Podcast
Questions and Answers
What is defined as all business activities that transcend national boundaries?
What is defined as all business activities that transcend national boundaries?
Which type of company formulates its strategies based on perceived market differences in multiple countries?
Which type of company formulates its strategies based on perceived market differences in multiple countries?
What does the term 'international environment' refer to?
What does the term 'international environment' refer to?
What is a key characteristic of a global company?
What is a key characteristic of a global company?
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What is an example of a service included in international business activities?
What is an example of a service included in international business activities?
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What describes the environmental forces that management cannot directly control?
What describes the environmental forces that management cannot directly control?
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Which strategy involves locating production functions primarily in the home country while exporting to foreign markets?
Which strategy involves locating production functions primarily in the home country while exporting to foreign markets?
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What encompasses manufactured parts, sub-assemblies, and assemblies in international business?
What encompasses manufactured parts, sub-assemblies, and assemblies in international business?
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What characterizes a multi-domestic company?
What characterizes a multi-domestic company?
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What is a key factor that businesses need to assess regarding a country's government?
What is a key factor that businesses need to assess regarding a country's government?
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Which of the following is a feature of a global corporation?
Which of the following is a feature of a global corporation?
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Which type of economy is characterized by private ownership of the means of production?
Which type of economy is characterized by private ownership of the means of production?
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What is one of the primary reasons companies engage in international business?
What is one of the primary reasons companies engage in international business?
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What is a common force behind globalization?
What is a common force behind globalization?
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What aspect of a new government's policies should a business consider?
What aspect of a new government's policies should a business consider?
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How does managing an international business differ from managing a domestic business?
How does managing an international business differ from managing a domestic business?
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Which region is noted for having established democracies that offer high political stability?
Which region is noted for having established democracies that offer high political stability?
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Which factor does NOT influence globalization?
Which factor does NOT influence globalization?
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What kind of government involvement in the private sector is typically seen in authoritarian regimes?
What kind of government involvement in the private sector is typically seen in authoritarian regimes?
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What role do services like banking and finance play in international business?
What role do services like banking and finance play in international business?
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How do businesses generally perceive rules in democracies, even with government changes?
How do businesses generally perceive rules in democracies, even with government changes?
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Why do governments encourage liberalization of cross-border trade?
Why do governments encourage liberalization of cross-border trade?
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Which of the following questions would NOT help a firm assess political risks in a country?
Which of the following questions would NOT help a firm assess political risks in a country?
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What is critical for attracting foreign investment according to government efforts?
What is critical for attracting foreign investment according to government efforts?
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What are the three key requirements for succeeding in international business?
What are the three key requirements for succeeding in international business?
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Which element of culture includes social rules and guidelines for behavior?
Which element of culture includes social rules and guidelines for behavior?
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Folkways can be best described as?
Folkways can be best described as?
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High power distance cultures typically exhibit what characteristic?
High power distance cultures typically exhibit what characteristic?
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Which dimension compares the degree of individualistic tendencies against collectivism?
Which dimension compares the degree of individualistic tendencies against collectivism?
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What does high uncertainty avoidance indicate about a culture?
What does high uncertainty avoidance indicate about a culture?
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What distinguishes mores from folkways?
What distinguishes mores from folkways?
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In Hofstede's cultural dimensions, what does the masculinity versus femininity dimension refer to?
In Hofstede's cultural dimensions, what does the masculinity versus femininity dimension refer to?
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What is the primary advantage that authoritarian governments provide for businesses in the commodities and oil industries?
What is the primary advantage that authoritarian governments provide for businesses in the commodities and oil industries?
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Which of the following legal systems is the most widely spread across the globe?
Which of the following legal systems is the most widely spread across the globe?
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How does common law primarily determine judicial decisions?
How does common law primarily determine judicial decisions?
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Which of the following is a characteristic of Islamic law, or Sharia?
Which of the following is a characteristic of Islamic law, or Sharia?
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What approach is the Chinese government currently using to gain access to local resources and commodities in Africa?
What approach is the Chinese government currently using to gain access to local resources and commodities in Africa?
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Which legal system is primarily followed in Vatican City?
Which legal system is primarily followed in Vatican City?
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Which of the following legal systems focuses primarily on applying the law to specific facts through a detailed code?
Which of the following legal systems focuses primarily on applying the law to specific facts through a detailed code?
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Why is it vital for companies to discuss global business ethics in different political environments?
Why is it vital for companies to discuss global business ethics in different political environments?
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Study Notes
Definition of International Business
- Encompasses business activities that cross national boundaries, including resource creation, goods and services exchange, and knowledge transfer.
- Resources involved: raw materials, technology, capital, and organizational skills.
- Goods range from manufactured components to complete assemblies, while services cover a variety of fields, including healthcare and transportation.
- Knowledge includes both technological innovations and intellectual property like copyrights and trademarks.
Company Types in International Business
- Multidomestic Company: Operates in multiple countries; each subsidiary develops its own strategies based on local market differences.
- Global Company: Strives for a standardized approach across all operations internationally, integrating various functional areas.
- International Company: Can be characterized as either global or multidomestic.
Globalization
- Described as a comprehensive process that enhances relationships across nations, involving social, economic, and political dimensions.
- Aims to reduce barriers to facilitate international trade of goods, services, capital, and labor.
Forces Driving Globalization
- Advances in technology for transportation and communication.
- Government policies promoting liberalization of trade.
- Growth of financial services supporting international activities.
- Rising consumer demand for foreign products and increased competition.
Reasons for Companies Engaging in International Business
- To broaden sales opportunities and acquire essential resources.
- To mitigate risks associated with market volatility.
- To leverage technological advancements and favorable government policies.
Challenges in Managing International Business
- Geographic, political, legal, and economic influences shape operational strategies.
- Requires an understanding of competitors and resources available in each market.
Cultural Considerations in International Business
- Success hinges on understanding and adapting to local cultures.
- Culture elements: values, norms, roles, folkways, and mores dictate social conduct.
Key Cultural Dimensions (Hofstede's Framework)
- Power Distance: Measures societal acceptance of inequality in power distribution.
- Individualism vs. Collectivism: Individualist societies emphasize personal achievement; collectivist societies prioritize group harmony.
- Uncertainty Avoidance: Describes how cultures deal with uncertainty; high avoidance prefers structured environments.
- Masculinity vs. Femininity: Examines gender roles and values within a society.
Political and Legal Environment Assessment
- Firms must evaluate a country’s political stability, form of government, and the predictability of legal frameworks.
- Legal systems differ globally, primarily falling into three categories: common law, civil law, and religious law.
- Common law relies on case law; civil law follows codified statutes; religious law is based on spiritual principles, with Islamic law being a notable example impacting business practices regarding interest and finance.
Conclusion on International Business Practices
- Determine how societal values and governmental roles impact operational and strategic decisions in international markets.
- Political stability and legal predictability are crucial for businesses seeking to invest and operate abroad.
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Description
Explore the fundamentals of international business, including the creation and transfer of resources, goods, and services across national borders. Understand the essential components that define international trade and the various factors involved such as technology, capital, and organizational skills.
