Zusammenfassung Buch PDF

Preview

Summary

Download Zusammenfassung Buch PDF

Description

Zusammenfassung IB Foundations

Chapter 1: What is International Business International Business: performance of trade and investment activities across national borders. → because it emphasizes crossing national borders it gets referred as cross-border business. IB Is characterized by 6 major dimensions: 1. Globalization of markets: ongoing economic integration and growing interdependency of countries worldwide. a. Internationalization: Tendency of companies to deepen their international business activities systematically. Lead to diffusion of products/technologies/knowledge 2. International Investment: transfer of assets to another country or the acquisition of assets in that country. a. International portfolio investment: passive ownership of foreign securities like stocks, bonds to gain financial returns. → no active management, short term interest b. Foreign direct investment (FDI): internationalization strategy, firm establishes presence abroad through acquisition of productive assets (land, equipment, capital, technology). Partial or full ownership of a enterprise.  long term planning 3. International Trade: exchange of products and services across borders. (either exporting, importing or global sourcing) a. Global sourcing: procurement of products in countries abroad for consumption in the home country 4. International Business Risks 5. Participants 6. Foreign market entry strategies

Nature of International Trade Export growths faster than GDP worldwide. Reasons are: -

Rise of emerging markets Advanced economies are sourcing many of the products they consume from low-cost manufacturing countries Advances if information and technologies, lower trade barriers, liberalization of markets

In some countries total trade surpasses 100% of GDP, why? Entrepot: they import large volume of products; some get processed into higher-products and some get simply re-exported.

Nature of International Investment ➔ FDI is the most important form of international investment In the process of FDI firms establish a new legal business entity in the host country. Its common among large companies with substantial international activities. Since the 1980ies FDI have grown fast. Especially in emerging markets inflow has grown.

Service as Well as Products Historically important: Products. Now services are important. (accounts for 25% of International trade and is growing).

Value of merchandise trade is still higher than service trade → services face greater barriers and challenges in cross-country trade. Not all services can be exported, although they can be digitized and moved across borders. Service industry has great potential in international trade. Sharing economy: firms and individuals undertake online peer-to-peer exchange of all types of goods and services. (Uber and AirBnB)  great potential for growth.

International Financial Services sector International banking and financial services are among the most internationally actives services industries. 2 Factors: -

Internationalization of Banks Flow of money across borders into pension funds and portfolio investment

How does International Business Differ from Domestic Business? More Risks: the four risks in Internationalization 1. Cross Cultural Risk: when cultural misunderstandings put human value at stake. They arise from differences in languages, lifestyle, mind-sets, values, customs and religion. Values influence shopping behavior, work style of employees and mind-set. Language is also critical → window for peoples value system, miscommunication can result in inappropriate business strategys. 2. Commercial Risk: Potential loss or failure from poorly conceived or executed business strategy’s, tactics or procedures. Consequences are usually costlier when abroad. a. Cyber Risk: attacks on the firm’s information systems b. Social media risks: rapid spread of unfavorable “buz” about the firm. 3. Country Risk: (political risk) potentially adverse effects on company operations and profitability caused by developments in the political, legal and economic environment. a. Possible governmental intervention b. Laws and regulations c. Inflation, debt or unbalanced international trade 4. Currency (Financial) Risk: risk in adverse fluctuations in exchange rates → arise because international trade is often conducted with more than one currency.

Who Participated in International Business 1. Focal Firm: initiator of an IB transaction 2. Distribution channel intermediary: specialist firm that provides logistics and marketing services for focal firms → include distributors and sales representatives located in foreign markets where they provide distribution and marketing services 3. Facilitator: firm/individual with expertise in banking, legal advice, customer clearance that helps focal firms perform international trade. 4. Governments: State owned enterprise (SOEs) 5. Consumers/Households 6. Retailers 7. Organizational buyers

Focal Firms in IB -

MNE (multinational enterprise): large company with substantial ressources that performs carious business activities through a network of subsidiaries located in multiple countries.

