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Import

Good or service purchased abroad, and brought into a country.

Export

A good and service sold abroad and sent out of a country

multinational corporation (MNC)

A business that has direct investments (in the form of marketing or manufacturing subsidiaries) abroad in multiple countries.

Globalization

The Trend towards greater economic, cultural, political, and technological interdependence.

Globalization of Production

Dispersal of production activities to locations that help a company achieve its cost minimization or quality maximization objective for a specific good or service. Includes Accessing Low-cost workers, Accessing Technical expertise, And accessing resources that are not available or are more costly in their domestic country.

Globalization of Markets

Convergences of buyer preferences in markets around the world. The marketing of products worldwide, with little to no changes. Includes companies selling global products saving money by selling the same product, but only changing the packaging of it. Such as changing the language on the product, or changing the language on their billboard ad in a different country. It also allows for new opportunities for selling your product, if your home market has become oversaturated, and there is too many people trying to sell your product already. Marketing your products in international markets can also help if your product is a seasonal item, because seasons aren't always the same around the world. As well as globalization of products inviting the possibility for your company to be more sustainable.

Two Major Forces Driving Globalization: Falling Barriers to Trade and Investment

1. Falling barriers to Trade and Investment: Starting with the 1947, GATT (Treaty designed to promote free trade by reducing both tariffs and non tariff barriers to international trade). Helped by the WTO (World Trade Organization), helping the free flow of trade, negotiate the further opening of markets, and settle trade disputes among its members.

Two major forces driving Globalization:

Technological Innovation

Innovations including emailing or e-commerce, the internet, advancements in transportation technologies, and intranets and extranets.

GDP: Gross Domestic Product

Value of all goods and services produced by a domestic economy during a one year period. Only things produced within a country are counted towards total GDP.

GNP Gross National Product

Value of all goods and services produces by a country's domestic and international activities during a one year period. Can include multiple countries in their account towards GNP.

Arguments for globalization

Increases overall wealth and efficiency in all nations, Generates Labor Market Flexibility, and Advances the economies of Developing Nations.

Arguments against Globalization:

Eliminates Jobs in Developed Nations, sending jobs to be done in developing nations, so that they don't have to pay them as much for doing the same work domestically. Lowers wages in developed nations, and decreases worker loyalty, and trust in the company they work for. As well as exploits workers in developed nations, because they don't have the same regulations and laws that prevent exploiting workers, like in developed nations.

Sustainability:

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Culture:

Set of values, beliefs, and institutions help by a specific group of people

Subculture: A group of people who share a unique way of life within a larger, dominant culture

Cultural Literacy:

Detailed knowledge about a culture, that enables a person to work happily and effectively within it.

Ethnocentricity

Belief that one's own ethnic group or culture is superior to that of others.

Cultural imperialism:

Replacement of ones cultural traditions, folk heroism artifacts with substitutes from another.

lingue franca:

a third or link language understood by two parties who speak different native languages. A middle ground language that both ends can speak and understand, meant to better help the streamlining of business dealings and activities, with little confusion.

Hofstdee Framework: Individualism vs collectivism

The extent to which a culture emphasizes the individual versus the group. Individualist cultures value hard work and promote entreprenuraeal risk taking. thereby fostering invention and innovation. Vs that of collectivist cultures, in which they feeling a strong association to groups, including family and work unites. Meant to maintain group harmony, and emphasize the idea that everyone is working for the betterment of the company as a whole, and not for the individual betterment of themselves.

Hofstedes Framework 2: Power Distance

The degree to which a culture accepts social inequality among its people. Cultures with large power distance tends to be characterized by much inequality between superiors and subordinates. Includes a more hierarchical system, with power often deriving from privilege and prestige, and inheritance. Cultures with smaller power distance have a greater degree of equality among its people. Power in these cultures seem to derive from hard work and entrepreneurial drive, and is considered more legitimate.

Hofstedes Frame Work 3: Uncertainty avoidance

The extent to which a culture avoids uncertainty and ambiguity. Cultures with large uncertainty avoidance values security and places its faith in systems with strong rulesets and procedures. These cultures have a lot of difficulty implementing change within their corporations. Cultures with low uncertainty avoidance levels tend to welcome the best and all business practices from other cultures, and are less fearful of change

Hofstedes framework #4: Masculinity and Feminity:

The extent to which a culture emphasizes masculinity vs femininity. Cultures scoring high on masculinity tend to be characterized by personal assertiveness and accumulation of wealth, typically translating entrepreneurial drive. Cultures scoring low on this dimension, have more relaxed lifestyles, wherein people are more concerned about caring for others as opposed to material gain.

Hofstede framework #5: long-term orientation

A societies perception of time and its attitudes about overcoming obstacles with time. Higher scoring cultures value respect for tradition, thrift, perseverance, and a sense of personal shame. Strong work ethic and hard working. Lower scoring cultures are characterized by individual stability and reputation, fulfillment of social obligations, and reciprocation of gifts. Rapidly changing culture.

Hofstedes framework #6 Indulgence vs Restraint:

The extent to which a society allows free expression. Indulgent societies allows people to rather freely satisfy their needs, relating to enjoying life and having overall fun. Restrained societies uses varying degrees of social norms to suppress free expression, and satisfaction of those needs. Indulgent societies tend to be happier and value happiness more, restrained think that certain aspects of life are predestined. Indulgent societies are more likely to be kind and offer a smile to those who come into their business, and those in restrained societies would think that doing that would seem forced, and artificial.

Aesthetics:

What a culture considers "good taste" in the arts, the imagery evoked by certain expressions, the symbolism of certain colors.

Caste System:

System of social stratification in which people are born into a social ranking. or caste, with no opportu nity for social mobility.

class system

System of social stratification in which personal ability and actions

determine social status and mobility.

Totalitarian

Political system in which individu als govern without the support of the people. tightly control people"s lives. and do not tolerate opposing viewpoints.

Democracy:

Political system in which govern ment leaders are elected directly

by the w ide participation of the people or by their representatives.

Theocracy:

A political system in which a country's religious leaders are also its political leaders is called a theocracy. The religious leaders enforce a set of laws and regulations based on religious beliefs. A political system under the control of totalitarian religious leaders is called theocratic totalitarianism.

beaucracy

a system of government in which most of the important decisions are made by state officials rather than by elected representatives.

Copyright Law:

Property right giving creators of original works the freedom to publish or dispose of them as they choose.

Philosophies of Ethics and Social Responsibility: Friedemans:

A company's sole responsibility is to maximize profits for its owner or shareholders while operating within the law. Increasing profits, no matter what, as long as it is still legal.

Philosophies of Ethics and Social Responsibility: Culture Relativist

The cultural relativist view says that a company should adopt local ethics wherever it operates because all beliefsystems are determined within a cultural context. Cultural relativism sees truth, itself, as relative and argues that right and wrong are determined within a specific situation.

Philosophies of Ethics and Social Responsibility: Righteous Moralist

The righteous moralist view says that a company should maintain its home-country ethicswherever it operates because the home-country's view of ethics and responsibility is superior to others' views. Imagine a company that expands from its developed-country base to an emerging market where local managers commonly bribe officials.

Philosophies of Ethics and Social Responsibility: Utilitarian view

The utilitarian view says that a company should behave in a way that maximizes "good" outcomes and minimizes "bad" outcomes wherever it operates. The utilitarian manager asks the question, "What outcome should I aim for?" and answers, "That which produces the best out come for all affected parties." In other words, utilitarian thinkers say the right behavior is that

which produces the greatest good for the greatest number.