International Business and Trade Notes PDF

WEEK 1 and 2 Gross National Product (GNP) Value of all goods and services produced by International Business a country's domestic and international - Commercial transaction that crosse...

WEEK 1 and 2 Gross National Product (GNP) Value of all goods and services produced by International Business a country's domestic and international - Commercial transaction that crosses activities during a one-year period the borders of two or more nations Globalization of Markets - Reducing Marketing Cost Imports - Creates New Market Opportunities - Goods and services purchased abroad - Levels Uneven Income Streams and brought into a country - Local Buyer’s Need - Global Sustainability Exports - Goods and services sold abroad and Globalization of Production sent out of a country Access Lower-Cost Key Players in International Business Workers - Multi National Corporation (MNC) Access Technical Expertise - Business that has direct investments Access abroad in multiple countries Production Inputs Foreign Direct Investment - Purchase of physical assets or a Drivers of Globalization significant amount of the ownership of Falling Barriers to Trade and Investment a company in another country to gain Global E-Commerce a measure of management control Digital Transformation Communication and Transportation What is Globalization? - Trend toward greater economic, Falling Barriers to Trade and Investment cultural, political, and technological General Agreement on Tariffs and Trade interdependence among national (GATT) institutions and economies World Trade Organization (WTO) - Characterized by denationalization Regional Trade Agreements (national boundaries becoming less World Bank relevant) International Monetary Fund - Different from internationalization (IMF) (entities cooperating across national boundaries) Culture Key Terms Set of values, beliefs, rules, and institutions Gross Domestic Product (GDP) held by a specific group of people Value of all goods and services produced by a domestic economy during a one-year period Ethnocentricity  Lifelong learning about new ideas and Belief that one's own ethnic group or culture perspectives is superior to that of others National Culture Rightly or wrongly, we tend to invoke the CROSS-CULTURAL LITERACY concept of the nation-state when speaking of culture Detailed knowledge We do this because we are conditioned to about a culture that enables a person to work think in terms of national culture happily and effectively within it - But this is at best a generalization Attributes Sub-cultures - Inquisitive: Interest in exploring new ideas and activities - A group of people who share a unique - Understanding: View matters from way of life within a larger, dominant another's perspective with empathy culture - Impartial: Value equity and fairness - Cultural boundaries do not always and be willing to challenge bias correspond to political boundaries - Tolerant: Accept other people's values - In other words, subcultures sometimes and ways of doing things exist across national borders - Cooperative: Pleasant and respectful - People who live in different nations but demeanor toward others who share the same subculture can - Flexible: Adapt and adjust to new and have more in common with one changing situations another than with their fellow nationals Skills and Knowledge Physical Environment - A people's physical environment is a Multilingual: very visible and foundational feature of Speak, write, and read in native and foreign culture that influences personal language(s) communication - The physical environment also affects - Self- Awareness: Recognize our own consumers' product needs values and how others perceive us - Climate affects where people settle - Collaborative: Work productively with and the distribution systems they others to achieve objectives create - Communicative: Employ effective and appropriate communication skills Material Culture - Resilience: Pursue goals despite difficulties and setbacks - All the technology used in a culture to manufacture goods and provide Active Learning: services  - Often used to measure the - Large gifts to business associates are technological advancement of a particularly suspicious nation's markets or industries Aesthetics Social Structure - Aesthetics comprises those aspects a A culture's fundamental organization, culture considers "good taste" in the including its groups and institutions, its arts in the imagery evoked by certain system of social positions and their expressions, and in the symbolism of relationships, and the process by which its certain colors resources are distributed - Social Group Associations Values - Social Status - Ideas, beliefs, and customs to which - Social Mobility people are emotionally attached Attitudes Social Group Associations - Positive or negative evaluations, Collection of two or more people who identify feelings, and tendencies that and interact with each other individuals harbor toward objects or concepts Types of Groups Manners Primary Group - Appropriate ways of behaving, - A small group of people who share speaking, and dressing in a culture close personal relationships that form early in life and endure