They are best known for their FDI activity. Most MNE’s have been concentrated in industrialized economies, however emerging countries are getting more important. SME (Small- and Medium-sized Enterprises): make up the majority of companies active in IB. They are more flexible and quicker, less bureaucratic, more adaptable, and more entrepreneurial. They have less financial and human capital and thus choose exporting as their internationalization strategy. They normaly target smaller markets/niche markets. Born Global Firms: special type of SME – young company that initiates international business very early. Governments and NGO: o

-

-

Why do firms Internationalize? 1. 2. 3. 4. 5. 6. 7. 8. 9.

Seek opportunities for growth through market diversification Earn higher margins and profits Gain new ideas about products, services and business models Serve key customers better that have relocated abroad Be closer to supply sources, benefit from global sourcing advantages, or gain flexibility in product sourcing Gain access to lower-cost or better-value factors of production Develop economies of scale in sourcing, production, marketing and R&D Confront international competitors more effectively or thwart the growth of competition in the home market Invest in potentially rewarding relationship with a foreign partner

Chapter 2: Globalization of Markets and the Internationalization of the Firm Globalization of markets → gradual integration and growing interdependence of national economies. Allows companies to outsource part of their value-chain → sequence of value-adding activities the firm performs.

Phases of Globalization: 1. First Phase a. 1830 – 1880: IB began to rise due to railroads, better ocean transport, and rise of large manufacturing/trading firms. Telegraph and telephone allowed information to flow between nations and companies. 2. Second Phase: a. 1900 – 1930: rise of electricity and steel production. Colonialization led to the first MNE’s in Europe and the US. Electric power was used to drive mass production. 3. Third Phase: a. 1948 – 1970s: associated with reconstruction efforts after the war and dismantling of trade barriers. 1947 → Bretton Woods Conference and GATT was created. GATT led to WTO. MNE’s first established subsiaries around the world. MNE began to seek cost advantages and moved factories to developing countries. Growing trade, crossnational flow of capital and integration of global financial markets. 4. Fourth Phase: 1980 – 2006: electronics and information technology to automate production. Strong growth in cross-border trade/investment. Important are PC, internet and web browsers. Collapse and market liberalization in central, and eastern Europe, Asian economies got industrialized and emerging markets prospered. 5. Fifth Phase: 2006 – today: Digital technologies are important. They boost the efficiency of international trade. Local manufacturing gets more profitable again due to digital technologies.

Market Globalization: Organizing Framework Driving Forces of Globalization 1. 2. 3. 4. 5.

Worldwide reduction in barriers to trade and Investment Market liberalization and adoption of free markets Industrialization, economic development and modernization Integration of world financial markets Advances in technology

Technology Advances and Globalization 1. Information Technology a. Science and process of creating and using information resources. Costs fell drastically in recent years, IT can give you competitive advantages and geographic distances are not important anymore. SME profit, too. Information is available for everyone, everywhere. Technology allows to interact with business partners more cost efficient and rises productivity. 2. Digitalization a. Enabling or transforming business functions, operations and activities by leveraging digital technologies and digitized data. Digital networks and Digital flows connect people around the world and allow them to collaborate, obtain information or develop strategies. E-Commerce got important and allows firms to sell worldwide. Sharing economy got enabled.

Digitalization changes how we interact and consume. Data Analysis allows companies to get better insights on how their products get used. 3. Communications: a. Internet connects billions of people. It allows SME’s to become international firms and Marketing Manager to promote a range of products to customers worldwide. Internet of things: machine-to-machine connectivity online. Internet creates jobs and wealth. Social Media allow free flow of information and deepen the pace of globalization. 4. Manufacturing: a. Digitalization and computer-aided design (CAD) transforms manufacturing wit robotics → reduced production costs. 5. Transportation: a. More fuel-efficient plains, giant ocean-going freighters and new transportation technologies lowers cost for transportation

