GSCM 211 MIDTERM QUESTIONS WITH VERIFIED
ANSWERS
Globalization - Answers - - an extension of the make or buy decisionbeyond national
borders
- the interconnectedness and interdependence of peoples and countries
what are some benefits of globalization? - Answers - • Exchange of information, ideas,
goods, etc.faster across the globe
• Increases interactions
Pros of Globalization - Answers - •Increased awareness of other cultures and countries
•Globalization encourages innovation
•Income of low cost labor in developing countries has increased
•Developing countries have increased access to first-world products
Cons of Globalization - Answers - •Unequal opportunities across the world
•The world's wealth is increasingly concentrated (rich getting richer)
•Globalization strategy is poorly managed (damage of the environment)
comparative advantage - Answers - - The ability of a country to produce a good at a
lower OPPORTUNITY cost than another country can.
- a foundation of the majority of world trade since 1944 country should specialize in
producing and exporting only those goods and services which it can produce more
efficiently (at lower opportunity cost) than other goods and services (which it should
import).
- all countries benefit by each country using its comparative advantage
absolute advantage - Answers - a party can produce a good or service more efficiently
than its competitors
mercantilism - Answers - countries centrally controlling trade so they export more than
they import, and thus prosper more than other countries
Thomas Friedman - Answers - said "the world has moved from periods of being round
(where trade barriers are high) to periods of being flat (where barriers to trade are
lowered).
- "the world is flat"
First Industrial Revolution - Answers - - nations focused on their strengths and traded
for products they were not as skilled at producing. Trade barriers lowered
"The wealth of nations" - Answers - Adam Smith
, Bretton Woods System - Answers - - the foundation of the majority of world trade
- financial and commodity interdependence
- US dollar as the main trading currency
- Tariffs reduced or eliminated
- the west prospered
Trading Blocs - Answers - - European Union
- African Continental Free Trade Agreement
- Mercosur
- NAFTA
- NECP
- All of these have the intention of making trade easier
Protectionism - Answers - - the practice of shielding one or more industries within a
country's economy from foreign competition through the use of tariffs or quotas
- taxes and tariffs to make imports look bad on the store shelf
- encourage growth within a country but at the same time sometimes protectionism fails
(ex: Harley Davidson)
creative destruction - Answers - where industries change dramatically or are replaced
by new industries, all in response to changing consumer preferences & innovation
Benefits of global trade - Answers - •Raise the standard of living for both developed and
developing nations
•Jobs and investment are often exchanged and flow both ways
•Experiencing automation
Considerations with International Entrance: - Answers - - Physical Operations/ Facilities
(do we open a new physical location or do we build from the ground up? Do we choose
to lease or rent a property? or do we choose to outsource operations completely?)
- service operations ( do we hire and manage employees who will represent our
company in an international location? Or do we contract with a third-party provider?)
- ownership (is the company a fully owned subsidiary? or a joint venture?) associated
with operating internationally
PEST Analysis - Answers - is the scanning of outside influences on an organization
- Political
- Economic
- Socio-Cultural
- Technological
Political (PEST Analysis) - Answers - - laws, property rights, patents, political stability,
etc.
ANSWERS
Globalization - Answers - - an extension of the make or buy decisionbeyond national
borders
- the interconnectedness and interdependence of peoples and countries
what are some benefits of globalization? - Answers - • Exchange of information, ideas,
goods, etc.faster across the globe
• Increases interactions
Pros of Globalization - Answers - •Increased awareness of other cultures and countries
•Globalization encourages innovation
•Income of low cost labor in developing countries has increased
•Developing countries have increased access to first-world products
Cons of Globalization - Answers - •Unequal opportunities across the world
•The world's wealth is increasingly concentrated (rich getting richer)
•Globalization strategy is poorly managed (damage of the environment)
comparative advantage - Answers - - The ability of a country to produce a good at a
lower OPPORTUNITY cost than another country can.
- a foundation of the majority of world trade since 1944 country should specialize in
producing and exporting only those goods and services which it can produce more
efficiently (at lower opportunity cost) than other goods and services (which it should
import).
- all countries benefit by each country using its comparative advantage
absolute advantage - Answers - a party can produce a good or service more efficiently
than its competitors
mercantilism - Answers - countries centrally controlling trade so they export more than
they import, and thus prosper more than other countries
Thomas Friedman - Answers - said "the world has moved from periods of being round
(where trade barriers are high) to periods of being flat (where barriers to trade are
lowered).
- "the world is flat"
First Industrial Revolution - Answers - - nations focused on their strengths and traded
for products they were not as skilled at producing. Trade barriers lowered
"The wealth of nations" - Answers - Adam Smith
, Bretton Woods System - Answers - - the foundation of the majority of world trade
- financial and commodity interdependence
- US dollar as the main trading currency
- Tariffs reduced or eliminated
- the west prospered
Trading Blocs - Answers - - European Union
- African Continental Free Trade Agreement
- Mercosur
- NAFTA
- NECP
- All of these have the intention of making trade easier
Protectionism - Answers - - the practice of shielding one or more industries within a
country's economy from foreign competition through the use of tariffs or quotas
- taxes and tariffs to make imports look bad on the store shelf
- encourage growth within a country but at the same time sometimes protectionism fails
(ex: Harley Davidson)
creative destruction - Answers - where industries change dramatically or are replaced
by new industries, all in response to changing consumer preferences & innovation
Benefits of global trade - Answers - •Raise the standard of living for both developed and
developing nations
•Jobs and investment are often exchanged and flow both ways
•Experiencing automation
Considerations with International Entrance: - Answers - - Physical Operations/ Facilities
(do we open a new physical location or do we build from the ground up? Do we choose
to lease or rent a property? or do we choose to outsource operations completely?)
- service operations ( do we hire and manage employees who will represent our
company in an international location? Or do we contract with a third-party provider?)
- ownership (is the company a fully owned subsidiary? or a joint venture?) associated
with operating internationally
PEST Analysis - Answers - is the scanning of outside influences on an organization
- Political
- Economic
- Socio-Cultural
- Technological
Political (PEST Analysis) - Answers - - laws, property rights, patents, political stability,
etc.
