WGU D080 Managing in a Global Business Environment 2023/2024 with complete solution Questions

WGU D080 Managing in a Global Business Environment 2023/2024 with complete solution Questions What is globalization? The key element of globalization is interdependence and interconnectedness among companies and countries around the globe. Globalism is characterized by an increasing number of worldwide connections, rapid and discontinuous change, an increasing number of diverse participants, and growing complexity. What are the economic, political, and cultural effects of globalization? economic: developed economies integrating with developing countries through foreign direct investment, lowering the costs of doing business, reducing trade barriers, and, in many cases, increasing cross-border migration. political: globalization may ultimately reduce the importance of nation-states. cultural: The spread of culture has added to processes such as commodity exchange and colonization, which have a more extended history of carrying cultural meaning around the globe. The circulation of cultures enables individuals to partake in extended social relations that cross national and regional borders. What is nongovernmental organization and how does it impact government public policy across national boundaries? any nonprofit, voluntary citizens' groups that are organized on a local, national, or international level What are the features of international business? International business encompasses a full range of cross-border exchanges of goods, services, or resources across two or more nations. These exchanges can go beyond the exchange of money for physical goods to include international transfers of other resources such as people; intellectual property such as patents, copyrights, brand trademarks, and data; and contractual assets or liabilities. Such assets or liabilities include the right to use some foreign asset, provide some future service to overseas customers, or execute a complex financial instrument. The entities involved in international business range from large multinational firms with thousands of employees doing business in many countries to a small one-person company acting as an importer or exporter. This broader definition of international business also encompasses for-profit, border-crossing transactions as well as transactions motivated by nonfinancial gains. What are the different forms of international business? Explain each form. - Exporting - franchising - joint ventures - home-owned affiliates - fully global ventures What are the 5 stages of entering a global market? Explain each stage 1. market entry 2. product specialization 3. value chain disaggregation 4. value chain reengineering 5. creation of new markets What are the 4 drivers of globalization? Explain market, cost, competition, government What are the benefits and costs of global expansion from MNCs' perspective? unsaturated demand for new products, lower labor costs, less expensive natural resources, and other inputs to products. What are the characteristics of each stage of globalization? 1.0: the first stage of globalism and is pushed forward by nationalism and religion. 2.0: the second stage of globalization and is characterized by advances in methods of transportation. 3.0: the third stage of globalization and is characterized by advancements across the board, especially technology and communication. What are the criticisms of globalization? Ethical issues, governmental policies, and economic restrictions are all likely when a company moves into an unfamiliar global space. A multinational company may also face infrastructural and technological challenges in a developing country. What are different types of governments? Explain There are more than 13 major types of government, each of which consists of multiple variations. At one end of the extremes of political ideologies is anarchism, which contends that individuals should control political activities, and public government is both unnecessary and unwanted. At the other extreme is totalitarianism, which contends that every aspect of an individual's life should be controlled and dictated by a strong central government. Totalitarianism Authoritarian Monarchy Democracy Oligarchy Dictatorship What impacts does a political system have on international trade and business? Local policies, rules, and regulations can have a significant effect on the success rate of a business. Depending on how long a company expects to operate in a country and how easy it is for business to enter and exit, a firm may also assess the country's political risk and stability. What are the features of industrialized, less-developed, and developing nations? - Industrialized nations have economies characterized by a healthy climate for private enterprise (business) and by a consumer orientation, meaning the business climate focuses on meeting consumers' long-term wants and needs. - Less-developed nations, also known as least-developed countries (LDCs), have extensive poverty, low per capita income and standards of living, low literacy rates, and minimal technology. - Developing nations are those that make the transition from economies based on agricultural and raw materials production to industrialized economies. What are different economic systems and how to differentiate them? - Traditional economies are found in rural countries where the primary occupation is farming. - In a command economy found in a communist country, most of the economic system is controlled by a centralized power. - In a planned economy found in a socialist country, the factors of production are used for the common good. - In an open economy, a democratic method is used to determine how to use the factors of production. - A market economy is a decentralized economy in which firms and households determine how resources are allocated based on how best to satisfy their needs. - A mixed economy has less government