chapter 1

Question 1

What is globalization?

Answer 1

globalization refers to the shift towards a more integrated and interdependent world economy

Question 2

How does international business differ from domestic?

Answer 2

currency conversion, legal systems, culture, and availability of resources

Question 3

Why study international business?

Answer 3

any large organization you work for deals globally, could work for a foreign owned company, small businesses use products made abroad, business techniques and tools, cultural literacy

Question 4

What are 5 IB things that have been shaped by history?

Answer 4

coinage, security, passage, markets, standardized weights and measures

Question 5

Two recent eras of globalization

Answer 5

1st: colonization, british pound sterling, transportation and communication
2nd: collapse of USSR, opening up of China and other countries, technology and transportation

Question 6

What are the 2 facets of globalization?

Answer 6

globalization of markets: merging of national markets

globalization of production: shift from home country production of goods to international production of goods

Question 7

What are the international business activities?

Answer 7

exporting and importing, international investments, licensing, franchising, and management contracts

Question 8

What are the British terms for intangible and tangible goods?

Answer 8

visible trade and invisible trade

Question 9

Gross Domestic Product

Answer 9

total monetary value of all goods and services provided by a country in a year

Question 10

Who has the highest GDP? top 4

Answer 10

• European Union
  1. U.S.
  2. China
  3. Japan
  4. India

Question 11

What is the top 10 list for exports as a % of GDP?

Answer 11

1. Hong Kong 2. Singapore 3. Luxembourg 4. Netherlands 5. Germany 6. Mexico 7. UK 8. China 9. India 10. U.S.

Question 12

What are the top 3 ports?

Answer 12

1. Shanghhai, China 2. Singapore, Singapore 3. Rotterdam, Netherlands
2. South Louisiana 12. Houston

Question 13

Who are the top world oil producers?

Answer 13

Russia, Saudi Arabia, USA

Question 14

Top sources of US imports

Answer 14

Canada, Saudi Arabia, Mexico

Question 15

What are the 2 types of international investments?

Answer 15

foreign direct investments and foreign portfolio investments

Question 16

Stock of foreign direct investments abroad

Answer 16

all the money you have invested in other countries

Question 17

Stock of foreign direct investment at home

Answer 17

all the money you have invested in at home

Question 18

What is flow?

Answer 18

measures the same thing as stock of foreign direct investments but at one point in time

Question 19

What are the 3 methods of FDI?

Answer 19

Greenfield: enter into a new market w/ou help of another business who is already there
Aquisition/Brownfield Strategy
Joint Venture: go in on a new business togetther

Question 20

Licensing

Answer 20

you are allowing the other party to use your intellectual property

Question 21

Franchising

Answer 21

same as licensing but you are required to run the business the certain way they do things

Question 22

Management Contracts

Answer 22

sell the services of your expertise

Question 23

Who are the 3 largest MNC’s?

Answer 23

Royal Dutch Shell, Wal-Mart Stores, Exxon Mobile

Question 24

What are the 2 big reasons for contemporary causes of globalization?

Answer 24

strategic imperatives(motivate) and environmental changes (facilitate)

Question 25

What are strategic imperatives?

Answer 25

leverage core competencies, acquire resources and supplies, seek new markets, better compete with rivals

Question 26

What are the the 2 environmental changes in globalization?

Answer 26

Political and technological

Question 27

What are the changes in the political environment affecting globalization?

Answer 27

Barriers have been reduced, ideological change, and global organizations like WTO and UN have formed

Question 28

What are the technological changes affecting globalization?

Answer 28

Communication, information processing, transportation technologies

Question 29

Who are the emerging markets?

Answer 29

BRIC brazil, Russia, India, china