International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual

Page 1 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 1 preview image

Hisrich, International EntrepreneurshipInternational Entrepreneurship:Starting, Developing and Managing a Global Venture2ePart 1–International Entrepreneurship and Entrepreneurship OpportunitiesChapter 1–Importance of International EntrepreneurshipQuestions for Discussion1.What are some differences between domestic and international entrepreneurship?International entrepreneurship requires the consideration of a multitude of factors that willimpact the business decision making process. These factors include:The Economicsof the new market and how that market’s economy will be able to supportthe new product or service being introduced.The Stage of Economic Developmentthat that market is in and whether it is in the rightstage for this business.The Balance of Paymentsin a country and its impact on currency exchange rates,Type of Economic Systempresent in that country and how a foreign would go aboutentering the market.Political-Legal Environmentand how laws and regulations are created and enforced.Cultural Environmentof the country and how that country’s cultural practices differ fromyours.

Page 2 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 2 preview image

Page 3 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 3 preview image

Hisrich, International EntrepreneurshipTechnological Environmentdetermines if that market is in fact ready for the product andhas the necessary technical infrastructure for it to be useful.2.What are the key characteristics to understand when moving a business from one countryor region to another?EconomicsState in economic developmentBalance of payments–balance of tradeType of economic systemPolitical-legal environmentCultural environmentTechnological environment3.What potential problems might an entrepreneur encounter when entering a new country?Success in one country or market does not automatically mean success in other countries.Anentrepreneur needs to be aware of the market conditions in that country, whether there is aneed for their product or service, whether there is a distribution network that can efficientlyget that good to the customer, and a sales network to deliver it. Fluctuations in currencyexchange rates can have a drastic impact on businesses as sales one day could be worth muchless than sales the next depending on movements in rates. This makes planning and pricingdifficult. Local competition can be problematic if the entrepreneur does not know the new

Page 4 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 4 preview image

Hisrich, International Entrepreneurshipmarket well as a local player could be completely dominant and the local market will notshift to a foreign entrant. Communication problems and cultural differences could lead tomisunderstandings or disagreements between the entrepreneur and their customers, limitingpotential business opportunities and growth.And legal problems could arise if there is noprotection of trade rights, intellectual property, or contract enforcement. And in someinstances foreign governments have been known to take over foreign businesses or pushthem out of the market with little notice.4.What does an entrepreneur need to be aware of before entering a foreign market?The entrepreneur needs to be aware of several things before entering a foreign market:the distribution systemthe banking systemforeign exchange rates and policiestariff rules and regulationspatent protection enforcement policiesany appropriation regulations and business practices

Page 5 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 5 preview image

Hisrich, International EntrepreneurshipInternational Entrepreneurship:Starting, Developing and Managing a Global VenturePart 1–International Entrepreneurship and Entrepreneurship OpportunitiesChapter 2–Globalization and the International EnvironmentQuestions for Discussion1.What are themostcritical strategic factors to consider before entering a foreign market?The allocation of responsibility between U.S.and foreign operationsThe nature of the planning, reporting, and control systems to be used throughout theinternational operationsThe appropriate organizational structure for conducting international operationsThe potential degree of standardizationEach of these must be thought through and understood so that the international venture worksin concert with the domestic enterprise, each supporting the other. If these factors are not

Page 6 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 6 preview image

Hisrich, International Entrepreneurshipconsidered than there is the potential for miscommunication, overlapping of duties, or errorsin action that would prevent the international venture from succeeding.2.How does the control of foreign operations change as the enterprise grows?At its infancy, the foreign operation is generally run by a very centralized decisionmaking process. Theinternationalentrepreneur relies on their limited circle of advisorand partners to aid in controlling operations at home for the international markets.As the enterprise grows, it is able to build more of a local network in the foreign country.The larger size and complexity of the business makes it more difficult for all decisions tobe made back in the home office. At this point the local office becomes more independentand is free to make its own business decisions.Once this process of decentralization has expanded to several different markets, itbecomes very difficult to control and manage as one office might be acting in conflictwith another, and information is slow to make it back to the home office. At this pointcontrol is brought back to the headquarters and systems and controls are implemented toimprove the communication structure and process.

