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15e
Cultural Collision
Change by Imposition
sometimes called cultural imperialism—
involves imposing certain elements from
an alien culture,
such as a forced change in laws by an
occupying country that, over time,
becomes part of the subject culture.
Merchandise imports
goods that are brought into a country
(visible exports and imports)
Example
The athletic shoes that an Indonesian plant sends to the United
States are exports for Indonesia and imports for the United States.
Service imports
recipient and payer of payment
Examples
Tourism and transportation
Service performance
turnkey operations and management
contracts
Asset use
licensing and franchising
Copyright © 2015 Pearson Education, Inc. 1-31
Modes of Operations in IB
Service exports
provider and receiver of payment
Service imports
recipient and payer of payment
Examples
Let’s say that the Williams sisters, Venus and Serena, and some U.S.
tennis fans take Air France from the United States to Paris for the
French Open tennis tournament. Their tickets on Air France and
travel expenses in France are service exports for France and service
imports for the United States.
Copyright © 2015 Pearson Education, Inc. 1-32
Modes of Operations in IB
Service exports
provider and receiver of payment
Service imports
recipient and payer of payment
Examples
Turn key Operations:
Companies also pay fees for management contracts—arrangements in which one
company provides personnel to perform general or specialized management
functions for another, such as Disney’s management of theme parks in France and
Japan.
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Modes of Operations in IB
Service exports
provider and receiver of payment
Service imports
recipient and payer of payment
Examples
Asset use
For example, Adidas pays a royalty for the use of the Real
Madrid football team’s logo on jackets it sells. Royalties also
come from franchise contracts.
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Modes of Operations in IB
Investments
Foreign Direct Investment (FDI)
investor takes a controlling interest in a foreign
company
joint venture
When,
for example, U.S. investors bought the Liverpool Football Club, it
became a U.S. FDI in the United Kingdom.
Although players from the Dominican Republic form the largest share
of non-U.S.-born players, the idea of putting a major-league baseball
team there isn’t feasible because too few Dominicans can afford the
ticket prices necessary to support a team. Obviously, higher incomes
in the United States and Canada enable major league teams to offer
higher salaries that attract Dominican players.
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Chapter 1: Discussion Questions
1. Define globalization and explain the forces
driving globalization.
2. Define globalization and explain the cost and
future of globalization.
3. What is global governance? Explain the role of
each institution in Global Governance.
4. What is Globalization Index? Explain the
construct and methodology in evaluating the
countries.
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