Notes, summaries, assignments, exams, and problems for Economy

1. The CEO of Gulf Italia could probably justify paying a bribe to Italian government officials if he embraced a Utilitarian ethical framework.

2. When a company creates a wholly owned subsidiary in a foreign country, it makes a direct investment to establish a business that it solely owns and controls there.

3. Which of the following is NOT true about Whole Foods? Workers are encouraged to form unions.

4. According to the Friedman Doctrine, 'the business of business is business.'

5. According to management Guru Peter Drucker, the main responsibilities of a manager include all of the following EXCEPT: Disciplining people for bad.

6. European multinational firms commonly use a region-country focused approach because they are operating in multiple... Continue reading "Ethical Frameworks and Global Business Practices" »

Social Networks

are spaces on the internet formed by communities of individuals with interests and activities in common, such as friendship, kinship, work, and that allow contact between them, so they can share content and interact.

No one thought that social networks were going to be a success

Many believed that they were just going to be a fad and would soon disappear. What is even more surprising is that it is now a consolidated universal platform, a highly requested and necessary tool for a brand, company, business, or artist. But it is not only of great help for various sectors, also for any individual who is in them.

Now, networks are already generating employment

but it was never thought that it would ever exist. New jobs were born due to

Balanced Budget

Balanced budget is when current revenues equal current expenditures; however, when a deficit budget occurs causing revenues to fall short of expenditures, it requires the government to borrow money or even tap into reserves to make up the difference. This becomes a requirement that shapes the entire budget process, thus making budget deliberations revenue-driven when revenues determine the level of spending. Balanced budget is elusive when authorities propose a balanced budget but the council approves an unbalanced one or state or local laws allow the deficit at the end of the year to be carried over to the next year. Furthermore, there are no consistent or enforced standards for the balanced budget since it may be manipulated... Continue reading "The Importance of Balanced Budget and Tax Neutrality in Financial Management" »

Social Security and Citizen Protection

Social Security is the protection that a society provides to all its citizens so that they can develop their personalities through education. It must guarantee that they can live a safe and healthy life through healthcare. It must also guarantee that a person can still receive money if they lose their job (income during unemployment) and receive financial support during periods of need, such as sickness or retirement.

Everyone, as a member of society, has the right to social security provided by the State (government) and international cooperation.

Types of Pensions and Benefits

• Disability pension: Provided when you have had an accident at work and can no longer work.
• Paternity/maternity pay: Provided when

Product

Product is anything that can be offered to a market for attention, acquisition, use, or consumption, in order to satisfy customer needs.

Consumer Products

are bought by consumers for personal consumption.

Industrial Product

are bought by other companies for further processing or use in conducting a business.

Product Value (Creating and communicating value): 2 ways

• The customer-value hierarchy

Perceived value will differentiate a company from competitors and will make the product more attractive for the market.

• Core benefit
• Basic product
• Expected Product
• Augmented Product
• Potential Product

• Value Proposition

consists of identifying the Benefits, Barriers, and Needs. Describes the benefits customers can expect from your products and services.

• Benefits
• Experience
• Barriers
• Needs
• Features

• The

Characteristics of International Division Structure:

• Organized by function, product, or geography – such as country units within a region.
• Reflects a shortage of capabilities: With few employees having knowledge and experience in international operations, it made sense to cluster them together rather than to spread them throughout the organization.
• Used mainly by firms with a low ratio of foreign to domestic revenues and low foreign product diversity.

Global Product Structure Decision Involves:

• Locating manufacturing and other value-creation activities in the most appropriate global location to increase efficiency, quality, and innovation.
• Considerations made on coordination and integration problems.
• Locating a structure that can coordinate resource

Global Market Entry Strategies and Alliances

Market Entry Modes: Definitions and Characteristics

• Licensing: Represents a market entry strategy whereby a company grants rights to a foreign partner.
• Franchising: A variation of licensing.
  • Fact Check: Franchising is another variation of licensing. (T)
  • Fact Check: Franchising in a global context. (T)
  • Fact Check: Franchising is a variation of [X]. (F)
• Foreign Direct Investment (FDI): Honda's investment of $550 million in building a plant is an example of FDI. (T)
• Contract Manufacturing: Companies that use contract manufacturing may require a considerable commitment of management resources.

Licensing Strategy and Advantages

• Licensing is a contractual agreement. (T)
• Licensing as a market entry mode has several

Stages of Tourism Development

Exploration: Tourism is limited, and the social and economic benefits are small. Tourist attractions are likely to be focused on nature or culture.

Involvement: This marks the beginning of tourism development. Governments may be under pressure to develop transport infrastructure and community resources.

Development: New roads, train stations, and airports may be built. New tourist attractions may emerge, and hotels and hospitality provisions will be put in place.

Consolidation: Tourism growth slows to keep tourist products and services exclusive.

Stagnation: A decline in tourism begins; numbers may have reached their peak, and carrying capacities may be met.

Rejuvenation or Decline: These are possible outcomes for destinations... Continue reading "Tourism Development: Lifecycle, Impacts, and Attitudes" »

California Property Tax & Budgeting Sector Differences

California's Prop 13: A Non-Neutral Tax System

Property tax in California operates under a non-neutral system, initiated by Proposition 13 in 1978. This landmark legislation linked the tax rate to a property’s sales price at the time of acquisition, with a maximum 2% annual increase on the assessed value. As noted by Bland, this structure means the tax rate is determined by the sales price, primarily benefiting owners who retain their properties for extended periods. The low annual increase on property tax has resulted in significant tax disparities, allowing long-term property owners to realize substantial tax benefits over time, especially upon sale.

Impact on State Revenue and Local

Economic Integration

• Free Trade Area: In such an area, trade barriers amongst member countries are removed, but they keep their own barriers with third countries. In this situation, countries still need customs to check that no product from a third country is passed as a product from the union. For example, Mexico and the United States are in the NAFTA, but the United States has a higher tariff on rice coming from India. It could go through Mexico if there were no customs between Mexico and the United States.
• Customs Union: Members not only remove trade barriers amongst them but also adopt a common set of external barriers. That way, it is not necessary to have customs inspections at the borders.
• Common Market: Members not only remove trade barriers