Summary: Principles Of Business Administration

Read the summary and the most important questions on Principles of Business Administration

• Chapter 1

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• What is the difference between domestic and international business?

  - Boundaries (Domestic within the boundaries of one country, international is between two different countries) 
  - Currencies 
  - Legal systems 
  - Cultures
  Availability of resources 

• What is the difference between visible and invisible trade?

  Visible: Trade of physical goods/ tangible products -> Also called merchandise export/import
  
  Invisible: Trade of services/ intangible products ex. Banking. -> Also called service export/ import

• What is the difference between franchising and licensing?

  • Franchising is operating under the rights of the brand name wheras licensing is just selling the rights to sell a specific product. 
  • Franchising: McD 
  • Licensing: Disney 

• Chapter 4

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• What is culture? What are the characteristics?

  Culture is a shared set of values, behaviors, and beliefs that exist within a group of a society that distinguishes it from another.
  
  Characteristics: 
  

  • Learned behaviour 
  • Interrelated 
  • Adaptive 
  • Shared

• What are the elements of social structure?

  Individuals, families and groups
  

  • Defining family 
  • Individual's role within groups 
  • Importance of the individual relative to the group 

  
  Social stratification (Society's categorisation of people) 
  

  • Attributes 
  • Highly stratified societies 
  • Less stratified societies 

  
  
  Social mobility (Ability to move between different social groups in society) 
  

  • Low social mobility
  • You are born into a group and are most likely to stay in this group your entire life 
  • Socially mobile societies 
  • Easy to move from lower group to higher 

• Why might language become a cultural problem in business?

  • Message becomes a different meaning when translated 
    
  • Words may have different meanings in other languages (Ex. Saying yes) 

• International investment theories

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• Why do companies choose to use FDI according to the theory "Ownership advantages"?

  Ownership advantages gives a competitive advantage to the firm from owning a valuable asset - Ex. Brand name, economies of scale, or technology - to better penetrate new markets.

• Developing international strategies

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• What is strategy formulation and strategy implementation?

  Strategy formulation is deciding what to do and strategy implementation is actually doing it. 
  
  In a strategy formulation the firm establishes its goals and a strategic plan that will lead to those goals. 
  
  In strategy implementation the company develops tactics for achieving the international strategies. 

• Leadership in int. Business

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• What is the theory called that states that leaders cannot succeed by always using the same set of behaviours in all circumstances?

  Contemporary leadership theory

• Scope, implementation and pitfalls of strategic alliances

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• When forming a strategic alliance, following pitfalls might happen:Incompatibility of partnersAccess to informationDistribution of earningsLoss of autonomyChanging circumstancesDescribe each pitfall and what consequences they might have,

  • Incompatibility of partners
  • Partners not able to work together - Can lead to conflict, often poor performance
  • How to solve: Meet up beforehand to discuss reasons to join the alliance
  • Access to information
  • One partner may have to share information with the other that was preferred to keep secret
  • Ex. Information about technology
  • Distribution of earnings
  • Share risks and costs -> Also share profit
  • Who earns how much?
  • Loss of autonomy
  • Share control -> Limited what you can do
  • Changing circumstances
  • The motivating drivers for the alliance be disappear.