CH 4 Flashcards
(39 cards)
Globalization
The trend of the world economy toward becoming a more interdependent system
Global village
The “shrinking” of time and space as air travel and the electronic media have made it much easier for the people of the globe to communicate with one another.
E-commerce
The buying and selling of products and services through computer networks.
Global economy
the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets .
Positive vs Negative Effects ( The Global Economy)
Positive; more markets for American exports
Negative; vast surplus fund from global investments flowed into U.S. that were invested badly in subprime mortgages
Multinational Corporation vs Multinational Organization
Corporation; business firm with operations in several countries
Organization; nonprofit organization with operations in several countries.
Ethnocentric Managers
believe that their native country, culture, language, and behavior are superior to all others
Parochialism
Narrow view in which people see things solely through their own perspective
Polycentric Managers
take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone.
Geocentric managers
accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective.
Global outsourcing
using supplies outside the U.S. to provide labor, goods or services
Importing
a company buys goods outside of the country and resells them domestically
Exporting
A company produces goods domestically and sells them outside the country
Countertrading
Bartering goods for goods
Licensing
A firm allows a foreign company to pay it a fee to make or distribute the firm’s product or service
Franchising
A firm allows a foreign company to pay it a fee and a share of the profit in return. for using the firm’s brand name and a package of materials and services
Joint ventures
- Formed with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country
-strategic alliance
Wholly-owned subsidiary
foreign subsidiary that is totally owned and controlled by an organization
Greenfield Venture
A foreign subsidiary that the owning organization has built from scratch
Tariffs
Customs duty, or tax, levied mainly on imports
Import quotas
Limits on the numbers of a product that can be imported
Embargoes
Complete ban on the import or export of certain products
World Trade Organization ( WTO)
- Designed to monitor and enforce trade agreements
-Agreements are based to the General Agreement on Tariffs and Trade ( GATT) - Consist of 152 countries
World Bank
-Purpose is to provide low-interest loans to developing nations for improving transportation, education, health, and telecommunications.
