MGT 4090 Management Policy & Strategy - Global Strategy

This set of flashcards covers key concepts related to global strategy and globalization as outlined in the lecture notes for MGT 4090.

Globalization

A process of closer integration and exchange between countries and peoples worldwide.

CAGE distance framework

A framework that guides multinational enterprise decisions on which countries to enter, focusing on Cultural, Administrative and Political, Geographic, and Economic distances.

Foreign direct investment

Investments made in value chain activities abroad by multinational enterprises.

Liability of foreignness

The additional costs and disadvantages incurred by entering a foreign market, due to unfamiliar cultural and economic environments.

Loss of reputation

Diminished competitiveness caused by negative perceptions regarding a company's practices, which can arise when operating in less regulated environments.

Loss of intellectual property

The challenge of protecting intellectual property rights, particularly in foreign markets where infringement is more likely.

Multinational enterprise

A firm that deploys resources and capabilities in two or more countries as part of its global strategy.

Competitive advantage

An advantage a firm has over its competitors, allowing it to generate greater sales or margins.

Economic distance

Refers to the wealth and per capita income of consumers, affecting cross-border trade.

Geographic distance

The physical distance and related factors affecting cross-border operations.

Cultural distance

The disparity between a firm's home country and host country in social norms, beliefs, and values.

Administrative and political distance

Factors such as shared monetary or political associations, and the existence of political hostilities that impact international business.

Advantages of going global

Benefits such as access to larger markets, low-cost input factors, and the development of new competencies.

Disadvantages of going global

Challenges including liability of foreignness, potential loss of reputation, and loss of intellectual property.

Globalization 1.0

Period from 1900 to 1941 characterized by sales and operations being directed from headquarters to international sites.

Globalization 2.0

Period from 1945 to 2000 focused on reconstructing post-war economies, with greater local responsiveness.

Globalization 3.0

The 21st Century era of globalization characterized by optimizing business function locations based on costs and capabilities.

Retrenchment

A potential future trend where increased nationalism may lead to a reversal of globalization.