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University of Bridgeport
# Midterm exam
Multi National Corporation (MNC) is firm that has operations in more than one
country, international sales and a mix of nationalities among managers and
owners. Every company wants to be multinational. The reason why is very simple
– raising the sales among the company.
There are 3 major types of economies: market economy, command economy and
exists when private enterprise reserves the
right to own property and monitor the production and distribution of goods and
services while the state simply supports competition and efficient practices.
is comparable to a monopoly in the sense that the
organization (government), has explicit control over the price and supply of a
good or service. Businesses in this model are owned by the state to ensure that
investments and other business practices are done in the best interest of the
nation despite the often contradictory outcomes.
combination of a market and a command company. While some sectors of this
system reflect private ownership and the freedom and flexibility of the law of
demand, other sectors are subject to government planning. The balance allows
competition to thrive while the government can extend assistance to individuals
Foreign Corrupt Practices Act (FCPA) is act that makes it illegal to influence
foreign officials through personal payment or political contributions. The
objectives of the FCPA were to stop U.S. MNCs from initiating or perpetuating
corruption in foreign governments and to upgrade the image of both the US and
its business abroad.
Corporate social responsibility
(CSR) can be defined as the actions of a firm
to benefit society beyond the requirements of the law and the direct interests of
may first be associated with financial investments of the
hope of steadily increasing profits, but for a growing number of companies, this
term means the same to them as it does to an environmental conservationist.
Corporate governance can be defined as the system by which business
corporations are directed and controlled. It specifies the distribution of rights and
responsibilities among different participants in the corporation – such as the
board, managers, shareholders, and other stakeholders – and spells out the
rules and procedures for making decisions on corporate affairs.
Culture is acquired knowledge that people use to interpret experience and
generate social behavior. This knowledge forms values, creates attitudes, and
Dutch researcher Geert Hofstede identified four dimensions, and later fifth
dimension, of culture that help explain how and why people various cultures
behave as they do. The dimensions Hofstede examined were: power distance,
uncertainty avoidance, individualism and masculinity. The more recent fifth
dimension of time orientation is now as well known, but it was added to help
describe the long – versus short term orientations of cultures.
Individualism and communitarianism are key dimensions in Hofstede’s earlier
research. Although Trompenaars derived these two relationships differently than
Hofstede does, they still have some basic meaning, although in his more recent
work Trompenaars has used the word communitarianism rather than collectivism.
For him, individualism refers to people regarding themselves as individuals, while
communitarianism refers to people regarding themselves as part of group.
There are four strategic dispositions: ethnocentric, polycentric, regiocentric and
geocentric predispositions. A company with an
allows the values and interests of the parent company to guide strategic
decisions. Firms with a
make strategic decisions
tailored to suit the cultures of the countries where the MNC operates. A
leads firm to try to blend its own interests with
those of its subsidiaries on a regional basis. A company with a
tries to integrate a global systems approach to decision making.
is the tendency to view the world through one’s own eyes and
is the process of exhibiting the same orientation
toward different cultural groups.
Organizational culture has been defined in several different ways. In its most
basic form, organizational culture can be defined as the shared values and
beliefs that enable members to understand their roles in and the norms of the
organizations. Hofstede’s research found that the national cultural values of