560- Post and Responses DB-2
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MKT560-W2-Forresponses.docxKelsey Leja
Discussion Board #2
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Chapter 5
17. Suggest some cautions that an individual from a relationship-oriented culture should bear in mind when dealing with someone from an information-oriented culture.
Someone that is from a relationship-oriented culture will not want to consider bribery in their business with anyone from an information-oriented culture. Usually, this practice can be illegal or looked down upon in these cultures. They also do not want to be late to any meetings as someone from the other culture follows Monochromatic time, which means that they view time as "linear. Events are scheduled one at a time, with one event following another" (Duranti & Di Prata, 2009). In contrast, Polychromatic time "views time as being more flexible. Because life isn’t entirely predictable, scheduling and being precise are seen as simply not that important" (Duranti & Di Prata, 2009). Knowing the habits of other cultures is important in order to avoid potential conflicts that may affect the business deal before the meeting has even started. They also may need to keep in mind that their relationships may not form as easily as they would with similar cultures, keeping an open mind on both sides is key for both parties to come out satisfied with their deals.
19. Differentiate among the following: bribery extortion lubrication subornation
Bribery is considered making offers to make a payment in order to gain "unlawful advantage". An example of this would be a company offering money to a government to not allow the competition to sell their products in their country or a specific region because they only want their products to be sold there. Extortion is making offers when they are legally entitled to, for example, a leader of a country demanding that a company pay extra so their contract gets renewed for the next year. Although Extortion is legal, it is still not viewed as ethical similar to how bribery is viewed in the United States.
Lubrication is a form of bribery that involves a small amount of cash, a gift, or service in order to speed up the performance of a process or job. This occurs in countries in which it is not illegal, and can be viewed as a means to do someone else's job first since they paid more for it. Subornation, in contrast, is not legal. It usually involved a large amount of money to motivate someone to commit an illegal practice to benefit a company. This can include them not whistle-blowing or committing an act that goes against the law.
All of these practices are frowned upon in the United States, but they may not be viewed as poorly in other countries if they are still following the laws of each country.
Chapter 6
10. Expropriation is considered a major risk of foreign business. Discuss ways in which this particular type of risk can be minimized somewhat as a result of company activities. Explain how these risks have been minimized by the activities of the U.S. government.
Expropriation's risk can be minimized by companies creating contracts before investing in a foreign country. If a contract is made, there is less of a chance that this will occur if there are benefits to each side of the country, and negative consequences implemented if they do not follow the contract. The U.S government has also put in regulations of when a company is allowed to invest in a foreign country in order to protect themselves from expropriation, such as having the company becoming domesticated before the contract goes into effect. Another way is to privatize the company, which allows them to create more competition and attract foreign capital. Companies need to do their research first to make sure that they are getting the best deal from doing business in a foreign country, just as much as they would research the marketing strategies they would need to alter to better fit a country.
16. Select a country and analyze it politically from a marketing viewpoint.
Japan is the third-largest economy in the world, which gives businesses many great opportunities to enter their markets. After World War II, Japan has had tensions with China, "Japan’s relationship with China remains fragile, even if it has improved in the latest years" (Santander, 2020). Japan's relations with South Korea "has worsened recently, due to a 2018 South Korean ruling which compels Japanese companies to pay compensation for the forced Korean labor during World War II" (Santander, 2020). Due to these tensions with nearby countries, this could mean that they are hesitant to make agreements with these nearby countries as opposed to other world leaders, such as the United States or European Nations. Japan also has a democratic government, which is similar to the United States and European Nations. If there are agreements that need to be made between these countries, it may be easier to come to negotiation as many of the laws have a greater chance of being similar. All in all, Japan is a great option for many companies in democratic nations to expand their business to in their current political climate.
Sources:
Cateora, Philip. International Marketing (p. 128-195). McGraw-Hill Higher Education. Kindle Edition.
