Global Management Perspectives and Trade Alliances
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Questions and Answers

What is the primary goal of the World Trade Organization (WTO)?

  • To promote international monetary cooperation
  • To provide loans to developing countries
  • To regulate trade agreements between nations
  • To deal with the rules of trade among nations (correct)

    • The North American Free Trade Agreement (NAFTA) eliminated all trade barriers between Mexico, Canada, and the U.S.

    False

    What does IMF stand for?

    International Monetary Fund

    The _____ promotes sustainable economic growth and employment among its 34 member countries.

    <p>OECD</p> Signup and view all the answers

    Match the following types of Multinational Corporations (MNC) with their characteristics:

    <p>Multidomestic Corporation = Decentralizes decisions to local/host country Global Company = Centralizes decisions in home country Transnational Organization = Eliminates artificial geographical barriers</p> Signup and view all the answers

    Which organization provides technical assistance specifically to developing countries?

    <p>World Bank Group</p> Signup and view all the answers

    A Global Company reflects a geocentric attitude.

    <p>False</p> Signup and view all the answers

    How many countries are members of the World Trade Organization (WTO)?

    <p>161</p> Signup and view all the answers

    What attitude considers the home country’s practices as superior to others?

    <p>Ethnocentric attitude</p> Signup and view all the answers

    A polycentric attitude views every foreign operation as the same.

    <p>False</p> Signup and view all the answers

    Name one significant factor influenced by regional trading alliances in global business.

    <p>Economic power</p> Signup and view all the answers

    The _____ is an economic and trade union consisting of 28 democratic European nations.

    <p>European Union</p> Signup and view all the answers

    Which of the following is a characteristic of a geocentric attitude?

    <p>A world-oriented approach to best practices</p> Signup and view all the answers

    The European Union has a common currency known as the Dollar.

    <p>False</p> Signup and view all the answers

    What is one impact of the EU on global trade?

    <p>Accounts for a large percentage of global exports and imports</p> Signup and view all the answers

    Match each attitude to its correct description:

    <p>Ethnocentric = Believes home country practices are best Polycentric = Trusts host country managers for business practices Geocentric = Seeks best practices from around the world</p> Signup and view all the answers

    Which of the following best describes a free market economy?

    <p>Resources are primarily owned and controlled by the private sector.</p> Signup and view all the answers

    Managers do not need to consider the political climate in the countries where they operate.

    <p>False</p> Signup and view all the answers

    What does Hofstede's framework assess?

    <p>National culture</p> Signup and view all the answers

    In a __________ economy, economic decisions are made by a central government.

    <p>planned</p> Signup and view all the answers

    Match the Hofstede's dimensions with their descriptions:

    <p>Individualistic = People look after their own and family's interests Collectivistic = People expect the group to look after and protect them High Power Distance = Accepts wide differences in power Low Power Distance = Plays down inequalities among employees</p> Signup and view all the answers

    Which dimension of Hofstede's framework indicates acceptance of differing power levels?

    <p>Power Distance</p> Signup and view all the answers

    A high power distance culture encourages employees to approach their superiors freely.

    <p>False</p> Signup and view all the answers

    What is one potential problem managers must address due to cultural differences?

    <p>Miscommunication or conflict</p> Signup and view all the answers

    What is the primary role of the World Trade Organization (WTO)?

    <p>Promote trade relationships</p> Signup and view all the answers

    Nationalism has seen a decrease in influence over international trade agreements.

    <p>False</p> Signup and view all the answers

    What is a multinational corporation (MNC)?

    <p>An international company that maintains operations in multiple countries.</p> Signup and view all the answers

    A strategic alliance in which partners form a separate and independent organization is known as a __________.

    <p>joint venture</p> Signup and view all the answers

    Match the following global business strategies with their descriptions:

    <p>Global sourcing = Purchasing materials wherever it is cheapest Licensing = Allowing another to use brand name for a fee Exporting = Making products domestically for sale abroad Foreign subsidiary = Establishing an independent facility in another country</p> Signup and view all the answers

    Which of the following is NOT a perspective of global management?

    <p>Parochialism</p> Signup and view all the answers

    Which organization provides monetary support to countries in need?

