Globalization
define globalization
the trend of the world economy towards becoming a more interdependent system
define cross-cultural awareness
the ability to operate in different cultural settings
define global economy
the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets
define geocentric managers
accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective
why might a company chose to offshore?
access to foreign resources or supply is cheaper
what are the three developments driving globalization?
the rise of the "global village" and e-commerce
the world becoming one market instead of many national ones
the rise of megafirms and internet-enabled mini-firms worldwide
define ethnocentric managers
their native country, culture, beliefs, language, and behavior are superior to all others
what are the positive effects of the global economy
internet and travel innovations have "shrunk" the world
increased information sharing
many products can be produced cheaper due to economies of scale and innovations
increased access to capital-- allowing for greater market growth
revitalization of US industrial areas
small companies can get started more easily and can maneuver faster
explains each of the four Hofstede cultural dimensions
Individualism/collectivism: desribes the amount of social framework (people take care of themselves or look after each other)
Power Distance: the degree of which people accept inequality in social situations
Uncertainty avoidance: peoples intolerance for uncertainty and risk
Masculinity/Femininity: how much people value performance-oriented traits (masculine) or embrace relationship-oriented traits (feminine)
_____ companies use licensing and ______ companies use franchising
manufacturing, service
define global village
the shrinking of time and space as air travel and the electronic media have made it easier for the people around the globe to communicate with one another
define polycentric managers
take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone
what are the negative effects of the global economy
job losses in US
potential threats to information security
loss of control over quality and standards
risk of hidden cost (ex: transportation cost)
more interdependence means if one falls they all fall
define polychronic time and how it perceives time
preference for doing more than one thing at a time. Time is flexible and multidimensional
what are the barriers to international trade
tariffs, import quotas, embargoes, sanctions
what two factors gave rise to the global village
communication and transportation innovations
Define parochialism
a narrow view in which people see things solely through their own perspective
why do companies expand internationally?
1. Availability of supplies
2. New markets
3. Lower labor costs
4. Access to finance capital
5. Avoidance of tariffs & import quotas
define low context culture and where is located
shared meanings are primarily derived from written and spoken words. located in North America, Britain, Germany,
what are the two types of tariffs and what do they do?
revenue tariff-- raise money for government
protective tariff-- raise price of imported goods to make domestic products more competitive
what three historical events gave way to the global economy
Berlin Wall came down,
Asian countries began to open their economics to foreign investors,
and deregulation
what do enthocentric managers believe about exporting their managers? and what is this view prone to?
they can go anywhere in the world and they will be more capable and reliable. it is prone to ignorance
How do companies expand internationally starting with lowest risk?
1. Global Outsourcing
2. Importing, exporting, countertrading
3. Licensing and franchising
4. Joint ventures
5. Wholly owned subsidiaries
define high context culture and where its located
people rely heavily on situational cues for meaning when communicating. located in Arab, China, Korea, and Mexico
define trading bloc
group of nations with a geographic region that have agreed to remove trade barriers with one another