Duranti, G., & Di Prata, O. (2009). Everything about time - Monochronism - Polychronism - Orientation. Retrieved July 05, 2020, from https://www.pmi.org/learning/library/everything-time-monochronism-polychronism-orientation-6902
Santander, B. (2020). Japan: Economic and political outline. Retrieved July 07, 2020, from https://santandertrade.com/en/portal/analyse-markets/japan/economic-political-outline
Andrew Harrell
DB #2 Week 3 Chapter 5 and 6 - Andrew Harrell
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Chapter 5 Question 19, Differentiate the following: bribery, extortion, lubrication, and subordination.
Countries with the highest perceived corruption are Somalia, Syria, South Sudan, Yemen, and North Korea. (Ospina, Roser, 2019) Countries that are perceived with low corruption are Denmark, New Zealand, Finland, Singapore, and Sweden. (Ospina, Roser, 2019) Corruption can be in the form of bribery, extortion, lubrication, and subordination.
Bribery can include an individual or company offering a promise, gift, or money to another individual to gain an advantage. A bribe can be given to a public official, foreign official, corporations, witness, financial officials, educational officials, sporting official, coach, or player. An example of bribery is an individual who pays another person money to have their company selected as the winner of a bid or contract.
Extortion is gaining a benefit, money, or property from another party by using intimidation, violence, threats, or force. Hobbs Act of 1946 protects individuals and corporations from extortion concerning domestic and foreign commerce. (Chen, 2020) An example of extortion is someone that is blackmailing another person and forcing them to pay money not to have their secret exposed to the public.
An individual or corporation offers a low-value gift or small amount of money to a low-ranking official is called lubrication payment. (Cateora, Money, Gilly, Graham, 2020, pg 156) The payment or small gift will help speed up a task. An example is a person offering a gift to a custom official to speed up clearing a shipment at the foreign border.
An individual or corporation that offers a large sum of money to an official to turn their head the other way and ignore that a law is being broken is called subordination. (Cateora, Money, Gilly, Graham, 2020, pg 156) An example would be if a company claimed the wrong duty on a shipment because the taxes were lower and paid the custom official to turn their head.
Chapter 5 Question 24: Visit Transparency International’s website and check to see how the CPI index for countries listed in exhibits 5.4 and 5.6 have changed. After searching TI’s database, explain why the changes have occurred. The site is found at http://www.transparency.org
The Corruption Perception Index of 2019 found at http:www.transparecny.org has a few changes within the top 10 compared to exhibit 5.6 that has the 2017 index displayed. Exhibit 5.6 has New Zealand (89), Denmark (88), Finland (85), Norway (85), and Switzerland (85) in the top five. (Cateora, Money, Gilly, Graham, 2020, pg 154) 2019 index has Denmark (87), New Zealand (87), Finland (86), Singapore (85), and Sweden (85) in the top 5. (Transparency International, 2019) The countries with the most improved scores from 2012 to 2019 were Greece (+12), Guyana (+12), and Estonia (+10). (Transparency International, 2019)
Greece passed legislative laws that help protect individuals and corporations from corruption. Guyana has implemented governmental controls that will hold government officials accountable for corruption. Estonia has implemented a new framework and institutions that help prevent corruption.
The countries with the worst decline from 2012 to 2019 were Canada (-7), Nicaragua (-7), and Australia (-8). (Transparency International, 2019) Canada's index score has been declining because they have lax laws on bribery. Canadian company SNC was fined for bribing Libyan government officials. Nicaragua is declining because of human rights violations and social unrest. Australia has decreased because of scandals in the police departments, prosecution of whistleblowers, and Senator Bridget McKenzie's misuse of sports money. (Redlich, 2020)
The bottom five countries in 2017 were Yemen (16), Afghanistan (15), Syria (14), South Sudan (12), and Somalia (9). (Cateora, Money, Gilly, Graham, 2020, pg 154) In 2019 the bottom five were Venezuela (16), Yemen (15), Syria (13), South Sudan (12), and Somalia (9). (Transparency International, 2019) The bottom countries in the index have a low legislative framework to prevent corruption, civil unrest, and have low human rights laws in place.
Chapter 6 Question 10: Expropriation is considered a major risk of foreign business. Discuss ways in which this particular type of risk can be minimized somewhat as a result of a company activities. Explain how these risks have been minimized by the activities of the U.S. government.
