GEB exam 1 modules 1,2,3

GEB exam 1 modules 1,2,3 Globalization of markets: what does it refer to? - ✔✔refers to the interconnectedness of national economies and the growing interdependence of buyers, producers, suppliers, and governments aro ...

GEB exam 1 modules 1,2,3 Globalization of markets: what does it refer to? - ✔✔refers to the interconnectedness of national economies and the growing interdependence of buyers, producers, suppliers, and governments around the world. What role has technology played in globalization? - ✔✔-has been the Internet and information systems. Massive amounts of information and data are available via the World Wide Web, and there is rarely a question that cannot be answered with a search engine. -offering products or services worldwide, communication, finding information, the world has become a "small place". What are the drivers of globalization? - ✔✔five major kinds. 1.) Political (more friendly towards trade, FDI) 2.) Technological (communication, delivery of services) 3.) Market (e.. Tap into demand or suppliers in other markets) 4.) Cost (e.g. economies of scale, wage differentials) 5.) Competitive (internationalize or die) The internationalization of business: is this a new process?*** - ✔✔-is the process of increasing involvement of enterprises in international markets In a nutshell: the consensus is that free trade is good or bad for economic development? - ✔✔good Importing - ✔✔bring (goods or services) into a country from abroad for sale. The largest trading nations (which are the top 3) - ✔✔1.) China 2.) United States 3.) Germany Major trading partners of the U.S. - ✔✔Imports: 1.) Canada 2.) Mexico 3.) China Exports: 1.) China 2.) Canada 3.) Mexico 2013 largest markets for American exports - ✔✔Exports: 1.) China 2.) Canada 3.) Mexico Trade balance - ✔✔-is the difference between a country's imports and its exports for a given time period. -is the largest component of the country's balance of payments (BOP). -is also referred to as the trade balance or the international trade balance. Trade surplus - ✔✔The amount by which the value of a nation's exports exceeds the value of its imports. Trade deficit - ✔✔The amount by which the value of imports into a nation exceeds the value of its exports. What is the situation with the U.S? surplus or deficit? - ✔✔Trade Deficit. Import more than it exports. Economies of scale - ✔✔The predictable decline in the average cost of producing each unit of output as a production facility gets larger and output increases (also works for services) Experience curve - ✔✔The rising scale on which efficiency improves as a result of cumulative experience and learning (works for manufacturing and services) What do the concepts of economies of scale and experience curve have to do with the issue of international trade? - ✔✔they explain how a nation's industries can become low-cost producers if the nation has an abundance of a certain class of production factors. Regionalization of trade: what does this refer to? - ✔✔The process of dividing an area into smaller segments called regions. One of the more obvious examples of _______________ is the division of a nation into states or provinces. Businesses also use _______________ as a management tool and a way to make certain that needs unique to particular areas are met. FDI inflows, which countries receive a lot of FDI? - ✔✔1.) United States 2.) China 3.) Russia FDI outflows,which countries are the source of a lot of FDI? - ✔✔1.) United states 2.) China 3.) U.K. U.S accumulated FDI investment abroad: in what countries does the U.S. (or rather U.S. companies) have invested a lot of money? - ✔✔canada, mexico, U.K. , continental europe , Australia, and japan What is a greenfield investment? - ✔✔is a form of foreign direct investment where a parent company builds its operations in a foreign country from the ground up. In addition to the construction of new production facilities, these projects can also include the building of new distribution hubs, offices and living quarters. What is a portfolio investment - ✔✔-is a grouping of assets such as stocks, bonds, and cash equivalents. -in economics, it is the entry of funds into a country where foreigners deposit money in a country's bank or make purchases in the country's stock and bond markets, sometimes for speculation. Culture (characteristics of culture) - ✔✔The learned, shared, and enduring orientation patterns in a society. People demonstrate their _______ through values, ideas, attitudes, behaviors, and symbols. Influences: -how people behave -how people negotiate -how people communicate -what products they buy -what people consider to be good tasting -how much risk they are willing to take -how the interpret the behavior of others -what they expect from their bosses, their employers, their governments Ethnocentrism (def) + consequences - ✔✔Using our own culture as the standard for judging other cultures (we believe that they way we act, see the world, the things we like etc. is somewhat superior to others). Socialization - ✔✔The process of learning the rules and behavioral patterns appropriate to one's society. Acculturation - ✔✔The process of adjusting and adapting to a culture other than one's own; commonly experienced by expatriate workers. Languages: the top 3 primary (as in native speakers) in the world? - ✔✔1.) Chinese 2.) Spanish 3.) English Hall's High- and Low- Context Typology of Culture - ✔✔High Context: -Establish social trust first -Personal