Ajami Goodard Ch. 1, 2, 4, 5

Question 1

A business focused in a home/domestic location, excludes MNC

Answer 1

Ethnocentric

Question 2

Organizations that have investments, operations, or markets in several countries, but don’t integrate management of international functions

Answer 2

Polycentric

Question 3

organizations that are integrated and have world perspective regarding depth/reach of international operations

Answer 3

Geocentric

Question 4

Advantages gained by MNC

Answer 4

• technical know-how (patents)
• large size/economies of scale
• Greater access to resources
• lower cost financing
• greater brand awareness/image
• diversification of risk

Question 5

Disadvantages of MNCs

Answer 5

• Host country regulations/restrictions
• Political risks
• exchange rates
• cultural differences
• operational difficulties

Question 6

Globalization

Answer 6

the shift towards a more integrated and interdependent world economy

Question 7

Globalization of Markets

Answer 7

the merging of historically distinct/separate national markets into one huge global marketplace

Question 8

Globalization of Production

Answer 8

the sourcing of g/s aroudn the globe to take advantage of cost/quality differences

Question 9

Disadvantages of global production

Answer 9

• barriers to trade
• transportation costs
• political/economic risk
• coordination challenges

Question 10

Responsible for policing world trading system and making sure nations adhere to rules and treaties

Answer 10

World Trade Organization (previously GATT, General Agreement on Tariffs and Trade)

Question 11

Established to maintain order in international monetary system

Answer 11

International Monetary Fund

Question 12

Established to promote economic development

Answer 12

World Bank

Question 13

International organization to promote peace, international cooperation, and security

Answer 13

United Nations

Question 14

Group of 20, G20

Answer 14

Finance ministers, central banks in largest enconomies representing 90% world GDP, 80% of world trade

Question 15

Moore’s law

Answer 15

cost of microprocessor continues to fall while its capacity increases

Question 16

Driver’s of globalization

Answer 16

Declining trade/investment barriers and technological changes

Question 17

Business that has productive act ivites in 2 or more countries

Answer 17

Multinational Enterprise

Question 18

Direct Exporting

Answer 18

overseeing all aspects of sale/transmittal of merchandise

Question 19

Indirect Exporting

Answer 19

Firms hire someone else to handle various pieces of the exchange (intermediaries)

Question 20

Methods of going international

Answer 20

Exporting, licensing, franchising, management contracts, contract manufacturing, direct investment, strategic alliance/joint venture, subsidiaries, globalized operations , portfolio investments

Question 21

Franchising vs licensing

Answer 21

Franchisees get help with operations/raw materials but less control than licensees

Question 22

Government intervention in trade markets for specific industries in its economy

Answer 22

Protectionism

Question 23

Group of commodity-producing countries join forces to bargain as a single entity , such as OPEC

Answer 23

Cartel