MGMT Exam 2 Toma

what is the difference between a multinational organization and a multinational corporation

an organization is a non-profit organization

a corporation is a business

What is Ethnocentric management

Managers who believe that their native country, culture, language, and behavior are superior to all others

What is geocentric management

Managers who accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective

what is polycentric management

Managers who 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

List the five ways to expand internationally from Lowest risk to Highest risk

Global outsourcing (lowest risk and investment)

Importing, exporting, and countertrading:

Licensing and franchising:

Joint ventures

Wholly owned subsidiaries (Highest risk and investment):

what is global outsourcing

The use of suppliers outside of the U.S. to provide labor, goods, and services

what is importing

buying goods from outside the country and reselling domestically

what is exporting

producing goods domestically and selling them outside the country

what is countertrading

bartering for goods

what is licensing

company x allows foreign company y to pay them a fee to make or distribute company x's products or services

what is franchising

a form of licensing in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first companies brand name and a package of materials and services

what are wholly owned subsidiaries

A foreign subsidiary, or subordinate section of an organization, that is totally owned and controlled by an organization

what is a greenfield venture

A foreign subsidiary that the owning organization has built from scratch

what is free trade

The movement of goods and services among nations without political or economic obstruction

what is trade protectionism

The use of government regulations to limit the import of goods and services

what is a tariff

A trade barrier in the form of a customs duty, or tax, levied mainly on imports

What are the two forms of tariffs

A revenue tariff

A protective tariff

What is a revenue tariff

A tariff designed simply to raise money for the US government, such as a tax on all oil imported into the United states

What is a protective tariff

is intended to raise the price of imported goods to make the prices of domestic products more competitive

What is an import Quota

a trade barrier in the form of a limit on the quantity of a product that can be imported

its intent is to protect domestic industry by restricting the availability of foreign products

What is a sanction

The trade prohibition on certain types of products, services, or technology to another country for a specific reason

What is an embargo

A complete ban or prohibition of trade of one country with another so that no goods or services can be imported or exported from or to the embargoed nation

What is a trading bloc

Also known as an economic community, it is a group of nations within a geographical region that have agreed to remove trade barriers with one another

What are examples of trading blocs

NAFTA

USMCA

EU

What does NAFTA stand for

North American Free Trade Agreement

it consisted of the United States, Mexico, and Canada

What does USMCA stand for

United States, Mexico, Canada

Why did NAFTA turn into USMCA

In 2018 the three countries agreed to renegotiate the terms of their trade agreement including digital trade, anti-corruption and regulatory practices.

USMCA= NAFTA2.0

What does the EU stand for

The European Union consists of 27 trading partners in Europe

What does BRICS Stand for

Brazil, Russia, India, China, and South Africa

BRICS IS NOT A TRADING BLOC

what is BREXIT

The United Kingdom's exit from the European Union

What is the Hofstede Model of four cultural dimensions

The four dimensions along which national cultures can be placed

individualism/ collectivism

power distance

uncertainty avoidance

Masculinity/ femininity

What are the 5 levels of of regional economic integration

1. establish a free trade agreement (NAFTA)

reduce and abolish internal Trade barriers

2. establish a customs union

Uniform external trade barriers

3. establish a common market

Regulate free flow of labor and capital

4. Establish an economic union (EU)

Uniform policies to administer the economies

5. The highest level is to establish a political union

Uniform system of government internally and externally

What is GATT

General agreement on Tariffs and Trades:

A foundational agreement reached between many countries after world war 2 to reduce tariffs, Quotas, and other barriers to trade

What is WTO

World Trade Organization

Created to replace GATT, made to monitor and enforce trade agreements

What is diversity management

the process of getting a heterogenous work group to perform as an integrated work team to its maximum potential in an equitable work environment