Foreign governments that forcefully take over a company is called expropriation. Expropriation includes a government taking property or assets without adequately compensating the other party. Companies can minimize expropriation by borrowing money from local banks within the country a company is doing business. Joint ventures with other multi-national companies can help reduce risk and expropriation.
Companies can also protect themselves from expropriation by borrowing money from a host investor or bank. Licensing or franchising a company, technology, processes to a local investor will help reduce the risk of expropriation. Political bargaining and lobbying in the foreign company can help reduce expropriation. The political payoff to a foreign government official can help reduce expropriation but is not recommended as there are other legal issues involved with the method. Planned domestication is the last way a company can reduce from expropriation.
Risks have been minimized by activities of the United States government in several ways. The first way to reduce risks is for the United States to cut-off funding or aid to countries. The next way that the American government has reduced risks is by developing government agencies that help reduce risks. An example is the “Export-Import Bank that helps underwrites trade and investment for American firms.” (Cateora, Money, Gilly, Graham, 2020 pg 193) The Overseas Private Investment Corporation and the Foreign Credit Insurance Association are examples of American agencies that provide credit and risk insurance for United States companies that participate in foreign activities. (Cateora, Money, Gilly, Graham, 2020 pg 193) The Agency for International Development provides aid to underdeveloped countries and helps protect
Chapter 6 Question 19: You are an executive in a large company with only minor interests in international markets: however, corporate plans call for a major global expansion. Visit the home page of Control Risk Group (CRG) at https://www.controlrisks.com/ . After thoroughly familiarizing yourself with the services offered by CRG, write a brief report to management describing how its services could possibly help with your global expansion.
Control Risk Group could help a corporate with a global expansion in several ways. Control Risk Group can help a corporation that is trying to expand globally by identifying associated risks in each market. Control Risk Group collaborates with a corporation by building a strategic framework that mitigates risk in each global market. Control Risk Group has highly trained security professionals that helps globally monitor risk that could threaten a corporation's service or products. They can help identify potential threats that could damage a corporation's reputation. Control Risk Group has a solution called travel tracking. Travel tracking creates a safe travel plan for a corporation's employees while they are in a foreign country. They offer a service called Executive Protection that provides VIP protection to senior executives, families, and clients while traveling in a foreign country. Control Risk Group has services that help monitor cyber-attacks. They provide cybersecurity threat intelligence, risk assessments, training, and response services. They provide security design engineering that could be useful while trying to expand into a foreign country. Lastly, they provide security training and education to employees and managers, which will help a corporation expand globally. Control Risk Group can help a corporation that is looking to expand globally by identifying potential global or local threats in a market. For instance, they can help provide expertise with how to expand globally during COVID-19.
Thank you,
Andrew Harrell
References:
Ospina, E., Roser M., (2019, May). Corruption, retrieved from: https://ourworldindata.org/corruption
Chen, J., (2020, May). Extortion, Retrieved from:
https://www.investopedia.com/terms/e/extortion.asp
Cateora, P., Money, B., Gilly, M., Graham, J., (2020). International Marketing (18th Edition).
New York, NY: McGraw Hill Education
Redlich, H., (2020, February). Austrilia Struggles to Improve Corruption Perception Ranking,
Retrieved from: https://www.lexology.com/library/detail.aspx?g=7b4c3fea-fd7b-47f0-a455-29b047413c7e
Transparency International, (2019). Corruption Perception Index 2019, Retrieved from:
https://images.transparencycdn.org/images/2019_CPI_Report_EN.pdf
Ashley Fifield
DB Week 3
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Chapter 5
17. Suggest some cautions that an individual from a relationship-oriented culture should bear in mind when dealing with someone from an information-oriented culture.
Relationship-oriented culture stands for the culture in which a lot of importance is given to the relationships that exists between people in the professional and personal aspects of someone’s life. According to Watershed Associates an example of relationship-oriented culture would be in Latin America where the group that a person belongs to is a large and crucial part of their identity and the goals that will be accomplished occur via the relationship. The decisions typically made when a consensus has been reached or utilizing a top-down method (Watershed, 2019).
