What are a few of the methods used to create a multinational operation?
International trade (simple imports/exports)
Direct foreign investment (purchase subsidiary)
Global sources (the synchronization of all levels of production)
What are some differences in culture that entities looking to invest internationally should consider?
Individualism vs collectivism
Short- vs Long-term orientation
Acceptance of leadership hierarchy
Technology availability and infrastructure (such as transportation, power & water resources)
Differences in accounting practices
What are the 3 primary global economic systems?
Centrally planned (China)
Market (US, Europe)
Conglomerate (Japan, Korea)
There are several risks involved with an international venture. Which of the following is more encompassing? (1) Economic (2) Transfer, (3) Exchange rate, (4) Sovereign, (5) Country
Country risk as it incorporates all of the other risk types
What is a sourcing requirement regarding a trade agreement between nations?
Either content or value added limits on the percentage of imported labor or materials used in imported products.
How does comparative advantage work?
One nation specializes in a series of products or resources, while another nation specializes in a different series. Nation A then trades its specialities with Nation B such that both benefit from the relationship.
Define polarity with regards to international relations
The various ways in which power is distributed within the international system.
It is believed the current system is unipolar, with the US dominating the world due to its superior defense.
Which 4 nations are most frequently associated with the shift in the economic balance of power?