Term
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Definition
| the trend of the world economy toward becoming a more interdependent system |
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Term
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Definition
| the “shrinking” of time and space as air travel and the electronic media have made it easier for the people around the globe to communicate with one another |
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Term
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Definition
| or electronic commerce, the buying and selling of products and services through computer networks |
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Term
| Rosabeth Moss Kantor's events that led to a global economy (3) |
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Definition
1) end of communism in Eastern Europe when the Berlin Wall came down
2) when Asian countries began to open their economies to foreign investors
3) trending of government deregulating their economies |
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Term
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Definition
| the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets |
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Term
| Positive effects of the global economy (4) |
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Definition
1) Medium- to longer-term benefits of globalization are positive for everybody
2) Foreign direct investment makes up 15% of the country’s GDP
3) Companies based overseas provide jobs for 10% of the US workforce
4) Interconnectedness, better and more affordable products, and better international communication |
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Term
| Negative effects of the global economy (3) |
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Definition
1) Housing-and-credit investment bubble burst
2) Outsourcing seeking cheaper labor costs
3) Job instability, economic insecurity, sense of turmoil |
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Term
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Definition
| certain industries (i.e. oil, telecommunications, automobiles, financial services, and pharmaceuticals) aren’t suited to be local, small, or midsize, so companies in these industries are trying to become bigger and cross-border |
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Term
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Definition
| small companies can get started more easily because anyone can put goods or services on a website and sell worldwide and can maneuver faster which gives them an advantage in terms of time and distance over large companies |
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Term
| Multinational corporation/enterprise |
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Definition
| a business firm with operations in several companies (i.e. GE, ExxonMobil, AT&T, etc.) |
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Term
| Multinational organization |
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Definition
| a nonprofit organization with operations in several countries (i.e. World Health Organization, Red Cross, etc.) |
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Term
| Why learn about international management? (4) |
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Definition
1) you may deal with foreign customers or partners
2) you may deal with foreign employees or suppliers
3) you may work for a foreign firm in the US
4) you may work for an American firm outside the US |
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Term
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Definition
| believer that their native country, culture, language, and behavior are superior to all others; “we know best” |
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Term
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Definition
| a narrow view in which people see things solely through their own perspective |
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Term
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Definition
| take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them along; “they know best” |
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Term
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Definition
| accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective; “what’s best is what’s effective, regardless of origin” |
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Term
| Why companies expand internationally (5) |
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Definition
1) availability of supplies
2) new markets (decline domestically, but an increase overseas)
3) lower labor costs
4) access to finance capital (i.e. foreign subsidies)
5) avoidance of tariffs and import quotas |
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Term
| How companies expand internationally (5) |
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Definition
1) global outsourcing
2) importing, exporting, and countertrading
3) licensing and franchising
4) joint ventures
5) wholly owned subsidaries |
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Term
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Definition
| manufacturing plants allowed to operate in Mexico with special privileges in return for employing Mexican citizens |
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Term
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Definition
| using suppliers outside the company to provide goods and services |
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Term
| Global outsourcing/offshoring |
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Definition
| using suppliers outside the US to provide labor, goods, or services *lowest risk |
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Term
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Definition
| a company buys goods outside the country and resells them domestically |
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Term
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Definition
| a company produces goods domestically and sells them outside the country |
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Term
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Definition
| bartering goods for goods |
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Term
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Definition
| a company allows a foreign company to pay it a fee to make or distribute the first company’s product or service |
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Term
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Definition
| a form of licensing in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first company’s brand name and package of materials and services |
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Term
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Definition
| forming a strategic alliance with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country *holds highest risk and investment for the organization |
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Term
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Definition
| a foreign subsidiary that is totally owned and controlled by an organization |
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Term
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Definition
| a foreign subsidiary that the owning organization has built from scratch |
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Term
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Definition
| the movement of goods and services among nations without political or economic obstruction |
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Term
| Barriers to international trade (3) |
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Definition
1) tariffs
2) import quota
3) embargo |
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Term
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Definition
| the use of government regulations to limit the import of goods and services to protect their domestic industries against foreign competition |
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Term
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Definition
| a trade barrier in the form of a customs duty, or tax, levied mainly on imports (two types: revenue or protective) |
