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Management Core
MGCR 382
Nicholas Matziorinis

1 Identify the five cultural dimensions identified by Geert Hofstede and describe them indicating their importance in international business SPUGTSocial Orientation Persons beliefs about the individual and the groups to which it belongs There is individualism and collectivism International firms must be aware of the social orientation of a countryPower Orientation Persons beliefs about the appropriateness of power and authority There is power respect and power tolerance When negotiating a firm needs to know where the power is orientated in order not to insult anyone Uncertainty Orientation Feeling people have towards uncertain and ambiguous situations There is uncertainty acceptance and uncertainty avoidance An international firm needs to know the uncertainty orientation of a country since some might not like change and might have strict hierarchies and rules Goal Orientation Manner in which people are motivated to work towards different goals There is aggressive goal behavior and passive goal behavior International firms need to know a countrys goal orientation since some are more profit oriented and others put more efforts into societal concernsTime Orientation Extent to which members of a culture adopt longterm versus shortterm outlook on work life and other aspects 2 Compare the advantages and disadvantages of various modes of enteringforeign markets ELFFCMTExportingALow Financial Exposure gradual market entry local market knowledgeBTariffsLogistical Complexities Conflicts with distributorLicensingALow Financial Risks Avoid Tariffs Knowledge of local markets BLimited market opportunities Dependence on license Conflicts with license Future competitorFranchising ALow Financial Risks Low cost wat to assess market potential avoid tariffs more control than licensingBLimited market opportunities Have to split revenues Dependence on franchisee conflicts with franchisee creating future competitorContract ManufacturingALow financial Risk Minimizes resources devoted to manufacturingBReduced control reduced learning potential monitor work conditionsManagement ContractAFocus on expertise of firm minimum financial exposureBPotential returns limited by contracts may transfer techniques to contracteeTurnkey ProjectsAArea of expertise of the firm avoid longterm operation risksBFinancial risks construction risks Foreign Direct Investment AHigh profit maintain control avoid tariffs market knowledgeBHigh investment potential risks restrictions on foreign market managerial complexity
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