International Business Exam 1 - Professor Leo, Cedarville University

Examples of manufacturing exports:

Cars, Oil, Servers

Examples of service exports:

Banking, phone-based services, medical

What caused reduced barriers?

Globalization

What happens when tariffs are lowered?

Cross-border transactions increase, and lower tariffs introduce more opportunities to conduct business globally.

What is one of the major controversies of globalization?

Uneven distribution of globalization.

What is the biggest challenge of globalization?

Job losses.

What is one of the biggest opportunities for globalization?

Opportunities for new markets, ideas, and innovations.

What is a globalist?

All about open borders, with no border control.

What are some examples of formal trade barriers?

Official restrictions to trade, tariffs, and quotas.

What are some examples of informal trade barriers?

Unofficial obstacles, beurocracy

Transportation costs:

Transportation can be expensive.

What are some examples of economic and political risk associated with globalization?

Unstable currency, changes in government, wars, governments imposing actions that harm business.

Why are products and services globalized?

Other countries often provide cost-effective labor.

What are the main drivers of globalization? MEMORIZE FULLY.

Decrease in trade barriers,

Increase in technology,

Bulk shipping,

Fall of communism and socialization,

The opening of China.

How does the technology surge affect globalization?

Technological advancements have bridged global distances, creating interconnected economies, cultures, and societies.

Moors' law

Microprocessors double every 18 months, which speaks to the fact that technology is growing leaps and bounds, and becomes more affordable every year.

Containerization

New shipping methods involving, you guessed it, big containers accelerated global trade and revolutionized transportation. They also reduced shipment costs.

Communism

Ideology advocating a classless society with collective ownership of property and resources.

What does the Soviet Union and the Beetles speak on?

Western culture was a massive influence on undermining the Soviet regime. It was banned, so western culture snuck in. As we tend to do.

How did the opening of China affect the global economy?

The massive population drove to an increased trade, and they provide a low cost labor force.

World Trade Organization

Resolves disputes between nations and companies, negotiates treaties, and participates in global exchanges.

World Bank

Provides cheap, low-interest loans to poor countries, specifically for infrastructure and large projects.

IMF (International Money Fund)

Bailouts to countries in debt. Countries like Argentina or Greece gives them money. However, with that bailout, it imposes very strict conditions on those loans that the countries must abide by. When the IMF steps in, they may put a limit on the benefits given to countrie's citizens.

GDP:

the total monetary or market value of all the finished goods or services produced in the country's borders in a specific time period. Functions as a comprehensive scorecard of a given country's economic health.

What factors are all affected universally by culture?

Political,

Legal,

Economy

What policies led to Argentina's fall?

Export taxes

High import tariffs

Has isolated Argentina from global markets. I.E, it is too expensive to ship there, and too expensive for them to purchase products from anywhere else.

Collectivism:

Places collective goals over individual gains, and it traces back to Plato. - Roots in socialism and communism

Individualism

Political philosophy that emphasizes individual freedom, primarily in personal, economic, and political pursuits.

Totalitarianism

Absolute authority that is concentrated in a single entity, or a single group. No room for political opposition. That group rules over everything and they do not tolerate any opposition.

Who is totalitarianism related to in the Political Philosophy Family Tree

It's communism's baby

Who is democracy related to in the political philosophy family tree?

It's individualism's baby

What are the two main branches that stemmed from collectivism?

Communists and Social democrats

What is the difference between communists and social democrats?

Communists achieve their goals through violent revolutions and dictatorship, and social democrats try to achieve their goals democratically.

Best in economic freedom

Singapore

Worst in economic freedom

North Korea

Why are legal systems important?

They regulate business practice and define the manner in which you engage in business practice.

Common law

Tradition, precedent, and custom. Evolvd in England over hundreds of years. Allows for more flexibility for interpretation.

Civil law

Detailed set of laws organized into codes.

Found in the majority of the world.

A lot more rigid, because any and ever situation has a code.

Theocratic law

Religious teachings

Islamic law is most largely practiced theocratic laws

Hindu, Jewish

Contract law:

Body of law that governs contract enforcement

Contract:

A document that specifies the conditions under which an exchange will occur.

Civil law contracts

Shorter, less specific. All issues that could arise are already covered in civil law.

Property rights

Important for functioning of business.

A bundle of legal rights over the use of which a resource is put, and the use of any income derived from that source.

Hernando De Soto

Argued that much of the developing world will fail to reap benefits because of property rights.

Most corrupt country

Somalia

Least corrupt country

New Zealand

What are The West's Killer Apps?

Competition, Scientific revolution, property rights, modern medicine, consumer society, work ethic.

GDP

Monetary measure of hte market value of all that is produced (output of goods and services) within country's borders

GDP per capita

Standard of living comparison

GNP

Gros National Produce

Monetary measure of the market value of all that is produced with the means of production owned by a country's residents

GNI

All the income in a country. includes income from abroad. It is (GDP_ plus payments in to resdient employees by foreign firms and income to residents owning overseas property. Less the resident payments out to foreign employees and income generated by foreign owners of domestic property.

PPP

Purchasing Powre Parity

What is the PPP

if a country using its own currency reports GDP or GNI it is not comparable by converting the currency rate between it and the USA (because currencies are often manipulated) - must normalize the conversaion with the value of a standard basket of goods of services.

Cross-cultural literacy

Understanding how cultural differences across and within nations can affect the way in which business is practiced.

Ethnocentric

A belief in the superiority of one's own ethnic group or culture.

National competitive advantage:

How cultural differences affect entrepreneurship, innovation, and business practices resulting in competitive advantages

What are the "pieces" of culture?

Values

Norms

Values:

Ideas about what society believes to be good, right, and desirable

What do values lead to?

Worldview

Norms

Social rules and guidelines that prescribe appropriate behavior for specific situations

Folkways

The routine conventions of everyday life

Mores

Central to the functioning of a society and to its social life

Nation

States are political creations that can contain a single culture or several cultures

What are the two kinds of nations

Single cultures, and multiple cultures.

Factors of culture

Religion

Political philosophy

Economic philosophy

Education

Language

Social Structure

Social stratification

Hierarchical categories within a society based on family background, income, and occcupation

Caste system

Closed system, hierarchical strata by birth, no mobility

Class system

Open system, often strata by socio-economic background, social mobility by achievements (education, performance, entreprenurial)

High context:

Primary purpose of communication is to form and devlop relationships; contextual information is needed.

Low context:

Primary purpose of communication is the exchange of information, facts, and opinions.

Monochronic time:

Time is a dot on the timescale. "I'll see you at ten, on the dot."

Poly chronic time:

Time is more of a range or a continuum.

Haptics

Communicating through the use of bodily contact

Power distance:

People are unequal in physical and intellectual capabilities. Inequalities and power and wealth exist or grow over time.

Higher power distance score:

Accepts and expects power differences.

Lower power distance score;

Rejects power and differences

Individualism:

The relationship between the individual and others

Uncertainty avoidance

Culture socializes members to accept ambiguity or tolerate uncertainty.

Masculinity, also known as:

Motivation towards achievement and success

Masculinity:

Characterized by more differentiation with gender, often more aggressive, powerless caring and nurtering.