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Questions and Answers
What requirement do private companies face due to globalization?
What requirement do private companies face due to globalization?
How does HR management support organizations in a global context?
How does HR management support organizations in a global context?
What is a characteristic of a transnational company?
What is a characteristic of a transnational company?
What is meant by globalization?
What is meant by globalization?
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Which of the following is a risk associated with globalization?
Which of the following is a risk associated with globalization?
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Why might organizations choose to expand internationally?
Why might organizations choose to expand internationally?
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What role do HR management practices play in fostering organizational learning?
What role do HR management practices play in fostering organizational learning?
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What is often prioritized by public institutions and NGOs due to globalization?
What is often prioritized by public institutions and NGOs due to globalization?
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What primary reason might drive an organization to pursue global markets?
What primary reason might drive an organization to pursue global markets?
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Which factor does NOT belong to the STEEPLE model?
Which factor does NOT belong to the STEEPLE model?
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When considering international markets, which of the following is a cost factor organizations might utilize?
When considering international markets, which of the following is a cost factor organizations might utilize?
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In terms of socio-cultural considerations, which factor is most beneficial for an organization looking to operate in foreign markets?
In terms of socio-cultural considerations, which factor is most beneficial for an organization looking to operate in foreign markets?
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Which aspect of the macro environment refers to the level of governmental regulation affecting businesses?
Which aspect of the macro environment refers to the level of governmental regulation affecting businesses?
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What is the importance of market size and growth rate in the micro environment?
What is the importance of market size and growth rate in the micro environment?
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Which of the following factors may negatively affect the profit potential in a market?
Which of the following factors may negatively affect the profit potential in a market?
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What effect do trading systems typically have on domestic companies?
What effect do trading systems typically have on domestic companies?
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What characterizes Foreign Direct Investment (FDI)?
What characterizes Foreign Direct Investment (FDI)?
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How does foreign direct investment differ from portfolio investment?
How does foreign direct investment differ from portfolio investment?
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What is one effect of globalization on Human Resource Management (HRM)?
What is one effect of globalization on Human Resource Management (HRM)?
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What has globalization done to worker protections and wages?
What has globalization done to worker protections and wages?
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Which of the following is a potential outcome for organizations managing in a globalized market?
Which of the following is a potential outcome for organizations managing in a globalized market?
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What is an example of a company that primarily uses Foreign Direct Investment?
What is an example of a company that primarily uses Foreign Direct Investment?
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What is a key challenge for HRM due to globalization?
What is a key challenge for HRM due to globalization?
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What does the balance of payments indicate regarding a country's economy?
What does the balance of payments indicate regarding a country's economy?
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What is one ethical concern associated with targeting marketing at lower-income consumers in developing countries?
What is one ethical concern associated with targeting marketing at lower-income consumers in developing countries?
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What does the geographical separation of business operations allow large multinational corporations to do?
What does the geographical separation of business operations allow large multinational corporations to do?
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How has the cultural landscape changed in China with the increase in middle-income consumers?
How has the cultural landscape changed in China with the increase in middle-income consumers?
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What is one effect of exporting consumerism according to the given information?
What is one effect of exporting consumerism according to the given information?
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What criticism has been directed toward pharmaceutical companies regarding their marketing practices?
What criticism has been directed toward pharmaceutical companies regarding their marketing practices?
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What is a key advantage of global brands?
What is a key advantage of global brands?
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Which recommendation is made for building a global brand?
Which recommendation is made for building a global brand?
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What is a defining characteristic of local brands?
What is a defining characteristic of local brands?
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How can packaging contribute to brand perception?
How can packaging contribute to brand perception?
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What ethical issue arises from globalization regarding consumer protection?
What ethical issue arises from globalization regarding consumer protection?
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Why might younger consumers prefer global brands?
Why might younger consumers prefer global brands?
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What is one disadvantage local brands face compared to global brands?
What is one disadvantage local brands face compared to global brands?
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What is typically one of the advantages of local brands according to Kapferer?
What is typically one of the advantages of local brands according to Kapferer?
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Study Notes
Balance of Payments
- A country with a large current account deficit borrows money to purchase goods and services from other countries.
Foreign Direct Investment (FDI)
- Companies establish plants and offices in other countries to produce or sell products and services.
- Aim of FDI is to gain operational control, unlike portfolio investments (PIs) which focus on buying and selling financial assets.
