Midterm2_Study_Guide2 - Textbook Chapter 5: International...

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Textbook Chapter 5: International Trade Theory An Overview of Trade Theory Mercantilism Absolute Advantage Comparative Advantage Heckscher-Ohlin Theory The Product Life Cycle Theory New Trade Theory National Competitive Advantage: Porter’s Diamond Chapter 6: The Political Economy of International Trade Instruments of Trade Policy (Tariffs, Subsidies, Import Quotas and Voluntary Export Restraints, Local Content Requirements, Administrative Policies, Antidumping Policies) Political Arguments for Intervention Economic Arguments for Intervention Development of the World Trading System, GATT, WTO Modules Module: Doing Business in Latin America Why Do Business in Latin America? o o Barriers to business-compromised of developing countries o Basics- national language, Spanish (Brazil-Portuguese); Do not try to interchange languages across countries! o Advantages- FDI-1Brazil, 2Mexico.Liberalization of markets (apetura) / protectionism; hyperinflation o Hot industries-consumer products industry, automotive industry, IT infrastructure, software security co o Constraints- Bureaucracy, poor infrastructure, corruption, economic barriers, and a lack of technology; Latin American Culture o Collectivism-Identify as group; Group protection is valued. Family, collectivist nature extends throughout society. Office colleagues stick together and aid each other. Some become more “Americanized.” o Closeness-Emotional bonds; Commonality between people; Physical proximity. distance- Latin<US o Value family-Interested in family lives of co-workers. Begin with conversation about families @ meeting Being “strictly business” while conducting a meeting in Colombia could lead others to think of you as “the cold American.” Secondly, understanding this characteristic and being flexible will help one affectively manage people and processes across cultures.
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o Power distance -high power distance, more afraid of bosses than US does. Because bosses in Latin America are generally paternalistic and autocratic, thus evoking a fearful response from their subordinates, does not mean that you should adopt a hostile and short-tempered management style. Instead, you should be sensitive to the way subordinates think about you.
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This note was uploaded on 11/19/2011 for the course MKT 310 taught by Professor Tunga during the Fall '10 term at Michigan State University.

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Midterm2_Study_Guide2 - Textbook Chapter 5: International...

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