Global Business Exam 1

We are Created to Work

1. Work as created and intended by God

2. Work as distorted by the fall

3. Work as redeemed by Chrhist

4. Work as it will be in the Consummation

Work is part of our creature nature and good

• Work reflects something of the image of God in humanity

• Work is part of God’s will for humans

• Work beings with our responsibility to creation

• Work includes the development of culture

A calling for all Christians to be in a nonsecular work field is not supported by scripture

Work itself is ministry

Work as distorted by the Fall

• The fall changes work into labor

• Resistance, rather than cooperation

• Temptation to laziness, idolatry

Work as redeemed by Chirst

We work to honor Christ, as a testimony to provide

Work as it will be in Consummation

God’s servants will serve him

Biblical Signposts for Business

1. Glorification of God

2. Resource stewardship

3. Respect for human life

4. Respect for authority and the rule of law

5. Respect for marriage and family

6. Respect for our neighbor

Utilitarianism

Greatest good for the greatest number

Hedonism

Maximizing pleasure and minimizing pain

Individualism

Competing self interest leads to holistic good

Moral rights

People are invested with fundamental inviolate rights

God is Holy

1. Zeal for God

2. Purity

3. Accountability

4. Humility

God is Just

1. Procedural Rights

2. Substantive Rights

3. Merit

4. Contractual Justice

God is Loving

1. Empathy

2. Mercy

3. Sacrifice of Rights

Guidelines for a Biblical Business

Does our business exist to make money or to enhance people’s lives?

International Business

Business that engages in international (cross-border) economic activities or the action of doing business abroad

Global Business

Business around the global including both international (cross-boarder) activities and domestic business activities

Multinational enterprise (MNE)

Firm that engages in foreign direct investments

Foreign direct investment (FDI)

Investments in, controlling, and managing value-added activities in other countries

Emerging economies (emerging markets)

A term that replaced “developing countries”

Gross domestic product (GDP)

Total market value of all final goods and services produced within a country in a given period of time usually a calendar year

Grass national product (GNP)

GD +P plus income from nonresident sources abroad

Gross national income (GNI)

GDP plus income from nonresident sources abroad - no conceptual difference with GNP - the term used by the World Bank and other international organizations to supersede the GNP term

Purchasing power parity (PPP)

Adjustment made to the GDP to reflect differences in the cost of living

Triad

North America, Western Europe and Japan

BRIC

Acronym for the emerging economies of Brazil, Russia, India, and China

Group of 20

Leaders of 19 major countries + EU who meet on biannual basis to discuss global economic issues

Nongovernment organizations (NGOs)

Heterogeneous organizations with numerous classifications

Advocacy

Environmentalists, human rights activities, consumers, etc. that raise awareness, acceptance and knowledge by lobbying, press work and activist events

Operational

Design and implementation of development-related projects that may stress service delivery or participation; whether religious or secular; whether more public or private-oriented - can be community-based, national or international

Base of the pyramid

The bottom 1.55 billion have only 0.6% of the world’s wealth

Top of the pyramid

Top 1.8% of the world’s population controls 48% of the wealth

Expatriate manager

A manager who works abroad, or “expat”

International premium

Significant compensation “package” when working overseas

Institution-Based View

Suggests that the success and failure of firms are constrained by institutions

Formal rules

Requirements that treat domestic and foreign firms as equals enhance the potential odds for foreign firms’ success or those that discriminate against foreign firms, would undermine the changes for foreign entrants

Informal rules

Cultures, ethics, and norms play an important part in shaping the success and failure of firms around the globe

Liability of foreignness

Inherent disadvantage that foreign firms experience in host countries because of their nonnative status

Resource-based view

Success and failure of firms are determined by their environments

Globalization

A long term trend away from distinction between nations driver by technological capability, economic incentive, and political alignment

3 views of Globalization

1. A new force in recent times

2. A long-running historical evolution

3. A pendulum swinging between extremes

Management

Coordination and control of people, material, and processes to achieve organiational objectives as efficiently and effectively as possible

>50% of international joint ventures fail within the first 5 years of operation

Primary reason: cultural differences and conflicts between partners

Informal institutions come from

• culture

• ethics

• norms

ethnocentrism

To perceive one’s own culture, ethics, and norms as “natural, rational, and morally rights.”

Culture

• The collective programming of the mind that distinguishes the members of one human group from another

• Collection of beliefs, values, behaviors, customers, and attitudes

• Common experiences

• Symbols, stories, rituals and worldviews

Social stratification

The hierarchical arrangement of individuals into social categories (strata) such as classes castes, or divisions within a society
* education can be used to maintain social stratification or to break down social barriers

Social mobility

The degree to which members from a lower social cateogry can rise to a higher status

Low-context cultures

Communication taken at face value

High-context cultures

Communication relies a lot of the underlying unspoken context

Cluster

Countries that share similar cultures

Ronen and Shenkar clusters

Influential set of clusters proposed by management

GLOBE clusters

Influential set of clusters named after the Global Leadership and Organizational Behavior Effectiveness prjoect

Civilization

Highest cultural grouping of people and the broadest level of cultural identity people have

Power Distance Index (PDI)

The extent to which the less powerful members of organizatinos and institutions (like the family) accept and excpet that power is distributed unequally

Individualism (IDV)

Everyone is expected to look after him/herself immediate family

Masculinity (MAS)

The distribution of roles between the genders which is another fundamental issue for any society to which a range of solutions are founds

Uncertainty Avoidance Index (UAI)

Society’s tolerance for uncertainty and ambiguity - Man’s search for Truth

Long-Term Orientation (LTO)

Thrift and perseverance

Ethics

The principles, standards, and norms of conduct that govern individual and firm behavior

Code of conduct

A set of guidelines for making ethical decision

Ethical relativism

Follows the cliche, “When in Rome, do as the Romans.”

Ethical imperialism

Refers to the absolute belief that “there is only one set of Ethics and we have it”

Corruption

The abuse of public power for private benefits, usually in the form of bribery

Foreign Corrupt Practices Act (FCPA)

Unlawful for a US person and ceratin foreign issuers of securities, to make a payment to a foreign official for the purpose of obtaining or retaining business for or with or directing business to, any person

Strategic responses

Reactive —> defensive —> accommodative —> proactive

Norms

The prevailing practices of relevant players

In-group

Individuals and firms regarded as a part of their own collective

Out-group

Individuals and firms no regarded as a part of “us”

Cultural intelligence

An individual’s ability to understand and adjust to new cultures

Centralized vs Distributed stakeholder model

Nrarow vs. broad (sustainable growth and developemnt, social resopnsibility)

Centralized

Autocratice and exclusive
e.g. Australia, US

Collaborative

Participative and inclusive
e.g. Germany, Netherlands, Sweden

Consultative decision-making

Japan
slow —> slow —> rapid —> rapid

US - firm

Stockholders —> board of directors —> CEO —> management —> first line supervisors —> employees

Keiretsu

Horizontal keiretsus - involve firms in different industries (more inclusive)
Vertical keiretsus involve firms upstream and downstream of a manufacturing process

Kongfuzi’s 5 cardinal virtues

1. Filial piety

2. Absolute loyalty

3. Mutual trust among friends and family

4. Weak subservient to strong

5. Strict seniority

Family-owned gong-si (China)

Family management
* Very small core of “members'“ - everyone else is “contingent”

German Konzern

Supervisory board —> management board —> management —> first-line supervisors —> employees
* Dual system of vocational training

Miester

Mexican grupo

• Family-controlled board of directs —> owner-ceo

• Very successful but country is still poor?