Summary M&O 2
Chapter 4 – Internationalization
4.1 Introduction
2 concepts that are often mentioned with respect to internationalization are import and export.
Reasons for companies/countries to engage in import:
- Products are cheaper to produce abroad
- The product quality of foreign products is superior to that of domestic products
- The imported products are not manufactured domestically
Reasons for companies/countries to engage in export:
- They are looking to expand the market field, allowing for improved economies of scale
and competitive advantage
- The product quality of domestic products is superior to that of foreign products
- The domestic market is subject to overcapacity
Internationalization only concerned with products or services.
Globalization focusses less on those aspects but much more on a process of global
economic, political, and cultural integration between countries and continents.
Globalization is related to the following themes: (p.198)
o Trade
o Transport
o International trade policy
o International finance and capital flows
o International organization of production of goods and services
o Information and communications technology
o Politics
o Tourism
4.2 Forms of economic integration
In general, 5 forms of economic integration can be identified.
1. The free trade zone (European Free Trade Association, Mercosur, NAFTA, ASEAN). Only the
mutual trade restrictions (import and export rights) are repealed by participating countries.
Each country determines its own import tariffs for products imported from outside the free
trade zone.
Advantages of the free trade zone:
- Efficient implementation of production factors
- Encouragement of competition
- Prevention of trade war
- Strengthening of trade and investment
- Encouragement of growth of prosperity
2. The customs union (Swiss Toll Zone, Southern African Customs Union). A customs union also
repeals mutual import and export rates. As a result, there is free trade between participating
,countries, who also apply a common outside tariff. The same import/export rate is applied to
imports from non-participating countries.
3. The common market (also exists within the EU). Also referred to as the internal market, the
common market is based on customs union that has no economic interior border but applies
one common exterior border. In addition, there are no restrictions with respect to production
factors. Within a common market, there is free movement of goods, people, capital, and
services.
To qualify as a free open market, countries need to remove a number (6) of restrictions,
including (p. 201):
- Physical limitations
- Technical limitations
- Fiscal limitations
4. The economic and monetary union. An economic union with not just the characteristics of a
common market, but a harmonization of monetary policy and its financial government politics.
This requires the implementation of central institutions, such as a single Central Bank.
5. The full political and economic union. A complete merger of countries. One example is the
formation of the United States of America.
The European Union:
1. Free movement of goods
2. Free movement of people
3. Free movement of services
4. Free movement of capital
the development of a common internal market has led to the formation of an economic
block at the European level, thereby possibly improving the competitive position compared to
other power blocks, such as Japan, the USA, and South-East Asia.
, Chapter 8 – Individuals and groups
Organisation any group of people cooperating to achieve a common purpose.
8.2 People in organisations
Following (individual) subjects are discussed:
- Motivation
- Emotional intelligence
- Overloading, stress, stress prevention and burnout
- Intuition and creativity
- Core qualities
Following (group) subjects are discussed:
- Team management and characteristics of successful teams
- Organisational conflict
8.3 Motivation
Organisations prefer to attract motivated employees.
But what is motivation? motivation is what gets people moving (the inner readiness of a
person to perform certain actions).
Job intrinsic motivation derives from the work itself. The job is seen as a challenge. Long-term
stimulation. (The need for acknowledgement and self-fulfillment.) having responsibility,
expanding one’s skills, and living up to performance expectations constitute important
motivating factors.
Job extrinsic motivation does not derive from the work itself. Derives from work circumstances,
rewards, bonuses, and status. People whose motivation is job extrinsic have a pragmatic
attitude to their work. Short-term stimulation.
Alderfer’s (ERG) theory (1969). Identified a more limited number of needs.
- Existential needs. These concern material security, corresponding to the physiological
needs and security defined by Maslow.
- Relational needs. These concern good relationships with other people. Social
acceptance, appreciation and acknowledgement are important.
- Growth needs. These needs are directed towards personal growth and self-fulfillment.
Differences with Maslow: Alderfer’s needs are not hierarchical. Alderfer is of the opinion that
various needs can be in effect simultaneously. Alderfer also introduces a new element: the
frustration-regression hypothesis a need on a lower level becomes more significant if higher-
level needs are frustrated or are not feasible.
Similarity with Maslow: they both believe that people are prompted into action if they
experience a deficiency. Everyone’s needs are fixed.