Dimensions of Market Globalization 1. Integration and interdependence of national economies: a. MNE’s develop multy-country activities and thus rise economic integration of the world. Governments are helping with regional economic integration blocs and supranational institutions 2. Rise of regional economic integration blocs a. WTO and other groups consist of countries that facilitate reduced trade and investment barriers among themselves (NAFTA, EU, APEC) 3. Growth of global investment and financial flow 4. Convergence of consumer lifestyles and preferences 5. Globalization of production 6. Globalization of services

Societal Consequences of Globalization 1. Contagion: Rapid Spread of Monetary and Financial Crisis a. Contagion: tendency for a financial crisis in one country to spread rapidly to other countries due to integrated national economies. 2. Loss of National Sovereignty a. Sovereignty: ability of a nation to govern its own affairs → is threated due to MNE’S activities that can interfere with a governments ability to control its economy, social structure and political system 3. Offshoring: a. Globalization has created but also destroyed costs. Offshoring → relocation of manufacturing and other value-chain activities to cost-effective locations abroad. 4. Reshoring 5. Effect on the Poor 6. Effect on Sustainability and the Natural Environment 7. Effect on National Culture 8. Globalization and Africa

Chapter 3: The Cultural Environment of International Business Culture and Cross-Cultural Risk Culture → values, beliefs, customs, arts, and other products of human thought and work that characterize the people of a given society. It affects the common rituals of daily life. It captures how the members of the society live – feed, clothe and shelter. It explains how we behave towards each other and within groups, it defines values, attitudes and the way we perceive life. Culture thus introduces new risks. Cultural risks is a situation in which a cultural misunderstanding puts some human value at stoke.

What culture is not: -

Not right or wrong → culture is relative, there is not a RIGHT culture Not about individual behavior → its about groups, it’s a collective phenomenon of shared values and meanings Not inherited → it comes from your social environment and is learnt.

Socialization and Acculturation Socialization: learning the rules and behavioral patterns appropriate to ones society. It is cultural learning and provides the means to acquire cultural understandings and orientation. Acculturation: process of adjusting and adapting to a culture other than one’s own.

Dimensions of Culture -

-

-

-

-

Values and Attitudes o Values: persons judgment about what is good or bad. Basis for our motivation and behavior. They guide our daily life and decisions o Attitudes: are similar to opinions, but more unconsciously held → prejudices are unfavorable held altitudes aimed at a particular group Manners and Customs o Are ways of behaving and conducting oneself in public. (What we eat, how we see power, how we great each other etc.) Perception of Time o Some societys are more past-oriented, other to the present or future. ▪ Past-oriented cultures evaluate plans to their fit with established traditions, customs and wisdom. (Europe for example) → less innovation friendly ▪ Present-oriented tend to have a monochronic orientation on time. ▪ Future-oriented tend to have a polychronic orientation o monochronic orientation: rigid orientation in which people are focused on schedules, punctuality and time as a resource, time is linear. Managers tend to set deadlines and follow a strict schedule. Punctuality is important. Short-term oriented. o polychronic orientation: a flexible, nonlinear orientation to time, in which the individual takes a long-term perspective and emphasizes human relationships. People are more likely to multitask. Perceptions of space o Sense of personal space → differences on how close people tend to stay when talking, standing on the streets etc. Symbolic Productions o Symbol: can be letters, figures, colors that communicate a meaning. They represent religions, nations, corporations and they unite people.

