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What is regional economic integration? a. Define regional economic integration. b. What are the 5 different stages? 2. What are the costs of regional economic integration?      

undermining the most-favored-nation status rule (the lowest tariff applicable to one member must be extended to all members), an essential principle of the WTO. Imposing laws and regulations that are uniform, and that at times do not take into account national economic, cultural, and social differences. Eliminating jobs and increasing unemployment in protected industries. Losing sovereignty, national independence, and identity. Reducing the powers of the national government. Increasing the probability of rising crime associated with illegal drugs and terrorism because of ease of crossborder labor movement.

3. What are key aspects of economic geography? 

market size, location, and openness to trade

4. What are the reasons why countries pursue regional integration? 

Regional integration helps countries—especially small and medium-sized—scale up their supply capacity through regional production networks and become more globally competitive.

5. What are the characteristics of each regional integration bloc (ASEAN, MERCOUSR, EU, NAFTA)? Two or more countries join together to form a regional integration bloc. The main objectives for integration could be: economic; geo-political; social; and/or regional security a. Why and when was each created? NAFTA - North/central America ASEAN - South west Asia LAFTA/MERCOSUR - Latin America b. What stage is each bloc?

Competency 3004.1.6: The Legal and Political Environment of Global Business (Chapter 6) 1. What are the business implications for conducting international business in different economic ideologies? 

Political risks, economic risks, and/or corruption/danger. o COMMUNISM - the gov't or state owns/controls all the major factors of production...labor unions are controlled by the state...collectivist rights trump individual rights...aspires to be economically classless...China is the largest communist economy in the world but it's finding it needs to not be 100% commie - about 80% of biz is still gov't owned/controlled but there's been some relaxation of state control of labor unions SOCIALISM - gov't or state plays a strong role in the economy and may own stakes in certain biz's...unlike commies, do not aspire to be classless...more collective than individual, and less wealth disparity than in capitalism...stress worker & labor rights & strong/free labor unions (among highest union membership in world) - traditionally these countries are very hospitable places to conduct global biz from a # of perspectives CAPITALISM - biz privately owned...strong individualistic profit orientation...little room for gov't in purely free market economy...individual losses/gains can be very large - gov't not involved and stay out of the individual successes/failures that occur...individual incentives are @ the core of this ideology...US is leading capitalist economy in world until now (much more socialist than before)...of course, this type is very hospitable to business, in general

2. What are key political risks when conducting global business? A. Political Risk: Potential changes in government, civil wars, social unrest, and possible government confiscation of assets. Types:

B. ECONOMIC RISKS: o o o o

Currency inconvertibility or devaluation. Foreign money will lose value. Weak enforcement of contracts. Labor union strikes Inflation: general increase in price level, decreases purchasing power.

POLITICAL RISKS: o o o o o o o

Micro/macro political Nationalization or expropriation Coups detat: govt. is overthrown. Unpopular policies are changed/reversed. Unstable. Civil wars Terrorism Corruption

3. What are the reasons why intellectual property protections are critical in today’s global business environment?

a. Intellectual property: a commercially valuable product of the human intellect, in a concrete or abstract form.

Competency 3004.1.7: Corruption and Ethics in Global Business (Chapter 7) 1. What is the relationship between ethics and economic progress?  Business ethics are important because it creates trust between buyers and sellers. Without trust there cannot be economic progress.  2. What is the function of corporate social responsibility? a. Define corporate social responsibility i. A business' primary goal to shareholders is to make a profit, but to stakeholders (customers. employees, business partners, entire society) they have corporate social responsibility to be fair, create quality products, follow laws, keep customer info confidential, build charity, be environmentally careful, fair treatment, fair wages, dignity/respect, good conditions, no discrimination. 3. What are some famous scandals and the events related to each scandal? a. Enron: Displayed future profit as current in order to make profit look better than it was. They collapsed and so did the retirement of the employees that bought their stock and 20K jobs lost. The result is Sarbanes Oxley 2002. many checks and balances now. b. World Com: Overstated their earnings and under reported costs. This caused a false profit to show as an increase. Making stock prices climb. the Ceo Ebbers was found out. He filed bankruptcy and was later charged with the crime and sentenced to 25 years in prison. c. Vivendi: The company cooked its books to make financial performance look better than it was for the purpose of making acquisitions. Used company finances to repurchase stock. He was fined 50Mill and had to forfeit his 25mill severance. d. Parmalet: Cooked its books by purchasing its own credit-line notes and creating an asset that did not really exist. Company collapsed when it could not pay its debts in 2003. Europe's biggest bankruptcy. 10 yrs for fraud. 4. What are the reasons for having internal controls that facilitate ethical behavior?  Prevent accidental errors and intentional misrepresentations. Sometimes use a 3rd party auditing system. a. What are the different types of internal controls?

b. How does each facilitate ethical behavior?

