International Business Environment
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Questions and Answers

What is the term used to describe all the forces that influence the life and development of a firm?

  • Competitive forces
  • External forces
  • Environmental forces (correct)
  • Internal forces

    • Which of the following is an example of an internal force?

  • Economic forces
  • Political forces
  • Sociocultural forces
  • Human resources (correct)

    • What is the result when a change in an external force affects a firm's internal forces?

  • The firm's external forces become controllable
  • The firm's internal forces remain unchanged
  • The firm's operations are unaffected
  • All controllable forces of the firm are affected (correct)

    • Which of the following is NOT an example of an external force?

    <p>Financial resources</p> Signup and view all the answers

    What is the term used to describe the forces that influence the life and development of a firm in its home country?

    <p>Domestic environment</p> Signup and view all the answers

    What is the primary difference between external and internal forces?

    <p>Management has control over internal forces but not external forces</p> Signup and view all the answers

    Which of the following is an example of a firm responding to a change in an external force?

    <p>A firm responding to a change in government regulations</p> Signup and view all the answers

    What is the term used to describe the forces that influence the life and development of a firm in a foreign country?

    <p>Foreign environment</p> Signup and view all the answers

    What is one of the reasons why businesses choose to go international?

    <p>To defend home markets by distracting competitors</p> Signup and view all the answers

    What is a result of the privatization of industries in formerly communist nations?

    <p>Opening of their economies globally</p> Signup and view all the answers

    What is a concern related to host country markets?

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

    What is a reason why large trading groups like the EU are attractive markets for investment?

    <p>Large consumer market</p> Signup and view all the answers

    What is the main idea behind the 'buy American' approach?

    <p>To support local businesses</p> Signup and view all the answers

    What is economic globalization?

    <p>The tendency toward an international integration and interdependency of goods, technology, information, labor and capital</p> Signup and view all the answers

    Why has there been almost no negative backlash among Americans to the flood of foreign investment into their country?

    <p>The question does not provide enough information to answer this</p> Signup and view all the answers

    What is one of the reasons why a company may enter into downstream markets?

    <p>To protect existing international business</p> Signup and view all the answers

    What percentage of world trade is accounted for by Multinational Enterprises (MNEs)?

    <p>More than half</p> Signup and view all the answers

    Where are most multinationals based, according to recent trends?

    <p>Developed nations</p> Signup and view all the answers

    What is the estimated number of Multinational Enterprises (MNEs) worldwide?

    <p>More than 103,000</p> Signup and view all the answers

    What is the primary factor driving the shift in the world's economic center of gravity?

    <p>Rapid urbanization and industrialization</p> Signup and view all the answers

    What is the primary definition of a Multinational Enterprise (MNE)?

    <p>A company made up of entities in more than one nation</p> Signup and view all the answers

    What is the title of the report cited in the text that discusses the growth of the consuming class?

    <p>Urban World: Cities and the Rise of the Consuming Class</p> Signup and view all the answers

    Which of the following is NOT a characteristic of Multinational Enterprises (MNEs)?

    <p>Having a global strategy only</p> Signup and view all the answers

    What is the approximate number of foreign affiliates of Multinational Enterprises (MNEs)?

    <p>Nearly 900,000</p> Signup and view all the answers

    What is one of the concerns associated with the globalization of business?

    <p>It has had deleterious effects on labor and labor standards</p> Signup and view all the answers

    What is the trend observed in the number of people living in extreme poverty in Sub-Saharan Africa?

    <p>It has been increasing steadily</p> Signup and view all the answers

    What is one of the benefits of free trade according to its proponents?

    <p>It promotes more and better jobs</p> Signup and view all the answers

    What is the primary benefit of going abroad to gain new perspectives, as in the case of Lily DeNoma?

    <p>It increases one's confidence and teamwork skills</p> Signup and view all the answers

    What is the focus of the minicase 'The COVID-19 Pandemic: Temporary Hiccup or Permanent Change for International Business?'?

