors, but they also draw summarized information from internal MIS and DSS. 4. ESS are
designed for ease-of-use and rely heavily on graphical presentations of data. **Enterprise systems integrate the key business processes of an organization into a
single central data repository. This makes it possible for information that was previously fragmented in different systems to be shared across the firm and for
different parts of the business to work more closely together. Business benefits include: 1. Information flows seamlessly throughout an organization, improving
coordination, efficiency, and decision making. 2. Gives companies the flexibility to respond rapidly to customer requests while producing and stocking only that
inventory necessary to fulfill existing orders. 3. Increases customer satisfaction by improving product shipments, minimizing costs, and improving a firms
performance.4. Improves decision making by improving the quality of information for all levels of management. That leads to better analyses of overall business
performance, more accurate sales and production forecasts, and higher profitability. ** Supply chain management (SCM) systems help businesses better manage
relationships with their suppliers. Objective of SCM: SCM helps organizations achieve great efficiencies by automating parts of these processes or by helping
organizations rethink and streamline these processes. SCM is important to a business because through its efficiency it can coordinate, schedule, and control the
delivery of products and services to customers. Business benefits include: 1. Decide when and what to produce, store, and move 2. Rapidly communicate orders 3.
Track the status of orders 4. Check inventory availability and monitor inventory levels 5. Reduce inventory, transportation, and warehousing costs 6. Track
shipments 7. Plan production based on actual customer demand. 8. Rapidly communicate changes in product design. Customer relationship management (CRM)
systems enable a business to better manage its relationships with existing and potential customers. Business benefits include: CRM systems provide information to
coordinate all the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention.
This information helps firms identify, attract, and retain the most profitable customers; provide better service to existing customers; and increase sales.
CRM systems consolidate customer data from multiple sources and provide analytical tools for answering questions . CRM tools integrate a businesss customer-
related processes and consolidate customer information from multiple communication channels, giving the customer a consolidated view of the company.
creates risks that affect all firms because of a change in public policy. However, such changes do not necessarily reduce potential profits. Procedural Political
Risk refers to the risk evolving from the daily movement of people, products, and funds from point to point in the global market. Each move creates a procedural
transaction between the units involved, whether units of a company or units of a country. Political actions sometimes create frictions th at interfere with these
transactions. Distributive Political Risk: result of the profits generated by foreign companies in the local economy. If the host country questions the distributive
justice of the rewards of operating in its market, it may wonder whether, as the business grows more successful, it is receiving its fair share of the growing
profits. Catastrophic Political Risk. : includes those random political developments that adversely affect the operations of all firms in a country. Typically, it
arises from specific flash points, such as ethnic discord, illegal regime changes. ** Legal Issues in International Business: ** Operational Concerns:
operational concerns that face manager worldwide include: Starting a business, entering and enforcing contacts, Hiring and firing local worker and closing down
the business. The Task of Compliance: Countries regulate the day to day operations of business under jurisdiction. Getting Started: This task begins with
starting up a business. Some countries jurisdiction is relatively easier then others. For example : setting up business in Canada require two registration procedures
in contract with Chad ( African Nation) require 20 procedural requirements. Making and enforcing contracts: once you are up and running, you can start
worrying about entering and enforcing contracts with buyers and sellers. Hiring and Firing: No matter where you are operating you will probably have to hire and
when necessary fire local workers. Hiring should be relatively easy and firing extremely taxing. Going under and getting out: finally, many companies fail and as
if that is not traumatic enough, some countries make the task of closing down quite difficult. General relationships. ** Strategic concern: Many legal issues
affect the process of value creation. The following legal contingencies often shape an international competitors strategic plans. Product Safety and Liability:
Often products must be customized in order to comply with local standards, which may be higher than those found in a firms h ome market. While product
liability laws are very stringent in markets such as the United States, they are spotty, absent, and at times even arbitrary in many less developed countries.
Marketplace Behavior: National laws determine permissible practices in pricing, distribution, advertising, and the promotion of products, and they vary widely
from one country to another. Product Origin: Local content is important to all nations, and most countries push foreign firms to add value locally. In addition,
product origin determines applicable fees and may be subject to quantitative restrictions as well. Legal Jurisdiction: Every country specifies which law should
apply and where litigation should occur when agents are involvedwhether they are legal residents of the same or different countries. Arbitration: Most
arbitration is governed by the New York Convention, a protocol specified in 1958 that allows parties to choose their own mediators and resolve disputes on
neutral ground.
