Term
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Definition
| business whose activities are carried out across national borders |
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Term
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Definition
| domestic operations within a foreign country |
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Term
| multidomestic company (MDC) |
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Definition
| an organization with multi-country affiliates, each formulates its own business strategy based on perceived market differences. |
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Term
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Definition
| an organization that attempts to standardize and integrate operations worldwide in all functional areas. |
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Term
| international company (IC) |
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Definition
| a global or multidomestic company |
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Term
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Definition
| company that combines characteristics of global and multinational firms; responsive to different global environments |
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Term
| Multicultural multinational |
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Definition
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Term
| What is Different About International Business? |
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Definition
| deals with 3 environmental forces: Domestic,Foreign,International |
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Term
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Definition
| all forces surrounding and influencing the life and development of the firm |
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Term
| International Business (uncontrollable) internal forces in the Environment |
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Definition
a.Production – capital, raw materials, and people
b.Organization – personnel, finance, production, and marketing |
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Term
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Definition
| external forces over which management has no direct control, although it can exert an influence |
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Term
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Definition
| internal forces that management administers to adapt to changes in the uncontrollable forces |
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Term
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Definition
| uncontrollable forces originating in the home country that surround and influence the firm’s life and development |
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Term
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Definition
| all uncontrollable forces originating outside the home country that surround and influence the firm |
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Term
| International Environment |
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Definition
| interaction between domestic and foreign environmental forces or between sets of foreign environmental forces |
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Term
| Forces in Foreign Environment |
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Definition
a.Forces Have Different Values
b.Forces Can Be Difficult to Assess
c.The Forces Are Interrelated |
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Term
| International Environment interactions between |
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Definition
Domestic and foreign environmental forces
The foreign environmental forces of 2 countries when the affiliate of 1 does business with customers in another |
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Term
| International Organizations that affect international environment |
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Definition
1.Worldwide bodies – World Bank
2.Regional economic groups of nations – NAFTA, EU
3.Organizations bound by industry agreements – OPEC |
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Term
| Decision Making is More Complex |
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Definition
1.Multiple forces make decision making more complex.
2.They’re many sets of forces, differences among them sometimes are extreme. |
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Term
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Definition
| Managers are frequently unfamiliar with other cultures. Many have the tendency to refer unconsciously to their own cultural values. Self-reference criterion is probably the biggest cause of international business blunders |
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Term
| History of International Business |
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Definition
•Greek and Phoenician merchants traded before Christ
•China world’s leading manufacturer for 1,800 years, replaced by Britain, 1844
•Ottoman Empire trade routes <1300, Middle East, Europe, North Africa
•East India Company 1600, branches throughout Asia; Dutch East India Company
•The 17th and 18th centuries the “age of mercantilism”
•Significant multinationals in late 1800s: Singer Sewing Machine, J&P Coates, Ford Motor Company
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Term
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Definition
•64,000 transnational corps. account for:
•25% of global output
•66.6% of world trade
•866,000 foreign affiliates
•53,000,000 employed, IB
•700% sales growth >1990
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Term
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Definition
–World stock of outward FDI $16.2 trillion in 2008
–Growth of world merchandise exports:
•$2.0 trillion in 1980
•$3.45 trillion in 1990
•$16.1 trillion in 2008
•$12.5 trillion in 2009 (Global recession)
–Growth of world service exports
•$365 billion in 1980
•$781 billion in 1990
•$1.483 trillion in 2000 |
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Term
What is Driving the Globalization of Business |
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Definition
No widely accepted definition, but it has political, social, environmental, historical, geographic, and cultural implications. Technological and political globalization may be developing. |
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Term
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Definition
| The tendency toward an international integration of goods, technology, information, labor and capital, or the process of making this integration happen |
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Term
| Who created the term Globalization in a Harvard Business Review article predicting that technology-based “proletarianization” would lead to global standardization of consumer products at lower prices? |
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Definition
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Term
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Definition
Political Drivers
Technological Drivers
Market Drivers
Cost Drivers
Competitive Drivers |
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Term
| Arguments Supporting Globalization |
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Definition
Enhances socioeconomic development.
Promotes more and better jobs. |
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Term
| Concerns with Globalization |
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Definition
Uneven results across nations and people
Deleterious effects on labor and labor standards
Decline in environmental and health conditions |
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Term
| Motives For Entering Foreign Markets |
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Definition
(1) desire for increased profits and sales,
or (2) protect profits and sales from competition |
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Term
| Increase Profits and Sales |
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Definition
1. Enter New Markets
a. Viable markets have rising per capita GDP and population growth
b. Not in markets where economy is growing faster than in home country
2. New Market Creation
a. Produce locally
b. Assemble abroad
3. Faster-Growing Markets
4. Improved Communications
5. Obtain Greater Profits
6. Greater Revenue
7. Lower Cost of Goods Sold
8. Higher Overseas Profits as an Investment Motive |
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Term
| Protect Markets, Profits, and Sales |
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Definition
1. Protect Domestic Markets by Following Customers Overseas
2. Attack in Competitor’s Home Market
3. Using Foreign Production to Lower Costs
4. Protect Foreign Markets
5. Lack of Foreign Exchange
6. Local Production by Competitors
7. Downstream Markets
8. Protectionism
9. Guarantee Supply of Raw Materials
10. Acquire Technology and Management Know-How
11. Geographic Diversification
12. Satisfy Management’s Desire for Expansion |
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