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| Lower transportation costs make a geographically dispersed production system more economical and allow firms to better respond to international customer demands |
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Definition
| What are the implications of technological change for the globalization of production? |
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Low cost communications networks help create electronic global marketplaces
Low cost transportation enable firms to create global markets, and facilitate the movement of people from country to country promoting a convergence of consumer tastes and preferences |
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Definition
| What are the implications of technological change for the globalization of markets? |
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a system that stresses the primacy of collective goals over individual goals
can be traced to the ancient Greek philosopher Plato
today, socialists support collectivism |
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a political philosophy that suggests individuals should have freedom over their economic and political pursuits
can be traced to Aristotle who argued that individual diversity and private ownership are desirable
Individualism stresses
individual freedom and self-expression
letting people pursue their own self-interests to achieve the best overall good for society
democratic systems and free markets |
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| right wing totalitarianism: |
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Definition
| individual economic freedom is allowed but individual political freedom is restricted in the belief that it could lead to communism |
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based on tradition, precedent, and custom
found in most of Great Britain’s former colonies, including the United States |
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based on a very detailed set of laws organized into codes
found in over 80 countries, including Germany, France, Japan, and Russia |
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based on religious teachings
Islamic law is the most widely practiced |
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Term
The two systems approach contract law (the body of law that governs contract enforcement) in different ways
a contract - specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved
In a common law state, contracts are very detailed will all contingencies spelled out
In a civil law state, contracts are shorter and much less specific |
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Definition
| How do common law and civil differ? |
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| (theft, piracy, blackmail, and the like by private individuals or groups) |
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Definition
| (public officials extort income or resources from property holders) |
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Term
it is illegal to bribe a foreign government official in order to obtain or maintain business over which the foreign official has authority
all publicly traded companies must keep detailed records so that it is clear whether a violation of the act has occurred
facilitating or expediting payments to secure the performance of routine government actions are permitted |
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Definition
| The Foreign Corrupt Practices Act limits corruption in the U.S |
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Term
Innovation (new products, new processes, new organizations, new management practices, and new strategies) and entrepreneurship are the engines of long-run economic growth
Entrepreneurs first commercialize innovative new products and processes
Economic freedom in a market economy creates greater incentives for innovation and entrepreneurship than in either a planned or mixed economy |
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Definition
| What is the relationship between political economy and economic progress? |
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Term
many totalitarian regimes failed to deliver economic progress to the majority of their population
new information and communication technologies have broken down the ability of the state to control access to uncensored information
economic advances of the last quarter century have led to the emergence of increasingly prosperous middle and working classes who have pushed for democratic reforms |
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Definition
| Democracy has spread to new countries because |
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Definition
an understanding of how cultural differences across and within nations can affect the way in which business is practiced
important to success in international business
There may be a relationship between culture and the costs of doing business in a country or region
Culture is not static
the actions of MNEs can contribute to cultural change |
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Term
| Culture is a system of VALUES (abstract ideas about what a group believes to be good, right, and desirable) and NORMS (the social rules and guidelines that prescribe appropriate behavior in particular situations) that are shared among a group of people and that when taken together constitute a design for living |
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| provide the context within which a society’s norms are established and justified |
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| (a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with others) is high, the way individuals from different classes work together may be prescribed |
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Definition
a system of shared beliefs and rituals that are concerned with the realm of the sacred
Religions with the greatest following are
Christianity (1.7 billion adherents)
Islam (1 billion adherents)
Hinduism (750 million adherents)
Buddhism (350 million adherents)
Confucianism also influences behavior and shapes culture in many parts of Asia |
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Definition
a set of moral principles, or values, that are used to guide and shape behavior
the ethical practices of individuals within a culture are often closely intertwined with their religion |
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Geert Hofstede isolated four dimensions that summarized different cultures
Power distance
Individualism versus collectivism
Uncertainty avoidance
Masculinity versus femininity |
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Definition
| How does a society's culture impact on the values found in the workplace? |
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Term
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Definition
| how a society deals with the fact that people are unequal in physical and intellectual capabilities |
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Term
| Individualism versus collectivism |
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Definition
| the relationship between the individual and his or her fellows |
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Term
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| - the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity |
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| Masculinity versus femininity |
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Definition
| the relationship between gender and work roles |
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Definition
| captures attitudes towards time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors |
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Definition
| occurs when a resource held in common by all, but owned by no one, is overused by individuals resulting in its degradation |
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Term
| Foreign Corrupt Practices Act |
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Definition
| outlawed the practice of paying bribes to foreign government officials in order to gain business |
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Definition
situations in which none of the available alternatives seems ethically acceptable
they exist because real world decisions are complex, difficult to frame, and involve various consequences that are difficult to quantify |
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• Organization culture
• Personal ethics
• Decision making processes
• Leadership
• Unrealistic / realistic performance goals |
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Definition
| Determinants of Ethical Behavior |
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Definition
| are raised by business ethics scholars primarily for the purpose of demonstrating that they offer inappropriate guidelines for ethical decision making in a multinational enterprise |
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Definition
the only social responsibility of business is to increase profits, so long as the company stays within the rules of law
companies should not undertake expenditures beyond those mandated by law and those required for the efficient running of a business |
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Definition
a multinational’s home country standards of ethics are the appropriate ones for companies to follow in foreign countries
approach is common among managers from developed countries |
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Definition
if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either
actions are ethically justified if everyone else is doing the same thing |
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Term
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Definition
to ethics hold that the moral worth of actions or practices is determined by their consequences
actions have multiple consequences, some good, some not
actions are desirable if they leads to the best possible balance of good consequences over bad consequences
Problems with this approach
measuring the benefits, costs, and risks of a course of action
the philosophy fails to consider justice |
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Definition
based on the philosophy of Immanuel Kant who argued that people should be treated as ends and never purely as means to the ends of others
people have dignity and need to be respected, they are not machines |
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Definition
human beings have fundamental rights and privileges that transcend national boundaries and culture
fundamental human rights form the basis for the moral compass that managers should navigate by when making decisions that have an ethical component |
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Definition
focus on the attainment of a just distribution (one that is considered fair and equitable) of economic goods and services
John Rawls - all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage
Impartiality is guaranteed by the veil of ignorance (everyone is imagined to be ignorant of all his or her particular characteristics) |
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