What is the global village and why has it grown in the past generation? What thr
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Question
What is the global village and why has it grown in the past generation? What three important developments of globalization will probably affect me?
Why learn about international management, and what characterizes the successful international manager?
What are the positive effects and the negative effects of a global economy?
What are of megafirms and minifirms in the global economy? Give examples of each.
What is a (1) multinational corporation and a (2) multinational organization? Give examples of each.
Why is the study of international management important?
Distinguish between (a) Ethnocentric managers, (b) Polycentric managers and (c) Geocentric managers.
What are legitimate reasons for companies to expand internationally? Why do companies expand internationally, and how do they expand internationally? Examples?
Discuss the four main barriers to trade.
There are several (three major) organizations promoting international trade. Define each.
What is a trading bloc? Examples?
What is the “most favored nation trading” status?
Prepare an essay on the importance in understanding the principal areas of cultural differences.
Explanation / Answer
What is the global village and why has it grown in the past generation? What three important developments of globalization will probably affect me?
The term global village simply means binding the entire world into one village by the use of various electronic media and lessening of time and space due to air travel. It is also term which expresses equivalent relationship between various economies and other social activities throughout the world. This term has changed the way the world has seen itself. Electronic media and technology have played a very strong role in world becoming a global village. This is due to the instant information movement from one corner of the world to other at the same time.
The three most important developments of globalization which will affect me are the rise of e-commerce, which in turn will give rise to the trend of world becoming one big global market and rise of big companies and internet-capable small/mini-firms globally.
Why learn about international management, and what characterizes the successful international manager?
International management will become the “in thing” in the coming time. International management study will help in preparing individuals who would be working with foreign nationals in the form of vendors, suppliers, customers etc. They will be able to handle diverse population in their work culture, when they are working for a foreign firm in native land or native firm in foreign land. An international manager should be a geocentric manager to be successful.
What are the positive effects and the negative effects of a global economy?
Due to positive effects of global economy, under developed areas are able to enjoy benefits of industrial revolution and scientific advancements which is helping in the improvement and growth in these areas. World has become a global market and successful emerging markets in developed countries are result of privatization. Multinational corporations are result of privatization. Globalization has increased the global trade. More and more things are getting imported from developed countries and making in-way in the emerging market. Goods and services which were inaccessible for underdeveloped or developing nations have become a reality for them now. Everyone can buy whatever they wish for and the companies can export their goods in all countries.
Negative effects of global economy are that it has created prices to fluctuate tremendously. Increased competition has forced the developed nations to lower their prices, because other countries might be supplying the same goods at lower prices. Apart from that, it has created job insecurity for people in developed countries. Developing nations are outsourcing their work to underdeveloped and developing economies where the cost of labour is less creating a lot of job insecurity.
What are of megafirms and minifirms in the global economy? Give examples of each.
A megafirm or a conglomerate is a mixture of two or more companies operating in totally different industries but come together and start working under one “parent-company”. They are often huge and large with operations in number of countries. They can be profit or non-profit firms. E.g., ExxonMobil, General Motors.
A minifirm is a small firm which is easily started and fast moving companies which can be manoeuvred faster and use internet extensively to work. E.g., Mint.com, Good Greens
What is a (1) multinational corporation and a (2) multinational organization? Give examples of each.
Multinational Corporation: - A huge conglomerate with business operations in several countries. They run business operations on profit basis.
Multinational Organization: - A huge conglomerate with business operations in several countries. They are basically non-profit run business operations.
Why is the study of international management important?
Study of international management is important because in future more and more people will be travelling inter-country and inter-continent to work and to manage a diverse workforce, people need to be trained to manage this diverse workforce.
Distinguish between (a) Ethnocentric managers, (b) Polycentric managers and (c) Geocentric managers.
Ethnocentric Managers: - consider their native country, language and behaviour superior to other cultures. They believe that the managers and work practices from their native country will be more capable and reliable workers and can do wonders anywhere in the world.
Polycentric Managers: - are of the view that the local managers in overseas offices understand the local people and practices better than anyone else and therefore they should be left alone
Geocentric Managers: - believe and accept the likeness between native and foreign workers and customs and they should use various different techniques which will be more effective in managing this diverse workforce.
What are legitimate reasons for companies to expand internationally? Why do companies expand internationally, and how do they expand internationally? Examples?
Some of the legitimate reasons for companies to expand internationally are via exporting, importing, outsourcing, joint ventures etc.
5 reasons for companies to expand internationally include: - looking for new or emerging markets, cost effective labour, good availability of supplies, easy access to finances, avoidance of tariffs and regulations.
The companies edge their way into international markets taking minimal risks and making minimal investments at first and testing the international business.
Discuss the four main barriers to trade.
The four main trade barriers are: -
Government regulations to limit import and export: - Various regulations which limit the import and export to and from one country to other
Tariffs: - Taxes and duties imposed on various imports.
Import quotas: - Limit on the number of items that can be imported and number of products that can be imported
Embargos: - Completely banned imported and exported products
There are several (three major) organizations promoting international trade. Define each.
1. World Trade Organization (WTO): - This trade body has been designed to monitor and enforce various trade agreements
2. World Bank: - This organization provides low-interest loans to developing nations so that they can improve telecommunication, transport, education and health in their countries.
3. International Monetary Fund (IMF): - This organization helps in assisting smooth flow of funds between various nations.
What is a trading bloc? Examples?
A group of nations inside a geographical location who have agreed to remove any trade barrier with each other. E.g., NAFTA, EU, APEC
What is the “most favored nation trading” status?
The most favoured status refers to a country assessing the lowest possible tariffs that is assessed on another country. World trade organization (WTO) members extend “most favoured nation” to each other.
Prepare an essay on the importance in understanding the principal areas of cultural differences.
Culture can be defined as a group of people with different characteristics like language, lifestyle, religion, food, upbringing etc. Different societies have different cultures which might have few similarities. Culture is also defined as identity of group of people living in various places and having their own culture or way of life. People follow various cultures when they have different occasions. Like weddings, death rituals etc.
Many people or students or workers when come to work in cross cultural environment, they seem to be bit reserved and do not open up easily. This might be due to the reason that they think that their views and ideas will not be valued and that is why they do not open up easily. Once they are convinced that their ideas will also carry value, they will easily open and participate in the activities.
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