Review for Midterm 1: Global Dimensions of Business

1
Review for Midterm 1 Global Dimensions of
Business

• Business 187 Prof. Brannen

2
The midterm

• 30 multiple choice questions
• 15 true/false questions
• 2 essay questions
• You will write the essay in the classroom
• Scantron (Form 882-E the small style)
• One sheet of lined college-ruled binder paper.

3
Multiple Choice will cover the readings and
lecture notes up through through todays lecture.

• Only the pages specified in the syllabus
• But review early chapters and class powerpoints
  carefully

4
Key issues in Chap. 1 International Business -
An Overview

• Definition of international business
• Why has international business grown?
• Government policies (freer trade)
• New technology
• New institutions
• Modes of international business
• Importing and exporting merchandise
• Service exports and imports
• Investment Direct investment and portfolio
  investment

5

• What is a multinational enterprise?
• Patterns of internationalization
• Two basic multinational strategies
• Globally integrated company
• Multi-domestic (locally responsive) company
• Price competition, rapid change, better
  communication, inimitable core competencies favor
  global integration
• Current motivations for internationalization
  include the traditional four AND
  knowledge/innovation and strategic moves and
  counter moves

6
Key issues in Chap. 2 Cultural Environments
Facing Business

• Define culture
• Culture is the pattern of shared values,
  expectations, and behaviors developed and learned
  by a group of people interacting over time.
• How does culture impact upon internationization?
• Recontextualization--definition
• Examples?
• Cultural stabilizers language, religion, shared
  business practices

7
Pros and Cons of the Billiard Ball Model of
Culture

• Pros (Explains)
• Variance between cultures
• Anchors when we are in the dark
• Average cultural norms
• General rules so we dont offend

• Cons (Doesnt explain)
• Variance within cultures
• Hyper
• Normal
• Marginal
• Dynamic aspect of culture
• Examples?
• Power and Influence
• Mergers
• Acquisitions
• IJVs

8
Key points in Chap. 3 Political and Legal
Environments

• The basic political process (Fig. 3.2)
• Interest aggregation
• Adjudication (sets policies which often become
  rules of the game)
• Political ideologies definition
• Pluralism in most countries
• Democracy common traits in developed rich
  countries
• Totalitarianism

9

• Political risk definition
• Macro vs. micro
• Relative importance in democracies vs.
  totalitarian states
• Individualistic vs. communitarian paradigms on
  role of government
• Power and prestige of officials
• Major ways countries differ legally
• Common law vs. civil law
• Law firms in international business
• Implications
• Patent protection
• HR issues

10
Key points in Chap. 4 The Economic Environment

• Basic economic concepts
• Factors of production
• Demand conditions market potential
• What are the three types in I.B.
• Gross national income (GNI) and gross domestic
  product (GDP)
• Purchasing Power Parity
• Issues in CEITs

11

• Economic systems Market economy vs. Command
  economy vs. Mixed economy
• Economic freedom
• Difference betw. Eastern Europe and China as
  CEITs?
• Largest language group (Mandarin) vs. largest
  share of economic activity (English-speakers)
• Differences in economic growth rates by region

12
Studying cases

• You are not required to memorize any facts from
  the cases
• Looking for
• Understanding of key issue
• Application of theory
• Examples from cases discussed in class

13
On tests, a question about a case will give you
the facts you need

• A multiple choice question will provide the basic
  data
• You must use information from cases to support
  your arguments in essay questions

14
Macro-Environment Review

• Cultural Political Legal
  Economic
• Disney
• Yahoo
• Lands End
• Newport Mining
• Fusion
• Daewoo
• McDonalds