IB Exam 2 Review

The global institutions and what they do

Manage, regulate and police global marketplace

promotes establishment of multinational treaties to govern global business system

WTO, World bank, UN, G20, IMF

Important considerations in different legal systems

civil law - detailed set of laws organized into codes

theocratic - religious teachings

common law - precedent, tradition

Different economies

command - govt owns everything

free market - private

mixed - govt only owns important business

Different political parties

Totalitarianism - 1 person

socialists

communists - socialism through violence

social democrats - work to achieve socialism through democracy

Different economic and political risks

pay off political entities in a foreign country

costly to do business in undeveloped economies b/c lack of infrastructure

political risk in countries with social unrest, high inflation rate

Actions govts can take to encourage or discourage ib

encourage - lower trade barriers, deregulation, privatization, property rights

Discourage - tariffs

Biggest trends of the last 30 years

Before - US dominates world economy, fdi, ib, ½ of the world off limits to west

Now - China, Brazil, India high, more outward stock of fdi, cross border of fdi in developing nations, from totalitarianism to authoritarianism, more democracy, market based economies, legal property rights, signs of retreat from free market model

Tools can implemented to encourage better ethical behavior

hire people with good ethics, have good org culture, ethical officers, moral courage, code of ethics

Different approaches for ethical decision making

kantian - univeral moral principles

cultural relatavism - reflection of the host country culture

righteous moralist - mnc’s home country ethics are the standard

naive moralist - manager doesn’t follow

utilitarianism - do the best for everybody

rights theories - everybody has rights

sources of unethical behavior

personal ethics, decision making processes, org culture, unrealistic performance goals, leadership, culture

what do you call ethical problems

ethical dilemma

Hofstede’s cultural dimensions

1. power distance - extent to which people accept power is unequal (low means people question authority)

2. individualism v collectivism

3. uncertainty avoidance - people accept ambiguity (high means people want rules)

4. masculinity v feminity

5. long v short term orientation - focuses on rewards, long term means emphasizes future

Mendez dimensions

1. achievement/birthright

2. individualism v collectivism

3. indirectness v directness

How are societies structured and how do they change

structured based on individual/group and classes/caste

change based on social stratification and mobility

What are cultures based on

values and norms

political/economic philosophies, social strucuture, religion, language, education

Don DePalma

CSA, common sense advisory, researchs on globalization

Micheal Sdarkasa

africa business group, focuses on south africa growth

Dr mendez

director of center for global business, cultural frameworks

Mr Liberte

lead council at international council (lawyer for cross border work)