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Multinational Management
The form of strategies and the design of management systems that successfully take advantage of internationla opportunities and respond to international threats.
159
Business
Undergraduate 3
10/05/2006
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Term
Multinational management:
 Definition
The formulatin of strategies and the design of management systems that successfully tatke advantate of international opportunities and respond to interantional threats.
Term
Multinational company:
 Definition
Any company that engages n vusiness fuctional beyond its domestic borders.
Term
Globalization:
 Definition
The worldwide trend of economic integration across borders that allows businesses to expand beyond their dcomestic boundaries.
Term
Developed countries:
 Definition
Countries with mature economies, high GDPs, and high levels of trade and investmetn.
Term
Developing Countries:
 Definition
Countries with economies that have grown extensively in the past woth decates.
Term
Transiton econonies:
 Definition
Countries in the process of changing form government controlled economic systems to capitalistic system.
Term
Less dervoloped countries (LDC's):
 Definition
Teh poorest nationals, often plagued with unstable politica regimes, high unemployment and low workker skills.
Term
General Agrreemetn on Tariffs and Trade(GATT)
 Definition
Tariff negociation between several nations that reduce the average worldwide tariff on manufactured goods.
Term
World Trade Organization (WTO):
 Definition
A formal structure for continued negotiations to reduce trade barriers and a mechaninism for settling trades disputes.
Term
Regional trade agreements:
 Definition
Agreements among nations in a particualt region to reduce tariffs and develop similat technical and economic standards.
Term
European Union (EU):
 Definition
The largest and economically integrated regional trading group.
Term
North American Free Trade Agreement (NAFTA):
 Definition
A multilateral treaty that links the U.S. Canada, and Mexico in an economic boloc that allows freer exchange of goods and sevices.
Term
Asia-Pacific economic Cooperation (APEC):
 Definition
A confederation of 19 nationa with less specif agreemetns on trade facilitation in the Pacific region.
Term
Triad:
 Definition
The world's dominant trading partners: European Union, United States, and Japan.
Term
Foreign direct investment (FDI):
 Definition
Multinational firm's ownership, in part or inwhole, or an operation in onother country.
Term
Privatization:
 Definition
The sale of government-owned businesses to private investors.
Term
ISO 900:2000
 Definition
The current name of the technical and quality standards of he international organization for standization.
Term
Global mindset:
 Definition
One that requires managers to "think globally, but act locally"
Term
Culture:
 Definition
the pervasive and ahsere beliefs, normas and values that guide everday life.
Term
Cultural norms:
 Definition
Prescribe and fprocribed behaviors, telling us that we can and cannot do.
Term
Cultural values:
 Definition
What is good, beautifl, holy, and what are legitimate goals for life.
Term
Cultural beliefs:
 Definition
Our undestandings about what is true.
Term
Cultural symbols:
 Definition
These may be physical, such as national flags or holy artificats. In the workplace, office size adn location can serve as cultural symbols.
Term
Cultural rituals:
 Definition
Ceremonies such as baptism, graduation, or tricks played on a new worker or tricks played on a new worker or pledge to a sorority or fraternity.
Term
Pervasive:
 Definition
the idea that culture affects almost everythng that we do, see, feel and believe.
Term
Front state of culture:
 Definition
Aspects of culture that are understood only by insiders or members of the culture.
Term
Back state of culture:
 Definition
Aspects of culture that are understood only by insiders or members of the culture.
Term
Shared cultural values, norms, and beliefs:
 Definition
The idea that people in different cultural groups have similar views of the world.
Term
Level of culture:
 Definition
These include national, business, and occupational and organizational culture.
Term
National culture:
 Definition
The dominant culture with the political boundaries of hte nation-State.
Term
Business culture:
 Definition
Norms, values, and beliefs that pertain to all aspects of doing business in a culture.
Term
Organizational culture:
 Definition
The norms,values, and beliefs concerning the organization share by members or the organization.
Term
Hofstede model of natinal culture:
 Definition
A cultural model base on difference in values and beliefs regarding work goals.
Term
7d Culture model:
 Definition
A seven-dimension cultural model bse on beliefs regarding how people relate to each other, manage time, and deal wht nature.
Term
Power distance:
 Definition
Expectations regarding equality among people.
Term
Uncertainty avoidance:
 Definition
How people react to what is differnt and dangerous.
Term
Individualism:
 Definition
The relationship betw the individual and the group in society.
