Latin America Country Quiz Assignment

Multiple choice quiz on this reading: By 1900, the United States had claimed its place as a world power through the Spanish-American War. As the new century began, the country governed subject territories in Puerto Rico, Hawaii, Guam, the Wake Islands, and the Philippines. U.S. troops also occupied Cuba. U.S. businesses reached beyond the country's borders. During the first decade of the new century, the Coca-Cola Company, Quaker Oats, AT&T, the Standard Oil Company, Du Pont, General Electric, and Ford Motor Company seized the opportunity for international sales. After finding international markets, they built factories abroad, taking advantage of lower labor costs in foreign countries. Then they asked for U.S. protection of their investments and interests. Foreign countries invested heavily in Central America. U.S. investors focused on banana plantations and mining, as well as railroads, with little money in government bonds. By 1913, U.S. investments in Central America totaled about $93 million. British investment in Central America peaked at about $115 million in 1913. About $75 million of that total represented railroad holdings, mostly in Costa Rica and Guatemala. The other $40 million was in government bonds, which were worth little or nothing. The Roosevelt Corollary to the Monroe Doctrine From its earliest days, the United States claimed a special interest in the Western Hemisphere. The Monroe Doctrine, issued in 1823, warned European powers to keep their hands off Latin America. In 1902, Britain, Germany, and Italy mounted a naval blockade of Venezuela. They wanted to force the government to repay its debts. All the countries involved eventually agreed to settle the matter by arbitration. The United States stood back and did nothing, but U.S. citizens were clearly uneasy with the appearance of European military forces in "their" hemisphere. In 1904, President Theodore Roosevelt issued a corollary to the Monroe Doctrine, saying that the United States would act as a police officer to keep order in the region. He intended both to keep European military forces out of the hemisphere and to protect U.S. and European investors, exerting whatever pressure or control on Latin American governments that might be necessary to these ends. In 1905, the Dominican Republic owed $40 million in debts to European lenders. In order to prevent the European nations from using military force to collect their debts, Roosevelt used U.S. power. The United States basically took over collection of Dominican customs taxes, declared that $20 million of the debt was unjustified, and began repayment of the rest. Building a Canal The United States needed a canal through Central America, in order to save shipping time and costs. Colombia had the best location for a canal, and the United States negotiated a deal. It would pay Colombia $10 million for a three-mile-wide strip of land and would make annual rental payments of $250,000 yearly, beginning in 1912. Colombia's Senate turned down the deal, and Roosevelt exploded in rage, calling its members "foolish and homicidal corruptionists." Roosevelt considered seizing the land for the canal by military force but soon found an easier way. The province of Panama seceded from Colombia. A U.S. gunship stood off shore, protecting the Panamanian rebels. They formed a new republic under the protection of the United States. The new country of Panama and the United States agreed on a canal treaty within days. The new treaty had similar terms except that the Canal Zone would be five miles wide, instead of three, and the United States would guarantee and maintain the independence of Panama. Revolutions While Roosevelt welcomed the revolution that separated Panama from Colombia, he opposed most other revolutionary activity. So did his successors in office, William Howard Taft and Woodrow Wilson. The U.S. presidents sent troops to put down revolutions in Nicaragua and Haiti, using U.S. military forces to set up new governments in those countries and maintaining military occupations for years. U.S. military interventions were frequent throughout the hemisphere. Dollar Diplomacy President Taft preferred using "dollar diplomacy" to control Latin American countries. In Honduras, for example, U.S.-based banana companies virtually ran the government. Taft supported expanded U.S. investment in South and Central American countries, the Caribbean, and the Far East. He ordered Secretary of State Philander Chase Knox to protect U.S. investments, sending in military troops if necessary. On the World Stage As a world power, the United States did not limit its involvement to the Western Hemisphere. In 1905, President Roosevelt brought Russia and Japan to the negotiating table to end their war over control of Korea and Manchuria. Roosevelt agreed to Japanese annexation of Korea in return for Japan giving up any claim to China, Hawaii, and the Philippines. Roosevelt won the Nobel Peace Prize for settling this dispute. In 1906, Roosevelt's negotiating powers were tested again. This time, he mediated a dispute between the Alliance powers—Germany, Austria-Hungary, and Italy—with the Entente—France, Russia, and Britain—over control of Morocco. The United States backed France and ended the dispute. No longer an upstart, the United States had taken its place as a world power alongside its former colonial ruler.

