Review Fall 2011 IMPORTANT CONCEPTS Chapter 5 1. Does cultural adaptation require that businesspeople give up their customs when working overseas? Depends 2. What are Cultural Imperatives? Cultural Electives? Cultural Exclusives? Imperatives: social relations, etc. Electives: optional customs Exclusives: customs only for locals, you do not participate. 3. What is Edward T. Hall’s theory of cultural context and linguistic communication? There are non verbal accents of communication that need to be paid attention to. 4. How does communication differ in high context from low context cultures?
Low context information is explicit, with words carrying the entirety of the message and written formal specifications. Awards are competency based. IN a high context information is implicit, including non verbal cues. Awards are trust/recommendation based. 5. What are Edward T. Hall’s silent languages? What is m-time? What is p-time? The silent languages are of time, space, things, friendship and agreements. M-time (Monochronic) – divide time into small units and are concerned with promptness. Concentrate on singular tasks at a time. Low context P-Time (Polychronic) – simultaneous occurrence of many things.
High context 6. What is the difference between bribery and extortion? Bribery is when the payment is offered voluntarily to an official to gain unlawful advantage, while extortion is when an official extracts payment from a person under duress for something which they are lawfully entitled to. 7. What is the difference between lubrication and subornation? Lubrication deals with small sums of money, given to low-ranking officials (which is not prohibited in some countries) while subornation deals with large sums of money given to officials (higher rank) in order to commit illegal acts. . What does the U. S. Foreign Corrupt Practices Act (FCPA) forbid and what does it allow? Forbids US companies from engaging in bribery of any kind in foreign countries, however it does allow lubrication. 9. What is the position of the FCPA on the use of agent’s fees to facilitate bribery? The use of agent’s fees as intermediaries to pay bribes is prohibited. Chapter 6 – The Political Environment 1. What is sovereignty? Under what conditions do nations give up part of their sovereignty? The power that a nation has to govern its people and territory without interference from the outside. . What is extraterritoriality? Name 2 U. S. laws that are extraterritorial. When a nation makes its laws to apply outside of a territory. Ex. Sherman Antitrust Act, IRS Tax Laws, Helms-Burton Act, Foreign Corrupt Practices Act. 3. What is the main political condition Multi-National Corporations (MNC’s) want when working overseas? Predictability and stability of government policies. 4. What is Confiscation? Expropriation? Domestication? Confiscation: Taking away; no payment. Expropriation: Take over the property but some reimbursement.
Domestication: transfer to national control. 5. When do countries use exchange controls and how are they applied? When a nation faces shortages of foreign exchange and/or substantial amount of capital is leaving the country. Multiple rates levied over all movements of capital to regulate trade in specific commodities and block repatriation of profits. 6. What is a local-content law? A certain percentage of the imported product must contain locally made parts. 7. What is an import license and when do countries require them? Permission to import a product.
Required when trying to force foreign industry to purchase more supplies within the host country and thereby create markets for local industry. 8. When do countries use price controls and how are they applied? Done to control inflation. Applied as a limitation on the maximum price you can charge on a product. 9. What types of products are more at risk politically in a foreign country? Those which are “politically sensitive” or perceived to effect environment, exchange rates, security, welfare and health are subject to more debate. 10. What are some of the strategies that you can follow to lessen political risk overseas? -Joint Ventures–Investment Base Expansion –Control of Marketing and Distribution–Licensing –Planned Domestication–*Political Payoffs 11. What agencies provide political-risk insurance to U. S. companies working overseas? 1- Foreign Credit Insurance Association: insures against nonpayment risk caused by financial, economic or political uncertainties. 2-Agency for International Development: limited protection on certain projects and products. 3-Overseas Private Investment Corporation: provides risk insurance for companies investing in less developed countries.