What are the three must conditions to succeed in diversity training programs

1. power in diversity

2. ethnocentricity: get rid of it

3. 3 r's recognize, respect, refit

what are the five categories of input in the decision making process

1. knowledge

2. Experience

3. intuition

4. assumptions

5. Data/ information

*Ethics and social responsibility

What are the three outputs in the decision making process

1. maximization= absolute best decision

2. optimization= relative best

3. satisficing= good enough

What are the conditions you can make a decision under

certainty

risk

uncertainty

what is the difference between geo-economics and geo-politics

With geo-economics the main source of power is the economy which is supported by the military

with geo-politics the main source of power is the military supported by the economy

what are the types of international business activities

imports

exports

investments- direct and portfolio

what is a direct investment

when a foreign company buys a foreign asset in a foreign market and will be directly involved

what is a portfolio investment

When a foreign company buys an asset in a foreign market simply to create a rate of return with no involvement

what are the leading factors for the globalization of business

Tremendous development in transportation and information technologies

Trends toward REI (regional economic integration)

Trend towards the reduction of trade barriers and restrictions to facilitate the free flow of trade

what are the benefits of globalization

Company perspective: when successfully engaged a company is able to expand its markets, and increase its sales and profits but it involves a higher level of risk

Host country perspective: have a safe and hospitable country with economic success

what are the behavioral factors influencing decision making

Values

Personality: Decision Making style

Risk propensity: your willingness to take risks

Dissonance potential: to what extent you get anxiety/ mental discomfort in decision making

what are the factors leading to bounded rationality

time pressures

social realities

Psychological biases

what are the four decision making styles

directive, analytical, conceptual, behavioral

what are the steps in a rational decision making process

problem identification

thinking up alternative solutions

evaluate alternatives and select a solution

implement and evaluate the solution

what is bounded rationality

One type of nonrational decision making; the ability of decision makers to be rational is limited by numerous constraints

what are the 10 psychological biases

1. Availability bias

2. Representative bias

3. Confirmation bias

4. Sunk cost bias

5. Anchoring and adjustment bias

6. Overconfidence bias

7. Hindsight bias

8. Framing bias

9. Escalation of commitment bias

10. Categorical thinking bias

what is the strategic thinking process

1. looking at where we were

2. seeing where we are

3. determining where we should be heading

what is the strategic management organizational structure

1. Strategic managers: set long term goals (5yrs) strategic goals and planning

2. Tactical managers: set annual goals (1yr, short term) tactical goals and plans

3. functional/operational: set goals within the year (quarterly, short term) organizational objectives and plans

what are the steps to the strategic planning process

1. establish a mission/ vision

2. assess the current reality

3. Formulate strategies and plans

4. Strategy implementation

5. Strategic control: monitoring performance and taking corrective action

whats the difference between vision and mission

vision is what an org wants to become (long term goal)

mission is an orgs purpose

what are SMART goals

Specific

Measurable

Attainable

Results oriented

Target dates/ timely

what is SWOT analysis

strengths, weaknesses, opportunities, threats

what is the BCG matrix

A management strategy by which companies evaluate their strategic business units on the basis of (1) their business growth rates and (2) their share of the market

stars, question marks, cash cows, dogs

what are the three overall types of corporate strategies

Growth

Stability

Defensive

What is the growth strategy

this strategy involves expansion—as in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served

What is the stability strategy

this strategy involves little or no significant change

What is the defensive strategy

a grand strategy that involves reduction in the organization's efforts

what is the diversification strategy

a growth Strategy by which a company operates several businesses in order to spread the risk

can be related or unrelated

what is unrelated diversification

Occurs when a company acquires another company in a completely unrelated businesses

what is related diversification

When a company purchases a new business that is related to the company's existing business portfolio

what is vertical integration

a firm expands into businesses that provide the supplies it needs to make its products or that distribute and sells its products

what are porters five competitive forces

1. threats of new entrants

2. bargaining power of suppliers

3. bargaining power of buyers

4. threats of substitute products or services

5. rivalry among competitors