relations and good will are valued -Agreements emphasize trust -Negotiations are slow and ritualistic Low Context: -Get down to business first -Expertise and performance are valued -Agreements emphasize specific, legalistic contact -Negotiations are efficient as possible High context cultures - ✔✔-emphasize nonverbal or indirect language. - For "outsiders" at times very difficult to understand exactly what the other person wants to communicate. - Such cultures prefer a polite, "face-saving" style of communication that emphasizes a respect for others. - Care is taken not to embarrass or offend others (e.g. by saying "No", showing disappointment, anger etc.). To outsiders this way communicating may seems evasive, even insincere (E.g. Japanese - American negotiations) -Japan and other countries located in Asia. -Brazil and other countries located in South America. -African tribal groups and most countries located in Africa. -A majority of the Middle East, including Iraq and Iran. Low context cultures - ✔✔- rely on explicit explanations with an emphasis on spoken words. - Communication is direct (including criticism) - The meaning of the communication can be taken literarily. -A "no" means exactly that.... -Very little interpretation is needed to understand what the other person is trying to say (people are easy to "read") -However: Can be perceived as overly blunt or aggressive by other cultures (e.g. Japanese - American negotiations) -Northern European countries -Canada -United States Communication context: Implications - ✔✔Refers to the degree in which communication (verbal and non-verbal) needs some degree of "interpretation" by the receiver in order to understand the true meaning of the message. -A "Yes" does not necessarily mean "Yes". -A smile does not necessarily mean that someone is happy. Individualism (def) + Implications - ✔✔the benefit and rights of an individual -Low level of loyalty to employers, groups or communities. -Group membership helpful, not mandatory -Pursuit of own personal objectives is accepted. -New employees hired on basis of expertise, professional profile -Rapid decision making and flexibility. Individualism: the chart in the slides comparing how the US, China, Brazil and Germany rank along this dimension - ✔✔1.) U.S. 2.) Germany 3.) Brazil 4.) China Collectivism (def) + Implications - ✔✔The degree to which a culture or subculture emphasizes the well-being and role of a group -High level of loyalty -Group membership very important (In-group vs. Out-of-Group status) -Business conducted preferably within groups -New employees hired on basis of group membership and personal contacts -Slow decision making and less flexibility. Power Distance (def) + Implications - ✔✔describes how a society deals with inequalities in power that exist among people. -In cultures with low power distance, people feel free to question and to challenge authority. -In cultures with high power distance, people generally defer to authority with little or no resistance. High power distance - ✔✔societies exhibit big gaps between the weak and powerful (or: People respect inequalities in power) -In firms, top management tends to be autocratic, giving little autonomy to lower-level employees. Low power distance - ✔✔societies have small gaps between the weak and powerful (or: People accept differences in power to a lesser degree) -Firms tend toward flat organizational structures, with relatively equal relations between managers and workers. Power distance: chart comparing US, China, Brazil rank along this dimension - ✔✔1.) China 2.) Brazil 3.) U.S. 4.) Germany Uncertainty Avoidance (def) + Implications - ✔✔refers to the extent to which people can tolerate risk and uncertainty in their lives. -Interestingly, this differs significantly around the world. High uncertainty avoidance - ✔✔People (and companies) have a more difficult time to deal with risk and uncertainty. -create institutions to minimize risk and ensure security. -Firms emphasize stable careers. -Decisions are made slowly. -Employees need security (laws!) Low uncertainty avoidance - ✔✔People feel comfortable working with limited information or under the premise of uncertainty. -managers are relatively entrepreneurial and comfortable with risk. -Firms make decisions quickly. -Are early to adopt new technologies. -Are more innovative. -People are comfortable changing jobs. Uncertainty avoidance: chart comparing US, China, Brazil rank along this dimension - ✔✔1.) Brazil 2.) Germany 3.) U.S. 4.) China Monochronic time orientation - ✔✔"Time is money." People value punctuality. Sequential, punctual, and reluctant to waste time. Polychronic time orientation - ✔✔Polychronic (Cyclical) time orientation: "There will always be another opportunity to do tomorrow what was put off today." Concept of time is more flexible. Look up how the U.S. ranks in terms of individualism, uncertainty avoidance, power distance, communication context (but you already should know that from the points above) - ✔✔Individualism: 1.) U.S. Uncertainty avoidance: 3.) U.S. Power Distance: 3.) U.S. Communication context: -low context Approximate number of Florida companies exporting - ✔✔61,000 Florida's rank as "exporting state" based on number of exporters - ✔✔2nd Of those Florida exporters, what % were SMEs? - ✔✔95% The key export destination (according to the slides) for Florida exporter is which country? - ✔✔Brazil Number of jobs supported by International Trade in Florida (2013) - ✔✔2,400,000