Information-oriented culture stands for culture that the is a large amount of importance that is given to the information sources and the amount of information that is received and exchanged determines the culture exists at that place.
Some of the cautions that a person from individual oriented culture should bear in mind when dealing with someone from an information-oriented culture is that the person belonging to information-oriented culture are only concerned about the availability and transfer of knowledge and information. These people pay little attention to towards relationship building. However, the person that is coming from an information-oriented culture will not posses any interest or urgency in in strengthening business relationships with other people as their only motive is to take information they need and move on from the relationship.
19. Differentiate among the following: bribery, extortion, lubrication, subornation
The difference between bribery and extortion relies on if an activity that occurred had its results due to an offer or from a demand of payment. Bribery is defined as being voluntarily offered a form of payment by a person that is seeking unlawful advantage. Extortion is when payments are given to someone in authority by someone that is only seeking what they feel they are lawfully entitled to. According to Peter Blair (2017) the main difference between extortion and bribery is a payment has been given to.
The difference between lubrication and subordination is a variation of bribery. Lubrication involves a small payment or service that is given to low-ranking officials in a country where the type of payment that is given is not prohibited by law. Subornation is the opposite of lubrication in that it involves large payments or services.
Chapter 6
10. Expropriation is considered a major risk of foreign business. Discuss ways in which this particular type of risk can be minimized somewhat as a result of company activities. Explain how these risks have been minimized by the activities of the U.S. government.
Expropriate means to take money or property of an owner for public welfare or personal use illegally without paying any money to the owner. Taking full control of the a business of foreign investors is known a expropriating.
The risk of expropriation is minimized in the US by:
-Putting strict pressure through the country of the expropriated firm—during this, the expropriated firm put economic pressure on the host country with the help of their home country. The county of the expropriated firm stops the supply of resources to the host country unless or until there is an agreement to release the firm.
-A change in foreign governments attitudes towards expropriating – The risk of expropriating is minimized by changing the attitude of the foreign government towards expropriating. This is done by hiring people of the host country on the job.
-Encouraging local investment in the business—The risk of expropriation is minimized when foreign companies encourage local investors to invest in their business. This gives the message to the government that the firm is also working for the welfare of the host country.
The United States government minimizes these risks by establishing import-export agencies to keep the record of investment activities. The U.S. government also put economic pressure on the countries those expropriate.
16. Select a county and analyze it politically from a marketing viewpoint.
India—This country is a democratic country meaning that the individuals there have the right to speak their own mind. Marketing sectors is an area that grabs the attention of a person whenever an advertising agency shoots innovative or explicit ads on TV, social media, newspaper, or magazines. Kalyan Jewelers and Fevikwik Commercial are market-driven incidents that were intervened politically. Kalyan Jewelers was recently criticized by the Bhartya Janta Party due to an ad that they labeled as racist and portraying child slavery. The Fevikwik commercial featured an Indian soldier and a Pakistani soldier at the Wagah Border. The ad had a focus on bonding between the two countries. The company meant to bring a smile to all the citizens watching, but the ad was actually deemed as hurting both of the country’s sentiments.
Blair, P. (2017, July 19). Is There a Difference Between Bribery and Extortion? Retrieved July 06, 2020, from https://www.blairdefense.com/difference-bribery-extortion/
Cateora, P., Graham, J., & Gilly, M. (2020). International Marketing (18th ed.). New York, NY: McGraw-Hill Publishing Copmany.
Watershed, A. (2019). Task Orientation vs. Relationship Orientation. Retrieved July 06, 2020, from https://www.watershedassociates.com/learning-center-item/task-orientation-vs-relationship-orientation.html
Dylan Reinink
DB Week 3
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Chapter 5
Question 17: Suggest some cautions that an individual from a relationship-oriented culture should bear in mind when dealing with someone from an information-oriented culture .