Competency 3004.1.10: The Organization of Global Business (Chapter 10) 1. What is meant by stateless corporations?  A firm that transcends international boundaries - one that is so well integrated into the countries it has a presence that it's difficult if not impossible to identify one country as the firm's home country -The newest phase in the evolution of global business... -The stateless corp (spread out across the globe according to accessible resources for it's business) is not limited to the strengths or weaknesses of a single country 2. What are benefits of having a clearly defined organizational structure on business performance? (Hint: there are three) Functional Structure: Activities are grouped by a common function. Group people together because they hold similar positions, perform similar tasks, or use the same kinds of skills. Problem: Departments don't work together because they never leave their function. Divisional Structure: Functions are grouped together to serve the needs of products, markets, or geographical regions (sub-structures: Product Structure, Market Structure, Geographical Region Structure) Hybrid Structure: A combination of organizational structures...organized by more than one dimension at the top level. Can have both functional and divisional. 3. What are issues involved in creating international divisions in global business? (hint: communication and cost) ADVANTAGES of INT'L DIVISION: Permits global biz to concentrate all int'l efforts and expertise in one location Let international customers know they are important because there's a division devoted to them Fosters global mindset in int'l division employees Encourages products that cater to int'l tastes DISADVANTAGES of INT'L DIVISION: Potential conflict between domestic/ int'l operations (same hierarchical level) Lack of communication & coordination between domestic and int'l operations, if separated (prevents design of products w/ both domestic & int'l appeal...no sharing of core competencies and knowledge...no capture of learning-curves savings from lack of consolidation)

4. What are different organizational structures and their descriptions? a. b.

Compare and contrast the different structures Provide examples of each

Competency 3004.1.11: Global Human Resource Management (Chapter 11) 1. What is involved in outsourcing and offshoring? 

a. OUTSOURCING - contracting work out to a 3rd party (can be inside the country) OFFSHORING - contracting work out to another party or same company/different division - but it's going OUTSIDE the country, regardless - co may do it b/c of cost - jobs may leave parent co's country, pissing off people in that country - quality of work may different, or may be the same - overall, it's said to HELP US workers (for example) because it ultimately provides high-quality goods/svcs @ a low price - quality of goods produced outside US may not be as good - outsourced call workers in another country may not do as well as those in the same country - harder for parent co to monitor things going on outside domestic operations - unethical practices can occur when outsourcing (unsafe working conditions) - however, because of increasing globalization, technological advances, and consumer pressure for lower prices, outsourcing and offshoring are here to stay

b.

2. What are challenges involved in staffing foreign operations? a.

i. Host country nationals: an employee who is a citizen of a country in which an organization's branch or plant is located, but the organization is headquartered in another country ii. Parent/Home county nationals: a person working in a country other than his/her country of origin iii. Third country nationals: an employee who is not a citizen of the home or host countries. For example, a French National working in the Hong Kong subsidiary of a US company would be considered a TCN employee. iv. Expatriates: an individual living in a country other than his or her country of citizenship, often temporarily and for work reasons

b. Discuss staffing Issues of above: -company needs to decide: should they staff the office w/ parent country nationals, host country nationals, third country nationals - or a combination? -it's difficult for virtual expatriates to build strong and trusting relationships w/ people in the foreign office; they are virtually managing - companies in nearly all global situations require expatriates (parent country and third country nationals) to live in the place of their foreign assignments (a local labor market may not have enough qualified workers, and also parent country nationals can help impose values/culture on host country workers) which has challenges: c. expatriate failure- is 30% or more (expatriate doesn't acclimate, family problems, etc) repatriation - has its own problems (culture shock)

3. What issues are involved in performance appraisal (hint: cultural differences and Hofstede’s cultural dimensions) and employee compensation (hint: cost of living, expatriate status, balance sheet approach) around the world? a. Cultures vary in how they present good/bad feedback@ an appraisal and whether appraisal is for an individual or a group. -Appraisal differed according to power distance: high power distance= hierarchical, managers eval subordinates, lower power distance=subordinates eval managers. -Compensation=cost of living is very different around the globe. Big cities are expensive. Underdeveloped areas are expensive if employee expects to maintain life style from home. -Home country or Host-country pay levels=Balance sheet approach is keeping the expatriate on the home country's salary structure, while providing additional allowances 4. What is the relationship between international labor standards and free trade? a. Weak standards of host country=more profit, but firms must act ethically. b.

Competency 3004.1.12: Global Marketing (Chapter 12) 1. What are the similarities and differences between marketing research and marketing intelligence systems? a. Market research= info collected at one particular time. It asks a specific question. SHORT TERM (ex: do shoppers buy more food on Mondays or Tuesdays?) Market Intelligence System (MIS)= info collected regularly over time. A database of collected info. LONG TERM (ex: shopping pattern for ten years) 2. What are three key terms for marketing strategies and their definitions? a. Standardization: The same (no change) marketing in both domestic and international markets. (ex: Taco Bell-dog worldwide) Adaptation: Marketing is different between domestic and international markets, in order to meet the needs of the market. (ex-Taco Bell- U.S. dog, Arabia-camel) Glocalization: Standardized whenever can (to save money), but adapt for countries where it needs to be changed. (ex: Taco Bell- dog in Europe & U.S., camel in Arabia) 3. What is the sequence for developing and managing products in international markets? 1. Generate the idea. Decide sources of new product ideas. 2. Evaluate new product ideas against a set of variables related to the product success. 3. Subject new product ideas to concept testing-present idea to a small sample and gauge reactions. 4.Move to business analysis step, when projections of potential revenues and profits are made. 5. Develop (physically design) product: product design is an important part of this step. 6. Subject the product to market testing-develop the marketing mix for the product. 7. commercialization of the new product, which is manufactured and introduced to the foreign market. 4. What are four marketing methods? a. Publicity: Free marketing. Create a newsworthy event. (ex: Oprah's favorite things, Yelp review) Advertising: Covers a wide audience: tv, radio, newspapers, magazines, mailers Sales Promotion: Contests, sweepstakes, end-aisle display, sponsorship, trade shows (ex: samples at Costco, business at a football game) Personal Selling: High cost due to time and manpower. One-on-one. Very effective internationally. (ex: door-to-door pest control sales)

