International Business Exam 1

Sessions 1-19

What is Cultural Intelligence (CQ)?

The ability to effectively understand, adapt, and work in different cultural contexts. Goes beyond basic cultural awareness to focus on navigating and succeeding in culturally diverse environments.

Define CQ Drive (Motivation) and its components

Your interest, persistence, and confidence in multicultural interactions: Intrinsic interest, Extrinsic interest, Self-efficacy

Define CQ Knowledge (Cognition) and its components

Understanding how cultures are similar and different: Business knowledge, Interpersonal knowledge, Socio-linguistic knowledge

Define CQ Strategy (Meta-cognition) and its components

Awareness and ability to plan for multicultural interactions: Awareness, Planning, Checking

Define CQ Action (Behavior) and its components

Ability to adapt behavior appropriately: Verbal behavior, Non-verbal behavior, Speech acts

CQ Profile: High Drive, Low Knowledge

Motivated but lacks understanding; may make mistakes despite good intentions

CQ Profile: High Knowledge, Low Drive

Understands culture but lacks motivation to engage

CQ Profile: High Strategy, Low Action

Thinks about culture but struggles to adapt behavior

CQ Profile: High Action, Low Strategy

Adapts behavior without understanding cultural nuances

CQ Score 5.5–7.0

High CQ — well prepared for international work

CQ Score 4.0–5.4

Moderate CQ — good foundation, needs development

CQ Score 1.0–3.9

Developing CQ — strong opportunity for growth

High-context communication

Indirect, relies on context, relationships, and non-verbal cues

Low-context communication

Direct, explicit, relies on clear verbal messaging

Meyer’s 8 cultural dimensions

Communicating, Evaluating, Persuading, Leading, Deciding, Trusting, Disagreeing, Scheduling

Direct vs indirect feedback

Direct = frank criticism; Indirect = softened, wrapped feedback

Principles-first vs applications-first

Principles-first = theory first; Applications-first = examples first

Egalitarian vs hierarchical leadership

Egalitarian = flat structure; Hierarchical = strong authority and titles

Consensual vs top-down decision making

Consensual = group agreement; Top-down = leader decides

Task-based vs relationship-based trust

Task-based = performance builds trust; Relationship-based = personal connection builds trust

Confrontational vs avoids confrontation

Confrontational = open disagreement; Avoids = harmony prioritized

Linear-time vs flexible-time

Linear = strict schedules; Flexible = adaptable timing

Ethnocentrism

Judging other cultures by your own standards, assuming superiority

Entry mode spectrum

Exporting → Licensing → Franchising → Joint Venture → Wholly owned subsidiary

Direct export vs indirect export

Direct = more control/learning; Indirect = lower risk/commitment

Trading company vs EMC

Trading company buys/resells; EMC acts as agent for commission

Licensing

Grant IP rights for royalties; low investment, low control

Franchising

Licensing plus full business system and brand support

Strategic alliance

Contract-based partnership, no new entity

Joint venture

New legal entity with shared ownership and control

Greenfield investment

Build new operations from scratch abroad

Acquisition vs merger

Acquisition = buy firm; Merger = combine firms

GATS Mode 1

Cross-border supply (service delivered remotely)

GATS Mode 2

Consumption abroad (customer travels)

GATS Mode 3

Commercial presence (firm sets up abroad)

GATS Mode 4

Presence of natural persons (workers travel temporarily)

Incoterms

Rules defining cost, risk, and responsibility in international shipping

Entry mode evolution

Firms increase commitment as they gain market knowledge (Uppsala model)

What is X-Culture

Global virtual team project developing cross-cultural business skills

X-Culture grading

Peer review (15%), Project (15%), CQ journal (7%)

Top employer skills (NACE)

Problem-solving, teamwork, communication

Future job skills (WEF)

Creativity, resilience, curiosity, leadership, talent management

Dolce & Gabbana China case

Failure of CQ leading to cultural backlash and brand damage

AromaFusion case

Joint venture chosen for equity commitment and shared risk

Group circles outcomes

Community, empathy, theory integration, leadership, purpose

Hofstede’s 6 cultural dimensions

Power distance, Individualism, Uncertainty avoidance, Masculinity, Long-term orientation, Indulgence

GLOBE clusters

Eastern Asia vs Anglo leadership and communication differences

CQ leadership skills

CQ, global mindset, adaptive communication, flexible leadership

CAGE framework

Cultural, Administrative, Geographic, Economic distance

PESTEL

Political, Economic, Social, Technological, Environmental, Legal

Porter’s Five Forces

Entry threat, supplier power, buyer power, substitutes, rivalry

SWOT strategies

SO, WO, ST, WT

7 entry modes

Export, Licensing, Franchising, Alliances, Joint venture, Subsidiary

Entry mode matrix

Control, Investment, Speed, Risk

STP framework

Segmentation, Targeting, Positioning

Segmentation types

Geographic, Demographic, Psychographic, Behavioral

Targeting strategies

Concentrated, Differentiated, Undifferentiated

Positioning statement

For [target], [brand] is [category] that [benefit] because [reason]

Pricing steps

Landed cost, margins, comparison, strategy

Pricing strategies

Penetration, Skimming, Competitive, Value-based

Trade creation vs diversion

Creation = efficiency gain; Diversion = inefficiency

Regional integration levels

FTA, Customs Union, Common Market, Economic Union, Political Union

Globalization and poverty

Reduces poverty unevenly; requires policy support

Tariff types

Ad valorem, Specific, Retaliatory, Protective, Revenue

Comparative advantage

Specialize in relative strengths for efficiency

Fuyao tensions

Productivity, safety, management style, unionization

China vs US culture

China = hierarchical/high-context; US = egalitarian/direct

Market screening

Preliminary screening + deep dive (PESTEL)

Promotional channels

Strategic fit, infrastructure, cost, reach, culture, competition

Consumer personas

Demographics, psychographics, behavior, goals, pain points, info sources

Messaging components

Message, value prop, tone, CTA

Pricing tools

Shipping calculators, duty tools, PPP, currency converters