Term
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Definition
| Global competition characterized by networks of international linkages that bind countries, institutions and people in an interdependent global economy. |
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Term
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Definition
| To provide a wider range of services and products. Competition is everywhere, with everyone and everything. |
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Term
| What does BRIC stand for? |
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Definition
Brazil, Russia, India and China.
(Rapidly growing economies) |
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Term
| 6 Global Trends that managers need to monitor and incorporate in their strategic and operational planning: |
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Definition
1. Globalization
2. Globality in Emerging Markets
3. Effects of Institutions
4. Effects of globalization on Corporations
5. Regional Trading Blocks
6. Information Technology (IT) |
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Term
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Definition
| Products are imported and exported all around the world. |
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Term
| Globality in Emerging Markets: |
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Definition
| BRIC, Growing Countries = Increase in demand for products. |
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Term
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Definition
On Global Trade:
WTO - World Trade Organization (Reduces barriers and promotes trade/decreases taxes) |
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Effects on Institutions:
(Subset, National Institutions:) |
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Definition
| Within each country, set up to regulate products and may make it difficult for other countries to import. |
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Term
| Effects of Globalization on Corporations: |
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Definition
| Outsourcing and off shore manufacturing. |
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Term
Regional Trading Blocks:
(3 Primary) |
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Definition
1. Western Europe: EU. Highly invested in infastructure manufacturing.
2. Asias: Rapidly Growing: China (2nd largest economy), India (Service Provider, Poorer Infastructure)
3. Americas: NAFTA - Job Growth/Opportunity
Mexico, US & Canada - Mexico has advantage
(Russia: Corrupt Government) |
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Term
| Information Technology (IT): |
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Definition
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Term
What are the 6 political risks of IM?
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Definition
1. Expropriation - of assets without prompt or adequate payment.
2. Nationalization - Forced sale of foreign assets to the locals, usually below value.
3. Discriminatory Treatment - against foreign firms in the application of laws and regulations.
4. Barriers - to repatration (returning to the country of origin) of funds (ex. profits)
5. Loss of Technology - or other intellectual property. (patents, copyrights)
6. Terrorism
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Term
Political Risk Assessment:
(Two Primary Ways) |
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Definition
1. Outside consultants
2. Development of internal staff, preferrably on the front line to provide current feedback. *Best way* |
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Term
Managing Political Risk:
(3 Ways) |
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Definition
1. Avoidance
2. Adaption - Set up a joint venture with some of the locals.
- Participative management including locals in all levels of the organization.
3. Localization - of the operations including modification of foreign firms name and management style. |
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Term
Political Risk Insurance
(2 Ways to insure against political risks) |
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Definition
1. OPIC - Overseas Private Investment Corp.
2. FCIC - Foreign Credit Insurance Corp. |
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Term
| What is Local Debt Financing? |
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Definition
A way of Hedging.
A risk management strategy used in limiting or offsetting probability of loss from fluctuations in the prices of commodities, currencies |
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Term
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Definition
| A country's ability to meet its financial obligations determines its economic risks. |
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Term
| 2 Main Categories of Risk: |
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Definition
1. The host country's government abruptly changes its domestic monetary policy or fiscal policies.
2. The local government decides to modify its foreign investment policies. |
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Term
| 4 Methods of Analyzing Economic Risk: |
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Definition
1. Quantitative Approach - Statistical
2. Qualitative Approach - Types of policy/most likely to implement (subjective)
3. Combination of Qualitative and Quantitative Approach
4. Checklist Approach - Make own list of risks.
*There will always be risk no matter which type of analysis is used. |
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Term
| Legal Environment: (3 Laws) |
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Definition
1. Common Law - Laws established through the court.
2. Civil Law - Codes and Statutes
3. Islamic Law - civil, common and indiginous (Holy) law
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Term
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Definition
An agreement by the parties concerned to establish a business contract.
Common law and civil law countries. |
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Term
| Advantages of Internet and E-Business in Global Business: |
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Definition
1. Worldwide communication
2. An electronic meeting and trading place
3. Powers of consumers to gain access to limitless options and pricing.
4. Corporate Intranet Sysyems
B2B - Business to Business transactions |
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Term
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Definition
Small to Medium Sized Businesses
1. Supply Chain
2. Procurement
3. Distribution Channels |
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