Parochialism is the state of being limited or narrow in scope.

It can refer to a focus on one's own local or regional

community, to the exclusion of other communities or perspectives. It can also refer to a narrow focus on a particular
issue or set of issues, to the exclusion of other important issues.

An ethnocentric attitude is the belief that one's own culture or ethnicity is superior to all others. Ethnocentric people
tend to view the world through the lens of their own culture, and they often judge other cultures based on their own
standards. This can lead to several problems, including prejudice, discrimination, and conflict.

A polycentric attitude is the belief that each country is unique and that businesses should adapt their strategies and
practices to each local market.

 Increased customer satisfaction: By adapting their products and services to local markets, companies can better
meet the needs of their customers.

 Improved relationships with local stakeholders: By showing a commitment to the local community, companies
can build stronger relationships with local governments, businesses, and other organizations.

 Increased market share: By being more responsive to local needs, companies can increase their market share in
each country in which they operate.

A geocentric attitude is the belief that the world is a single market and that businesses should develop global strategies
and practices.

 Reduced costs: By developing global strategies and practices, companies can reduce costs through economies of
scale and standardization.

 Increased efficiency: By coordinating and managing operations centrally, companies can improve efficiency and
reduce duplication of effort.

 Increased global integration: A geocentric approach can lead to greater integration between the company's
operations in different countries

Trading alliance

A trading alliance is an agreement between two or more countries to reduce or eliminate tariffs and
other trade barriers between them. Trading alliances can be bilateral (between two countries) or
regional (between multiple countries in a region).

Trading alliances are important because they can help to:

 Increase trade between member countries

 Promote economic growth and job creation
 Attract foreign investment
 Give member countries more bargaining power in international trade negotiations
 Help to reduce poverty and inequality
 Explanation of markets
 More product choices
 Less waste of resources
 Shared expertise

Trading mechanism A trading mechanism is a set of rules and procedures that govern how goods
and services are traded between countries. Trading mechanisms can be formal or informal.

 Formal trading mechanisms are typically established by governments and international

organizations. They include agreements such as the General Agreement on Tariffs and Trade
(GATT) and the World Trade Organization (WTO). Formal trading mechanisms help to ensure
that trade is conducted in a fair and orderly manner.
 Informal trading mechanisms are not established by governments or international
organizations. They are based on customs and practices that have evolved over time

Importance of trading mechanisms:

Trading mechanisms are important because they help to:

 Promote trade between countries

 Reduce uncertainty and risk for businesses involved in international trade
 Facilitate the settlement of disputes

EU =27 COUNTRIES (FRANCE, GERMANY, AUSTRIA, POLAND)

ASEAN (ASSOCIATION OF SOUTH EAST ASIAN NATIONS) 10 NATIONS (VIETNAM,
SINGAPORE, THAILAND)
NAFTA (NORTH AMERICA FREE TRADE AGREEMENT) MEXICO, CANDIA, AND US
GOVERNMENT

WTO 153 TO 164 COUNTRIES (FRANCE CHINA USA JAPAN GERMANY)

IMF 183 (ALL ABOVE BRAZIL AND ITALY)

GLOBAL OPERATION OF BUSINESS

Global sourcing is the practice of acquiring goods or services from suppliers around the world where
they are cheapest
Reduced cost
New resources and skills
Improved quality
A US-based clothing company may source its garments from factories in China and Bangladesh,
where labor costs are lower. The company may also source its raw materials, such as fabric and
zippers, from suppliers in India and Vietnam. By sourcing its products and materials from different
countries, the company can reduce its costs and improve its profitability
Exporting is the process of selling goods and services produced in one country (domestically) to
buyers in another country (abroad)
Access to new customers
More profit
More positive mouth
Importing is the process of bringing goods and services into a country from another country.
Lower price
More products to offer
Coffee beans are one of the most popular imported commodities in the world. The United States, for
example, imports over 20 billion pounds of coffee beans each year. Coffee beans are imported from a
variety of countries, including Brazil, Colombia, Vietnam, and Ethiopia
Licensing - an organization gives another organization the right to make or sell its products using its
technology or product specifications (intellectual properties)
Licensor: Google
Licensee: Samsung
Google licenses its Android operating system to Samsung, which allows Samsung to use Android on
its smartphones and tablets. This is a type of software licensing.

Franchising - an organization gives another organization the right to use its name and operating
methods.
The key difference between licensing and franchising is that in licensing, the licensee is free to
operate their business independently, while in franchising, the franchisee must operate their business
according to the franchisor's standards.

A strategic alliance is a formal agreement between two or more independent companies to work
together on a specific project or to achieve a common goal.
Strategic Alliance - a partnership between an organization and one or more foreign company
partner(s) in which both share resources and knowledge in developing new products or building
production facilities
Nestlé Pakistan and PepsiCo Pakistan
Joint Venture - a specific type of strategic alliance in which the partners agree to form a separate,
independent organization for some business purpose
Boeing and Airbus have a joint venture to develop and produce the A320 family of aircraft.
A foreign subsidiary is a company that is owned or controlled by a parent company in another
country
directly investing in a foreign country by setting up a separate and independent production facility or
office.
Individualism versus collectivism: Individualism is a measure of how independent people are. In
individualistic cultures, people are more likely to focus on their own goals and achievements. In
collectivistic cultures, people are more likely to focus on the goals and achievements of the group
Power distance is a measure of how comfortable people are with inequality. In low power distance
cultures, there is a more egalitarian society, and people expect to be treated equally, regardless of
their social status or position. In high power distance cultures, there is a clear hierarchy, and people
expect those in positions of power to be obeyed.
Certainty
High uncertainty avoidance (UA) cultures are more comfortable with clear rules and structure. They
prefer to have things planned out and predictable. In high UA cultures, people are more likely to be
anxious about change and uncertainty. They may also be more likely to follow rules and regulations,
even if they disagree with them.
Low uncertainty avoidance (UA) cultures are more comfortable with ambiguity and change. They are
more likely to be tolerant of risk and to be willing to experiment. In low UA cultures, people are more
likely to be confident in their ability to deal with uncertainty. They may also be more likely to challenge
rules and regulations if they believe they are not in the best interests of the group or society
Long-term versus short-term orientation: Long-term orientation is a measure of how much a
society values long-term planning and investment. In long-term-oriented cultures, people are more
likely to save money and invest in the future. In short-term oriented cultures, people are more likely to
spend money and enjoy the present.
Achieving is about setting and achieving goals. It is about taking action and working towards
desired outcomes. Nurturing is about taking care of oneself and one's relationships. It is about
providing oneself with the support and resources needed to thrive.

Cultural intelligence (CQ) is the ability to understand and adapt to different cultural contexts. It is a complex skill that
involves knowledge, skills, and attitudes.

Knowledge about different cultures includes understanding cultural values, norms, and practices.

Skills related to CQ include the ability to:

 Communicate effectively across cultures. This includes being able to understand and adapt to different
communication styles, such as verbal and nonverbal communication.

 Build relationships with people from different cultures. This includes being able to build trust and rapport, and
understand and respect different cultural values.

 Solve problems effectively in cross-cultural situations. This includes being able to identify and understand
cultural differences, and to develop solutions that are appropriate for the cultural context.
Attitudes that are important for CQ include:

 Open-mindedness. This means being willing to learn about and appreciate different cultures.

 Flexibility. This means being able to adapt to different cultural contexts.

 Tolerance for ambiguity. This means being comfortable with uncertainty and not having all the answers.