intervention than a command economy. Supply and demand control the economy, and ideally, the government steps in when needed. What is communism, socialism, and capitalism? - Communisim is a system in which all property is publicly owned and the government controls global trade - Social ownership, central control of the means of production, and a cooperative approach toward management of the economy are hallmarks of socialism. - Capitalism is generally considered to be an economic system based on private ownership of the means of production and on the creation of goods or services for profit by privately owned business enterprises. Explain and differentiate common, civil, and theocratic legal systems. - civil law system is an inquisitorial system where the investigating judge investigates the facts of the case. It is the most widespread legal system in the world. - Common law is based on traditions and precedence and can be traced to the English monarchy. In common law systems, judges interpret the law, and judicial rulings can set precedent. - Religious law is also known as theocratic law and is based on religious guidelines. Identify and differentiate the IMF, the World Bank, and the WTO's major functions and conditionality. Explain criticisms of each international organization. - The IMF helps maintain liquidity of global funding by providing a straight-forward method for nations to borrow and loan to each other through a mechanism called the special drawing right. - The World Bank's priorities are to help build sustainable economic growth, invest in people, and build resilience for shocks and threats. - WTO reviews the trade policies of all nations to ensure that each country is treated fairly and equally under the most favored nation requirement. - Criticisms are similar: a lack of transparency; neglect for considering the environment when making decisions; and policies in favor of more affluent, developed countries at the expense of poorer nations List and explain each international trade theory. Focus on the features of each theory. - mercantilism, a zero-sum theory advocating for each country to maintain a trade surplus. - Adam Smith's absolute advantage in which a country exports the goods it can make more efficiently or more cheaply. - Ricardo's comparative advantage which extends the theory to show benefits as long as each country exports the product it is comparatively more efficient at or can produce more cheaply and imports the others - Heckscher-Ohlin which states that competitive advantage comes from differences in natural resources. -Leontief Paradox - Country Similarity Theory - Global Strategic Rivalry Theory What are the two mechanisms to increase productivity? Explain. Technology and trade are two mechanisms to increase productivity, which lead to more products and ultimately to lower prices. it takes fewer resources to produce a product. a good can be produced at a lower cost in terms of other goods. What are the criticisms of comparative advantage theory? - many assumptions are made in this theory. - The benefits of specialization may be overstated if the transportation costs are not taken into account. - There is an increasing opportunity cost with increased specialization as less than ideal conditions or natural resources must be used. - Unemployment may be higher with complete specialization because it would be difficult for workers to transfer from one role to another. - Organizations may not recognize that their comparative advantage has changed over time as conditions change. - technology may make it possible for countries to produce many or even most products using an economy of scale, which makes comparative advantage an obsolete concept What is specialization and what is the impact of it? By specializing, countries would generate efficiencies because their labor force would become more skilled by doing the same tasks repeatedly. Production would also become more efficient because there would be an incentive to create faster and better production methods to increase the benefit from specialization. Specialization leads to increased productivity, which can in turn lead to increased unemployment. What is the definition and impact of the economies of scale? Economies of scale increase the available variety of goods for consumers and decrease the average cost of these goods. Economies of scale can result from the ability to divide labor into smaller parts, which allows for increased specialization. Define exporting and importing - Export refers to the selling of goods and services produced in the home country to other markets. - Imports are defined as purchases of goods or services by a domestic economy from a foreign economy. List and explain types of tariffs. - Import tariffs are taxes on goods that are imported into a country. - Export tariffs are taxes on goods that are leaving a country. Taxing exports may be implemented to raise tariff revenue or restrict the world supply of a good. - Protective tariffs are tariffs levied to reduce imports of a product and protect domestic industries. - Revenue tariffs are tariffs levied to raise revenue for the government. - Specific tariffs are tariffs that levy a flat rate on each item imported. - Ad valorem tariffs are tariffs based on a percentage of the value of each item. - Compound tariffs are tariffs that are a combination of specific tariffs and ad valorem tariffs. How does tariff impact the price of imported product, consumers, domestic businesses, and the government? If foreign goods can be sold at a lower price than domestic goods, consumer demand will go up, but the domestic price will do down. The decrease in price drives down the profit margin for domestic suppliers. With tariffs, domestic producers and the government gain and consumers and foreign producers lose overall What are the types of quotas? - An absolute quota is a limit on the number of specific goods that may enter a country during a certain