PSYC 290 Study Guide - Comprehensive Final Exam Guide - International Law, International, Federal Government Of The United States

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20 Nov 2018
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Unit 1 Macro-Level Influences on International Business
1. Define international business and discuss its scope. (textbook, p. 4, Lesson Note 1)
International Business: any commercial transaction that crosses the borders of two or more
nations. Evidence of international business is everywhere international franchises, imports from
all over the world clothes, electronics, food, and even services (call centers, support services
located in a foreign country).
2. Define the term globalization. (textbook, p. 6)
Globalization: the trend toward greater economic, cultural, political, and technological
interdependence among national institutions and economies. The effect is an increasingly freer flow
of goods, services, money, people, and ideas across national borders.
3. Describe the process of globalization and how it affects markets and production. (textbook pp. 6
9)
Globalization of markets refers to convergence in buyer preferences in markets around the world.
The effects of globalization include:
Reducing market costs
Creating new market opportunities
Level uneven income streams
Adaptable to local needs
Globalization of production refers to the dispersal of production activities to locations that help a
company achieve its cost-minimization or quality-maximization objectives for a good or service. This
includes the sourcing of key production inputs (such as raw materials or products for assembly) as
well as the international outsourcing of services. The effects of globalization of production include:
Access to lower-cost workers
Access to technical expertise
Access to production inputs
4. Discuss economic and non-eooi otivatios for opaies’ iteratioal usiess ativities.
(Lesson Note 2)
Economic reasons include:
to increase sales,
acquire resources, and
minimize risk), many firms
Non-economic factors include:
Internationalizing because of the ambitions of their founders (Starbucks and Amazon.com
have goe gloal eause of their fouders’ strategi itet.)
Successful business model and philosophies of the founders (Swedish furniture retailer
IKEA)
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Copetitive pressures ad a fear of eig left ehid"
5. Identify the key drivers of globalization. (textbook, pp. 911)
Forces driving globalization:
Falling barriers to trade and investment
World Trade Organization (goals are to help the free flow of trade, help negotiate the
further opening of markets, and settle trade disputes among its members.
Regional trade agreements
Trade and national output has increased
6. Discuss principal reasons for the recent growth of international business. (Lesson Note 3)
International business has grown as a result of traditional factors like technological advances, but
other contemporary factors, such as the collapse and rise of nation-states in Eastern Europe and the
evolution of introvert political and economic ideologies, have also driven this growth. The demise of
the former Soviet Union, for instance, has given rise to sovereign nations that conduct international
business for themselves. Inward-looking political and economic ideologies have also increased their
focus on international business, as is demonstrated in the case of many emerging markets in Asia
(e.g., China, India, and Vietnam) and elsewhere (e.g., Russia). Although it is difficult to prove, some
people believe international business has also grown because of the internationalization of
corporate executives, many of whom travel to exotic destinations for their vacations.
7. Summarize the evidence for each main argument in the globalization debate. (textbook, pp. 15
23)
Against globalization:
Eliminates jobs in developed nations
Lowers wages in developed nations
Exploits workers in developing nations
Individual pain is not worth the collective gain
For globalization:
Increases wealth and efficiency in all nations
Generates labor market flexibility in developed nations
Advances economies of developing nations
Individual pain is worth the collective gain
8. Idetify proesses that failitate opaies’ iteratioalizatio. Lesso Note 4
1) Passive to active internationalization. A firm may seek out international
opportunities on a proactive basis or can internationalize when conditions support
passive growth. Examples of the latter would be following existing customers
overseas or responding favourably to an interest expressed by a distributor in
another country.
2) External to internal handling of operations. A firm’s opportunities for
internationalization are limited to the extent that it lets other firms handle its own
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