Term
Collectivism:
 Definition
A set of cultural values that views people largely throuhg the groups to which they belong.
Term
Masculinity:
 Definition
Tendency of a society to emphasize traditional gender roles.
Term
Long-term orientation:
 Definition
A basic orientation toward time that value patience
Term
Universalism:
 Definition
Dealing with other people based on rules.
Term
Particularism:
 Definition
Dealing wiht other people base on personal relationships.
Term
Neutral versis effective:
 Definition
The acceptability of expressing emotins.
Term
Specific versus diffuse:
 Definition
The extent to which all aspects of an individual's work relationships.
Term
Achievement versus ascription:
 Definition
How a society grants or gives status.
Term
Time horizon:
 Definition
The way cultures deal with the past, present, and furure.
Term
Internal versus externatl control:
 Definition
Beliefs regarding whether one controls one's own fate.
Term
Stereotyping:
 Definition
When one assumes that all people wwithin a culture behave, believe, feel, and act the same.
Term
Ethnocentrism:
 Definition
When people form one culture belive that their are the only correct norms, values and and beliefs.
Term
Cultural relativism:
 Definition
A philosophical position arguing that all cultures, no matterr how different, are correct and moral for the people of those cultures.
Term
National Context:
 Definition
The respective national cultures and social institutions of a given society.
Term
Social institution:
 Definition
A complex of positons, and values organizing relatively stable patterns of human resources with respect to sustaining viable societal structures with a given environment.
Term
Regulative social institution:
 Definition
Cnstrains and regularizes behaviors through its capacity ot establish rules, and behaviors.
Term
Normative dimension:
 Definition
Refers to the values and norms promulgated by the social institutions.
Term
Coercive isomprphism:
 Definition
Socail institutions coerce or force organizations to adopt certain practice.
Term
Coercive isomorphism:
 Definition
Social institutions coerce or force organization to adopt certain practices.
Term
Economic system:
 Definition
System of beliefs, activities, organiztions, and relationships that provide the goods and services consumed by the members of a society.
Term
Capitalist or market economy:
 Definition
Production is decentralized to private owners who carry out activities to make profits.
Term
Socialist or command economy:
 Definition
Production resources are owned by the state and production decisions are cetrally coorinated.
Term
Mixed economy:
 Definition
Combines aspects of capitalist and socialist economies.
Term
Index of economic freedom:
 Definition
Determines the extent of governmental inervention n a county.
Term
Market transition:
 Definition
Changes societies go through as they move form socialism to a market-based economy.
Term
Privatization:
 Definition
Transfer of state ownership to private individuals.
Term
Industrialization:
 Definition
Cultural and economic changes that accur because of how production is organized and distributed in society.
Term
Pre-industrial society:
 Definition
Characterized by egricultural dominance and shaping of hte economic enivronment.
Term
Industrial society:
 Definition
Characterized by the dominace of the secondary or manufacturing sectors.
Term
Postindustrial society:
 Definition
Characterized by emphasis on hte service ssectors.
Term
Religin:
 Definition
Share set of beliefs,activiites, and institutions based on faith in supernatural forces.
Term
Christianity:
 Definition
Religion based on the life and teachings of Jesus.
Term
Islam:
 Definition
Religion based on the submission of the will to Allah (God).
Term
Convergence:
 Definition
Increased similarity of management practices.
Term
Generic strategies:
 Definition
Basic ways that both domestic and multinational companies keep and achieve competive advantage.
Term
Competitive advantage:
 Definition
When a company can outmatch its rivals in attracting and maintaining its targetred customers.
Term
Low-cost strategy:
 Definition
Producing products or services equal to tose of competitors at a lower cost than competitors.
Term
Focus Strategy:
 Definition
Applying a differentiation or low-cost strategy to a narrow market.
Term
Competititive scope:
 Definition
How broadly a firm targets its products or sevices.
Term
Value chain:
 Definition
All the activities that a firm uses to design, produce, market, deliver and support its product.
Term
Distinctive competencies:
 Definition
Strenghs that allow companies to outperform rivals.
Term
Resources:
 Definition
Inputs into the production or service processes.
Term
Capabilities:
 Definition
The ability to assemble and coordinate resources effective.
Term
Sustainable:
 Definition
Strategies not easily defeated by competiors.
Term
Competitive strategies:
 Definition
Moves multinational firms use to defeat competitors.
