Chapter 1 Flashcards
What is international business?
International business is business carried across national borders.
What is foreign business?
Foreign business is the operations of a company outside its home or domestic market.
What are the main external forces (11) that affect a company’s environment?
Competition, distribution, economy, socioeconomic issues, finance, legalities, physical issues, politics, culture, labor, and technology.
What is it called when one unconsciously makes reference to his or her own culture values when judging behaviors of others?
Self-reference criterion
What is a transnational corporation?
A transnational corporation is an enterprise comprised of entities in more than one nation.
What disproves that host governments aren’t diminished by the presence of a global firm?
If total sales were calculated rather than gross national income, which only accounts for added value, most countries make far more than the largest corporation (Walmart).
What are three major concerns of anti-globalizers?
Globalization has produced uneven results across nations, it has had a deleterious effect on labor and labor standards, and it has contributed to a decline in environmental and health conditions.
What is foreign direct investment?
Foreign direct investment refers to direct investments in equipment, structures, and organizations in a foreign control at a level sufficient to obtain significant management control.
What are 5 major kinds of drivers lead firms to internationalize their operations?
Politics, technology, market, costs, and competition
What three trends has modern politics produced?
The unification and socialization of the global community, the increased privatization of former communist nations, and the progressive reduction of barriers to trade and foreign investments.
How has technology affected international business?
The expansion of the internet, computer-based communication, and communication networks has allowed for firms to export work to cheaper labor forces and address business transactions more directly.
How do costs affect international business?
International firms tend to conduct business in countries where their costs will be the lowest.
What is economic globalization?
The tendency toward international integration and interdependency of goods, technology, information, labor, and capital.
What are arguments for globalization?
Life expectancy has doubled since WWII, poverty levels are declining, global literacy has constantly risen, and countries that are globally integrated have greater levels of civil liberties and political rights.
What are factors driving globalization?
Economics, technology, personal contact, and politics.