The cautions to take as a relationship-oriented individual when dealing with someone who is from an information-oriented culture is mostly to avoid briberies, understand their low distance from English, their individualism, and their preferred mode to communicate being digital. Since the relationship-oriented culture is used to bribery being more common, their understanding that English is high distance for their culture, their collectivistic ways of operating, as well as their preferred mode of communication being face-to-face, they must understand that IO cultures are the opposite of them, and must bear in mind these differences to avoid causing offence or to avoid inefficiencies in communicating between the two cultures.
Question 19: Differentiate among the following: bribery, extortion, lubrication, subordination.
The differentiation among these terms lies on the meaning and context of the action being performed by the individual. Starting with bribery, bribery is voluntarily offering payment by someone who wants to seek an advantage. In cultural contexts, the morality of this action is murky. In some cultures, attitudes towards bribery are more accepting, whereas other places in the world, such as the United States of America, heavily frown upon the act of bribery. The key difference between bribery and extortion is if the activity resulted from an offer or from a demand for payment (extortion). A key example of bribery is if an executive of a company decided to offer a government official payment to do something (often unethical) in their role that would create a positive outcome for the executive’s company/ the executive.
Extortion, which is different from bribery, is if the payments are taken under force/ extreme stress by someone who has authority, from a person seeking what they are entitled to. A good example of extortion can be seen if a shopkeeper is forced to pay a gang to protect their shop from “evil”.
Overall, bribery and extortion have two main results, being “(i) extortion should always be deterred but allowing bribery may be optimal; and (ii) bribery is deterred when information is hard but may be allowed when information is soft” (Khalil, 2010). Bribery being optimal can be seen with the cultural factors of each country. It is also important to note the role of bribery in information gathering and knowing when bribery may be more “justified” in the role of gaining information.
Lubrication and subornation can be seen as variations of bribery. Lubrication involves a gift, service, or small lump of cash given to a low-ranked official in a country where the offering is not allowed by the country’s laws. The incentive for this action is to speed up or facilitate the normal actions of the official. A good example would be a small offering of cash to detectives to quickly speed up their investigation to provide answers quicker.
Subornation involves giving large sums of money to an official to entice them to commit an illegal act for the person who gave them the sum of money.
The difference between lubrication and subornation ultimately can be seen as one giving incentive to complete a task more efficiently or rapidly, whereas the other can be seen as blatant head turning, not doing their job or breaking the law.
Chapter 6
Question 10: Expropriation is considered a major risk of foreign business. Discuss ways in which this particular type of risk can be minimized somewhat as a result of company activities. Explain how these risks have been minimized by the activities of the U.S. government.
Expropriation is the act of where the government seizes an investment, but still makes some attempt to reimburse some of the assets. After an investment is expropriated, often times it becomes nationalized, becoming a government run entity.
This particular form of risk can be minimized as a result of company activities by using bilateral investment treaties, as well as commodity hedging. Bilateral investment treaties help the investor “structure their investments so as to receive the benefit of an appropriate bilateral investment treaty” (Flynn, 2012). These often include language that, “prohibits expropriation by one state of the property of an investor from the other state without appropriate compensation being paid in the event that expropriation does occur” (Flynn, 2012).
Commodity hedging, if implemented early in the business, can enhance the value of a business in the long term. By increasing the value of your business, in the case of expropriation, the investor can receive more payments for the asset if they have implemented a commodity hedging strategy.
These actions have been minimized by the U.S. government by their role in negotiations between countries for trade. By including language in trade agreements that negate the act of expropriation, the U.S. is effectively decreasing the act of expropriation in foreign countries. The U.S. also can impose many different trade tactics to effectively “manage” other countries by cutting off their supplies or by cutting off profits through the use of boycotts and trade embargoes.
Question 19: You are an executive in a large domestic company with only minor interests in international markets: however, corporate plans call for major global expansion. Visit the home page of Control Risks Group (CRG) at https://www.controlrisks.com. After thoroughly familiarizing yourself with the services offered by CRG, write a brief report to management describing how its services could possibly help with your global expansion.
