International Business Chapter 1: Globalization of Sports

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Questions and Answers

How has the globalization of professional sports affected the accessibility of sports events to fans around the world?

It has enabled fans to watch top players and teams in nearly any sport from almost anywhere on earth through satellite television broadcasts.

How do professional teams benefit from the globalization of sports?

They can find and develop the most talented athletes from around the world, and attract more sponsors and advertisers who are willing to pay more for their global reach.

How do famous athletes benefit from the globalization of sports?

They can earn generous sums from endorsing products and companies, and may have more opportunities to play for teams or leagues with higher salaries.

How has the globalization of sports affected professional athlete A, a star?

Positively, it has increased their global visibility, endorsement opportunities, and salary. Negatively, it may lead to pressure to perform and maintain a global image. Signup and view all the answers

How has the globalization of sports affected professional athlete B, an average player?

Positively, it may provide more opportunities to play for teams or leagues with higher salaries. Negatively, it may increase competition for spots on teams and make it harder to stand out. Signup and view all the answers

How are successful teams and leagues seeking income opportunities outside their home countries?

They are looking for foreign investors and opening shops domestically and internationally to sell souvenirs bearing their logos. Signup and view all the answers

What percentage of world production is currently sold outside of its country of origin?

About a quarter Signup and view all the answers

Why do smaller countries tend to be more globalized than larger ones?

Smaller land masses and populations permit a lower variety of production Signup and view all the answers

What is a factor that contributes to countries with higher per capita incomes being more globalized?

Their citizens can better afford foreign products, travel, and communications Signup and view all the answers

What is an example of a country being highly globalized on one dimension but low on another?

The United States being high on technological scales but low on economic ones Signup and view all the answers

What technological advancement has increased the effectiveness and efficiency of international business operations?

Advances in communications and transportation Signup and view all the answers

Why have governments lowered restrictions on trade and foreign investment over time?

In response to the expressed desires of their citizens and producers Signup and view all the answers

Why do firms seek foreign markets?

To minimize cyclical effects on sales and profits and to counter potential advantages that competitors might gain from participating in foreign market opportunities. Signup and view all the answers

What is the definition of merchandise exports?

Tangible products sent to a foreign country for use or resale. Signup and view all the answers

What are service exports and imports?

Intangible products, such as tourism and transportation, and service performances like banking and insurance. Signup and view all the answers

What is an example of service export earnings?

When an American pays for a flight on Air France and stays in a French-owned hotel, it represents service export earnings for France. Signup and view all the answers

What is an example of asset use in international business?

Firms receiving export earnings in the form of royalties by allowing foreign clients to use their assets, such as trademarks or patents. Signup and view all the answers

What is a turnkey operation in international business?

A construction project performed under contract, where the facility is transferred to the owner when it is ready for operation. Signup and view all the answers

What is a multinational enterprise (MNE) and what approach does it take to foreign markets and production?

A firm that takes a global approach to foreign markets and production, considering markets and production sites anywhere in the world. Signup and view all the answers

What are the three main factors that smart companies examine when considering international strategies?

Physical factors, institutional factors, and competitive factors. Signup and view all the answers

What is the impact of geographic barriers on a company's operations?

They affect transportation, communications, and distribution channels within a country. Signup and view all the answers

What demographic influences can impact IB operations?

Differences in population density, education, age distribution, and life expectancy. Signup and view all the answers

What is an example of an institutional factor that can affect a company's operations?

Political policies. Signup and view all the answers

What is the benefit of having managers who are knowledgeable about geography?

They can better determine the location, quantity, quality, and availability of the world's natural resources and conditions. Signup and view all the answers

How do a nation's political policies influence international business?

A nation's political policies influence international business by affecting how and if IB takes place due to the influence of government leaders over the process. Signup and view all the answers

What is the role of domestic business law in international business?

Domestic business law regulates home-country firms in both home and host countries regarding matters such as taxation, employment, and foreign exchange transactions. Signup and view all the answers

Why is it important for managers to study anthropology, psychology, and sociology in an international business context?

Studying anthropology, psychology, and sociology helps managers understand interpersonal norms of people in foreign countries and adjust operating procedures accordingly. Signup and view all the answers

What does economics explain in the context of international business?

Economics explains why countries exchange goods and services, why capital and people travel among countries, and why one country's currency has a certain value compared to another. Signup and view all the answers

How do international laws affect a firm's foreign operations?

International laws, in the form of legal agreements between countries, determine how earnings are taxed by all jurisdictions. Signup and view all the answers

Why are behavioral factors important to consider in international business?

Behavioral factors, such as cultural differences, affect how a firm operates in foreign countries and require adjustments to operating procedures. Signup and view all the answers

Study Notes

Globalization of Professional Sports

Globalization of professional sports has enabled fans to watch top players and teams from anywhere in the world through satellite television broadcasts.
Professional teams scour the world to find and develop talented athletes, and players may forsake home country allegiances in pursuit of higher salaries.
The more people that tournaments can attract, the more money that sponsors and advertisers are willing to pay, and the greater the likelihood that those sponsors and advertisers will have business operations that span the globe.
Sports and non-sports companies pay famous athletes and teams to endorse their products.
Successful teams have opened shops to sell souvenirs bearing their logos, generating more revenue from merchandise than from TV rights and sponsorships.

Factors in Increased Globalization

Rise in and application of technology has increased the effectiveness and efficiency of international business operations.
Liberalization of cross-border trade and resource movement has led to lowered restrictions on trade and foreign investment.
Reducing risk by firms seeking foreign markets to minimize cyclical effects on sales and profits.

International Business Operating Modes

Merchandise exports and imports consist of tangible products sent to or brought from a foreign country.
Service exports and imports represent intangible products, including tourism, transportation, and service performance.
Service performance includes banking, insurance, rental, engineering, and management contracts.

Multinational Enterprises (MNEs)

MNEs are firms that take a global approach to foreign markets and production, considering markets and production sites worldwide.
MNEs are also referred to as multinational corporations (MNCs) or transnational companies (TNCs).

Factors Affecting Ability to Operate Abroad

Physical factors: geographic influences (resource distribution, transportation, and communication channels) and demographic influences (population density, education, age distribution, and life expectancy).
Institutional factors: cultural, political, and legal policies (government influence, taxation, employment, and foreign exchange transactions).
Competitive factors: number and strength of suppliers, customers, and rival firms.

Institutional Factors

Political policies: government leaders' influence on international business operations.
Legal policies: domestic and international laws, regulations, and enforcement affecting foreign operations.
Behavioral factors: understanding interpersonal norms and cultural differences in foreign countries.

Economic Forces

Economics explains why countries exchange goods and services, why capital and people travel among countries, and why currencies have certain values.
Economic forces provide analytical tools to determine the impact of foreign operations on home and host countries.

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Description

This quiz covers the globalization of professional sports, its impact, and the role of satellite television and international talent scouting in the industry.