INTERNATIONAL BUSINESS

INTERNATIONAL BUSINESS

Chapter 1

§ Business à Individual or organizations who try to earn profit by providing products that satisfy people’s needs

§ Product àA good or service with tangible and intangible characteristics that provide satisfaction and benefits

§ Primary goal of business is to earn profit!

§ Stakeholders à Groups that have a stake in the success and outcomes of a business

§ Market stakeholders (primary) à creditors, suppliers, consumers, distributors, employees

§ Non-market stakeholders (2ndary) à communities, government, activist groups, media, business support groups, general public

§ Economic systemà A description of how a society distributes its resources to produce goods and services

§ Communism à a society in which people, without class, own all the nation’s resources

§ Socialism à eco.system in which the government owns and operates basic industries but individuals own most businesses

§ Capitalism à eco.system in which indiv. own and operate the majority of businesses that provide goods and services

§ Free market system à pure capitalism, in which all economic decisions are made without government intervention

§ Free enterprise system (neoliberalism) à provides an opportunity for a business to succeed or fail on the basis of market demand.

§ Pure competition àthe market structure that exists when they are many small businesses selling one standardized product

§ Monopolistic àexists when they are fewer businesses than in a pure comppttion environment and the differences among the goods they sell are small

§ Oligopoly à exists when they are very few businesses selling a product

§ Monopoly à exists when there’s only one business providing a product in a  given market

Chapter 2

§ Business Ethics à The principles and standards that determine acceptable conduct in business. Business ethics relates to an individual’s or a work group’s decisions that society evaluate as right or wrong.

§ Social Responsibility à A business’s obligation to maximize its positive impact and minimize its negative impact on society. Social responsibility is a broader concept that concerns the impact of the entire business’s activities on society.

§ An ethical issue à An identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical.

§ Ethical issues category à Abusive and Intimidating Behavior, conflict of interest, fairness and honesty, communications, business relationships

§ Abusive behavior can be placed on a continuum from a minor distraction to disrupting the workplace. The concept mean anything from physical threats, false accusations, be annoying, profanity, insults, yelling, etc

§ Conflict of interest à Occurs when a person must choose whether to advance their own personal interest or those of others. Ex: Bribes (payments, gifts, or special favor intended to influence the outcome of a decision)

§ Fairness and honesty à The heart of business ethics; general values of decision makers. Honesty and fairness can relate to how employees uses the resources of the organization.

§ Communications à False and misleading advertising and deceptive personal-selling tactics anger customers and may cause a business to fail.

§ Business Relationship à Businesspeople must be ethical toward their customers, suppliers, and others in their workplace. Ethical behavior within a business involves keeping company secrets, meeting obligations and responsibilities

§ Alternative view of ethical behavior à individualism view, utilitarianism view, justice view, moral right view

§ Assessing ethical behavior à Gather the relevant factual information. Determine the most appropriate moral values. Make an ethical judgment based on the rightness or wrongness of the proposed activity or policy.

§ Codes of ethics à Formalized rules and standards that describe what a company expects of its employees

§ The act of an employee exposing the employer’s wrongdoing to outsiders. Usually the media, government regulatory agencies

§ Social Responsibility à The attempt of a business to balance its commitments to groups and individuals in its environment, including customers, other businesses, employees, and investors

§ Organizational Stakeholders à Those groups, individuals, and organizations who are directly affected by the practices of an organization and who therefore have a stake in its performance

§ Social responsibility issues à Organizational relationships with owners and stockholders (financial report, profit); Employee relations (providing a safe workplace, adequate pay); consumer relations (respecting the rights of customers and providing them with safe and satisfying products); Environmental issues (animal rights, pollution, global warming); community relations (responsibility to the general welfare of the community).