Materialism and leisure : countries differ in emphasis on materialism, Protestant ethicwork a means to salvation. Most people consider economic
achievement to be commendable, regardless of culture. Expectation of success and reward people are more eager to work if: rewards for success are high :
Same tasks performed in different countries may have different rewards for success and consequences of failure. There is some uncertainty of success : same
task performed in different countries may have different probabilities of success. *Masculinity indexdegree of admiration for success, sympathy for
unfortunate, preference for being better than others High masculinity cultures: roles differentiated by gender, men should dominate. Low masculinity
culture: need for smooth social relationships, employee and social welfare has higher priority than growth and Efficiency * Need hierarchylower-order
needs must be fulfilled prior to higher-order needs Workers in poor countries motivated by lower-order needs People from different countries may rank needs
differently. ** Risk Taking Behaviors: Uncertainty avoidance describes ones acceptance of risk.When the score is high, people need precise directions and
long-term assurances when the score is low, people are willing to accept the risk of trying new products or moving to new jobs. 2. Trust. Trust represents ones
belief in the reliability and honesty of another. Where trust is high, there tends to be a lower cost of doing business. 3. Fatalism. Fatalism represents the belief
that events are predestined. Such a belief may discourage people from working hard to achieve an outcome or accepting responsibility. 4. Future orientation: is
more pronounced in Canada than in Russia. **Orientation : Polycentrism represents a managerial approach in which foreign operations are granted a
significant degree of autonomy in order to be responsive to the uniqueness of local cultures and other conditions. 2. Ethnocentrism represents a belief that ones
own culture is superior to others, and that what works at home should work abroad. Excessive ethnocentrism may lead to costly business failures.3.
Geocentrism represents a managerial approach in which foreign operations are based on an informed knowledge of both home and host country needs,
capabilitiesand constraints.
: Countries have now developed a variety of services that facilitate conduct of international business. Some are :Bank credit agreements. and Insurance that
covers risks such as damages. 4. Growth of consumer pressures: Consumer now a days are more aware about the products and services that are available
within and outside their domestic territory. Today consumers want new and better products that are finely differentiated. 5. Increase in global competition:
The pressures both present and potential of increased foreign competition can persuade companies to buy or sell abroad. Firms have to become more global
to compete in todays business environment and failure of this can be very harmful. 6. Changes in political situations and government policies: Government
is supporting programs favorable to international trade. They are now providing an array of services to help domestic companies sell abroad and vice versa.
7. Expansion of cross-national cooperation: Increasingly governments have come to realize that their own interests can be addressed through international
cooperation by means of treaties, agreements and consultation **Limitation on Globalization: Threat to national sovereignty: Sovereignty is freedom
from external control .As international difference diminish, countries can no longer maintain the traditional ways of life that help unify generation and
people within their community and therefore they lose their ability to act according their local best interest Economic Growth and environmental stress:
Unless the positive consequences of globalization keep up with negative costs from growth, the sustainability of economic improvement will be problematic
in the future. Growing Income Inequality: The shift of job speeds up the process by which India narrows its economic gap with US. The process of shifting
production to a foreign country is called off shoring. For example :- Case of sports industry where globalization enabled European Teams to lure Brazilian
sports soccer, Brazilian gain nothing economically . STRATEGIES FOR DEALING WITH CULTURAL DIFFERENCES : Once a company identifies
cultural differences in the foreign countries in which it operates, must it alter its customary practices? A. Making Little or No Adjustment : Host cultures
do not always expect foreigners to adjust to them Less adjustment necessary when moving to a country with a similar culture B. Communications :
Problems in communications may arise when moving from one country to another, even though both countries share the same official language, as well as
when moving from one language to another. Spoken and written language: Difficult to directly translate one language into another. Silent language:
Color associations, sense of appropriate distance, time and status cues, and body language (kinesics). C. Cultural shock: Culture shock represents the
trauma one experiences in a new and different culture because of having to learn to cope with a vast array of new cues and expectations. Reverse culture
shock occurs when people return home, having accepted the culture encountered abroad and discovering that things at home have changed during their
absence.