Chapter 1 & 2 Flashcards

1
Q

What are the key issues in the Global Business Environment? (3)
(ITL, G, SED)

A
  • International Trade Liberalization.
  • Government’s impact on International Trade.
  • Issues related to socio-economic development.
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2
Q

Drivers of Globalization (4)
(Td.Ri.Dt&ib.+COOP).

A
  • Technological development.
  • Rising incomes.
  • Declining trade and investment barriers.
  • More cooperative arrangements among countries.
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3
Q

What is an FDI?
(…that involves a l-t-r reflecting a lasting…in…)
(The d.i’s. purpose is to…of…on the…of the…resident in the…)

A

Investment that involves a long-term relationship reflecting a lasting interest in one’s economy. The direct investor’s purpose is to exert a significant degree of influence on the management of the enterprise resident in the other economy.

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4
Q

what are the 4 criteria to be an FDI?
(%+ / PoA / INSIDE / No)

A
  1. Involves minimum threshold equity stake of 10%+.
  2. Involves the transfer of packages of assets or intermediate products.
  3. Transfer occurs inside the investing company.
  4. No change of ownership.
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5
Q

What are some criticisms of globalization? (4)
(Ttns.iii.E&li.Nceg.)

A
  • Threats to national sovereignty.
  • Negative costs of economic growth.
  • Increasing income inequality.
  • Environmental & labor issues.
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6
Q

What are MNEs?
(… that engages in… and … or… value-adding…in more than…).

A

Enterprise that engages in FDI and owns or controls value-adding activities in more than one country.

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7
Q

Globalization effects? (2).
1. Breaks down (tb) to (t,c,c).
2. Allows (p,s,i) to flow more freely across (n.b).

A
  • Breaks down traditional barriers to trade, communicate, and commerce.
  • Allows products, services, and information to flow more freely across national borders.
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8
Q

Globalization of Market
(Market Integration). (2)
R.T.B. & C.S.

A
  • Reduced Trade Barriers like tariffs and quotas through international agreements and trade liberalization policies.
  • Common Standards to develop and adapt.
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9
Q

Globalization of Market (Global Consumer Culture). (2)
C.H. & C.C.

A
  • Consumer Homogenization are shared global trends and preferences that contributes to the homogenization of consumer culture.
  • Cultural Convergence which influence cultural elements and consumer behavior.
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10
Q

Globalization of Market
(Trade Agreements & Economic Blocs).
R.I.

A

Reginal Integration like trade agreements and economic blocs (e.g., EU or NAFTA), contribute to the globalization of markets by fostering economic cooperation within specific regions.

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11
Q

Globalization of Market
(Financial Integration).
G.C.F.

A

Global Capital Flow leads to financial markets interconnection and allows the movement of capital across borders through investments.

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12
Q

Globalization of Production
(It takes advantage of…like…l,l,c,e,e)

A

It takes advantage of factors of production like labor, land, capital, energy, and expertise.

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13
Q

Globalization of Production
(Outsourcing & Offshoring). (2)
(DM & O)

A
  • Distributed Manufacturing which companies choose to outsource specific stage of the production because of cost advantages or specialized expertise.
  • Offshoring offers relocation of certain production activities, such as manufacturing or services.
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14
Q

Globalization of Production
(Global Value Chains (GVCs)). (2)
(SP. C&I.)

A
  • Sequential Production involves breaking down the production process into various stage in different locations.
  • Coordination & Integration dispersed production activities to create a final product or service.
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15
Q

Globalization of Production
(Specialization & Comparative Advantage). (2)
(RO.S.)

A
  • Resource Optimization seeks to leverage the comparative advantages in labor, raw materials, or technological expertise.
  • Specialization are often allocated to locations with effective capabilities.
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16
Q

Globalization of Production
(Technological Advances). (2)
(CT.SCMS.)

A
  • Communication Technology enable real-time coordination and management of production processes.
  • Supply Chain Management Systems facilitates the monitoring complexity of a supply chain.
17
Q

Globalization of Production
(Trade Liberalization). (2)
(RTB & TR).

A
  • Reduced Trade Barriers policies to ease the movements of goods and services across borders.
  • Tariff Reduction encourages cross-border trade and facilitates movement withing the global production networks.