Chapter 3

§ International business àthe buying, selling and trading of goods and services across national boundaries

§ Absolute advantages à a monopoly that exists when a country is the only sources of an item, the only production of an item, or the most efficient producer of an item

§ Comparative advantage à the basis of most intl trade, when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items

§ Licensing à a trade agreement in which one company (the licensor) allow another company (the licensee) use its company name, products, patents, brands, trademarks, raw materials, and/or production processes in exchange for a fee or royalty

§ Franchising à a form in licensing in which a company (franchisor) agrees to provide a franchisee a name, logo, methods of operation, advertising, products, and other elements associated in a franchiser’s business, in return for a financial commitment and the agreement to conduct business in accordance with the franchiser’s standard of operations

§ Joint venture à the sharing of the costs and operations of a business between a foreign company and a local partner

§ Strategic alliance à a partnership formed to create competitive advantage on a worldwide basis

§ MNC à a corporation that operates on a worldwide scale, without significant ties or any one nation or region

Chapter 4

§ Internet à global information system that links many computer networks together

§  Intranet à a network of computers similar to the internet that is available only to people inside an organization

§ Extranet à a network of computers that permits selected companies and other organizations to access the same information and may allow collaboration and communication about the information

§ E-business à carrying out the goals of business through utilization of the internet

§ E-business models : B2B, B2C, C2C

§ B2B à use of the internet for transactions and communications between organizations

§ B2C à delivery of products and services directly to individual consumers through the Internet

§ C2C à market in which consumers market goods and services to each other through the Internet

§ E-business has generated many legal and social issues for consumers and business, including concerns about privacy, identity theft, and protection of intellectual property and copyrights

Chapter 5

§ Sole proprietorships à businesses that owned and operated by one individual. Ex: restaurants, barber shops, flower shops, independent grocery stores

§ Advantages: Ease and cost of formation, secrecy, distribution and use of profits, control of the business, free government regulation, easy to close the business

§ Disadvantages: unlimited liability, limited sources of funds, limited skills, lack of continuity, lack of qualified employees

§ Partnership à an association of two or more persons who carry on as co-owners of a business for profit.

§ Types of partnership: general, limited and joint venture

§ General partnership à Partners completely share in the management of the business

§ Limited partnership àOne general partner with unlimited liability and one limited partner with limited liability

§ Joint venture à A partnership established for a specific project or a limited time

§ Advantages: Ease of organization, availability of capital and credit, combined knowledge and skills, decision making, regulatory controls

§ Disadvantages: unlimited liability, business responsibility, life of the partnership, distributions of profits, limited sources of funds, taxation

§ Corporations à Legal entity, created by the state, whose assets and liabilities are separate from its owners

§ Types of corporations: private corp., public corp., quasi-public corp., non-profit corp.,

§ Advantages: Limited liability, transfer of ownership, perpetual life, external sources of funds, expansion potential

§ Disadvantages: double taxation, forming a corporation, disclosure of information, employee-owner separation

§ How do corporations grow? By expanding operations, new product development, market expansion, mergers, acquisitions, leveraged buyouts (LBO)

§ Merger à When two companies (usually corporations) combine to form a new company

§ Acquisition  à When one company purchases another, generally by buying most of its stock

§ LBO à A group of investors borrow money from banks and other institutions to acquire a company (or a division of one)

§ Kebaikan usaha perseorangan: Keuntungan menjadi milik sendiri, mudah mendirikannya, tidak perlu berbadan hokum, rahasia perusahaan terjamin, biaya organisasi rendah, aktifitasnya relatif simple, manajemennya fleksibel

§ Kekurangan usaha perseorangan: modal tidak terlalu besar, aset pribadi sulit dibedakan dengan aset perusahaan, perusahaan sulit berkembang karena kurangnya ide-ide, pengelolaan tergantung kemampuan si pemilik, kelangsungan perusahaan kurang terjamin, tanggung jawab pemilik tidak terbatas

§ Kebaikan usaha persekutuan: permodalannya lebih besar dari perusahaan perorangan, kelangsungan hidup perusahaan lebih lama, pengelolaan lebih mudah dan profesional karena banyak pengelolanya, ide-ide inovasi lebih lancar mengalir

§ Kekurangan usaha persekutuan: kerahasiaan perusahaan tidak terjamin, mudah terjadi konflik antar pemilik modal, adanya pemilik modal yang tidak bertanggung jawab

