CBA229 Finals Reviewer

Economic Integration

An agreement between nations to reduce trade barriers and align monetary and fiscal policies.

Objectives of Economic Integration

• Reduction in cost of trade

• Improved availability of goods and services

• Wider selection of goods and services

Regional Integration

fosters cooperation by integrating markets and promoting the flow of trade, capital, energy, people, and ideas for peace, stability, and prosperity.

Objectives of Regional Integration

• Examine the debate on regional economic integration

• Review global progress

• Assess its impact on international business.

Example of Regional Trade Agreements

• European Union (EU)

• European Free Trade Association (EFTA)

• North American Free Trade Agreement (NAFTA)

• Southern Common Market (MERCOSUR)

• Common Market of Eastern and South Africa (COMESA)

• ASEAN Free Trade Area (AFTA)

Diversified Free Trade Agreements

coverage and depth of preferential treatment varies from one RTA to another

Trans–Pacific Economic Strategic Partnership Agreement (TPP)

concluded in 2005 by 4 Pacific countries (Chile, Singapore, Brunei, and New Zealand), and called the “P4 agreement”

EU Law

Formed after WWII to promote economic cooperation, based on the idea that interdependent trade reduces conflict.

EU Trade Policy

protects Europeans by ensuring imports meet standards and promotes human rights & environmental protection, and sustainability through trade policy

EU Institutions

• European council

• European parliament

• Council of ministers (council of EU)

• European commission

• Court of justice of the european union

European Council

summit of heads of state and government sets policy guidelines, addresses unresolved issues, includes all 27 member states, decides by consensus, and cannot pass laws

European Parliament

directly elected for 5–year term and represents the EU's citizens. It shares lawmaking & budget powers with Council of Ministers & oversees all EU activities

Council of Ministers

EU’s main decision–making body, representing member states through relevant ministers. Its presidency rotates every six months

European Commission

made up of 27 commissioners, is the EU's executive body. It proposes legislation, upholds treaties, and ensures their implementation by member states

Court of Justice of the European Union

judicial body, consisting of three courts: a) The Court of Justice; b) The General Court (1988); c) The Civil Service Tribunal (2004)

EU Internal Market

aims to create a single market with no internal borders or regulatory barriers, ensuring the free movement of goods, people, services, and capital

Single Market for Goods

free movement of goods

Free Movement of Goods Objectives

• Help European farmers to become competitive

• Promote development in rural areas

North American Free Trade Agreement (NAFTA)

enacted in 1994, created a free trade zone between Mexico, Canada, and the U.S., eliminating most tariffs

ASEAN Economic Integration

aims for economic integration, creating a competitive region with equitable development, fully integrated into the global economy.

August 8, 1967

the Foreign Ministers of Indonesia, Malaysia, the Philippines, Singapore, and Thailand signed a document in Bangkok, founding ASEAN.

Communication

process of sharing ideas, information, and feelings, essential to the directing function of management

Communication Process

sender > encoding > message > decoding > receiver > feedback

Elements of the Communication Process

• Sender

• Medium

• Receiver

• Message

• Feedback

Types of Communication

• Verbal

• Non–verbal

Verbal Communication

use of words to share information with other people, it includes both spoken and written

Non Verbal Communication

transmission of messages or signal through a nonverbal platform such as eye contact, facial expressions, gestures, and distance

Downward Communication

transmission of information from manager to subordinate, usually to convey orders and information (manager–initiated)

Upward Communication

transfer of information from subordinate to superior, usually to provide feedback and obtain assistance (subordinate–initiated)

Barriers to Communication

specific items that can distort or prevent communication

Language Barriers

occur when people who speak different languages cannot understand one another, can also include stuttering, articulation disorder, & hearing loss

Perceptual Barriers

how people see reality can vary and will influence their judgement & decision making

Doing It Right The First Time (Perception)