    <p>International Monetary Fund</p> Signup and view all the answers

    A multidomestic corporation centralizes management and decision-making to the home country.

    <p>False</p> Signup and view all the answers

    What term is used when a company obtains permission to use another company's technology?

    <p>licensed</p> Signup and view all the answers

    A multidomestic organization centralizes management decisions.

    <p>False</p> Signup and view all the answers

    What is meant by 'global sourcing'?

    <p>Purchasing materials or labor from around the world wherever it is cheapest.</p> Signup and view all the answers

    Lilly's collaboration with various global partners is an example of a __________.

    <p>strategic alliance</p> Signup and view all the answers

    In Hofstede’s model, if top management dislikes uncertain situations, they are high on _________.

    <p>uncertainty avoidance</p> Signup and view all the answers

    In __________ orientation societies, people value thrift and persistence.

    <p>long-term</p> Signup and view all the answers

    Which of the following dimensions was identified by Geert Hofstede?

    <p>Individualism-Collectivism</p> Signup and view all the answers

    Match the following economic issues with their description:

    <p>Currency Exchange Rates = The value of one currency for the purpose of conversion to another. Inflation Rates = The rate at which the general level of prices for goods and services is rising. Tax Policies = Rules and regulations governing taxation. Economic Stability = The absence of excessive fluctuations in the economy.</p> Signup and view all the answers

    Study Notes

    Global Management Perspectives

    • Ethnocentric attitude: The belief that one's own country's work approaches and practices are superior.
    • Polycentric attitude: The belief that managers in foreign countries know best how to run their businesses.
    • Geocentric attitude: A world-oriented view that values the best approaches and people from around the globe.

    Global Trade Alliances and Mechanisms

    • European Union (EU): A political and economic union of 28 European nations with a single currency (Euro). It's the largest GDP in the world, accounting for a significant portion of global trade.
    • North American Free Trade Agreement (NAFTA): An agreement between Mexico, Canada, and the U.S. eliminating trade barriers. (Now replaced by USMCA).
    • Association of Southeast Asian Nations (ASEAN): A trading alliance of 10 Southeast Asian nations.
    • World Trade Organization (WTO): A global organization of 161 countries that regulates international trade.
    • International Monetary Fund (IMF): An organization of 188 countries that promotes international monetary cooperation and provides financial assistance.
    • World Bank Group: Provides financial and technical assistance to developing countries.
    • Organization for Economic Cooperation and Development (OECD): An international economic organization that helps its 34 member countries achieve sustainable growth and employment.

    Multinational Corporations (MNCs)

    • Multidomestic Corporation: Decentralizes decisions to local countries (reflects polycentric attitude).
    • Global Company: Centralizes decisions in the home country (reflects ethnocentric attitude).
    • Transnational or Borderless Organization: Eliminates artificial geographic barriers (reflects geocentric attitude).

    Key Considerations for International Business

    • Political/Legal Environment: Managers must understand the specific laws and political stability of the countries where they operate.
    • Economic Environment: Managers need to be aware of economic factors such as exchange rates, inflation rates, and tax policies.
    • Cultural Environment: Managers must be sensitive to cultural differences, including Hofstede’s five cultural dimensions: individualism/collectivism, power distance, uncertainty avoidance, achievement/nurturing, and long-term/short-term orientation.

    Structures and Techniques for Going International

    • Global Sourcing: Purchasing materials or labor from the cheapest sources anywhere in the world.
    • Exporting: Selling domestically produced products abroad.
    • Importing: Acquiring products made abroad and selling them domestically.
    • Licensing or Franchising: Granting another organization the right to use brand names, technology, or product specifications in exchange for a fee.
    • Strategic Alliance: A partnership with a foreign company to develop new products or build facilities.
    • Joint Venture: A separate, independent organization formed by partners for a specific business purpose.
    • Foreign Subsidiary: A direct investment in a foreign country, establishing an independent facility or office.

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    Management: Global Management in Today's World (2021) PDF

    Description

    This quiz explores key concepts in global management, focusing on different attitudes towards international business, including ethnocentric, polycentric, and geocentric approaches. It also covers major trade alliances such as the EU, NAFTA, ASEAN, and the WTO, examining their impact on global trade. Test your understanding of how these concepts shape international business practices.

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