§ Firma à persekutuan untuk menjalankan usaha antara dua orang atau lebih dengan nama bersama, dalam mana tanggung jawab anggota firma tidak terbatas,  laba dan rugi dari usaha tersebut akan dibagi dan ditanggung bersama-sama

§ Kebaikan firma: jumlah modal relatif besar, lebih mudah memperoleh kredit, kemampuan manajemen lebih besar, pendirian mudah

§ Keburukan firma: tanggung jawab pemilik tidak terbatas, kelangsungan hidup tidak menentu, kerugian ditanggung bersama

§ CV à perjanjian kerjasama untuk berusaha bersama antara orang-orang yang bersedia memimpin, mengatur perusahaan dan bertanggung jawab penuh dengan kekayaan pribadinya, dengan orang-orang yang memberikan pinjaman dan tidak bersedia memimpin perusahaan serta bertanggung jawab terbatas pada kekayaan yang diikut sertakan dalam perusahaan tersebut

§ Kebaikan: modal lebih besar, mudah kredit, kemampuan manajemen lebih besar, pendirian mudah

§ Keburukan: sebagian anggota punya tanggung jawab tidak terbatas, kelangsungan hidup tidak menentu, sulit menarik kembali modal

§ PT à Kekayaan terpisah dengan pribadi, dividen hanya jika untung

§ Kebaikan: tanggung jawab terbatas, kontinyuitas lebih terjamin, pemindahan lebih mudah, tambahan modal lebih mudah, manajemen lebih efisien

§ Keburukan: double taxation (PT dan dividen terpisah), pendirian lebih sulit, start-up cost tinggi, kerahasiaan rendah

Chapter 6

§ Entrepreneurship à The process of creating and managing a business to achieve a desired objective

§ Small Business à Any independently owned and operated business that is not dominant in its competitive area and employs fewer than 500 people

§ Entrepreneur Businessperson who accepts both the risks and the opportunities involved in creating and operating a new business venture – people who assume the risk of business ownership with a primary goal of growth and expansion

§ Small business owner  – a people who start a small business with no plans other than to earn enough money from the business to lead a comfortable life – no plan to grow and expand

§ The basic distinction à aspiration ~ small  business owner à wants to remain small and support a lifestyle; Entrepreneurs à  is motivated to grow, expand and build

§ Permasalahan UKM di Indonesia: Iklim bisnis yang tidak adil – kebijakan pemerintah yang diskriminatif, manajemen dan kewirausahaan yang tradisional, terbatasnya modal, sebagian besar tidak berbadan hokum, birokrasi pendirian yg berbelit, biaya informal tinggi

§ Advantages of small business: (Personal) Independence, freedom of choice, the option of working at home; (Business) Often requires less money to start and maintain, flexibility, the ability to focus on a few key customers, the chance to develop a reputation for quality and service

§ Disadvantages of small business: high stress level, high failure rate, undercapitalization, managerial inexperience or incompetence, inability to cope with growth

§ Traits needed to succeed in entrepreneurship: Neuroticism (helps entrepreneurs focus on details), extroversion (facilitates network building), conscientiousness (facilitates planning), agreeableness (facilitates networking), openness to new ideas

§ Starting a small business: business plan, forms of business ownership, financial resources

§ Apakah kita semua dapat menjadi wirausaha? Semuanya Sangat Tergantung Pada: Kebutuhan untuk mandiri, kemampuan kreatif dan inovatif, kesempatan + Tantangannya, kemungkinan resiko dan keberanian untuk menghadapinya, rasionalitas dunia bisnis, tuntutan endurance fisik & psikologis, tuntutan atas 3C (competency, consistency, commitment), tanggungjawab atas moralitas bisnis

§ Franchise àA license to sell another’s products or to use another’s name in business or both

§ Advantages: Management training and support, brand-name appeal, standardized quality of goods and services, national advertising programs, financial assistance, proven products and business formats, centralized buying power, site selection and territorial protection, greater chance for success

§ Disadvantages: Franchise fees and profit sharing with the franchiser, strict adherence to standardized operations, restrictions on purchasing, limited product line, possible market saturation, less freedom in business decisions