Term
Offensive competitive stratefies:
 Definition
Direct attracks, end-run offensives, preemptive strategies, and acquisitions.
Term
Defensive competive strategies:
 Definition
Attempts to reduce the risk of being attacked, convince an attacking firm to seek other targets, or blunt the impact of any attack.
Term
Counter-parry:
 Definition
Fending off a competitor's attack in one country by attacking in anothe country, usually the competitor's home country.
Term
Business-level strategies:
 Definition
Those for a single business operation.
Term
Corporate level strategies:
 Definition
How companies choose their mixture of diffrent businesses
Term
Corporate level strategies:
 Definition
How companies choose their misture of differnt vbusinesses.
Term
Related diversification:
 Definition
A mixture of businesses with similar products and markets.
Term
Strategy formulation:
 Definition
Process by which managers select the strategies to be used by thier company.
Term
Key success factors (KSFs):
 Definition
Important characteristics of a company or its porduct that lead to success in an industry.
Term
competitor ananlysis:
 Definition
Profiles of your competitor's strategies and objectives.
Term
SWOT
 Definition
the analysis of an organizaton's internal stregths and weaknesses and the opportunities or threats form the environment.
Term
Local reponsiveness solution:
 Definition
Responding to differnces in the markets in all the countries in which a company operates.
Term
Global integration solution:
 Definition
Conducting business similarly throughout the world and locationg company units whereever the is high quality and low cost.
Term
Global-Local dilemma:
 Definition
Choice between a local- responsiveness or global approach to a multinational's strategies.
Term
Multidomestic:
 Definition
Emphasizing local responsiveness issues.
Term
Transnational strategy:
 Definition
Seeking location advantages nad gaining economic efficiencies form operating worlwide.
Term
Location advantages:
 Definition
Dispersin value chain activities anywhere in the world where the company can do them best or cheapest.
Term
Global platform:
 Definition
Country location wher a fira can best perfom some, but not necessaryly all of its value-chain activities.
Term
Comparative advantage:
 Definition
That arising from cost, quality, or resource advantages associated with a particular nation.
Term
International strategies:
 Definition
Selling global products and using similar marketing techniques worldwide.
Term
Regional strategy:
 Definition
Managing raw material sourcing,prodution, marketing, and support activities within a particular region.
Term
Globalization drivers:
 Definition
Condition in an industry that favor transnational or international strategies ove multilocal or regional strategies.
Term
Participatojn strategies:
 Definition
Options multinational companies have for entering foreign markets and countries.
Term
Passive exporter:
 Definition
Company that treats and fills oversesas orders like domestic orders.
Term
Indirect exporter:
 Definition
Uses intermediaries or go between firms to provide the knowledge and contacts necessary to sell overseas.
Term
Export Management Company (EMC):
 Definition
Intermediary specializing in particular types of produts or particular countries or regions.
Term
Export Trading Company (ETC):
 Definition
Intermediary similar to EMC, but it usually takes title to the product before exporting.
Term
Direct exporting:
 Definition
Exporters take on the duties of intermediaries and make direct contact with customers in the foreign makers.
Term
Licensing:
 Definition
Agreement between a domestic licenser and a foreign licensee(licenser usually has a valuagble patent, technological know-how , trademark, or company name that it provides to the foreign licensee).
Term
International Franchising:
 Definition
Comprehensive licensing agreement where the franchisor grants to the franchisee the use of a whole business operation.
Term
Contract manufacturers:
 Definition
Produce products for foreign companies following the foreign companies specifications.
Term
Turnkey operation:
 Definition
Multinational company makes a project fully operational and trains local managers and workers before the foreign owner takes control.
Term
International strategic alliance:
 Definition
Agreemetn between 2 or more firm form differnt countries to cooperate in any value-chain activity fomr R&D to sales.
Term
Interantional cooperative alliance(ICA):
 Definition
An agreement for coopertion between 2 or more companies form different nationas that does not set up a legally separate company.
Term
Foreign direct investmetn (FDI):
 Definition
Multinational firm's ownership, in part or in whole, of an operatin in another country.
Term
Greenfiel investments:
 Definition
Starting foreign operations from scratch.
Term
Small business:
 Definition
UN defenition: Less than 500 employees.Popular press definition: less than 100 employees. U.S. Small Business Administration's definitioin: varies by industry and uses both sales revenue and the number of employees.
Term
Small-business stage model:
 Definition
Process of interantionalization followed by many business.