period. - A tariff-rate quota is a two-tier quota system that combines characteristics of tariffs and quotas. Under a tariff-rate quota system, an initial quota of a good is allowed to enter the country at a lower duty rate. Once the initial quota is surpassed, imports are not stopped; instead, more of the good may be imported, but at a higher tariff rate. What is the Voluntary Export Restraint (VER)? Voluntary export restrictions are a form of trade barrier by which foreign firms agree to limit the number of goods exported to a particular country. What are the trade barriers that involve direct government intervention? Government procurement programs, Export subsidies, Countervailing duties How does free international trade impact manufacturing jobs in developed nations? Free trade can increase the wages and availability of jobs in some sectors but have the opposite effect in other sectors. Due to industry specializations, many workers are displaced and do not receive retraining or assistance finding jobs in other sectors. The nature of industries and trade increases economic inequality. As a result of unskilled workers, the wages within the various industries may decline. What is free trade agreement? Free trade is a policy by which governments do not discriminate against exports and imports. There are few or no restrictions on trade, and markets are open to both foreign and domestic supply and demand. What are the international organizations that handle international trade agreements? The WTO is the largest international trade organization, replacing the General Agreement on Tariffs and Trade (GATT) in 1995 and designed to enable international trade while reducing unfair practices. NAFTA, EU, Mercosur, ASEAN What is GATT? The General Agreement on Tariffs and Trade (GATT) consists of a set of promises or commitments that countries make to each other regarding their trade policies. The goal of GATT is to make trade freer, and thus, the promises countries make must involve reductions in trade barriers. Identify and explain political, economic, and social rationale of managing international trade from government's perspective. Protect domestic industries and employment Protect against unfair trade practices Protect national security Define and compare portfolio investment and foreign direct investment. - Portfolio investment refers to act of investing in a company's stocks, bonds, or assets, but not to control or direct the firm's operations or management. Typically, investors in this category are looking for a financial rate of return, as well as for diversifying investment risk through multiple markets. - Foreign direct investment (FDI) refers to an investment in or the acquisition of foreign assets with the intent to control and manage them. Companies can make FDIs in several ways by purchasing the assets of an international company; investing in the company or new property, plants, or equipment; or participating in a joint venture with a foreign company, which typically involves an investment of capital or know-how. FDI is primarily a long-term strategy. Identify the reasons that governments restrict or promote FDI. governments seek to limit or control FDI to protect local industries and critical resources (oil, minerals, etc.), preserve the national and local culture, protect segments of the domestic population, maintain political and economic independence, and manage or control economic growth. Define two forms of FDI. Give an example for each. - Horizontal FDI occurs when a company is trying to open a new market—a retailer, for example, that builds a store in a new country to sell to the local market. - Vertical FDI is when a company invests internationally to provide input into its core operations—usually in its home country. A firm may invest in production facilities in another country. When a firm brings the goods or components back to its home country (i.e., acting as a supplier), this is referred to as backward vertical FDI. When a firm sells the goods into the local or regional market (i.e., acting as a distributor), this is termed forward vertical FDI. Define greenfield and brownfield FDIs. Give an example for each. - Greenfield FDIs occur when multinational corporations enter into developing countries to build new factories or stores. - A brownfield FDI is when a company or government entity purchases or leases existing production facilities to launch a new production activity. What are the benefits of FDI? FDIs benefit both developing and developed nations by increasing jobs and bringing capital to the most successful companies. - An inflow of capital can benefit the global and local economy. - Invested capital goes to businesses with the highest potential for growth. - The profit motive is color blind, and investments are made regardless of religion or politics. - Investors can decrease their risk by diversifying - Investing capital in firms can lead to growth and subsequently increased jobs. What are the costs of FDI? Governments are careful not to allow foreign ownership of strategically important industries as this could lower the competitive advantage of the nation. Foreign investors could also take advantage of the company they are investing in and take away all valuable assets then leave the country What is the difference between horizontal and vertical FDI? Horizontal FDI occurs when a company is trying to open a new market—a retailer, for example, that builds a store in a new country to sell to the local market. Vertical FDI is when a company invests internationally to provide input into its core operations—usually in its home country. Define multinational companies. MNC is a company that operates in two or more countries, leveraging the global environment to enter new markets to increase revenue. Which agreement was created in 1981 among Arab states, to expand trade, economic growth, and development and to promote social welfare, peace, and stability? GCC