Latin America Country Pre-Assessment

The Columbian Exchange was the widespread exchange of animals, plants, culture, disease, people, and ideas that began between European countries and their colonies in North and South America. The Spanish came to the Americas in search of gold and other riches. The Europeans wanted to convert the Native Americans to Christianity/Roman Catholicism. Spain had the greatest impact on the culture of Latin America. Sugarcane was a crop that was grown in the Caribbean that required a lot of land and labor. Native populations died out largely due to diseases that they had no natural immunity to before the arrival of Europeans. When the Native populations died out, African slaves were brought over to work. Two cultural elements in Latin America that resulted from the Columbian Exchange were language - Spanish, and religion - Roman Catholicism/Christianity. Environmental Issues Deforestation is the clearing of forests for human demands such as farmland, timber, and mining. The Amazon Rainforest in Brazil is one area experiencing major deforestation. Hurricanes can damage the economies in the Caribbean and Central America by keeping tourists away. Economy The three economic indicators used to determine the Human Development Index (HDI) are: life expectancy, literacy rate, and GDP per capita. Higher literacy rates, GDP per capita, and life expectancy are associated with more developed countries, while lower literacy rates, GDP per capita, and life expectancy are associated with less developed countries. The three sectors of the economy are primary/agriculture (e.g. rancher), secondary/manufacturing (e.g. table factory), and tertiary/services (e.g. teacher). A single product economy is when a country depends on just one product for almost all of its jobs, like the Caribbean Islands depend on tourism. Three disadvantages of a single product economy are: having to import other goods/resources, facing competition from other countries for the same product, and if the product fails, the economy is ruined which could restrict access to goods/resources. A free enterprise/market economy is when individual people and businesses make all economic decisions. A command/communist economy is when the government makes all basic economic decisions. Cuba has a communist economy where the government controls all aspects of the economy.