- Example: Tommy Hilfiger Corporation
- Headquartered in Hong Kong.
- Incorporated in the British Virgin Islands.
- Listed on the New York Stock Exchange.
- Owned by international institutional investors.
- Annual shareholder meetings held in Barbados.
- Production sourced to manufacturers in Mexico and Asia.
- Licensed its name to producers globally and retailed its classic American clothing in Europe and North America.
Role of HRM in Globalization
- Globalization reinforces the importance of HRM, but limits its ability to set organizational strategy.
- Emphasis on the 'free market' has declined worker protections and wages.
- Created conditions for massive job insecurity, giving employers greater power to determine working conditions.
- HRM must work with managers to attract and retain employees who fit the company culture.
Obstacles to Organizational Survival and Success in Globalization
- Private companies face pressure to maximize profit, restricting their ability to prioritize other goals.
- Companies must manage complex international pressures and an international workforce.
- Public institutions and NGOs must prioritize fiscal concerns above their original purpose.
Role of HRM in Multiculturalism
- HR Management helps organizations navigate diverse cultures.
- HR Management attracts an international workforce and meets diverse needs and desires.
- HR Management acts as information brokers, highlighting contrasting regulations and cultural expectations.
- HR Management fosters a culture of organizational learning that encourages institutions to adapt and benefit from diversity.
Transnational and Global Firms
- Transnational company: coordinates and controls operations in multiple countries, even if it doesn't own them.
- Global firm: operates in multiple countries, gaining cost and reputation advantages over domestic competitors.
Globalization
- Greater permeability and interdependence across national boundaries.
- An economic, political, and cultural phenomenon.
- Risks include: economic and government instability, legislative restrictions, trade barriers, and diverse cultural preferences.
Triggers for International Expansion
- Saturated domestic markets: Limited opportunities in the domestic market.
- Small domestic markets: Larger markets are necessary for survival.
- Low-growth domestic markets: Economic recession motivates seeking growing markets overseas.
- Customer drivers: Customer expectations drive global expansion.
- Competitive forces: Competitors' global expansion motivates expansion.
- Cost factors: Lower labor, energy or raw material costs in other countries.
- Portfolio balance: Operating in diverse markets mitigates risks.
STEEPLE Model
- Stands for Social, Technological, Economic, Environmental, Political, Legal, and Ethical.
- Macro-environment aspects:
- Trading systems: Governments and trading blocs protect domestic companies.
- Socio-cultural considerations: Operating in similar cultures is easier.
- Technological considerations: Technological development affects viability of operation.
- Economic considerations: Analyze economic factors in prospective markets.
- Political and legal considerations: Political stability and regulations affect attractiveness.
- Ethical and legal considerations: Ethical issues in less developed countries can damage reputation.
Micro Environment
- Market size and growth rate: crucial for predicting future demand.
- Competition: strength and volatility influence market entry.
- Costs of serving the market: distribution and control increase with distance.
- Profit potential: market characteristics may limit profitability.
Packaging and Labeling
- Packaging communicates brand identity and perceptions.
- Secure packaging reassures consumers of product safety.
- Sustainability is important: consumers prefer recyclable packaging.
Global and Local Brands
- Global brands: Same marketing strategy and mix in all markets.
- International brands: Same marketing mix elements across markets.
- Local brands: Marketed in a single country or limited area.
Advantages of Global Brands
- Economies of scale enable lower prices.
- Stream of innovations.
- International image appeals to younger and mobile consumer segments.
Advantages of Local Brands
- Flexibility to adapt to local needs.
- Flexible pricing strategies.
- Insulation from global issues.
- Close relationships and trust from consumers.
Building a Global Brand Recommendations
- Cultural immersion: visiting and understanding local cultures.
- Leveraging local influencers: incorporating insights from local markets.
- Global frameworks with local relevance: Adapting marketing programs and messages to local markets.
Ethical Issues of Globalization
- Consumer protection: Companies exploit differences in regulations.
- Exporting consumerism: Spreading consumer values and increasing cultural homogenization.
- Targeting lower-income consumers: Ethical issues arise when marketing products beyond reach of low-income consumers in developing countries.
- Geographical segregation: Companies exploit national boundaries to reduce taxes.
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Description
This quiz covers essential concepts in economics and globalization, including the balance of payments and foreign direct investment. You'll explore the implications of globalization on human resource management as well. Test your understanding of these interconnected topics.