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45 Cards in this Set
- Front
- Back
Globalization |
_________the shift toward a more integrated andinterdependent world economy |
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General Agreement on Tariffs and Trade(GATT) |
__________Internationaltreaty that committed signatories to lowering barriers to the free flow ofgoods across national borders and led to the WTO. |
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World Trade Organization (WTO) |
___________Theorganization that succeeded the General Agreement on Tariffs and Trade (GATT)as a result of the successful completion of the Uruguay Round of GATT |
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International Monetary Fund (IMF) |
____________Internationalinstitution set up to maintain order in the international monetary system. |
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World Bank |
___________Internationalinstitution set up to promote general economic development in the world'spoorer nations. |
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United Nations (UN) |
____________An international organization made up of 193 countries headquartered in New York City, formed in 1945 to promote peace, security, and cooperation. |
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G20 |
__________Established in 1999, the G20 comprises the finance ministers and central bank governors of the 19 largest economies in the world, plus representatives from the European Union and the European Central Bank. |
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What is driving globalization? |
Declining barriers to the free flow of goods, services, and capital after WWII |
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Multinational enterprise (MNE) |
__________any business that has productive activities intwo or more countries |
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Two factors seem to underlie the trend towardglobalization |
1. decliningtrade barriers 2. changes in communication, information, andtransportation technologies |
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Managing an international business is differentfrom managing a domestic business for at least four reasons: |
(a) countries are different, (b) the range of problems confrontedby a manager in an international business is wider and the problems themselvesmore complex than those confronted by a manager in a domestic business, (c) managers in an internationalbusiness must find ways to work within the limits imposed by governments'intervention in the international trade and investment system, (d) international transactionsinvolve converting money into different currencies. |
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Collectivism |
____________isan ideology that views the needs of society as being more important than theneeds of the individual. Collectivism translates into an advocacy for stateintervention in economic activity and, in the case of communism, a totalitariandictatorship. |
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Individualism |
___________isan ideology that is built on an emphasis of the primacy of the individual'sfreedoms in the political, economic, and cultural realms. Individualismtranslates into an advocacy for democratic ideals and free market economics. |
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democracy |
___________citizens periodically elect individuals torepresent them, and political freedoms are guaranteed by a constitution. |
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totalitarian |
___________political power is monopolized by a party,group, or individual, and basic political freedoms are denied to citizens ofthe state. |
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market economy |
___________pricesare free of controls, and private ownership is predominant. |
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command economy |
_________prices are set by central planners, productiveassets are owned by the state, and private ownership is forbidden. |
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mixed economy |
____________has elements of both a market economy and acommand economy |
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Political economy |
_____________how the political, economic, and legal systems of a country are interdependent |
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Political System |
_______the system of government in a nation |
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Legal system |
__________the rules that regulate behavior along with the processes by which the laws areenforced and through which redress for grievances is obtained |
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Common law |
__________basedon tradition, precedent, and custom |
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Civic law |
___________based on detailed set of laws organized intocodes |
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Theocratic law |
_______________law is based on religious teachings |
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Property rights |
___________the legal rights over the use to which aresource is put and over the use made of any income that may be derived fromthat resource |
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Gross national income (GNI) |
_________per person measures the total annual incomereceived by residents of a nation & can be misleading because it does not consider differences in the cost ofliving |
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Human Development Index(HDI) |
Ø life expectancy at birth Ø educational attainment Ø whether average incomes aresufficient to meet the basic needs of life in a country |
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Culture |
__________asystem of values and norms that are shared among a group of people and thatwhen taken together constitute a design for living |
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values |
__________are abstract ideas about what a group believesto be good, right, and desirable |
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norms |
____________are the social rules and guidelines thatprescribe appropriate behavior in particular situations |
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Society |
______________a group of people who share a common set ofvalues and norms |
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Religion |
___________shared beliefs and rituals that are concernedwith the realm of the sacred |
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Ethical systems |
___________a set of moral principles, or values, that areused to guide and shape behavior |
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Geert Hofstede |
___________studiedhow culture relates to values in the workplace. He isolated four dimensionsthat he claimed summarized different cultures: power distance, uncertaintyavoidance, individualism versus collectivism, and masculinity versusfemininity. |
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Language |
_____________isone defining characteristic of a culture. It has both spoken and unspokendimensions. In countries with more than one spoken language, we tend to findmore than one culture. |
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Free trade |
______________a situation where a government does notattempt to influence through quotas or duties what its citizens can buy fromanother country or what they can produce and sell to another country |
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Mercantilism |
___________ Ø suggeststhat it is in a country’s best interest to maintain a trade surplus -to exportmore than it imports Ø views trade as a zero-sumgame Ø onein which a gain by one country results in a loss by another |
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Adam Smith |
____________arguedthat a country has an absolute advantage in the production of a product when itis more efficient than any other country in producing it |
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comparative advantage |
____________countriesshould specialize in the production of those goods they produce mostefficiently and buy goods that they produce less efficiently from othercountries |
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First Mover Advantage |
___________advantages accruing to the first to enter a market. |
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Porter |
__________identifiedfour attributes that promote or impede the creation of competitive advantage Ø Factorendowments Ø Demandconditions Ø Relatingand supporting industries Ø Firmstrategy, structure, and rivalry |
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Krugman |
___________argues that a strategic trade policy aimed atestablishing domestic firms in a dominant position in a global industry is abeggar-thy-neighbor policy that boosts national income at the expense of othercountries. |
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Trade barriers |
__________act as a constraint on a firm's ability todisperse its various production activities to optimal locations around theglobe. One response to trade barriers is to establish more productionactivities in the protected country. |
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Radical View |
_________argues that the multinational enterprise (MNE)is an instrument of imperialist domination. They see the MNE as a tool for ex |
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Dunning |
_________has argued that location-specificadvantages are of considerable importance in explaining the nature anddirection of FDI. According to Dunning, firms undertake FDI to exploit resourceendowments or assets that are location specific. |