Chapter 4 – Internationalization
4.1 Introduction
2 concepts that are often mentioned with respect to internationalization are import and export.
Reasons for companies/countries to engage in import:
- Products are cheaper to produce abroad
- The product quality of foreign products is superior to that of domestic products
- The imported products are not manufactured domestically
Reasons for companies/countries to engage in export:
- They are looking to expand the market field, allowing for improved economies of scale
and competitive advantage
- The product quality of domestic products is superior to that of foreign products
- The domestic market is subject to overcapacity
Internationalization only concerned with products or services.
Globalization focusses less on those aspects but much more on a process of global
economic, political, and cultural integration between countries and continents.
Globalization is related to the following themes: (p.198)
o Trade
o Transport
o International trade policy
o International finance and capital flows
o International organization of production of goods and services
o Information and communications technology
o Politics
o Tourism
4.2 Forms of economic integration
In general, 5 forms of economic integration can be identified.
1. The free trade zone (European Free Trade Association, Mercosur, NAFTA, ASEAN). Only the
mutual trade restrictions (import and export rights) are repealed by participating countries.
Each country determines its own import tariffs for products imported from outside the free
trade zone.
Advantages of the free trade zone:
- Efficient implementation of production factors
- Encouragement of competition
- Prevention of trade war
- Strengthening of trade and investment
- Encouragement of growth of prosperity
2. The customs union (Swiss Toll Zone, Southern African Customs Union). A customs union also
repeals mutual import and export rates. As a result, there is free trade between participating
,countries, who also apply a common outside tariff. The same import/export rate is applied to
imports from non-participating countries.
3. The common market (also exists within the EU). Also referred to as the internal market, the
common market is based on customs union that has no economic interior border but applies
one common exterior border. In addition, there are no restrictions with respect to production
factors. Within a common market, there is free movement of goods, people, capital, and
services.
To qualify as a free open market, countries need to remove a number (6) of restrictions,
including (p. 201):
- Physical limitations
- Technical limitations
- Fiscal limitations
4. The economic and monetary union. An economic union with not just the characteristics of a
common market, but a harmonization of monetary policy and its financial government politics.
This requires the implementation of central institutions, such as a single Central Bank.
5. The full political and economic union. A complete merger of countries. One example is the
formation of the United States of America.
The European Union:
1. Free movement of goods
2. Free movement of people
3. Free movement of services
4. Free movement of capital
the development of a common internal market has led to the formation of an economic
block at the European level, thereby possibly improving the competitive position compared to
other power blocks, such as Japan, the USA, and South-East Asia.
, Chapter 8 – Individuals and groups
Organisation any group of people cooperating to achieve a common purpose.
8.2 People in organisations
Following (individual) subjects are discussed:
- Motivation
- Emotional intelligence
- Overloading, stress, stress prevention and burnout
- Intuition and creativity
- Core qualities
Following (group) subjects are discussed:
- Team management and characteristics of successful teams
- Organisational conflict
8.3 Motivation
Organisations prefer to attract motivated employees.
But what is motivation? motivation is what gets people moving (the inner readiness of a
person to perform certain actions).
Job intrinsic motivation derives from the work itself. The job is seen as a challenge. Long-term
stimulation. (The need for acknowledgement and self-fulfillment.) having responsibility,
expanding one’s skills, and living up to performance expectations constitute important
motivating factors.
Job extrinsic motivation does not derive from the work itself. Derives from work circumstances,
rewards, bonuses, and status. People whose motivation is job extrinsic have a pragmatic
attitude to their work. Short-term stimulation.
Alderfer’s (ERG) theory (1969). Identified a more limited number of needs.
- Existential needs. These concern material security, corresponding to the physiological
needs and security defined by Maslow.
- Relational needs. These concern good relationships with other people. Social
acceptance, appreciation and acknowledgement are important.
- Growth needs. These needs are directed towards personal growth and self-fulfillment.
Differences with Maslow: Alderfer’s needs are not hierarchical. Alderfer is of the opinion that
various needs can be in effect simultaneously. Alderfer also introduces a new element: the
frustration-regression hypothesis a need on a lower level becomes more significant if higher-
level needs are frustrated or are not feasible.
Similarity with Maslow: they both believe that people are prompted into action if they
experience a deficiency. Everyone’s needs are fixed.