through time Customs - Instrumental to personal identity and - Habits or ways of behaving in specific development circumstances that are passed down through generations in a culture Secondary Group - Larger, less personal, and less Folk Custom enduring than a primary group - Behavior, often dating back several - Typically develop later in life and are generations, that is practiced by a established to achieve a specific goal homogeneous group of people Popular Custom Reference Group - Behavior shared by a heterogeneous - One that people use as a standard (or group or by several groups reference) for their own preferences, beliefs, attitudes, or behaviors Gift-Giving Customs - Help people determine if they are in - Although giving token gifts to business conformity with the standards of and government associates is members of the group to which they customary in many countries, the belong or aspire to belong proper type of gift varies  - Departure of highly educated people from one profession, geographic region, or nation to another Social Mobility - Ease with which individuals can move Religion up or down a culture's "social ladder." - religions take different views of work, Social Status savings, and material goods - Not confined to national political Social Stratification boundaries but can exist in different - Process of ranking people into social regions of the world simultaneously layers or classes - Common for several or more religions to be practiced within a single nation CLASS SYSTEM - System of social stratification in which Personal Communication personal ability and actions determine social status and mobility Communication upper class - System of conveying thoughts, middle class feelings, knowledge, and information lower class through speech, writing, and actions Education LANGUAGE BLUNDERS - The quality of a nation's education - Advertising slogans and company system tends to be related to its level documents must be translated of economic development carefully so that messages are received precisely as intended Reverse Brain Drain - Not exclusive to humans - Some workers were enticed home, at - Machine translation least temporarily, by job losses from economic lockdowns due to the Advertising slogans and company documents Covid-19 pandemic must be translated carefully so that messages - Others returned as economic growth are received precisely as intended at home narrowed the wage gap - Not exclusive to humans - Machine translation CASTE SYSTEM - System of social stratification in which LINGUA FRANCA people are born into a social ranking, - A third or "link" language understood or caste, with little or no opportunity for by two parties who speak different social mobility native languages Brain Drain Body Language  - Communicates through unspoken - Do people focus on past events, on cues Including hand gestures, facial the present, or on the future expressions, physical greetings, eye implications of their actions? contact, and the manipulation of - Are people easily controlled and not to physical space be trusted, or can they be trusted to act freely and responsibly? Perception of Time Polychronic Time (P-Time) Hofstede Framework - Tend to engage less in advance - Individualism vs. Collectivism planning and to do things according to - Power Distance their own schedule - Uncertainty Avoidance - Masculinity vs. Femininity Monochronic Time (M-Time) - Long-Term Orientation - Tend to prefer well-defined, advance - Indulgence vs. Restraint schedules for deadlines, meetings, and so forth - Emphasize using time efficiently, but Week 3 may differ in how they use their Political, economic. And legal systems. scheduled work time Cultural Change Political Systems - Cultural Trait Structures, processes, and activities by - Anything that represents a culture's way of life which a nation governs itself - Including gestures, material objects, traditions, and concepts -type of government/political system.(democracy, Totalitarianism) Cultural Diffusion - Process whereby cultural traits spread from one culture to another Totalitarianism Cultural Imperialism Political system in which individuals govern Replacement of one culture's tradition, folk regardless of the people's support, tightly heroes, and artifacts with substitutes from control people's lives, and do not tolerate another opposing viewpoints Kluckhohn-Strodtbeck Framework -control your entire right/ mas malala sa - Do people believe that their dictatorship environment controls them, that they control the environment, or that they are part of nature? Three Features of Totalitarianism: - Imposed Authority Democracies tend to encourage entrepreneurial activity and protect business - Lack of Constitutional Guarantees with Strong property-rights laws - Restricted Participation Economic Systems Structure and processes that a country uses THEOCRATIC TOTALITARIANISM to allocate its resources and conduct its commercial activities -Political system under the control of totalitarian religious leaders(e.x vatican) Centrally Planned Economy -Theocracy Political system in which a Economic system in which the government country's religious leaders are also its political owns a nation's land, factories, and