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| Political risk assessment by MNCs takes 2 forms: |
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Definition
1. Consulting with experts familiar with the area 2. Development of internal staff capabilities |
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| Political risk can be managed through |
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Definition
1. Avoiding or withdrawing investment 2. Adapting to the political regulatory environment 3. Maintaining the host country's dependency on the parent corporation 4. Hedging potential losses through political risk insurance and local debt financing |
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Countries ability to meet its financial obligations : Government may change its economic policies, thereby making a foreign company unprofitable or unable to repatriate its foreign earnings |
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1. Common Law 2. Civil Law 3. Islamic Law |
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Term
| Appropriability of Technology |
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Definition
The ability of the innovating firm to protect its technology from competitors and to obtain economic benefits from that technology |
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| Ways to protect intellectual property |
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Patents Trademarks Trade names Copyrights Trade Secrets |
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| The process of developing strategies, designing and operating systems, and working with people around the world to ensure sustained competitive advantage |
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| Dynamic worldwide changes present dynamic challenges to global managers |
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Definition
Political & Economic trend toward the privatization of businesses
Rapid advances in information technology
The management of offshore human capital |
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| Any governmental action or politically motivated event that adversely affect the long-run profitability or value of a firm |
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Definition
1. Form of government
2. Political stability
3. Foreign policy
4. State companies
5. Role of military
6. Level of terrorism
7. Restrictions on imports/exports |
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Definition
Economic system
State of development
Economic stability
GNP
International financial standing
Monetary/fiscal policies
Foreign investment |
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Definition
Legal system
Prevailing international laws
Protectionist laws
Tax laws
Role of contracts
Protection for proprietary property
Environmental protection |
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Term
International Social Responsibility
(CSR-Corporate Social Responsibility) |
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Definition
| The expectation that MNCs should be concerned about the social and economic effects of their decisions on activities in other countries in other countries, and should build appropriate provisions into their strategic plans to deal with those potential affects |
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| The need for a moral standard that is accepted around the world |
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| Concerns about MNC social responsibilty |
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Definition
Revolve around the issue of human rights in other countries.
Many organizations have developed a code of conduct that specifically deal with human rights |
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| International Business Ethics |
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Definition
| The conduct of MNCs in their relationships to all individuals and entities with whom they come into contact |
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| Foreign Corrumt Practice Act |
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Definition
| Prohibits most questionable payments by US companies doing business in other countreis |
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| Managing environmental interdependence |
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Definition
| The need to consider ecological interdependence as well as the economic and social implications of MNC activities |
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Definition
Shared values
Understandings
Assumptions
Goals
passed down through generations & imposed by members of the society |
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| An attitude that assumes one's own management techniques are best in any situation or location and that other people should follow one's patterns of behavior |
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Take a systems approach to understanding cultural and national variables and their effects on work behavior
They identify eight subsystems of variables: KINSHIP, EDUCATION, ECONOMY, POLITICS, RELIGION, ASSOCIATION, HEALTH, and MASCULINITY |
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| Confirmed some similar dimensions, and found other unique dimensions: OBLIGATIONS, EMOTIONAL ORIENTATION, PRIVACY, SOURCE OF POWER & STATUS |
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| Team of 170 researchers in 62 countires concluded the presence of a number of other dimensions, and ranked countries on those dimensions, including ASSERTIVENESS, PERFORMANCE ORIENTATION, FUTURE ORIENTATION, and HUMANE ORIENTATION |
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Definition
| In international business frequently arise out of conflicting values and orientations regarding TIME, CHANGE, MATERIAL FACTORS, and INDIVIDUALISM. |
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Definition
| Inherent part of a manager's role, taking up the majority of the manager's time on the job |
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Definition
| Culture is the foundation of communication, and communication transmits culture. Cultural variables that can affect the communication process by influencing a person's perceptions include ATTITUDES, SOCIAL ORGANIZATIONS, THOUGHT PATTERNS, ROLES, LANGUAGE, NONVERBAL LANGUAGE, and TIME |
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Definition
Kinesic Behavior: Body Movement
Proxemics: Influence of proximity and space on communication (personal & office layout)
Paralanguage: How something is said rather than the content
Object Language: Communicating through material artifacts, whether architecture, office design and furniture, clothing, cars, or cosmetics. |
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Term
Monochronic Culture
(Switzerland, Germany, USA) |
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Definition
Time is experienced in a linear way, with a past, a presence, and a future, and time is treated as something to be spent, saved, made up, or wasted.
"Time serves to order life" |
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Polychronic Cultures
(Latin Americans, Arabs, & other collectivist cultures) |
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| Tolerate many things occurring simultaneously and emphasize involvement with people. |
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High-Context Culture
(Asia, Middle East, Africa, Mediterranean) |
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| Feelings & Thoughts are not explicitly expressed (read between the lines |
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Low-Context Culture
(Germany, Switzerland, Scandinavia, North America) |
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Definition
| Personal & Business relationships are more compartmentalized, communication media have to be more explicit. Feelings & thoughts are expressed in words & info is more rapidly available |
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Term
| Effective management of intercultural communication |
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Definition
| Necessitates the development of cultural sensitivity, careful encoding, selective transmission, careful decoding, and follow-up actions |
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Definition
One of the most important abilities in international business.
Relative emphasis on task vs. interpersonal relationships
Use of general principles vs. specific ddetails
Number of people present & extent of their influence |
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Term
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Definition
1. Preparation
2. Relationship building
3. Exchanges of task-related information
4. Persuasion
5. Concessions and agreement |
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| Negotiation tactics & action |
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Definition
| Promises, threats, initial concessions, silent periods, interruptions, facial gazing, touching |
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Term
| Effective management of negotiation |
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Definition
| Requires an understanding of the perspectives, values, and agendas of other parties and the use of a problem-solving approach, |
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Definition
Reactive Reasons: International competition, trade barriers, customer demands
Proactive Reasons: seeking economies of scale, new international markets, resources access, cost savings, local incentives |
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Definition
Defining the mission & objectives of the firm
Scanning the environment for threats and opportunities
Assessing the internal strengths and weaknesses
Considering alternative international entry strategies
Deciding on strategy |
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Definition
| An assessment of how a firm's strengths and weaknesses vis-a-vis those of its competitors affect the opportunity and threads in the international environment. |
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