UNIVERSITY OF TECHNOLOGY, JAMAICA

SCHOOL OF BUSINESS ADMINISTRATION

MODULE NAME: INTRODUCTION TO MANAGEMENT (MAN1006)

PRINCIPLES OF MANAGEMENT (MAN1001)

Unit 4 – Managing in the Global Environment

Review Questions

1. In your own words, explain the term “borderless”. If large companies are “stateless”,
what is the impetus for a company to choose becoming global?

2. Define the terms internationalization and international management. Identify and

describe the unique characteristics of each stage of globalization.
3. INTERNATIONALIZATION is the process by which a firm responds to
changing in the environment expand itself into international competition,
domestic market saturation, for expansion, new markets, and diversification.
(Deresky, 2011).
• International  Management - the management  of business operations in more
than one country. (multinational)

4. Define Multinational Corporation. Identify two multinational companies operating in

Jamaica – one manufacturing and one service. In what other countries do they do business?
Where the company has marketing and production facilities located in many
countries, with more than one-third of its sales outside the home country

5. Identify two Jamaican companies that are multi-national. What are their characteristics?
Would you describe them as being successful? Why do you say so?
Grace
Air jamaica

6. Explain the various market entry strategies that are available to managers wishing to do
business internationally or globally. What are their advantages and disadvantages?
Export .. disadvantages- cost may rise, loss of control, no attention paid to local customers
Licensing is where a corporation (the licensor) in one country makes certain
resources available to companies in another country ( the licensee), in order to
participate in the production and sale of its products abroad, at low cost.  The
resources include technology, managerial skills, and/or patent and trademark
rights. 
 Disadvantages-loss of control (partially or fully) over your invention.
 relying on the licensee's ability to effectively commercialise your patent.
 poor quality management damaging your brand or product reputation.

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 Franchising – a special form of licensing that occurs when the franchisee buys
a complete package of materials and services, including equipment, products,
product ingredients, trademark and trade name rights, managerial advice and a
standardized operating system.  
Disadvantages-Limited creativity.
 Decreased profits.
 5) Shared information.
 6) Less control.
 7) Damaged reputation.-rat meat

7. Identify two Jamaican companies that are doing business overseas. How long have they
been overseas? Why do you think they chose to do business in those specific countries?
What market entry strategy did they use? Why do you think they chose that particular
strategy?
Grace – export -1995

8. What are the three key dimensions in the international environment that international
firms face? Identify the factors within each. Explain each in relation to the Jamaican
environment.
A. Economic environment – exchange rate
B. Sociocultural environment- cultural
C. Political environment- political risk (bad policies)

True or False
1. _____F The reality of today's borderless companies also means that consumers can easily
identify from which country they are buying.

2. _____F ABC Manufacturing is in the domestic stage. It has its market potential open to
the countries that border its home country.

3. _____ T Whether a company operates domestically or internationally, the management

functions of planning, organizing, leading, and controlling are the same.

4. _____T The belief in the right to vote, the right of choice and equal rights is part of the
beliefs, values and ways of thinking that defines a society's culture.

5. _____ F The multinational stage of corporate international development transcends any

single home country. The ownership, control, and top management tend to be
dispersed among several nationalities.

6. _____F Multinational corporations typically receive more than 55 percent of its total sales
revenues from operations outside the parent’s home country

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7. _____T Changes in the exchange rates can have major implications for the profitability of
international operations.

8. _____ F Theodore and Stefany sometimes have a tendency to regard their own Jamaican
culture as superior and to downgrade other cultures; this reflects an attitude called
geocentricism.

9. _____T An example of global sourcing is when Nordia and Sanjay from Gap, Inc use low-
cost Caribbean labor to cheaply produce their clothing, and then finish off and sell
their clothing in the United States.

10. _____F An organization developed for the purpose of eliminating tariffs in trading
between Canada and the United States is called The North American Freedom of
Tariffs Administration (NAFTA).

Fill in the Blanks

11. Capita per income ________________ is the criterion traditionally used to classify countries
as developed or developing.
12. Outsourcing_______________ means engaging in the international division of labor so
that manufacturing can be done in countries with the cheapest sources of labor and
supplies.

13. List the three examples of direct investing mentioned in your text.
Joint Ventures 
In a joint venture a company shares costs and risks with another firm, typically in the
host country, to develop new products, build a manufacturing facility, or set up a sales
and distribution network.  
Direct Acquisition 
Direct Acquisition (purchase) of an affiliate may provide a cost savings over exporting
by shortening distribution channels and reducing storage and transportation costs.
Local managers also have better awareness of economic, cultural and political
conditions.
Wholly-Owned Foreign Affiliate 
When a foreign subsidiary over which an organization has complete control.  
_______________________________________________________________________

Multiple Choice

14. Companies that think __________ have a competitive edge.

a. Globally
b. regionally
c. nationally
d. strategically

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 e. “customers first”

15. The process of globalization typically passes through all of the following stages EXCEPT

a. domestic stage.
b. global stage.
c. international stage.
d. inter-domestic stage.
e. multinational stage.

16. If you built a computer company in Africa and then found that your product was having
difficulty being distributed to customers because of the road system, your problem would
be related to

a. an economy incapable of supporting growth.

b. an inadequate infrastructure.
c. a poor resource market.
d. a poor product market.
e. none of the above.

17. Although the challenge in unstable countries is great, often the biggest area of
__________ is also there.

a. opportunity
b. consumer shopping
c. economic improvement
d. leadership
e. low governmental control

18. Color Copiers operates in a true global fashion, making sales and acquiring resources in
whatever country offers the best opportunities and lowest cost, what stage of international
development is it in?

a. Stateless stage
b. Multinational stage
c. International stage
d. Domestic stage
e. Multidomestic stage

DISCUSSION QUESTIONS

1. What policies or actions would you recommend to an e-commerce company wanting to do

business internationally?

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Shipping
Turn around time
Policy for complaints

2. Compare the advantages associated with the foreign market entry strategies of exporting,
licensing, and wholly owned subsidiaries.

3. What steps could a company take to avoid making product design and marketing mistakes
when introducing new products into a foreign country?

4. Should a multinational corporation operate as an integrated, worldwide business system, or

would it be more effective to let each national subsidiary operate autonomously?

5. What might managers do to avoid making mistakes concerning control and decision-making
when operating in a foreign culture?

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