D080 Managing in a Global Business Environment Study Guide Flashcards

These flashcards cover the key concepts, definitions, and frameworks from the D080 course transcript, including globalization drivers, economic systems, international trade theories, and global regulatory requirements.

What is the definition of globalization provided in the course?

The shift toward a more integrated and interdependent world economy.

What are the five stages of entering a global market?

1. Market entry; 2. Product specialization; 3. Value chain disaggregation; 4. Value chain reengineering; 5. Creation of new markets.

What are the four primary drivers of globalization?

Market (convergence of needs), Cost (economies of scale and scope), Competition, and Government (favorable policies and industry support).

What does the acronym CAGE stand for in the CAGE analysis framework?

Culture, Administration, Geography, and Economic.

Differentiate between the 'world is flat' view and CAGE analysis.

The 'world is flat' view suggests that the world is becoming a level playing field with fewer barriers to commerce, while CAGE analysis emphasizes the importance of distance and differences (Cultural, Administrative, Geographic, and Economic) between countries.

What are the initial and current goals of the International Monetary Fund (IMF)?

The initial goal was to oversee the fixed exchange rate system and provide short-term capital to aid balance-of-payments; the current goal is to ensure the stability of the international monetary system by monitoring economies and providing technical assistance.

What are the four categories for IMF conditionalities?

Privatization, deregulation, austerity policies, and the assumption of a corrupt government.

What is the primary difference between the World Bank's initial and current goals?

The initial goal was to rebuild Europe after World War II; the current goal is to provide financial and technical assistance to developing countries to end extreme poverty and promote shared prosperity.

What are the two major functions of the World Trade Organization (WTO)?

To oversee trade agreements and settle trade disputes between member nations.

Explain the Most Favored Nation (MFN) rule under the WTO.

A rule ensuring non-discrimination where a country must treat all WTO members equally in terms of trade advantages and tariff levels.

What is the core premise of Mercantilism?

A theory suggesting a nation's wealth is determined by its gold and silver holdings, encouraging exports and discouraging imports to achieve a trade surplus.

Differentiate between Absolute Advantage and Comparative Advantage.

Absolute Advantage (Adam Smith) is the ability to produce more of a good using fewer resources; Comparative Advantage (David Ricardo) is the ability to produce a good at a lower opportunity cost than another country.

What does the Heckscher-Ohlin Theory state regarding international trade?

Countries will export goods that make intensive use of the factors of production (land, labor, capital) that are locally abundant.

Define Specific, Ad Valorem, and Compound tariffs.

Specific: a fixed charge per unit; Ad Valorem: a percentage of the item's value; Compound: a combination of both specific and ad valorem taxes.

What is the difference between an Absolute Quota and a Tariff-Rate Quota?

An absolute quota strictly limits the quantity of a product that can be imported; a tariff-rate quota allows a certain quantity in at a low tariff but charges a significantly higher tariff for amounts exceeding that limit.

Explain the difference between Horizontal and Vertical Foreign Direct Investment (FDI).

Horizontal FDI occurs when a firm invests in the same industry abroad as it operates in at home; Vertical FDI occurs when a firm moves into a different stage of the value chain (backward or forward) in a foreign country.

What is the difference between Greenfield and Brownfield FDI?

Greenfield FDI involves building a brand-new facility from the ground up; Brownfield FDI involves acquiring or leasing an existing facility for production.

List the five stages of regional economic integration in order of increasing integration.

1. Free trade area; 2. Customs union; 3. Common market; 4. Economic union; 5. Political union.

What are the three categories of exchange rate policies?

Floating exchange rate, fixed (pegged) exchange rate, and pegged floating (managed floating) exchange rate.

Compare the Kyoto Protocol and the Paris Agreement regarding environmental regulation.

The Kyoto Protocol set binding emission reduction targets for developed nations, while the Paris Agreement is a global pact where nearly all nations set voluntary goals to limit temperature increases to below $2^{\circ}C$.

What are the three international labor conventions cited for protecting workers?

Worst Forms of Child Labour Convention, 1999; The Maritime Labour Convention (MLC), 2006; and the Domestic Workers Convention, 2011.

What is the role of the Sarbanes-Oxley Act in global business?

A US law passed to protect investors by improving the accuracy and reliability of corporate disclosures and preventing accounting fraud.

Differentiate between the Standardized and Multidomestic strategies.

Standardization seeks global integration by offering the same product worldwide to achieve economies of scale; Multidomestic strategy emphasizes local responsiveness by adjusting products and marketing to fit specific local markets.

What is 'Guanxi' and in which culture is it a significant feature?

Guanxi refers to a system of social networks and influential relationships which facilitate business and other dealings, primarily in Chinese culture.

Define Ethnocentric, Polycentric, and Geocentric HR staffing strategies.

Ethnocentric: key management positions filled by parent-country nationals; Polycentric: host-country nationals manage subsidiaries; Geocentric: the best people are sought for key jobs regardless of nationality.

Differentiate between Push and Pull supply chain models.

Push models produce goods based on projected demand (forecasts); Pull models produce goods based on actual customer orders.

What are the four sources of funding specifically mentioned for exporters?

JETRO, OPIC, Ex-Im Bank, and PEFCO.

Compare GAAP and IFRS.

GAAP (Generally Accepted Accounting Principles) is used primarily in the US and is overseen by FASB; IFRS (International Financial Reporting Standards) is used in over 140 countries and is overseen by IASB.

Define Hedging and list common derivative instruments used for it.

Hedging is a strategy to protect against financial loss from exchange rate fluctuations; instruments include currency forward contracts, futures contracts, swap contracts, and option contracts.

What are the three stages of the digital divide?

Economic divide (access to hardware), Usability divide (tech literacy), and Empowerment divide (using technology to achieve goals).

What is the purpose of the General Data Protection Regulation (GDPR)?

An EU regulation designed to give individuals more control over their personal data and to simplify the regulatory environment for international business.