Survey of International Business

What is international strategic management?

A comprehensive, ongoing planning process for formulating and implementing strategies to compete globally.

What are the five fundamental questions firms must answer?

What to sell, where to make, how to make, where/how to sell, and how to outperform competitors.

What are the three sources of competitive advantage?

Global efficiencies, multinational flexibility, worldwide learning.

Define global efficiencies.

Cost advantages from location, economies of scale, and economies of scope.

Define multinational flexibility.

Ability to respond to changes in one country by adjusting operations in another.

Define worldwide learning.

Knowledge gained in one market transferred to others.

What are the four strategic alternatives?

Home replication, multidomestic, global, transnational.

When is a global strategy used?

When pressures for global integration are high and local responsiveness is low.

When is a multidomestic strategy used?

When local responsiveness is high and global integration is low.

What is a transnational strategy?

Combines global efficiencies with local responsiveness.

What are the four components of international strategy?

Distinctive competence, scope of operations, resource deployment, synergy.

What is distinctive competence?

What the firm does exceptionally well compared to competitors.

What is synergy?

When the whole is greater than the sum of the parts.

What are the two stages of strategy development?

Strategy formulation and strategy implementation.

What are the steps of strategy formulation?

Mission → SWOT → Strategic goals → Tactical goals → Control framework.

What are the three steps to entering a new foreign market?

Assess markets → Evaluate costs/benefits/risks → Select markets.

What four factors are used to assess alternative markets?

Market potential, competition, legal/political environment, sociocultural influences.

What are direct costs of market entry?

Costs of setting up operations, shipping equipment, transferring managers.

What are opportunity costs?

Profits lost by choosing one market instead of another.

List three benefits of entering a foreign market.

Sales/profits, lower costs, competitive advantage, tech access, synergy.

List three risks of entering a foreign market.

Exchange-rate risk, political risk, operating complexity, financial losses.

What are the three ownership-location-internalization (OLI) factors?

Ownership advantages, location advantages, internalization advantages.

What are the three forms of exporting?

Indirect, direct, intracorporate transfers.

What is an Export Management Company (EMC)?

A firm acting as a client’s export department.

What is a Webb-Pomerene association?

A group of U.S. firms allowed to coordinate export activities without violating antitrust laws.

What is licensing?

Leasing intellectual property to a foreign firm for royalties.

What is franchising?

A form of licensing with more control and support from the franchisor.

What is contract manufacturing?

Outsourcing production to another firm.

What is a turnkey project?

A firm designs, builds, equips a facility, then hands it over ready to operate.

What are the three FDI modes?

Greenfield, acquisition, joint venture.

What is a strategic alliance?

Two or more firms cooperating for mutual benefit.

What is a joint venture (JV)?

A separate, jointly owned entity created by two or more firms.

What is a non-JV alliance?

A narrower, less formal alliance without creating a new entity.

List four benefits of alliances.

Ease of market entry, shared risk, shared knowledge, synergy.

What is a functional alliance?

Cooperation in one area: production, marketing, finance, or R&D.

What is a comprehensive alliance?

Cooperation across multiple value-chain stages (often a JV).

What are key partner selection criteria?

Compatibility, product fit, learning potential, risk level.

What are the three ownership forms?

Corporate JV, limited partnership, public–private venture.

What is a shared-management agreement?

Both partners actively manage the alliance.

What is an assigned arrangement?

One partner takes primary responsibility.

What is a delegated arrangement?

JV executives manage operations independently.

List three pitfalls of alliances.

Incompatibility, info access issues, earnings disputes, loss of autonomy.

What is organization design?

Structuring resources, tasks, and information flows to support strategy.

What are the early international structures?

Corollary approach, export department, international division.

What are the five global designs?

Product, area, functional, customer, matrix.

What is global product design?

Worldwide responsibility for product lines (M-form or H-form).

What is global area design?

Organizing operations by geographic region.

What is global functional design?

Worldwide responsibility for functions (U-form).

What is global customer design?

Organizing around customer groups.

What is matrix design?

Overlaying two structures (e.g., product × function).

What is a hybrid design?

A mix of structures tailored to the firm.

What are the three control levels?

Strategic, organizational, operational.

What is strategic control?

Monitoring strategy formulation and implementation.

What is organizational control?

Controlling the structure itself (responsibility centers, generic control).

What is operations control?

Monitoring day-to-day processes.

What are individual differences?

Personality, attitudes, perception, creativity, stress.

What are the Big Five traits?

Agreeableness, conscientiousness, emotional stability, extroversion, openness.

What is locus of control?

Belief about whether outcomes are controlled internally or externally.

What is self-efficacy?

Belief in one’s ability to perform tasks.

What is authoritarianism?

Belief in appropriateness of power differences.

What is job satisfaction?

Fulfillment from work.

What is organizational commitment?

Loyalty and identification with the organization.

What is stress?

Response to strong stimuli; varies across cultures.

What are the three motivation model types?

Need-based, process-based, reinforcement.

What are Hofstede’s four motivation-relevant dimensions?

Social orientation, power orientation, uncertainty orientation, goal orientation.

What is Maslow’s hierarchy?

Physiological → Safety → Love → Esteem → Self-actualization.

What are McClelland’s three needs?

Achievement, affiliation, power.

What are Herzberg’s two factors?

Hygiene factors and motivators.

What is expectancy theory?

People act based on expected outcomes.

What is reinforcement theory?

Behavior is shaped by consequences.

What is bounded rationality?

Decision-making limited by imperfect information.

What is satisficing?

Choosing the first acceptable option.

What is the difference between a group and a team?

Teams assume responsibility for their own work.

How do heterogeneous teams differ?

More conflict, more creativity, weaker norms.

How do Hofstede dimensions affect teams?

Social orientation → cohesion; power orientation → hierarchy; uncertainty → structure; goal orientation → motivation.