Mkt360 Exam 2 Review

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MKT 360 Test 2 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. 8. 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. 2. 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...
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