Page 7 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 7 preview image

Hisrich, International EntrepreneurshipInternational Entrepreneurship:Starting, Developing and Managing a Global VenturePart 1–International Entrepreneurship and Entrepreneurship OpportunitiesChapter 3–Cultures and International EntrepreneurshipQuestions for Discussion1.Why does an entrepreneur need to be aware of the culture of the country that they areentering into?Differences in culture between an entrepreneur’s home and the foreign market they areentering can be large. This means that a product in one market may not be suitable inanother market with differing cultural norms and behaviors. Or perhaps the packagingand the marketing will have to be altered in order for it to be accepted.The manner in which business itself is done might be very different based on the cultureof a country. Decisions might be made more collectively, potentially extending the time ittakes to complete a deal. Or communication barriers may lead to confusion andfrustration, in addition to added costs for translation services or multiple contracts. Themanner in which people work might be different, so an entrepreneur that is expanding

Page 8 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 8 preview image

Hisrich, International Entrepreneurshipmanufacturing facilities overseas might find that it takes either a longer or shorter time tocomplete the same amount of production that they achieve in their home market.Some of the cultural distinctions that U.S. firms most often face include differences inbusiness styles, attitudes toward development of business relationships, attitudes towardpunctuality, negotiating styles, gift-giving customs, greetings, significance of gestures,meanings of colors and numbers, and customs regarding titles. For example, consider thefollowing:oThe head is considered sacred in Thailand so never touch the head of a Thai or passan object over it.oThe number 7 is considered bad luck in Kenya and good luck in the Czech Republic,and it has magical connotations in Benin. The number 10 is bad luck in Korea, and 4means death in Japan.oIn Bulgaria a nod means no, and shaking the head from side to side means yes.oThe "okay" sign commonly used in the United States (thumb and index fingerforming a circle and the other fingers raised) means zero in France, is a symbol formoney in Japan, and carries a vulgar connotation in Brazil.oThe use of a palm-up hand and moving index finger signals "come here" in theUnited States and in some other countries, but it is considered vulgar in others.American firms must pay close attention to different styles of doing business and thedegree of importance placed on developing business relationships. In some countries,businesspeople have a very direct style, while in others they are much more subtle instyle and value the personal relationship more than most Americans do in business. For

Page 9 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 9 preview image

Hisrich, International Entrepreneurshipexample, in the Middle East, engaging in small talk before engaging in business isstandard practice.Attitudes toward punctuality vary greatly from one culture to another and, ifmisunderstood, can cause confusion and misunderstanding. Romanians, Japanese, andGermans are very punctual, whereas people in many of the Latin countries have a morerelaxed attitude toward time. The Japanese consider it rude to be late for a businessmeeting, but acceptable, even fashionable, to be late for a social occasion. In Guatemala,on the other hand, one might arrive any time from ten minutes early to 45 minutes late fora luncheon appointment.People around the world use body movements and gestures to convey specific messages.A misunderstanding over gestures is a common occurrence in interculturalcommunication, and misinterpretation along these lines can lead to businesscomplications and social embarrassment.Proper use of names and titles is often a source of confusion in international businessrelations. In many countries (including the United Kingdom, France, and Denmark) it isappropriate to use titles until use of first names is suggested. First names are seldom usedwhen doing business in Germany. Visiting business people should use the surnamepreceded by the title. Titles such as "Herr Direktor" are sometimes used to indicateprestige, status, and rank. Thais, on the other hand, address one other by first names andreserve last names for very formal occasions and written communications. In Belgium itis important to address French-speaking business contacts as "Monsieur" or "Madame,"while Flemish-speaking contacts should be addressed as "Mr." or "Mrs." To confuse thetwo is a great insult.

