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B AD 302 Test 4 Chapter 14


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Know the definitions for parochialism
A narrow view of the world; an inability to recognize differences between people.
Know the differences between ethnocentric, Polycentric, and Genocentric attitudes
Ethnocentric – Parochialistic belief that the best work approaches and practices are those of the home country.

Polycentric – The view that the managers in the host country know the best work approaches and practices for
running their businesses.

Geocentric – A world-oriented view that focuses on using the best approaches and people from around the globe.
What are the competitive advantages of international operations?
Cost reductions
Market expansion resulting in economies of scale
Transfer of technology through joint ventures
Foreign product distribution in the U.S.
Market expansion abroad
What is the European Union and know examples of their efforts.
A union of 15 European nations created as a unified economic and trade entity.
Broke down national barriers that to travel, employment, investment, and trade.
Established economic and monetary unit to share the Euro
What does NAFTA stand for, what does it represent, and who is involved?
North American Free Trade Agreement – An agreement among Mexico, Canadian, and U.S. governments in which barriers to free trade have been eliminated.
What does ASEAN stand for and who is involved?
Association of Southeast Asian Nations – A trading alliance of 10 Southeast Asian Nations.
What’s the difference between MNC’s and TNC’s and know examples of each.
MNC – multinational corporation – A company that maintains significant operations in multiple countries but manages them from a base in the home country. Ex) Sony, Merril Lynch, etc.

TNC – transnational corporation – A company that maintains significant operations in more than one country but decentralizes management to the local country.
What’s the difference between individualism and collectivism?
Individualism – A cultural dimension that describes when people are supposed to look after their own interests and
those of their immediate family.

Collectivism – A cultural dimension that describes when people expect others in their group to look after them and
to protect them when they are in trouble.
What is a Borderless Organization?
A global type of organization in which artificial geographical barriers are eliminated
What are some approaches to going global?
1. Exporting involves making products and home and selling them overseas.
2. Importing involves selling products at home that were mad overseas.
3. Licensing involves manufacturing org. giving other organizations the right to use your brand name, technology, or product specs.
4. Franchising involves service org. giving other organizations the right to use your brand name, technology, or product specs.
5. Strategic Alliances involves partnerships between an organization and a foreign country in which both share resources and knowledge in developing new products or building production facilities.
6. Joint Venture – Specific type of strategic alliance in which the partners agree to form a separate, independent organization or some business purpose.
7. Foreign Subsidiary – Involves a direct investment in a foreign country by setting up a separate and independent production facility or office.
What is national culture?
The values and attitudes shared by individuals from a specific country that shape their behavior and beliefs about what is important.
What are two cultural measures?
Power Distance - A cultural measure of the extent to which a society accepts the unequal distribution of power in institutions and organizations.
Uncertainty Avoidance - A cultural measure of the degree to which people tolerate risk and unconventional behavior.
What is the difference between the national culture attribute of quality and quantity of life?
Quality of Life – Reflects the emphasis placed upon relationships and concern for others.
Quantity of Life - Describing the extent to which societal values are characterized by assertiveness and materialism.
What is a culture shock?
The feelings of confusion, disorientation, and emotional upheaval caused by being immersed in a new culture.
What is organizational socialization?
The process that employees go through to adopt an organization’s culture.

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