-

-

-

Material Productions and Creative Expressions o Material Productions → artifacts, objects, and technological systems people construct to function within their environments. (f.e. infrastructures for energy, housing, education, banks, marketing) etc. o Creative Expressions: art, folklore, music, dance, theater etc. Education: o Cultural values are passed from one generation to the next through education. Nowadays most academic education takes place as schooling. Education niveau influences where companies will invest in and influences the well-being of the country’s population (literacy-rate etc.) Social Structure o Pattern of social arrangements and organized relationships that characterize a society. Refers on how a society is organized in terms of: ▪ Individuals: Individualism vs. Collectivism (Europe and Asia) ▪ Family: immediate and extended family is particular important for most people. ▪ Reference Groups: in some cultures, people’s social class is defined by group or employer affiliation rather than individual performance ▪ Social Stratification: most individuals are classified within classes or social layers depending on their occupation, education, family → some cultures value these social strata more than others. ▪ Social Mobility: easy with witch a person can move up within social strata (caste system is the hardest, advanced economies have a class system)

Role of Language and religion in Culture

Im Buch genauer lesen, nicht so interessant für mich -

Verbal Language Non-Verbal language Religion o Christianity o Islam o Buddhism o Hinduism o Confucianism o Judaism

Cultures Effect in International Business Auch im Buch nachlesen (1 Seite)

Models and Explanations of Culture -

-

Cultural Metaphors o Refers to a distinctive tradition or institution that is strongly associated with a particular society. (American Football with USA, Hygge with Denmark etc.) High- and Low-Context Cultures o High-Context: emphasize nonverbal messages and view communication as a mean to promote smooth, harmonious relationships. They are indirect and more polite, emphasize on respect.

Low-Context: rely heavily on spoken words and detailed verbal explanations. Speech is used to express ideas and thoughts. Communication is direct and straightforward. They tend to value expertise and performance. Hofstedes Research on National Culture (nachlesen, nicht schwer) o Individualism versus Collectivism o Power Distance o Uncertainty Avoidance o Masculinity versus Femininity o Long-term thinking versus Short-term o Indulgence versus restraint Deal versus Relationship Orientation o Deal oriented managers focus on the task at hand and prefer getting down to business o In relationship oriented, managers put more value on relationships with people. It is important to build trust and understanding. o

-

-

Managerial Implications of Culture Culture is important in cross-border business 3 Levels of Culture that influence each other: -

National Culture Professional Culture Corporate Culture

Cultural Orientation -

-

-

Ethnocentric Orientation o Using our own culture as the standard for judging other cultures. (Home-country orientation)  not really efficient Polycentric orientation o Refers to a host-country mind-set in which the manager develops a strong attachment to the country in which he conducts business. Geocentric Orientation o Global mindset, manager understands a business/market without regard to country boundaries. Implies openness and awareness to diversity of cultures.

How to Acquire Cross-Cultural Competence Managers are effective in cross-cultural setting when keeping an open mind, are inquisitive, and don’t jump to conclusions about others behavior. 3 guidelines to prepare for successful cross-cultural encounters: -

-

guideline 1: Acquire factual knowledge about the other culture and try to speak the language o study political, economic background, their history, current national affairs, and perceptions about other cultures. Such knowledge increases the understanding about the partners mind-set and events/decision become easier to interpret. Guideline 2: Avoid cultural bias: o Ethnocentric orientations can lead to poor business decisions and managers with such mindset may find the behavior of a foreigner odd and improper. o One way to minimize suh problems is critical incident analysis

▪

-

Helps to analyze awkward situations and encourages a more effective approach to cultural differences. • Identify the situations where you need to be culturally aware • When confronted with seemingly strange behavior, discipline yourself to avoid making judgments. Try to view the situation in terms of the unfamiliar culture. • Learn to make a variety of interpretations of others behavior, to select the most likely one in the cultural context, and only then formulate your response. • Learn from this process Guideline 3: Develop cross-cultural skills. o You should strive for cross-cultural proficiency to be successful in international business ▪ Tolerance for ambiguity ▪ Perceptiveness ▪ Valuing personal Relationships ▪ Flexibility and adaptability

Chapter 4: Ethics, Corporate Social Responsibility, Sustainability, and Governance in International Business Ethical Behavior and Its Importance in International Business Components of Ethical Behavior -

Ethics: moral principles and values that govern the behavior of people, firms and governments regarding right and wrong Corporate So...