Shared Flashcard Set


Chapter 1-7
Undergraduate 3

Additional Business Flashcards




manufacturing a product or service in our country and selling it to another

(out bounding activity) entry strategy involving the sale of product/service to customers located abroad
importing: global sourcing
inbound activity - the procurement of products/services from foreign suppliers for consumption in the home country of a third country
know the reason why firms go international
primarily to increase sales and profits but other reasons
international business
expansion of international business activities
integration, interdependency & interconnectedness of internationalization (the 4 i's) for example--

increasing exports vs. sourcing value-chain activities strategically around the globe to leverage factor efficiencies
globalization of markets (of the globalization of economies)
refers to ongoing economic integration and growing interdependence of countries worldwide. Facebook is an example. integration/interdependence/interconnectedness are central to globalization, which has resulted in the widespread diffusion of products, technology, and knowledge worldwide
know that internationalization
refers to the tendency of companies to systematically increase the international dimension of their business activities.
know that international business is different from domestic business
because of complexity and risks
know who participates in international business-
the multinational enterprise MNE
small and medium-sized enterprise SME
born global l- entrepreneurial firm that is international from inception
know why you should study international business
competitive advantage for you and your firm!
know that international business is both
a cause and a result of increasing national prosperity
know the important trends that have characterized globalization
cross-border transactions


development of highly sophisticated global financial systems

greater collaboration among nations through multilateral regulatory agencies such as the world trade organization and international monetary fund
know the six key dimensions of international business
1 globalization of markets
2 international trade
3 international investment
4 risks
5 participants: firms, distribution channel intermediaries
6 international entry strategies, including export and direct investment
know the two types of international investment
international portfolio investment (typically short-term) is the passive ownership of foreign securities such as stocks and bonds for the purpose of generating financial returns

Foreign direct investment (FDI) typically long time is a foreign market entry strategy that gives investors partial or full ownership of a productive enterprise. the firm establishes a physical presence aboard through the acquisition of productive assets such as capital, technology, labor, land, plant, and equipment. Asset ownership and long time frame is the ultimate commitment-level of internationalization, and thus this text focuses primarily on FDI (mode common mode of entry strategy) as opposed to international Portfolio investment. Know the motivations of firm FDI: Know how these fit into the value chain.
identify the types of companies active in international business
large firms from developed nations once dominated, but firms from Brazil, China and India now play a bigger role.

technology advancements allow small and midsize companies to better complete
explain globalization and how it affects markets and production
globalization of markets: standardizing activities

global sustainability: developed markets, emerging markets, traditional markets

globalization of production: dispersal of production activities to locations that help a company to minimize costs or maximize quality
detail the forces that are driving globalization
Word trade organization:
1 help the free flow of trade
2 help negotiate the further opening of markets
3 settle trade disputes

regional trade agreements: smaller groups of nations also integrating their economies eg NAFTA, European union

Trade and national output:
effect the WTO and regional trade pact is greater global trade and cross border investing

Gross Domestic Product is value of all goods and service produced by a domestic economy over a one-year period
Gross national product GNP adds income from international activites

technological innovation:
-email and videoconferencing

-the internet
company intranets--private networks of company web
extranets-- computer networks the give distributor and suppliers
-advancements in transportation technologies
online the debate over globalization's impact on jobs and wages
eliminates jobs in developed nations as good-paying manufacturing jobs go abroad to developing countries

-labor standards
-trade unions claim firms continually move to nations with low labor standards
-studies of developing nations' exporting processing zones instead find evidence that contradicts such claims
-environmental protection
-globalization opponents say it creates a "race to the bottom"
-evidence shows pollution-intensive US firms tend to invest in countries with stricter environmental standards. close economies historically are the worst polluters
-future markets
-protesters claim international firms pay local the lowest possible wage and export their goods back to the home country
-today, firms want to build local markets in developing nations not simply exploit workers and foment local animosity
summarize the debate over income inequality
-inequality between and within nations

-globalization critics claim that income disparity in rich nations is increasing as firms move factory jobs to poor nations

-globalization opponents say it is widening the gap in average incomes between rich and poor countries

-evidence shows that open nations are benefiting from trade whereas closed ones are not

-global inequality

-opponents of globalization say it is also widening income inequality among all the people of the world

-students agree that global inequality has fallen in recent decades, though they disagree on the extent of decline
outline the debate over culture, sovereignty, and the environment
-globalization and culture

-critics say globalization homogenizes our world and lets MNCs destroy cultural diversity and wipe out small local businesses

-yet globalization allows nations to
1 specialize and trade for goods they do not produce
2 import other people's cultural goods
3 still protect deeper moral and cultural norms

-globalization and national sovereignty, a menace to democracy?

-supranational institutions with international goals and appointment officials undermine nations sovereignty and democracy

-elected officials undercut decoy and local and regional authority with "international agreements on citizen's behalf"

-Globalization: guardian of democracy?
Globalization has helped spread democracy worldwide EG more democratic nations than ever

-some losses of sovereignty have has positive social impacts as in human rights, work's rights and discrimination
describe the global business environment and its main elements
-globalization is transforming our societies and commercial activities. it also increases competition everywhere, forcing companies to be vigilant.

- each national business environment costs of unique, cultural, political, and economic characteristics. companies must be attention to nuances and adapt products and practices as needed

-the international business environment influences how business is conducted so firms most closely monitor events

-context of international business management in defined by the characteristics of the national and international business environments. managers must abide by the prevailing rules in each market in which it operates.
measuring globalization
the KOF swiss economic institute's globalization index ranks nations on their economic, social, and political engagement

richest nations are the most global, with many in europe. the US ranks 32

the least global nations are found in Africa, East Asia, South Asia, Latin America, and the Middle East

(low technological connectivity slows global integration)
bottom line for business
harnessing the benefits:
the most global nations have the greatest equality, robust environmental protection, inclusive systems, lowest levels of corruption, healthiest lifestyles, and be where women have achieved the most social, education, and economic progress.

- the debate has opened a dialogue on how globalization can be harnessed to make its benefits exceed its benefits exceed costs

intensified competition:
-continued globalization is taking companies into previously isolated markets and increasing competitive pressures worldwide
- it gets easier and less costly to manage widely dispersed marketing and production activities, new opportunities and threats emerge

Wages and jobs:
-low wages are not all that draws investment by multinationals. a location must offer low-cost, adequately skilled workers in an environment with acceptable levels of social, political, and economics stability
-Labor mobility is increasing with globalization--depressing wages in some job categories but developing new job opportunities in others

the policy agenda:
-rich nations could open their markets, slash agricultural subsidies, and increase development aid. poor nations could improve their investment climates and improve social protection for the poor

-rich nations could offer workers their wage insurances, subsidized health insurance if out of work, and improve education. rich nations could help enforce labor standards, help clarify environmental agreements, and research the environmental implications of trade agreements
Supporting users have an ad free experience!