    <p>The interconnectedness of relationships across entities during the pandemic</p> Signup and view all the answers

    What is one of the arguments against globalization?

    <p>It has deleterious effects on labor and labor standards</p> Signup and view all the answers

    What is the relationship between globalization and national sovereignty?

    <p>Globalization threatens to reduce national sovereignty</p> Signup and view all the answers

    What is the likely outcome of the COVID-19 pandemic on international business, according to the minicase?

    <p>It will lead to a reversal of globalization</p> Signup and view all the answers

    What is the primary impact of the COVID-19 pandemic on international businesses?

    <p>A shift towards digitalization and new business opportunities</p> Signup and view all the answers

    Which of the following sectors is likely to be the most resilient to the effects of COVID-19?

    <p>E-commerce</p> Signup and view all the answers

    What is the primary role of the international environment in Figure 1.1?

    <p>To connect the domestic environment with foreign environments</p> Signup and view all the answers

    What is the result of the reversal of the domestic and foreign environments?

    <p>A shift in the focus of international businesses</p> Signup and view all the answers

    How can international businesses make use of technology to adapt to the new work environment?

    <p>By leveraging technology to create new business opportunities</p> Signup and view all the answers

    What is the primary reason why some sectors are likely to be slower to rebound from the effects of COVID-19?

    <p>High dependence on traditional business models</p> Signup and view all the answers

    What is the relationship between the domestic environment and foreign environments in Figure 1.1?

    <p>The domestic environment is surrounded by the foreign environments</p> Signup and view all the answers

    What is the primary implication of the COVID-19 pandemic on the international business environment?

    <p>An increase in the importance of digitalization and new business opportunities</p> Signup and view all the answers

    Study Notes

    International Business Environment

    • The coffee chain's number one growth market is China, according to company executives.

    External and Internal Environmental Forces

    • External forces are uncontrollable forces that management has no direct control over, including: • Competitive forces • Physical forces • Distributive forces • Political forces • Economic forces • Socioeconomic forces • Financial forces • Technological forces • Labor forces • Legal forces
    • Internal forces are controllable forces that management has direct control over, including: • Human resources • Finance
    • Changes in external forces can affect internal forces.

    International Business

    • The domestic environment includes all forces that influence the life and development of the firm.
    • The foreign environment includes all forces that influence the life and development of the firm in other countries.

    History of International Business

    • Multinational corporations existed in the late 1800s, such as Singer Manufacturing Company.
    • There has been a recent surge in the number of multinational corporations arising in emerging economies.

    Evolution of the World's Economic Center of Gravity

    • The world's economic center of gravity is shifting from Europe and the Americas to Asia due to rapid urbanization and industrialization in emerging markets.

    Multinational Enterprise (MNE)

    • A multinational enterprise is a company made up of entities in more than one nation, operating under a decision-making system with a common strategy and coherent policies.
    • There are over 103,000 MNEs with nearly 900,000 foreign affiliates, accounting for more than half of world trade.
    • Foreign affiliates have become increasingly important in the industrial and economic life of many nations.

    Drivers of Internationalization

    • Political drivers include: • Trend towards increased unification and socialization of the global economy • Progressive reduction of barriers to trade and foreign investment by most governments • Privatization of industry in formerly communist nations and opening of their economies globally
    • Competitive drivers include: • Defending home markets by distracting competitors • Guarantees supply of key raw materials • Entry into downstream markets to protect existing international business

    Globalization of Business

    • Economic globalization is the tendency towards international integration and interdependency of goods, technology, information, labor, and capital.
    • Concerns with globalization include: • Uneven results across nations and people • Deleterious effects on labor and labor standards • Contribution to decline in environmental and health conditions • Threat to national sovereignty
    • Arguments supporting globalization include: • Free trade enhances socioeconomic development • Free trade promotes more and better jobs

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    Geringer IB 3e PPT Module 1 - International Business PDF

    Description

    Learn about the external and internal environmental forces that influence the life and development of a firm in the context of international business.

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