other leaders economic resources and plans nearly all economic activity Secular Totalitarianism Market Economy (Capitalism) -Political system in which totalitarian leaders maintain control through military and Economic system in which most of a nation's bureaucratic power land, factories, and other Doing Business in Totalitarian Countries economic resources are privately owned, by either individuals or businesses The arbitrary nature of totalitarian governments makes it hard for companies to Market Economy (Capitalism) know how laws will be interpreted and applied -Supply to their particular business dealings Quantity of a good or service that producers Democracy are willing to provide at a specific selling price Political system in which government leaders -Demand are elected directly by the wide Quantity of a good or service that buyers are participation of the people or by their willing to purchase at a specific selling price representatives FEATURES OF A MARKET ECONOMY Representative Democracy Free Choice Democracy in which citizens elect individuals from their groups to represent their political Free Enterprise views Price Flexibility( heavily influence by price Doing Business in Democracy and demand) GOVERNMENT'S ROLE IN A MARKET Patents ECONOMY Property right granted to the inventor of a product or process that excludes others from -Enforce Antitrust Laws making, using, or selling the invention -Preserve Property Rights Trademark -Provide a Stable Fiscal and Monetary Property right in the form of words or symbols Environment that distinguish a product and its manufacturer -Preserve Political Stability COPYRIGHTS Antitrust (Antimonopoly) Property right giving creators of an original Laws designed to prevent companies from work the freedom to publish or dispose of it fixing prices, sharing markets, as they choose and gaining unfair monopoly advantages Product Liability Property Rights Responsibility of manufacturers, sellers, Legal rights to resources and any income individuals, and others for damage, injury, or they generate death caused by defective products Taxation Legal Systems Value-Added Tax (VAT) Country's set of laws and regulations, how its laws are enacted and enforced, and how its Tax levied on each party that adds value to courts hold parties accountable a product throughout its production and distribution Intellectual Property LECTURE (10/15/2024) Property that results from people's intellectual talent and abilities International Trade Theory Intellectual Property International Trade -Patent - Purchase, sale or exchange of goods and services across national borders -Trademark Domestic Trade -Copyright - Purchase, sale or exchange of goods and services between different states, regions or cities within a country Benefits of Trade - Ability of a nation to produce a good more efficiently than any other nation 1. Greater Choice of Goods and Services 2. Job Creation Comparative Advantage 3. Raise People’s Standard of Living - Inability of a nation to produce a good Mercantilism more efficiently that other nations, but an ability to produce that good more - Trade Theory that nations should efficiently than it does any other good. accumulate financial wealth usually in the form of gold by encouraging Assumptions and Limitations exports and discouraging imports - Assumes countries are driven only by Trade Surplus the maximization of production and consumption - Condition that results when the value - Assumes that there are only two of a nation’s exports is greater than countries engaged in the production the value of its import and consumption of just two goods - Assumes that there are no cost for transporting traded goods from one country to another - Consider labor to be the only resource Trade Deficit used in the production process - Assumes that specialization in the - Condition that results when the value production of one particular good does of a nation’s imports is greater than not result in gains in efficiency. the value of its exports Factors Proportions Theory Zero-sum game - Heckscher- Ohlin Theory - Belief that a nation could increase its - Trade theory stating that countries share of wealth only at the expense of produce and export goods that require others resources (factors) that are abundant and import goods that require Positive Sum Game resources in short supply - Leontief Paradox - Belief that both countries can benefit from an exchange ( such as International Product Life Cycle Theory international trade) - Theory stating that a company begins Absolute Advantage by exporting its product and later undertakes foreign direct investment  as the product moves through its life cycle New Trade Theory Trade Theory stating that - There are gains to be made from specialization and increasing economies of scale. - The companies first to market can create barriers to entry - Government may play a role in assisting its home companies First Mover- Advantage - Economic and strategic advantage gained by being the first company to enter an industry. National Competitive Advantage Theory - Trade theory stating that a nation’s competitiveness in an industry depends on the capacity of the industry to innovate and upgrade