International Business

4 Risks of International Business

Cross-cultural, country, commercial, financial

2 views that determine that determine success/failure of international firm

Resource-based view and institution-based view

5 Minds for the future

Disciplined, synthesizing, creative, respectful, ethical

Liability of foreignness

Disadvantage of non-nativeness

5 Phases of Globalizaton

Phase 1: Railroad and ocean transport

Phase 2: Electric and steel prod.

Phase 3: General Agreement on Tariffs and Trade

Phase 4: Privatization of state enterprises

Phase 5: Tech Boom

Societal Consequences of Globalization

Crisis spread, loss of national sovereignty, off-shoring

Regulatory Pillar

Coercive power of govt.

Normative Pillar

How norms influence behavior

Cognitive Pillar

Internalized values and beliefs

Political Systems

Authoritarianism, Socialism, Democracy

Legal Systems

Common Law, Civic Law, Religious Law, Mixed

Ethnocentrism

Culture superior, or respects others

Polycentric

Adopt host-country mindset

Geocentric

Global mindset w/o regard for boundaries

3 Levels of Culture

High culture, folk, deep

Perceptions of Time

Monochronic, and polychronic

Context

Underlies social interaction. High-context and low context

Cluster

Countries that share similar cultures

Power Distance

Perceived disparity in power

Individualism

“I” vs. “We”

Collectivism

People belong to groups

Masculinity

High gender-role determination

Uncertainty Avoidance

How you deal with ambiguous situations

Long-Term Orientation

Emphasis on long-term

Indulgence vs. Restraint

Controlling impulses

VRIO

Valuable, Rare, Imitation Costly, Organized to capture value

Different Stages based on yes/no of VRIO

Competitive disadvantage, competitive parity, temporary competitive advantage, temporary competitive advantage, sustainable competitive advantage