Term
Global start up:
 Definition
Company hat begings as multinational company.
Term
Liability of newness:
 Definition
A large percentage of new businesses fail within a year.
Term
Liability of newness:
 Definition
A large percentage of new businesses fail within a year.
Term
Liability of newness:
 Definition
A large percentage of new businesses fail within a year.
Term
Liability of newness:
 Definition
A large percentage of new businesses fail within a year.
Term
Liability of newness:
 Definition
A large percentage of new businesses fail within a year.
Term
Liability of newness:
 Definition
A large percentage of new businesses fail within a year.
Term
Liability of newness:
 Definition
A large percentage of new businesses fail within a year.
Term
Liability of size:
 Definition
Being small often makes business failure more probale because small size usually means limited resources.
Term
Size barrier to internationalization:
 Definition
It is often more difficult for small businessest take the first step in internationalizing their organiztions.
Term
Small-business advantage:
 Definition
Fast-moving entrepreneurs can use their competitive advantage of speed. Being first to market, they can capture significant sales before larger copetitors
Term
Global culture:
 Definition
Managerial and worker values that view stragetic opportunities as global and not just domestic.
Term
Size barrier to interantionalization:
 Definition
it is oftern moer difficult for a small business to take the first step in interantionalizations.
Term
International sales internsity:
 Definition
Amount of interantional sales divided by total sales of hte company.
Term
Small-business advantage:
 Definition
Fast-moving entrepreneurs can use their competitive advantage of speed. Being first to maker, they can capture significant sales before larger competitors react.
Term
Customer contact techniques:
 Definition
Trade shows, catalog expositions, international advantising agencies nad consulting firms,governmetn sponsored trade missins,and diret contact.
Term
Customer contact techniques:
 Definition
Trade shows, catalog expositions, international advantising agencies nad consulting firms,governmetn sponsored trade missins,and diret contact.
Term
Customer contact techniques:
 Definition
Trade shows, catalog expositions, international advantising agencies nad consulting firms,governmetn sponsored trade missins,and diret contact.
Term
Customer contact techniques:
 Definition
Trade shows, catalog expositions, international advertising agencies and consulting firms,government-sponsored trade missions, and direct contact.
Term
Entry wedge:
 Definition
Company's competitive dadvantage for breaking into the established pattern of commercial activity.
Term
First-mover advantage:
 Definition
That of hte entrepreneur who moves quickly into a new venture and establishes the business before other cmpanies can react to the opportunity.
Term
Technological leadership:
 Definition
Being first to use or introduce a new technology.
Term
Switchin cost:
 Definition
Expenses involved when a customer switches to a competitor's products.
Term
Copycat Businesses:
 Definition
Those following the "Me too" strategy, whereby they adopt existing strategies for providing products or service.
Term
Organizational design:
 Definition
How organizations structure subunits and use coordination and control mechanism to achieve their stratec goals.
Term
Functional structure:
 Definition
Has departments or subunits based on separat business funcionas, such as marketing or manufacturing.
Term
Product Structure:
 Definition
Has departments or subunits based on different product groups.
Term
Geographic structure:
 Definition
Has departments or subunits based on geographical regions.
Term
Hybrid structure:
 Definition
Mixes functional, geographic, and product units.
Term
Export department:
 Definition
Coordinates and controls a company's export operations.
Term
Foreigh subsidiary:
 Definition
Subunit of hte multinational company that is located in another country.
Term
Minireplica subsidiary:
 Definition
Smaller version of hte parent company, using the same technology and producing the same products as the parent company.
Term
Transnational subsidiary:
 Definition
Has no companywide form or function each subsidiary does what it does best or most efficiently anywhere in the world.
Term
International division:
 Definition
Responsible for managing exports,international sales, and foreign subsidiaries.
Term
Worldwide product structure:
 Definition
Gives product divisions responsibility to produce and sell their products or services throughout the world.
Term
Worldwide geographic structure:
 Definition
Has geographical units representing regions of the world.
Term
Front-back hybrid structure:
 Definition
Splits the value chain into worldwide product divisions for upstream activities and geographical units for upstream activities and geographical units for downstream activities.
Term
Worldwide matrix structure:
 Definition
Symmetrical organizaton,usually with equal emphasis on worldwide product groups and regional geographical division.
Term
Transnational network structure:
 Definition
Network of functional, product and geographic subsidiaries dispersed throughout the world, based on the subsidiarie' location advantages.
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