Page 10 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 10 preview image

Hisrich, International EntrepreneurshipIt is also important to understand the customs concerning gift giving. In some cultures,gifts are expected and failure to present them is considered an insult, whereas in othercountries offering a gift is considered offensive. Business executives also need to knowwhen to present gifts-on the initial visit or afterwards; where to present gifts-in publicor private; what type of gift to present; what color it should be; and how many to present.Gift giving is an important part of doing business in Japan, where gifts are usuallyexchanged at the first meeting. In sharp contrast, gifts are rarely exchanged in Germanyand are usually not appropriate. Gift giving is not a normal custom in Belgium or theUnited Kingdom either, although in both countries, flowers are a suitable gift wheninvited to someone's home.Customs concerning the exchange of business cards also vary. Although this point seemsof minor importance, observing a country's customs for card giving is a key part ofbusiness protocol. In Japan, for example, the Western practice of accepting a businesscard and pocketing it immediately is considered rude. The proper approach is to carefullylook at the card after accepting it, observe the title and organization, acknowledge with anod that the information has been digested, and perhaps make a relevant comment or aska polite question. (www.unzco.com/basicguide/c14.html)Cultural differences can add to the complexity of expanding into foreign countries. Byunderstanding them ahead of time the entrepreneur can prepare themselves and theirorganization to prevent any problems or disruptions to their business and ensure that theyachieve the benefits that their expansion offers.

Page 11 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 11 preview image

Hisrich, International Entrepreneurship2.How should an entrepreneur act in a country with highpower distance?In a highpower distance culture organizations are set up very hierarchical with cleardelineations of duties and process. Decision making is made at the top of the organizationand filtered down to those at the bottom. All interactions between bosses and subordinatesare very formal communication can be limited between layers of the organization. For anentrepreneur starting a business in such an environment,they should be aware that theiremployees will not openly question their decisions, that there is a sense of inequality betweenthe different layers of the organization, and that trying to implement a flat and openorganizational structure will take work and training and should not be expected right away.3.Why do you need to be culturally aware when you give or receive gifts in differentcountries?Gift giving is seen as different things in different countries. Some countries will expect youto bring them a gift and will be insulted if you do not. Other countries will not accept a gift atall for fear that it might look like a bribe. Businesspeople need to be aware of the practice inthe country they are entering so that they can be prepared and act accordingly.

Page 12 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 12 preview image

Hisrich–International Entrepreneurship Instructor’s ResourceInternational Entrepreneurship:Starting, Developing and Managing a Global VenturePart 1–International Entrepreneurship and Entrepreneurship OpportunitiesChapter 4–Developing the Global Business PlanQuestions for Discussion1.What role does a business plan play for a global entrepreneur?A business plan is used primarily to obtain financial resources for an entrepreneurial venturefrom a variety of potential investors. It outlines the opportunities available in the market andhow that business will take advantage of them. It also details the steps and plans that thebusiness will undertake in order to guide entrepreneurs and managers in their businessdecisions. Overall it will help to show that an entrepreneur has fully thought through,researched, and examined a potential market and has then developed a strategy to make afinancially viable operation succeed over a given period of time.

Page 13 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 13 preview image

Hisrich–International Entrepreneurship Instructor’s Resource2.What are the key sections of the plan?Themain parts of the business planare as follows:Executive Summarywhich outlines the business and contains important summaryinformation. This is often the most important section of the plan.Introductiongoes into further detail of the opportunities available in the market. Itdiscusses the proposed market and any potential barriers to entry.Economic, Political, and Legal Aspectsprovides information about these aspects in themarket and how they might impact the business venture. If there are problems identifiedthen solutions to them should be included here.Cultural Analysisexamines the customs and traditions in the market and any advantagesor disadvantages that the entrepreneur’s business will face.Organizational Plandescribes the form of ownership of the venture, how willmanagement be structured, the structure of board of directors (if needed), roles andresponsibilities of management team, and salary and payment information for them.Product or Service Descriptionis where full detail is given for the good that will beintroduced. If it is a product, full specifications and patent information should be given,for a service the unique skills and qualities of that service should be explained.Market Entry Strategyexplains how the venture will enter the market and claim acompetitive position.Operations Plandescribes the flow of goods and services from production to thecustomer. It will detail how the customer will order and receive the goods, how it ismanufactured and delivered, and how it is serviced after delivery, and the responsibleparties for each of these aspects.