Management and Globalization Global Management Why companies go global How companies for global Global Business environments Global Business Types of global business Pros and cons of global businesses Ethnic Challenges for global business Culture and Global Diversity Cultural intelligence Silent language of culture Tight and loose cultures Values and national cultures Global Management Learning Are management theories universal? Intercultural competencies Global learning goals Key concepts of the challenges of globalisation: Global economy Resources, markets and competition are worldwide in scope Internationalisation The process of increasing involvement in international operations Globalization/Deglobalization Glob- the growing interdependence among elements in the global economy The worldwide interdependence of resource flows, product markets and business competition World 3.0 Different views: World flat vs. round Distance is a metaphor that represents the degree of dissimilarities between countries Balancing cooperation in the global Global Management Global management - managing things in different countries Managing business and organizations with interests in more than one country What do we expect from global Managers Knowing how to adapt Knowing the language Global Manager Is culturally aware and informed on international affairs International Business Conducting for-profit transactions of goods and services across national boundaries International Motive Why do firms internatioalize their activities Cheaper labour Labour tax Natural resources Enrolments to do business Clientele Exclusive materials Personal benefits: Taxes Reasons why businesses go global Customers Suppluers Capital During (1993) - 4 motive 1. Market seeking 2. Efficiency Seeking 3. Resource seeking 4. Strategic Asset Seeking Cuervo Cazurra, Narula and un (2015) - 4 motive s Internationalization Motives A company may also explore the opportunities in different markets in order to take advantage and in some cases extend the product life cycle What is a Market Entry Strategy Involves the sale of goods or services to foreign markets but do not require expensive investments Franchising Exporting and importing Involve the sale of goods or services to foreign markets but do Types of market entry strategies Global sourcing Exporting Importing Licensing agreement Franchising Types of Foreign Direct Investment (FDI) strategies: Joint venture Strategic alliance Owned Subsidiary (sometimes called WOS) How to go abroad What conditions will affect the decisions of firms on how to internationalize their activities? During (1978)- Eclectic paradigm OLI model OLI- Ownership, Location and Internalization Advantages Ownership advantages Resources owned by the organization that can be transferred across locations include trademarks, production techniques and processes, managerial skills and other resources not available to the competitors Location Advantages Represent the implications of choosing to produce or to perform activities in a specific location (country or region) Internalization Advantages: The ability to internalize or to incorporate activities that add value to its business Evolution of Concepts- New Elements Although economic factors are certainly important to explain the formation, growth and expansion of firms within and across national borders, they are not sufficient to explain the additional complexity when a firm decides to expand its activities across national borders Economic factors Investigate the economic elements that affect the internationalization of firms Behavioural Elements Explaining the additional challenges (and perhaps opportunities) a firm faces in foreign host countries when compared to indigenous (local) firms Behavioural theories Johanson and Wiedersheim-Paul (1975) and Johanson and Vahlne (1977) Included the psychic Distance concept (beckerman,1956) to explain the internationalization behaviour of firms The Uppsala internationalization model Psychic distance is: the sum of factors preventing the flow of infomatio from and to the market Psychic Distance is a broad concept that includes several elements such as: language, culture, political systems, level of education, level of industrial development Firms behave in a “Risk Averse” manner It means that when the perceived risk goes down, the firm increase its commitment to the foreign market \ The Haier Group Data Strategy Big DATA and Small DATA The use of small data to satisfy individual customers’ needs, however, the book mentions a huge cultural shock at the plant in Camden, south caroline Ex: top down, hard hat colors and hierarchy Culutral Differnces can have a huge impact on the internationalization of firms Kogut and Singh (1988)- Cultural Distance Index First statsical study on the implication of ciltiral distance to the selection of entry mode When investigating in culturally distant countries, foreign firms can choose to partner with foreign firms in order to gain local knowledge and share the risk associated to the investment (higher commitment = higher risk) How Companies Go Global Global sourcing The process of purchasing materials or services around teh world for local use Exporting Selling locally made products in foreign markets Importing Buying foreign made products and selling them domestically Exports correspond to what percentage of Candain GDP What countries are the major trending partners of Canada Management and Globalization How Companies Go Global Licensing Agreement One firm pays a fee for rights to make or sell another company’s products What are the potential risks associated to licesning The case of new balance in China Franchising A fee is paid for the rights to use another firms name, branding and methods Insourcing Insourcing: refers to local job creation that results from foreign direct investment Types of insourcing Joint ventures: operate in a foreign country through co-ownership by foreign and local partners Strategic alliances: A partnership in which foreign and domestic firms share resources and knowledge for mutual gains Foreign subsidiaries: local operation completely owned by a foreign firm Criteria for choosing