After reviewing CRG’s website, I believe that CRG could effectively help us enter foreign markets on a global scale. Control Risks Group is a specialist in global risk consultancy, which helps navigate businesses through staying up to date on global happenings, essentially being in the loop 24/7. A great example that applies to us currently is navigating our COVID-19 inflicted world and the pressures placed on companies now. CRG has developed insights such as “Top 5 Risks”, roadmaps to navigate for businesses on the topics of economic risks, social risks etc, CEO viewpoints from other businesses, podcasts to educate yourself on the pandemic, as well as scenario mapping for businesses. Another great reason why CRG would help us move to a global scale is how they invest in their professional staff to create their team. By creating teams through global searches, there is more diversity in the office, therefor creating more knowledgeable staff to be able to help our company in our transition. I believe CRG would be perfect for our company to make the transition to the global market.
References.
Flynn, C. (2012, July 13). Avoiding expropriation and managing political risk in emerging markets. Retrieved from https://www.lexology.com/library/detail.aspx?g=a79db5c1-b552-4e53-b532-21cec6433166
Khalil, F., Lawarrée, J., & Yun, S. (2010). Bribery versus extortion: Allowing the lesser of two ` evils. The RAND
Journal of Economics, 41(1), 179-198. Retrieved July 2, 2020, from www.jstor.org/stable/40649276
Shane Workman
Chapters 3&4 Discussion questions.
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17. Suggest some cautions that an individual from a relationship-oriented culture should bear in mind when dealing with someone from an information-oriented culture.
The first caution I would recommend is an understanding that while cultures will lean one direction or the other, very few are on the extreme… Meaning, do not forgo one aspect of the spectrum completely for the other. This argument is along the same lines of communication, high context versus low context.
An individual from a relationship-oriented culture should give regard to a few key points:
· Think task-oriented, that is how “bonds” are built. You show care, by accomplishing the task at hand.
· Remember productivity and efficiency.
· They will be direct in their speech, do not take offense.
· Technology and internet inclined.
· They are monochronically timed.
· Personal relationships come secondary to accomplishing the task.
19. Differentiate among the following: bribery, extortion, lubrication, and subornation.
Bribery – is the use of money to garner favor and beneficial decisions from elected officials and government employees, often illegally.
Lubrication- is the use of money to expedite decided actions by elected officials or government employees.
Subornation- is the use of money to influence (or bribe) someone to perform a misdeed or commit a crime.
Extortion- is the use of force, or the threat thereof, to obtain something of value, particularly money.
10. Expropriation is considered a major risk of foreign business. Discuss ways in which this particular type of risk can be minimized somewhat as a result of company activities. Explain how these risks have been minimized by the activities of the U.S. government.
Expropriation is the action by the state of taking property from its owner for public use or benefit. This is a risk when investing in foreign business as you have little control over a countries laws as an outside investor.
There are many ways to mitigate or lessen the chances of expropriation within a specific nation, namely corporate social responsibility (CSR). Doing good for the foreign community or state in which the company is located will create a positive public view. Another way is to take out insurance against certain political risks. There are organizations that insure against these exact issues.
Moreover, expropriation throughout history, has shown it to be a losing proposition for the state to take, desired benefits never manifest and the company ends up inefficient, behind in technology, and generally cannot compete in the global economy.
The US has minimized the risk of expropriation by negotiating trade deals between many countries that want to participate in the global market. Some treaties are having provisions against the many risks of global investment and expropriation of foreign assets within agreeable states. As well, though more severe, the US has used sanctions, embargoes, and boycotts against countries that are back actors in the global market.
16. Select a country and analyze it politically from a marketing viewpoint.
Business in India is a conundrum and easily one of the worst countries to do business despite having continuous economic growth and having the largest middle-class consumer market in the world. A few highlights to consider for India:
· India currently faces turmoil due to widespread protests and political corruption.
· Regulations change from region to region and often shift frequently.
· Market dynamics shift with the culture which continues to be a moving target.
· The high middle class tends to place a high value on strong brands for status symbolism.
· India’s infrastructure is not nearly developed as most booming countries, logistics is a key concern.
· Highlight: the rural market comprises of 700 million people and is often underserved in favor of the urbanites…
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