Page 14 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 14 preview image

Hisrich–International Entrepreneurship Instructor’s ResourceMarketing Plandescribes how the goodswill be distributed, priced, and promoted. Thiswill include any market research the entrepreneur has completed, an analysis of thepotential customers, and forecasts for that goodsor services.Financial Planis the final section of the business plan and details the financialinformation needed to determine the viability of the venture. It includes up to three yearsof sales forecasts, along with forecast on costs of goods sold, and expenses. A projectedcash flow statement should be included to show how much money will be coming in andgoingout a given time for the venture. The last part of the financials is projected balancesheets for the first three years showing the projected assets and liabilities of the venture.3.What additional information is needed for a global plan than would be for a strictlydomestic business?Analyses of the international market, including an economic, political, and legal analysis ofthe foreign country, are needed in global business plans. The impact of trade areas andcultural differences should also be included.

Page 15 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 15 preview image

Hisrich–International Entrepreneurship Instructor’s ResourceInternational Entrepreneurship:Starting, Developing and Managing a Global VenturePart 2–Entering the Global MarketChapter 5–Selecting International Business OpportunitiesQuestions for Discussion1.What types of information should entrepreneurs seek outbeforedeciding onwhichforeignmarket to enter?Just as with entering a domestic market, they need to research the demographics of themarket they are trying to enter. How manypotential customers are there?What are theirincome levels? Is the infrastructure available to support their business? Are there existingcompetitors?They also need to look at the political stability of the region, the financial strength, and thelegal structure of the nation. Will they be able to take their profits out of the country?2.What are the different types and sources of information that are available?The two different types of data areprimaryandsecondary. Primary data is originalinformation collected for the particular requirement. This could take the form of surveys,interviews, or observations.Secondary data is pre-existing published information. This data can come fromboth publicand private sources, government research, andindustry trade groups. Often it is macro-level

Page 16 of 16

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 16 preview image

Hisrich–International Entrepreneurship Instructor’s Resourcedata that the entrepreneur can use to focus their data gathering at the primary level. Once theentrepreneur has identified the SIC or NAICS code, they can find a lot of industry level data,such as market size, growth trends, and competitive position. In some instances thissecondary data can be relatively easy to find and aggregate, while in others the entrepreneurwill need to be creative in research depending on the given market and the availability ofdata.3.What are some potential problems with data collected in another country?Depending on the level of development and transparency in a country, there are severalpotential problems an entrepreneur might face when collecting data:Comparability–The data for one country may not be the same as in another country,either in time scale, magnitude, or research factor.Availability–Some countries have more data available than others. For those thathave less data it can be difficult to make accurate predictions of the market or to fullyanalyze all the necessary factors.Accuracy–Sometimes the data collected has been done so using vigorous standards,or else its collection or representation may have been influenced by a heavy handsuch as a powerful local businessman or government. This is most often the case inless developed markets.Cost–While all government collected data is available for free in the United States,the cost of obtaining data in other countries can be quite high, either through thegovernment or through private data collection sources.

Preview Mode

This document has 153 pages. Sign in to access the full document!

Report

Learning Tools

Writing Tools

Browse Resources

International Entrepreneurship: Starting, Developing, And Managing A Global Venture , 2nd Edition Solution Manual - Page 1

Study Now!

Document Details

Related Documents

CIS 337 Unit 7 Assignment Final Project Part IV Pr

Analysis of Leadership in Monster Inc

Evaluation of Alphabet's Mission, Vision, and 8-29

Boundless Management

Uncovering the Martha Stewart Tax Scandal Insider

Boundless Business

JetBlue Airlines Case Analysis

Effective Speaker Notes Template for BUS 210 Prese

Leading as a Function of Management

McDonald's Q4 Earnings U

Company

Explore

Study Tools