a joint venture partner: Familiarity with your firm’s major business String local workforce Values its customers Future expansion possibilities Strong local market for partner’s own products Good Profit potential Sound financial standing Global business environments Legal and poliical systems Trade agreements and trade barriers Regional economic alliances Legal and political systems Differing laws and practices regards Business ownership Negotiation and implementation of contracts Foreign currency exchange Protection of intellectual property rights Counterfeit merchandise Political risk Potential loss in value of foreign investment due to instability and political changes in the host country Political risk analysis (expertise/experience) Forecast political disruptions that threaten the value of a foreign investment Changes in the rules of the game Brexit US Trade Wars-mexico-China Other examples Bolivia, Venezuela, China De-globalization The process of weakening interdependence among nations Trade Agreements and trade Barriers World trade organization Most favourd nation status Tariffs Nontariss barriers (quotes, restrictions, etc.) Protectionism Regional Economic Alliances USMCA (replacment for the NAFTA-North American Free trade Agreement) EU- European Union APEC- Aisa Pacific Economic Copperation ASEAN - Association of Southeast Asian Nationas SADC - Southern Africa Development Community MERCOSUR- Chapter 5- Global Management and Cultural Diversity (part 2) Review Types of global business Global corporation MNE (multinational enterprise) or MNC (multinational corporation) with extensive business operations in more than one foreign country Transnational corporation A global corporation that operates worldwide on borderless basis Some host country complaints about MNCs Host Country companits about MNCs: Excessive profits Interference with local government Domination of local economy Interference with local government Hiring the best local talent Limited technology transfer Disrespect for local customers Examples - War in Ukraine Disruption in global -value chains and increased pressure and interference of MNCs with local government Fertilizer imports in Brazil (one of the major producers of agricultural commodities) We must consider the triple bottom line and the impact in society, the environment and the economy $2.5 billion invest in potash mine in Brazill What about Globalization gap Large multinationals adn industrilizednaitons gaining disporoportinonally form globalization Globalization gap: Large multinational and industrialized nations gaining disproportionally from Globalization Some MNC complaints about host countries MNC Complaints about host countries: Profiit limitations Laws and regulations Overpirce resources Exploitative rules Foreign exchange restriction Failure to uphold contracts Mutual benefits for host countries and multinational companies Mutual benefits for host country and global corporation of MNC: Shared growth opportunities Shared income opportunities Shared learning opportunities Share development opportunities Develop projects together What are some of the ethical challenges for global business Ethincal challenges for global business Child labour Employmnet of children for worl otherwise done by adults Sweatshops Employment of workers at very low wages for long hours in poor working conditions Ex: Nike bad labour prices Unsafe working conditions Corruption Illegal practices that further one’s business interests Corrupiotn of froeign public officials Act makes it illegal for Candain firms and their representatives to engage in corrupt practices overseas Bribes to foreign officials Excessive commissions Non-monetary gifts Sweatshops Conflict materials What is culture Culture : The shared set of beliefs, values, and patterns of behvaiourr common to a group of people Food preferences Values and traditions Language and beliefs Religion Art music Life style Hofstede defines culture as: “The collectiv programing of teh mind distinguishing the members of one group or category of people from others” What is culture shock Culture Shock: Confusion and discoumfert a person experiences in an unfaamiliar culture Stages to adjusting to a new culture Confusion Small vitorires The honeymoon Irritation and anger Reality Cultural Intelligence The ability to adapt and adjust to new cultures What is Ethnocentrism Tendency to consider one’s own culture as superior others Slinet languages of culture Contect Low context High context Space Proxemics Ex: personal space Time Monochronic Polychronic High and low contexts cultures Edward T.Hall (1959) Def: Part of a discourse that surround a word or passage and can throw on its meaning Low context cultures Emphizes communication via spoken or written words Countries like United States, Canada and Germany High context cultures Rely on nonverbal and situational cues as well as on spoken or written works Thailand Malaysia Time Monochronic cultures People tend to do one thing at a time Canda Polychronic cultures Time is used to accomplish many different things at once Egypt Space Proxemics Study of how people use space to communicate In North American people value “personal space’ Many Latin and Asian cultures expect much less personal space Tight and Loose Cultures Cultural tightness-looseness Tight = Strength of norms that govern social behvaviour Japan, Korea, Malaysia Loose = tolerance for any deviation from norms Australia, Brazil, Hungary Values and national cultures (Hofstede) Power distance Uncertainty avoidance Individalism-collectivism Masculinity-femininty Time Orientation Indulgence vs. Restraint Comparative management How management pratices systematically differ among countries and /or cultures Intercultural competencies Skills and personal characteristics that help us be successful in cross cultural situations Global Managers (know how to adapt) Need to successfully apply management functions across interantional boundaries Global Learning goals Not universal Engage critical thinking Look everywhere for new management ideas Always consider culture

Latin America

110.31.b.17.C

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