Chapter 7 – The International Legal Environment 1. What are the differences between the patent laws of the US and Japan? In the US patent protection is to protect the inventor, filing is secret, quick and provides long period of protection; Japan patents benefit society, public filing, long process with short time of protection. 2. What kind of product pricing strategy was Wal-Mart not allowed to use in Germany? They could not use their Loss-leader pricing because pricing certain products below cost was determined as dumping. 3. What is the law on many European countries on the use of comparative advertising?
When a business says a product is better than their competitors. It is not allowed. 4. What is the basis for Common Law? In what countries is it presently used? Basis is tradition, past practices, legal precedents set by courts. Through interpretation of statutes, legal legislation and past rulings. US, England, Canada, English influenced countries. 5. How is ownership of intellectual property determined in Common Law? Ownership is determined by first to use. 6. What is the basis for Code Law? In what countries is it presently used? Comprehensive system of written rules or codes.
Divide into 3 separate codes for various situations: Comercial/Code/Criminal. Found in majority of countries (70) 7. How is ownership of intellectual property determined in Code Law? Ownership is determined by first to register. 8. What is the basis of Islamic Law? In what countries is it presently used? Based on interpretation of the Quran and the teaching of Muhammad. Religious duties, obligations, secular aspect, social behavior, economic behavior. Found in 27 Islamic countries. 9. What is the basis for Socialist Law? Law is subordinate to economic conditions. 10. What is International Law?
There is no “international” law; The rules and principles that states and nations consider binding unto themselves. 11. How is International Law created? Collection of treaties, conventions, and agreements between nations that have, more or less, the force of law. 12. What is the ISO and why do its standards have the effect of International Law? International Organization for Standardization. ISO9000 quality management. ISO14000 concerned with environment management. 13. What kind of standard is the ISO developing for the WTO and why is it needed? 14. What is the difference between a Patent, a Trademark, and a Copyright?
Patent: a government grant of certain rights given to an inventor for a limited time in exchange for the disclosure of the invention. Trademark: that portion of a brand that is given legal protection-cannot be copied. Copyright: protects the writings of an author against copying. 15. What is the international Patent Protection System that covers the most countries? Protects inventions and prevents sale by others; simplify application procedures. 16. What Patent protection does the Paris Union give? 1 year protection to register in other member countries (US + 100 countries) 17.
What Trademark protection does the Paris Union give? 6 months protection to register in other member countries. 18. What does the Berne Convention of 1886 protect? Protects literary and artistic works of authors. What is the minimum copyright protection it provides? Life +50 years however members may choose to provide longer. What is the length of copyright protection in the EU? In the USA? In the EU life +70 years. In the US Life+70 years for individual works. Life +75-95 years for corporate authorship. 19. What is the WTO agreement on TRIPs? What 2 intellectual property protection systems does it combine?
Trade Regulated Intellectual Property Rights. Covers copyrights, patents, trademarks, trade secrets, industrial designs, geographical indicia, and integrated circuit layouts. Includes intellectual property pertection of Berne Convention & Paris Union. 20. What is a “geographical indicia” and why is it important to marketers? The indication of a geographical origin of a product i. e. Champagne. Important because it is a part of the brand. 21. What does the Foreign Corrupt Practices Act prohibit? Prohibits bribery of any foreign official or person who will influence an official or party. 22.
How does the Omnibus Trade Reconciliation Act modify the Foreign Corrupt Practices Act? What 2 affirmative defenses does it allow? Modifies to allow payment to expedite “routine governmental action” 2 defenses are the payment was lawful under the law of the foreign officials country and the payment was a reasonable expenditure directly related to the promotion of products or services. 23. How does the Sherman Act affect mergers or acquisitions in foreign countries? Prohibits monopolies or attempts to monopolize the activities of US companies overseas through mergers or acquisitions that would lessen competition back in the USA. 4. What law is an exception to the Sherman Act by allowing competing firms to collaborate in export activities? Webb Pomerane law. 25. What is jurisdiction in a legal dispute? What court will hear the case and have power over the parties in its decision. 26. How much power does a mediator have over the parties in a dispute being resolved by conciliation? Has the power of suggestion and nothing more. 27. How much power does an arbitrator have over the parties in a dispute being resolved by arbitration? parties agree to abide by the ruling of an arbitrator. Chapter 8 – Marketing Research 1.
