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D080 UNIT 2 - Study Guide Questions (GLOBAL).
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D080 UNIT 2 - Study Guide Questions(GLOBAL)
What is globalization? - ANS-the growing global economic, cultural, and political
integration and interaction
what business opportunities are presented by globalization? - ANS-economic growth,
spread of technology and innovation, lower cost of products, access to new markets
what are the economic effects of globalization? - ANS-reduces cost of manufacturing,
consumers have a wider variety of goods
what are the political effects of globalization? - ANS-reduced importance of nation-state
governments (global institutions often replace or extend national functions to facilitate
international agreement)
what are the cultural effects of globalization? - ANS-increased cross-cultural contacts,
decrease in the uniqueness of once-isolated communities, global domination of
American culture, erasure of other cultures
what are some favorable arguments for globalization? - ANS-spread of technology and
innovation, lowered rates of poverty in developing nations
what are some arguments AGAINST globalization? - ANS-unemployment due to jobs
moving overseas for lower production costs, significant increases in inequality between
business owners and common people in developed nations
what are the different forms of international business? - ANS-1. organizations (any
company, large or small)
2. governmental organizations (embassies, consulates, NAFTA, etc.)
3. NGO's (non-governmental organizations such as non-profits and volunteer
organizations - UNICEF, Greenpeace, World Wildlife Fund)
what is the first stage of entering a global market? - ANS-market entry - companies
enter new countries using business models similar to the ones deployed in their home
markets.
,what is the second stage of entering a global market? - ANS-(product specialization),
companies transfer the full production process of a particular product to a single,
low-cost location and export the goods to various consumer markets.
what is the third stage of entering a global market? - ANS-(value chain dis-aggregation)
- companies separate the production process and focus on completing each activity in
the most advantageous location. (a single product might be manufactured in several
different places and assembled into final products elsewhere.)
what is the fourth stage of entering a global market? - ANS-(value chain re-engineering)
- increase cost savings by redesigning processes to suit local market conditions by
substituting lower cost labor for capital.
what is the fifth (and final) stage of entering a global market? - ANS-(creation of new
markets) - market expansion (allows companies to substantially lower their sticker
prices in both old and new markets and to expand demand.)
what are the four drivers of globalization? - ANS-market, cost, competition, government
how does market drive globalization? - ANS-As customers in different parts of the world
increasingly demand similar products and services, opportunities for scale arise through
the marketing of somewhat standardized offerings. (example: technology products are
relatively the same no matter what location - but soft drinks may vary depending on
region or culture.)
how does cost drive globalization? - ANS-efficiency and costs vary from country to
country and global firms can take advantage of this fact; opportunity to build global
scale economies and the high product development costs
how does competition drive globalization? - ANS-High levels of trade, competitive
diversity, and interdependence increase the potential for industry globalization
how does government drive globalization? - ANS-the presence or absence of favorable
trade policies, technical standards, policies and regulations, and government-operated
or subsidized competitors or customers
what is the difference between the world is flat view and the CAGE analysis? - ANS-The
world is flat view is a metaphor for the playing field being flattened with an increasingly
globalized community, with competitors having equal opportunities. The CAGE analysis
sees Culture, Administration, Geography, and Economics as barriers to global activity.
, how does (G)geography act as a barrier, according to the CA(G)E analysis? - ANS-as
distance goes up, trade goes down
what are some (C)cultural barriers, according to the (C)AGE analysis? - ANS-language,
norms, national or ethnic identity, levels of trust, tolerance, respect for entrepreneurship
and social networks, or other country-specific qualities
how does (A)administration create trade barriers, according to the C(A)GE analysis? -
ANS-the greater the administrative differences (laws, regulations, institutions, and
policies) between nations, the more difficult the trading relationship is to acquire
what are some of the (E) economic barriers, according to the CAG(E) analysis? -
ANS-differences between the countries relating to income, the purchasing power of the
target market, distribution of wealth, and disposable income levels
what are the benefits of global expansion from MNC's perspective? - ANS-multinational
companies claim that global expansion spreads liberty and capitalism, makes
companies more competitive, and lowers prices for consumers
what are some of the costs (disadvantages) of global expansion? - ANS-weakening
cultural values, power to influence governments, deregulation of climate change and
pollution standards, increasing unemployment and inequality in developed nations due
to outsourcing for lower production costs
what is the type of government where a monarch has unmitigated power? -
ANS-absolute monarchy (example: Oman)
what type of government has a sovereign that either exercises authority in accordance
with a written or unwritten constitution, or acts as a figurehead without making open
political decisions? - ANS-constitutional monarchy (example: United Kingdom)
what type of government has a small, elite group that ascends to positions of power
because of military might, economic power, or similar circumstances? - ANS-oligarchy
(example: There is a general agreement that Russia is an oligarchy because after the
fall of communism, groups of business owners captured control of the nation's natural
resources and have used the opportunity to expand their wealth and political influence.)
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