Chapter 1 Flashcards
Title of Chapter 1
Globalizing Business
International business (IB)
(1) A business (firm) that engages in international (cross-border) economic activities and/or
(2) the action of doing business abroad
Multinational enterprise (MNE)
A firm that engages in foreign direct investment.
Foreign direct investment (FDI)
Investment in, controlling, and managing value-added activities in other countries
Global Business
Business around the globe
Emerging economy
A term that has gradually replaced the term “developing country” since the 1990s
Emerging market
A term that is often used interchangeably with “emerging economy”
Purchasing power parity (PPP)
A conversion that determines the equivalent amount of goods and services that different currencies can purchase
Gross domestic product (GDP)
The sum of value added by resident firms, households, and governments operating in an economy
Gross national product (GNP)
GDP plus income from non-resident sources abroad
Gross national income (GNI)
GDP plus income from non-resident sources abroad
- GNI is the term used by the World Bank and other international organizations to supersede the term GNP
BRICS
Brazil, Russia, India, China, and South Africa
Great Transformation
Transformation of the global economy that is embodied by the tremendous shift in economic weight and engines of growth toward emerging economies in general and BRIC(S) in particular
Triad
North America, Western Europe, and Japan
The Base of the pyramid (BoP)
Economies where people make less than US $2,000 per capita per year
Reverse innovation
An innovation that is adopted first in emerging economies and is then diffused around the world
Group of 20 (G-20)
The group of 19 major countries plus the EU whose leaders meet on a biannual basis to solve global economic problems
Expatriate manager (expat)
A manager who works abroad
International premium
A significant pay raise when working overseas
Liability of foreignness
The inherent disadvantage that foreign firms experience in host countries because of their non-native status
Globalization
The close integration of countries and peoples of the world
Risk management
The identification and assessment of risks and the preparation to minimize the impact of high-risk, unfortunate events
Scenario planning
A technique to prepare and plan for multiple scenarios (either high- or low-risk)
Semiglobalization
A perspective that suggests that barriers to market integration at borders are high, but not high enough to insulate countries from each other completely