What is the difference between a MIS and formal market research? MIS provides a continuous flow of information about company operations and environment while MR is project specific, systematic gathering of data in the search scanning mode. 2. What is the most difficult and yet the most important step in market research? 3. What is the difference between an independent and a dependent variable in a market research hypothesis? Independent variables affect the dependent while the dependent variable is what we want to measure. 4. What is a focus group? What is its main function in market research?
A group of eight to twelve participants who are led by a moderator in an in-depth discussion on one particular or concept. Purpose is to identify potential areas of future inquiry. 5. What kind of a sample is a focus group? What statistical conclusions can you infer from the opinions of a focus group? A focus group is a non statistical sample. Cannot make statistical conclusions. 6. After you determine the costs of doing the research, what should be your next decision? Will you collect primary or secondary data sources. 7. How does the methodology differ in international market research from domestic market research?
It is the same as domestic however more complex due to greater scope. 8. How much secondary data is available overseas as compared to the U. S.? There is much less data available and for many countries there is only periodic info on essential data. 9. How reliable is overseas secondary data as compared to the U. S.? It is not always reliable and should be skeptic on. Example: official gov. est. often overstate/optimistic, tax avoidance results in false reports. 10. What are some of the issues you should take into consideration when comparing secondary data from one country with data from another country?
Understand there is greater variation from one country to another in dates of studies, bases and methodology. 11. How do you use “back translation” when developing a questionnaire for foreign use? You translate the questionnaire from the foreign language back into the primary language to see if it matches your original questionnaire. 12. How do social organization and values in foreign countries affect collection of primary data? Reluctance to interviewing, gender roles, issues collecting info, need use of locals. 13. What is: Measurement error? Non-response error?
Frame error? Random error? 1-People lie. 2- Refusal to cooperate or be reached. 3- Sample drawn differs from the target population. 4- Selected sample imperfect representation of overall pop. Chapter 9 – Economic Development and the Americas 1. What are the 5 stages of economic development according to Walt Rostow? The traditional society(The Pre-Conditions for Take-off(The Take-off(The Drive to Maturity(The Age of High Mass Consumption. 2. What are the characteristics of a More-Developed Country (MDC)? High per capita incomes. Of a Less-Developed Country (LDC)?
Industrially developing countries just entering world trade with relatively low per capita incomes. Of a Least-Developed Country (LLDC)? Industrially underdeveloped, rural populated, extremely low per capita incomes. 3. What are some of the factors that have contributed to the growth of Newly Industrialized Countries (NICs)? Political stability, economic reforms, factors of production, privatization. 4. What is the role of State Owned Enterprises in the development of NICs? The place a drain on national budgets and should be privatized during economic growth. 5. What is the role of infrastructure in economic development?
The quality of an infrastructure directly affects a countries economic growth potential and the ability of an enterprise to engage effectively in business. 6. How does marketing change as countries develop? The more developed an economy, the greater the variety of marketing functions demanded, and the more sophisticated and specialized the institutions become to perform marketing functions. 7. What is “economic dualism? ” Having two economies in one, where there is a very wealthy class and remaining lower class. 8. What are some of the important traits of Big Emerging Markets (BEMs)? -Physically large in area and population. Have strong rates of growth -Political importance within their regions, “regional economic drivers” 9. What are some of the reasons why the world’s emerging economies did well in 2005? They were not involved in many of the high risk investments many other industrialized nations financial systems were trading in. 10. What is the present economic situation of emerging markets in the Americas? –High demand for commodities, low bond interest rates, and reduced spending and inflation. –Social unrest, financial crises, not enough infrastructure development, high unemployment, Chinese competition.