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Question 1

Foreign environment is

Answer 1

Forces are uncontrollable outside the home country, and operate differently. they have different values, are difficult to assess, and they are interrelated

Question 2

International organizations that affect the IB environment

Answer 2

WTo, NAFTA, EU, 0PEC

Question 3

Self reference criterion

Answer 3

Managers tend to ascribe their own cultural values, preferences, taste and opinions to host country

Question 4

Uncontrollable forces are

Answer 4

Competitive, distributive, economic, Socio economic, financial, legal, physical, political

Question 5

Controllable forces are

Answer 5

Internal forces that management has control over such production and activities of the organization

Question 6

Domestic environment, foreign environment, international environment

Answer 6

Domestic environment is all the uncontrollable forces originating in the home country that surround and influence the life of the firm. foreign environment is all the uncontrollable forces originating outside the home country. international environment is the interactions between the domestic environmental forces and the foreign forces.

Question 7

Transnational corporation is

Answer 7

An enterprise in more than one nation operating under a decision making system that allows a common strategy and coherent policies

Question 8

Foreign direct investment

Answer 8

It refers to direct investment in equipment, structures, and organizations in a foreign country at a level sufficient to obtain significant management control

Question 9

Five major kinds of drivers

Answer 9

Political, technological, market, cost, and competitive

Question 10

Globalization is

Answer 10

The tendency toward international integration of goods, technology, info, labor and capital

Question 11

In support of Globalization: Free trade enhances

Answer 11

Socio economic development and promote better jobs

Question 12

Trade deficit

Answer 12

The amount by which the value of imports exceeds value of exports

Question 13

Trade surplus

Answer 13

Value of exports exceeds the value of imports

Question 14

Mercantilism

Answer 14

Philosophy based on belief that a nation’s wealth depends on treasures, such as gold and silver and to increase wealth. government policies should promote exports and discourage imports

Question 15

Favorable trade balance

Answer 15

Exporting more, importing less

Question 16

Absolute advantage (created by Adam Smith)

Answer 16

When a country can produce more services than another country for the same or lower cost of inputs

Question 17

Perfect competition

Answer 17

Sufficient large number of well informed buyers and sellers of a product that no one has the ability to determine the price

Question 18

Comparative advantage

Answer 18

When one nation is less efficient than another nation in the production of goods. Focusing on doing what they do best.

Question 19

Currency evaluation

Answer 19

Reduction in the states Currency relative to other currencies

• this lowers the value of a nation’s Currency relative to other currencies, and therefore effectively lowers the price of its exports. a nation can attempt to regain competitiveness

Question 20

Resource endowment

Answer 20

The land, labor, capital, and related production factors a nation possesses.

Question 21

Overlapping demand

Answer 21

Existence of similar preferences and demands for products among nations with several similar levels of income

Question 22

Product differentiation

Answer 22

Unique Differences producers build into their products with the intent of positively influencing demand

Question 23

International product life cycle

Answer 23

A theory explaining why a product that begins as a nation’s exports becomes its import. For example, the nation’s exports becomes its imports because another nation may be able to compete in quality and price

Question 24

Economies scale

Answer 24

The predictable decline in the average cost of producing each unit of output as a production facility gets larger and output increases

Produce more and the price drops

Question 25

Ethnocentricity

Answer 25

Belief that your own culture is superior to others

Question 26

Aesthetics

Answer 26

Cultures sense of beauty and good tastes, expressed in many areas such as music, and also applies to human bodies, as well as tattoos

Question 27

Folklore

Answer 27

Package of Connotation and emotions that are powerful

Question 28

Nationalization

Answer 28

Taking of private property by the government to make it public. it’s motivated by the belief that the government can manage the public goods or necessity better

Question 29

Privatization

Answer 29

Selling of government owns property to private sectors to gain more efficiency and to raise money

Question 30

internalization theory

Answer 30

Theory that to obtain a higher return on investment, a firm will transfer its superior knowledge to a foreign subsidiary that it controls, rather than sell it in the open market

Question 31

Eclectic theory

Answer 31

For a firm to invest overseas, it has to hv three advantages: ownership specific, location specific, and internalization

Question 32

Lifecycle Assessment

Answer 32

An Evaluation of the environmental aspects of a product throughout its lifecycle

Question 33

Cradle to cradle design

Answer 33

A closed loop design that recycles and reuses products; tries to eliminate waste

Question 34

Carbon disclosure project

Answer 34

Nonprofit organization that provides reporting framework for greenhouse gas emissions and water use

Question 35

Examples of non-renewable energy and renewable energy

Answer 35

Non-renewable energy is fossil fuels and gas

Renewable energy is wind power solar power