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Question 1.

How has globalization affected different

world regions? What are some of the benefits and costs of globalization for different sectors of society?

Globalization: the process of integration among countries around the world with a vision of a single market entity: Social Economic Political Technological Cultural

Internationalization: the process of a business crossing national and cultural borders.

Globalization: Pros and Cons

Benefits of Globalization: wealth, jobs, technology, lower prices.

Criticisms of Globalization: off-shoring of business service jobs to lower-wage countries; growing trade deficits; slow wage growth; environmental and social impacts.pro con Global and Regional Integration:

Global Agreements:

World Trade Organization (WTO) (General Agreement on Tariffs and Trade (GATT))

Regional Agreements: North American Free Trade Agreement (NAFTA)

U.S.-Central American Free Trade Agreement (CAFTA) European Union (EU) Association of Southeast Asian Nations (ASEAN) Free Trade Agreement of the Americas (FTAA)

1.Define the four basic predispositions MNCs have toward their international operations. Four distinct predispositions toward doing things in a particular way: 1.Ethnocentric 2.Polycentric 3.Regio-centric

Geocentric strategic predisposition

Ethnocentric predisposition A nationalistic philosophy of management whereby the values and interests of the parent company guide strategic decisions.

Polycentric predisposition A philosophy of management whereby strategic decisions are tailored to suit the cultures of the countries where the MNC operates. Regio-centric predisposition A philosophy of management whereby the firm tries to blend its own interests with those of its subsidiaries on a regional basis. Geocentric predisposition A philosophy of management whereby the company tries to integrate a global systems approach to decision making.
In what way are parochialism and simplification barriers to effective cross-cultural management? In each case, give an example. Cross-Cultural Differences and Similarities Parochialism and Simplification

Parochialism: view world through own eyes and perspectives

Simplification: exhibit same orientation toward different cultural groups

Similarities across cultures: Not possible to do business same way in every global location

Procedures and strategies that work well at home cant be adopted overseas without modifications Some similarities have been found Russia and U.S. (for example) Traditional management Communication Human resources Networking activities OB Mod Differences across cultures Far more differences than similarities found in cross-cultural research Wages, compensation, pay equity, maternity leave Importance of criteria used in evaluation of employees
Question 2. In what way do formalization, specialization, and centralization have an impact on MNC organization structures?

Organizational Characteristicsof MNCs

Formalization: use of defined structures and systems in decision making, communicating, and controlling Specialization: Assign individuals to specific, well-defined tasks Centralization: Important decisions are made at the top

Question 3.

Which cultures are more likely to focus on

external controls? Which cultures would consider direct controls more important than indirect? Internal and external perspectives of control one is often given more attention than the other. External control focus needed to find out what customers want and be prepared to respond appropriately Management wants to ensure market for goods and services exist

Types of Control: Direct Controls Use of face-to-face personal meetings for purpose of monitoring operations Examples: top executives visit overseas affiliates to learn of problems and challenges; design structure that makes unit highly

responsive to home-office requests and communications Types of Control: Indirect Use of reports and other written forms of communication to control operations at subsidiaries Financial statements Financial statement prepared to meet national accounting standards prescribed by host country Statement prepared to comply with accounting principles and standards required by home country Statement prepared to meet financial consolidation requirements of home country

Question Most MNCs need not enter foreign markets to face challenges of dealing with multiculturalism. Do you agree or disagree

1.Why are MNCs getting involved in corporate social responsibility? Are they displaying a sense of social responsibility, or is this merely a matter of good business? Defend your answer. Corporate Response to Social Obligations Agreements and codes of conduct committing MNCs to maintain certain standards Codes help offset real or perceived concern that companies move jobs to avoid higher labor or environmental standards in their home markets Contribute to raising of standard in developing world by exporting higher standard to local firms in these countries