5. What roles do distribution channels play in marketing products internationally? a. Compare and contrast indirection and direct distribution strategies i. Indirect: -Use existing distribution channels (agent or distributor) to market products and services. - no up front investment (pay after) -the market knowledge in the country can assist in introducing products more quickly. -channels may carry more competitive products -channel controls marketing efforts EX: Agent-is hired and earns commission (real estate agent) EX: Distributor-buys the products from manufacturer and then sells them for a profit ii. Direct: Bypass existing channels of distribution by using marketing and sales office in the foreign country. -Requires up front investment in recruiting and training a sales force. -Maintains control over marketing efforts. Ex for sale by owner: put 100% effort in the one product b. Describe the international distribution channel partners c. Describe physical distribution: the movement of goods through channels d. What issues are there in overseas distribution? 6. What are international pricing objectives? a. Performance-bottom line goals (net profit, ROI, Market share, Penetration) Prevention: Keep competitors out by setting low price (deter competition and govt security) Maintain Objectives: Keep things status quo (maintain competitive party and favorable dealer relations) Survival Objective: A combo of the 3 (Pricing strategy used to allow companies to survive in international markets) b. What are the different approaches to setting prices in domestic and international markets? 7. What facets of customer service are required for goods and services that are globally marketed? -on time delivery -installation and delivery of equipment -problem solving -explain and honor warranty repairs -accept returns -provide emergency shipments -handle product documentation (import and export) -reliability

-empowerment of employees to take care of customer problems immediately w/out waiting on supervisor a. What are the three main categories of customer service? Describe each and provide examples

Competency 3004.1.13: Global Operations and Supply-Chain Management (Chapter 13) 1. How does global operations management function? a. Global operations mgmt: when one or more of the production systems direct resources originate from or are located in more than 1 country. b. Production system: the system that businesses use to produce products. i. Manufacturing system: a production system in which goods dominate the value of the product. Service system: a production system in which services dominate the value of the product. **Production system model: Suppliers-->INPUTS-->Production process--> OUTPUTS-->customers.

2. What are the reasons why companies outsource and insource? For maximum efficiency, to maximize profit

a. In source- When a company is buying goods and services from a supplier and then begins buying them in house. b. Out source- When a firm has been making all the goods and services in house and then decides to buy those goods and services from suppliers. 3. What is global production? A concept in developmental literature which refers to "the nexus of interconnected functions, operations and transactions through which a specific product or service is produced, distributed and consumed. a. b. c. What are the advantages of global production? Knowledge of the product may provide process and production efficiencies, and cost advantages over potential suppliers. -Allows for control over component and process quality. -Maintains control over components and product deliveries. -In house production may be required for highly specialized raw materials and components. -Affords secure protection of the intellectual property associated with components and processes. 4. What are considerations for locating and relocating production facilities in givens

scenarios? a. If product can serve needs of all customers around the world, as it is, then the company may locate all production facilities in one country. If the product needs to be customized for different countries, then multiple production facilities will be needed 2) Because PRODUCTS are sold to customers, not components or raw materials, one consideration for deciding upon production facility location is proximity to markets Also, proximity to suppliers should be considered as well as the proximity to the production facilities that provide the components and raw materials. 3) Relates to product's image: better to make shoes in Italy, and cars in Germany, in making the product 'legacy' more attractive to customers, etc * a company may decide to RELOCATE if taxes become to high in a certain area, or labor becomes to expensive and there are better opportunities elsewhere, etc 5. How do the Internet and enterprise resource planning systems affect global supply chains? a. They allow firms to globalize their production more easily. -sales and production plans update immediately -shipments are scheduled using the most efficient route -accounts are billed and credited -Able to find lowest cost of side view in each step of the supply chain -anything and everything in the firm's business processes 4 -1. How do the Internet and enterprise resource planning systems affect global supply chains? They allow firms to globalize their production more easily.

Competency 3004.1.14: Global Financial Management (Chapter 14) 1. What are the foreign exchange risks that affect firms? a. Define exchange rate risk Exchange Rate Risk: the impact of random change in the value of one currency with respect to other currencies. b. c. Transaction risk: how short-term changes in exchange rates can affect operating costs and revenues of firms engaged in international business activities. Translation risk: the short term effects of currency mo...