Business Essential

Strategic alliances, and 5. Foreign direct investment (FDA). 4. Describe some of the ways in which social, cultural, economic, legal, and political differences among nations affect international business. Answer: Some social and cultural differences, like language, are obvious, but a wide range of subtle value difference can also affect operations. Economic differences can also affect operations. Economic differences can be fairly pronounced.

A firm may enter the global marketplace as an importer, an exporter, an international firm, or as a multinational firm. Numerous examples of each exist. 3. How does a country economic system affect the decisions of foreign firms interested in doing business there? Answer: In mixed economies, for example, outside firms must be aware of the extent of government involvement, if any, in a given industry. In planned economies, the outside firm must be aware of unfamiliar relationships of government to business, such as a government’s favor of state-owned companies over foreign investors. What aspects of the culture in your state or region would be of particular interest to a firm considering doing business there? Answer: Many foreign firms will likely consider the diversity and subcultures among the citizens of a particular state or region, and the willingness of those citizens to work whether the firm plans to set up a production facility in the area or whether the firm is looking to increase its customer base. List all the major items in your bedroom, including furnishings. Now try to identify the country in which each item was made.

Offer possible reasons why a given nation might have a comparative advantage in producing a given good. Answer: 6. Suppose that you are the manager of a small firm seeking to enter the international arena. What basic information would you need about a particular market that you are thinking of entering? Answer: The manager of a small firm will likely be interested in the economic system of the potential market and, thus, the ease with which the firm could enter the new market. Important, also, will be the nature of the customer base and whether those new customers possess the same buying behaviors as the firm’s current customers.

Of course, attention will need to be given to product demand in the new market. Some products in mature markets in the United States are still in their early stages in other countries; thus, the small firm may need to modify the product and/or the promotional strategy. Various information may be important, depending on the small firm’s intended level of involvement in the global arena. 7. Do you support protectionist tariffs for the United States? If so, in what instances and for what reasons? If not, why not?

Answer: I support the protectionist tariff in the United States, because I think allegedly to ensure fair competition between imported goods and local goods. 8. Do you think that a firm operating internationally is better advised to adopt a single standard of ethical conduct or to adapt to local conditions? Under what kinds of conditions might each approach be preferable? Answer: Conduct considered ethical in the home country may damage the firm’s reputation, backfire abroad, or lead to situations in which the legality of its actions could be called into question.