4. What is protectionism? What are protectionist measures?

Protectionism – the policy of protecting the domestic market from foreign competition. It restrains trade between states through different protectionist measures such as:

Tariffs (or taxes) are imposed on imported goods. Tariff rates usually vary according to the type of goods imported. Import tariffs will increase the cost to importers, and increase the price of imported goods in the local markets, thus lowering the quantity of goods imported.

Import quotas reduce the quantity of specific items and therefore increase the market price of imported goods.

Administrative barriers: Countries are sometimes accused of using their various administrative rules (e.g. regarding food safety, environmental standards, electrical safety, etc.) as a way to introduce barriers to imports.

Anti-dumping tariffs are usually used to impose trade tariffs on foreign exporters.

Direct subsidies: Government subsidies are sometimes given to local firms that cannot compete well against foreign imports. These subsidies are meant to "protect" local jobs, and to help local firms adjust to the world markets.

Exchange rate manipulation: A government may intervene in the foreign exchange market to lower the value of its currency by selling its currency in the foreign exchange market. Doing so will raise the cost of imports and lower the cost of exports, leading to an improvement in its trade balance.

Embargo is the partial or complete prohibition of commerce and trade with a particular country, in order to isolate it.

5.=4 What are the barriers to world trade?

export license - A document indicating that a government has granted a licensee the right to export specified goods to specified countries.

import license - Permit that allows an importer to bring in a specified quantity of certain goods during a specified period.

import quota - Means of restricting the quantity of imports through import licenses, either of a certain item or from a certain country.

embargo - is the partial or complete prohibition of commerce and trade with a particular country, in order to isolate it.

6. When does a country have an absolute advantage in the marketing of a product? When does a country have a comparative advantage in the marketing of a product?

-Country has an absolute advantage when it is the best place in the world for producing a certain product.

-Country has a comparative advantage when it can produce certain products more efficiently than others.

7. What is the balance of payments?

BOP is a record of all monetary transactions made between one particular country and all other countries during a specified period of time. These transactions include payments for the country's exports and imports, including all financial exports and imports.

8. What is the nation’s balance of trade?

The balance of trade is the difference between country’s exports and its imports over a certain period. A positive balance is known as a trade surplus if it consists of exporting more than is imported; a negative balance is referred to as a trade deficit.

9. When a company globalizes it tries to choose the best method to enter its overseas markets. What mode of entry could a company follow if it has no previous experience in global marketing?

When the company globalizes it has to find the best possible method to enter its overseas market. It is not an easy way especially if the company has no previous experience in global marketing. The most appropriate mode of entry can be franchising or join-venture, as well as entering overseas markets through mergers and acquisitions. Other possible variants are licensing and local manufactory.

10. Why do firms merge? What problems can arise before and after a merger takes place? What are the difficulties that cross-border mergers are fraught with? What are the usual reasons for them to fail? How might corporate culture affect the success or failure of a merger? What kind of things can lead to problems or even failure in international mergers and acquisition?

First of all, a merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. Both companies' stocks are surrendered and new company stock is issued in its place.

There are numerous reasons as to why firms merge, for instance: economy of scale, economy of scope, cross-selling, synergy, taxation, diversification, empire-building... All in all, the main motive is to improve financial performance of both parties.

The main problem arising before a merger is benefits. A merger is usually considered as a win-win situation, however, naturally each wants more.

After a merger (or during negotiations about details) there are also organisational problems, i.e. problems of brand consideration. Because the future success of a merger or acquisition depends on making wise brand choices.

The main difficulties connected with cross-borders mergers involve corporate governance, the level of authority of employees, worker job security, regulatory environments, customer expectations, and country culture, legal problems, lack of internal controls over budgeting, weak understanding of the fundamentals of the acquired business, misunderstandings arising from different business norms, and even fundamental differences in management style.

One of the biggest obstacles in the way of the merging of two organizations is corporate culture. Each organization has its own unique culture and most often, when brought together, these cultures clash. When mergers fail employees point to issues such as communication problems, human resources problems, ego clashes, and inter-group conflicts, which all fall under the category of “cultural differences”. One way to combat such difficulties is through cultural leadership. Organizational leaders must also be cultural leaders and help facilitate the change from the two old cultures into the one new culture. This is done through cultural innovation followed by cultural maintenance.