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Country, international sales and a mix of nationalities among managers
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University of Bridgeport

MGMT 302

Professor McMahon

Vladislav Paskas


# Midterm exam


Multi National Corporation (MNC) is firm that has operations in more than one

country, international sales and a mix of nationalities among managers and

owners. Every company wants to be multinational. The reason why is very simple

– raising the sales among the company.


There are 3 major types of economies: market economy, command economy and

mixed economy.

Market economy

exists when private enterprise reserves the

right to own property and monitor the production and distribution of goods and

services while the state simply supports competition and efficient practices.

Command economy

is comparable to a monopoly in the sense that the

organization (government), has explicit control over the price and supply of a

good or service. Businesses in this model are owned by the state to ensure that

investments and other business practices are done in the best interest of the

nation despite the often contradictory outcomes.

Mixed economy

is a

combination of a market and a command company. While some sectors of this

system reflect private ownership and the freedom and flexibility of the law of

demand, other sectors are subject to government planning. The balance allows

competition to thrive while the government can extend assistance to individuals

or companies.


Foreign Corrupt Practices Act (FCPA) is act that makes it illegal to influence

foreign officials through personal payment or political contributions. The

objectives of the FCPA were to stop U.S. MNCs from initiating or perpetuating

corruption in foreign governments and to upgrade the image of both the US and

its business abroad.




Corporate social responsibility

(CSR) can be defined as the actions of a firm

to benefit society beyond the requirements of the law and the direct interests of

the firm.


may first be associated with financial investments of the

hope of steadily increasing profits, but for a growing number of companies, this

term means the same to them as it does to an environmental conservationist.


Corporate governance can be defined as the system by which business

corporations are directed and controlled. It specifies the distribution of rights and

responsibilities among different participants in the corporation – such as the




board, managers, shareholders, and other stakeholders – and spells out the

rules and procedures for making decisions on corporate affairs.


Culture is acquired knowledge that people use to interpret experience and

generate social behavior. This knowledge forms values, creates attitudes, and

influences behavior.


Dutch researcher Geert Hofstede identified four dimensions, and later fifth

dimension, of culture that help explain how and why people various cultures

behave as they do. The dimensions Hofstede examined were: power distance,

uncertainty avoidance, individualism and masculinity. The more recent fifth

dimension of time orientation is now as well known, but it was added to help

describe the long – versus short term orientations of cultures.


Individualism and communitarianism are key dimensions in Hofstede’s earlier

research. Although Trompenaars derived these two relationships differently than

Hofstede does, they still have some basic meaning, although in his more recent

work Trompenaars has used the word communitarianism rather than collectivism.

For him, individualism refers to people regarding themselves as individuals, while

communitarianism refers to people regarding themselves as part of group.




There are four strategic dispositions: ethnocentric, polycentric, regiocentric and

geocentric predispositions. A company with an

ethnocentric predisposition

allows the values and interests of the parent company to guide strategic

decisions. Firms with a

polycentric predisposition

make strategic decisions

tailored to suit the cultures of the countries where the MNC operates. A

regiocentric predisposition

leads firm to try to blend its own interests with

those of its subsidiaries on a regional basis. A company with a



tries to integrate a global systems approach to decision making.



is the tendency to view the world through one’s own eyes and

perspectives and


is the process of exhibiting the same orientation

toward different cultural groups.








Organizational culture has been defined in several different ways. In its most

basic form, organizational culture can be defined as the shared values and

beliefs that enable members to understand their roles in and the norms of the

organizations. Hofstede’s research found that the national cultural values of





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