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| The shift toward a more interdependent and integrated economy |
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| All cross-border exchanges of goods, services, or resources between two or more nations. These exchanges can go beyond the exchange of money for physical goods to include international transfers of other resources, such as people, intellectual property, and contractual assets or liabilities. |
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| The body of knowledge that answers questions about the development and implementation of good strategies; mainly concerned with the determinants of firm performance |
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| The central, integrated, and externally oriented concept of how an organization will achieve its performance objectives |
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| SWOT (strengths, weaknesses, opportunities, Threats) |
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| A strategic management tool that helps an organization take stock of its internal characteristics (strengths and weaknesses) to formulate an action plan that builds on what it does well while overcoming or working around weaknesses and also assess external environmental conditions (opportunities and threats) that favor or threaten the organization’s strategy. |
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| The recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures |
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| A person who engages in entrepreneurship. |
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| A form of entrepreneurship that takes place in a business that is already in existence |
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| A person within an established business who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation |
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| An individual or organization whose interest may be affected as the result of what another individual or organization does |
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| A technique used to identify and asses the importance of key people, groups of people, or institutions that may significantly influence the success of an activity, project, or business |
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| A person or organization engaged in commerce with the aim of achieving profit. |
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| A person or organization that sells products and services that are sourced from other countries |
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| A person that sells products and services in foreign countries that are sourced from the home country |
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| Foreign Direct Investment |
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| The investment of foreign assets into domestic structures, equipment, and organizations |
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| Advantages due to choice of foreign markets; can include better access to raw materials, less costly labor, key suppliers, key customers, energy, and natural resources |
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| The body of people that sets and administers public policy and exercise executive, political, and sovereign power through customs, institutions, and laws within a state, country, or other political unit |
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| Nongovernmental organizations (NGOs) |
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| Any nonprofit, voluntary citizen's group that is organized on a local, national, or international level |
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| A metaphor for viewing the world as a level playing field in terms of commerce, where all competitors have an equal opportunity |
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| A metaphor for viewing the world's markets as being more different than similar, such that the playing field differs in respective mmarkets |
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| The analytical framework used to understand country and regional differences along the distance dimensions of culture, admministration, geography, and economics |
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| Generally, cultural differences between two countries reduce their economic exchange. Culture refers to a people’s norms, common beliefs, and practices. Cultural distance refers to differences based in language, norms, national or ethnic identity, levels of trust, tolerance, respect for entrepreneurship and social networks, or other country-specific qualities. Some products have a strong national identification, such as the Molson beer company in Canada (see Molson’s “I am Canadian” ad campaign). Conversely, genetically modified foods (GMOs) are commonly accepted in North America but highly disdained in Western Europe. Such cultural disdain for GMOs would make it easier to sell GMO corn in the United States but impossible to sell in Germany. |
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| Bilateral trade flows show that administratively similar countries trade much more with each other. Administrative distance refers to historical governmental ties, such as those between India and the United Kingdom. This makes sense; they have the same sorts of laws, regulations, institutions, and policies. Membership in the same trading block is also a key similarity. Conversely, the greater the administrative differences between nations, the more difficult the trading relationship—whether at the national or corporate level. It can also refer simply to the level and nature of government involvement in one industry versus another. Farming, for instance, is subsidized in many countries, and this creates similar conditions. |
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| This is perhaps the most obvious difference between countries. You can see that the market for a product in Los Angeles is separated from the market for that same product in Singapore by thousands of miles. Generally, as distance goes up, trade goes down, since distance usually increases the cost of transportation. Geographic differences also include time zones, access to ocean ports, shared borders, topography, and climate. You may recall from the opening case that even Google was affected by geographic distance when it felt the speed of the Internet connection to Google.com was slowed down because the Chinese were accessing server farms in other countries, as none were set up in China (prior to the setup of Google.cn) |
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| Economic distance refers to differences in demographic and socioeconomic conditions. The most obvious economic difference between countries is size (as compared by gross domestic product, or GDP). Another is per capita income. This distance is likely to have the greatest effect when (1) the nature of demand varies with income level, (2) economies of scale are limited, (3) cost differences are significant, (4) the distribution or business systems are different, or (5) organizations have to be highly responsive to their customers’ concerns. Disassembling a company’s economy reveals other differences, such as labor costs, capital costs, human capital (e.g., education or skills), land value, cheap natural resources, transportation networks, communication infrastructure, and access to capital. |
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| A branch of philosophy that seeks virtue and morality, addressing questions about "right" and "wrong" behavior for people in a variety of settings; the standards of behavior that tell how human beings ought to act |
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| The branch of ethics that examines various kinds of business activities and asks, "Is this business conduct ethically right or wrong?" |
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| Markkula Center for Applied Ethics at Santa Clara University decision-making framework |
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Is it an ethical issue? Being ethical doesn’t always mean following the law. And just because something is possible, doesn’t mean it’s ethical—hence the global debates about biotechnology advances, such as cloning. Also, ethics and religion don’t always concur. This is perhaps the trickiest stage in ethical decision making; sometimes the subtleties of the issue are above and beyond our knowledge and experience. Listen to your instincts—if it feels uncomfortable making the decision on your own, get others involved and use their collective knowledge and experience to make a more considered decision.
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Get the facts. What do you know and, just as important, what don’t you know? Who are the people affected by your decision? Have they been consulted? What are your options? Have you reviewed your options with someone you respect?
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Evaluate alternative actions. There are different ethical approaches that may help you make the most ethical decision. For example, here are five approaches you can consider:
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Utilitarian approach. Which action results in the most good and least harm?
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Rights-based approach. Which action respects the rights of everyone involved?
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Fairness or justice approach. Which action treats people fairly?
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Common good approach. Which action contributes most to the quality of life of the people affected?
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Virtue approach. Which action embodies the character strengths you value?
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Test your decision. Could you comfortably explain your decision to your mother? To a man on the street? On television? If not, you may have to rethink your decision before you take action.
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Just do it—but what did you learn? Once you’ve made the decision, implement it. Then set a date to review your decision and make adjustments if necessary. Often decisions are made with the best information on hand at the time, but things change and your decision making needs to be flexible enough to change too. Even a complete about-face may be the most appropriate action later on
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