• Business cards

• Bowing

• Attire

Business Cards

Exchanging ___ is key to etiquette and first meetings, serving as a reminder of appointments and a way to share contact info, boost sales, and build brand awareness

Bowing

most prevalent formal method of greeting, saying goodbye, expressing gratitude, or apologizing

Attire

typically conservative, with dark or navy suits. Generally, standard business wear in industrialized countries is considered appropriate

Culture

another major source of communication and perception problems

Kinesics

study of communication through body movement and facial expression, including eye contact and gestures

Oculesics

area of communicating through the use of eye contact and gaze

Proxemics

study of way that people use physical space to convey messages

Types of Distance Used in Communication

• Intimate distance

• Personal distance

• Social distance

• Public distance

Intimate distance

used for very confidential communications

Personal Distance

used for talking with family and close friends

Social Distance

used to handle most business transactions

Public Distance

used when giving a talk to a group

Chronemics

way in which time is used in a culture

Types of Time Schedules

• Monochronic

• Polychronic

Monochronic

one in which things are done in a linear fashion

Chromatics

use of color to communicate messages

International Negotiation

process where parties with different needs and goals discuss an issue to find a mutually acceptable solution

Process of Negotiation

• Preparation & planning

• Definition of ground rules

• Clarification & justification

• Bargaining & problem solving

• Closure & implementation

Persuasion

this step of negotiation is considered by many to be the most important

Agreement

final phase of negotiations, wherein there is granting of concessions and hammering out a final agreement

Time Limits

important negotiation tactic when one party is under a time constraint

Strategy

Describes how goals are achieved using resources; may be planned or emerge as the organization adapts to its environment.

Strategy Formulation

process that uses knowledge to define a business’s direction and actions, guiding resource allocation and goal validation

Strategy Formulation Contents

• Mission

• Vision

• Values

• Strategy

• Strategy map

Mission

why we exist

Vision

what we want to be

Values

what’s important to us

Strategy

game plan

Strategy Map

translate the strategy into action

Strategic Management

ongoing process of setting goals, planning actions, and allocating resources to achieve them

Economic Imperative

employ a world wide strategy based on cost leadership, differentiation, and segmentation

Types of Segmentation

• Demographic

• Geographical

Demographic Segmentation

segmentation by date of birth is a simple, common method that allows personalized, non-intrusive customer engagement

Geographical Segmentation

splitting buyers into groups based on their location

Overall Communication Process

• Quality imperative

• Administrative coordination

Quality Imperative

shifting attitudes & expectations toward better service and adopting management practices for continuous quality improvement

Administrative Coordination

involves MNCs making strategic decisions based on each situation’s merits, not fixed economic or political strategies

Global Integration

production and distribution of products and services of a homogeneous type and quality on a worldwide basis

National Responsiveness

adapting to local consumer preferences and complying with varying national standards and regulations

Global & Regional Strategies

• Global strategy

• Multi–domestic strategy

• International strategy

• Transnational strategy

Global Strategy

integrated strategy based primarily on price competition

Multi–Domestic Strategy

differentiated strategy emphasizing local adaptation

International Strategy

mixed strategy combining low demand for integration and responsiveness

Transnational Strategy

integrated strategy emphasizing both global integration and local responsiveness

Basic Steps in Formulation Strategy

• Environmental scanning

• Internal resource analysis

• Key success factor (KSF)

Environmental Scanning

provides management with forecasts of external trends in current or potential business locations

Internal Resource Analysis

often done after environmental scanning to assess a firm's internal capabilities for strategy formulation

Key Success Factor

Key factor for a firm to compete effectively in a market niche

Strategy Implementation

process of providing goods and services in accord with a plan of action

Frontier Markets

sometimes referred to as pre–emerging, are a unique subset of emerging economies

Marketing

must be tailored to each country, as approaches that work in one may not in another

Production

plays a role, as exports are typically handled through domestic operations

Finance

strategy developed at the home office and carried out by overseas affiliates or branches