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Term
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Definition
| a trade barrier in the form of a limit on the numbers of product that can be imported |
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Term
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Definition
| the practice of a foreign company’s exporting products abroad at a lower price than the price in the home market, or even below the costs of production, in order to drive down the price of the domestic product |
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Term
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Definition
| a complete ban on the import or export of certain products |
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Term
| Organizations promoting international trade (3) |
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Definition
1) WTO
2) World Bank
3) IMF |
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Term
| World Trade Organization (WTO) |
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Definition
| designed to monitor and enforce trade agreements |
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Term
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Definition
| provides low-interest loans to developing nations for improving transportation, education, health, and telecommunications |
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Term
| International Monetary Fund (IMF) |
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Definition
| designed to assist in smoothing the flow of money between nations |
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Term
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Definition
1) NAFTA
2) EU
3) APEC
4) ASEAN
5) Mercosur
6) CAFTA-DR |
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Term
| North American Free Trade Agreement (NAFTA) |
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Definition
a trading bloc consisting of the US, Canada, and Mexico
to eliminate 99% of the tariffs and quotas among these countries
and to allow for freer flow of goods, services, and capital |
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Term
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Definition
consists of 27 trading partners in Europe
World’s largest free market with a GDP of more than $17 trillion
Common currency, the euro |
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Term
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Definition
| the rate at which the currency of one area or country can be exchanged for the currency of another’s |
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Term
| Asia-Pacific Economic Cooperation (APEC) |
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Definition
| a group of 21 Pacific Rim countries whose purpose is to improve economic and political ties |
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Term
| Association of Southeast Asian Nations (ASEAN) |
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Definition
a trading bloc consisting of 11 countries in Asia
Became one of the largest free-trade zones (encompassing 1.9 billion people) when China was admitted in 2010 |
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Term
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Definition
the largest trade bloc in Latin America and has four core members- Argentina, Brazil, Paraguay, and Uruguay, with Venezuela scheduled to become a full member upon ratification by the other countries and five associate members- Bolivia, Chile, Colombia, Ecuador, and Peru
Reduces tariffs by 75%
Alliance negotiation with NAFTA, the EU, and Japan |
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Term
| Central American Free Trade Agreement (CAFTA-DR) |
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Definition
| involves the US and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua- is intended to reduce tariffs and other barriers to free trade |
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Term
| Most favored nation trading status |
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Definition
| describes a condition in which a country grants other countries favorable trading treatment such as the reduction of import duties |
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Term
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Definition
| the shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people |
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Term
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Definition
| shared meanings are primarily derived from written and spoken words (North America, Great Britain, Scandinavia, Germany, or Switzerland) |
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Term
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Definition
| people rely heavily on situational cues for meaning when communicating with others (China, Korea, Japan, Vietnam, Mexico, or many Arab countries) |
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Term
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Definition
| a massive and ongoing cross-cultural investigation created by Robert J. House of nine cultural dimensions involved in leadership and organizational processes |
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Term
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Definition
| distribution of power among organizations and society; GLOBE project cultural dimension |
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Term
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Definition
| reliance on social norms and rules to avoid uncertainty; GLOBE project cultural dimension *Hofstede's model |
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Term
| Institutional collectivism |
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Definition
| leaders encourage and reward loyalty; GLOBE project cultural dimension |
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Term
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Definition
| pride and loyalty towards family or organization; GLOBE project cultural dimension |
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Term
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Definition
| society maximize gender role differences; GLOBE project cultural dimension |
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Term
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Definition
| confrontational and dominant in social relationships; GLOBE project cultural dimension |
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Term
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Definition
| delay gratification by planning and saving; GLOBE project cultural dimension |
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Term
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Definition
| rewards for improvement and excellence; GLOBE project cultural dimension |
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Term
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Definition
| encourage and reward people for being kind, fair, friendly, and generous; GLOBE project cultural dimension |
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Term
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Definition
1) language
2) interpersonal space
3) communication
4) time orientation
5) religion |
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Term
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Definition
| a preference for doing one thing at a time (US) |
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Term
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Definition
| a preference for doing more than one thing at a time (Mediterranean, Latin American, and especially Arab cultures) |
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Term
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Definition
| people living or working in a foreign country |
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Term
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Definition
| patience, flexibility, and tolerance for others’ beliefs |
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Term
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Definition
| use local people to manage your business in a foreign country (less expensive option) |
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