Chapter 16 Vocabulary Flashcards
Resources, markets, and completion are worldwide in scope
Global economy
The process of growing interdependence among elements of the global economy
Globalization
The creation of domestic jobs by foreign employers
Insourcing
Shifts local jobs to foreign locations to take advantage of lower-wage labor in other countries
Outsourcing
Conducts commercial transactions across national boundaries
International business
Firms purchase materials, manufacturing, or services around the world for local use
Global sourcing
A network of a firm’s outsourcing suppliers and contractors
Global supply chain
Moves foreign production and jobs back to domestic locations
Reshoring
Local products are sold abroad
Exporting
The process of acquiring products abroad and selling them in domestic markets
Importing
One firm pays a fee for rights to make or sell another company’s products
Licensing
A firm pays a fee for rights to use another company’s name and operating methods
Franchising
Operates in a foreign country through co-ownership with local partners
Joint venture
Each partner hopes to achieve through cooperation things they couldn’t do alone
Global strategic alliance
A local operation completely owned by a foreign firm
Foreign subsidiary
Establishes a foreign subsidiary by building an entirely new operation in a foreign country
Greenfield venture
A global institution established to promote free trade and open markets around the world
World trade organization (WTO)
Gives a trading partner the most favorable treatment for imports and exports
Most favored nation status
Taxes governments levy on imports and exports
Tariffs
Nontax policies that governments enact to discourage imports, such as quotas and import restrictions
Nontariff barriers
A call for tariffs and favorable treatments to protect domestic firms from foreign competition
Protectionism
Links Canada, the United States and Mexico in an economic alliance
NAFTA (North American Free Trade Agreement)
A political and economic alliance of 28 European countries
EU (European Union)
Links 21 nations to promote free trade and investment in the pacific region
APEC (Asia-Pacific Economic Cooperation)
Links 14 southern African countries in trade and economic development efforts
SADC (Southern Africa Development Community)
Has extensive international business dealings in many foreign countries
Global corporation Multinational Corporation (MNC)
An MNC that operates worldwide on a borderless basis
Transnational corporation
Where large global firms gain disproportionately from the global economy versus smaller firms
Globalization gap
Involves illegal practices to further one’s business interests
Corruption
Makes it illegal for U.S. firms and their representatives to engage in corrupt practices overseas
Foreign corrupt practices act
Employ workers at low wages, for long hours, and in poor working conditions
Sweatshops
The full-time employment of children for work otherwise done by adults
Child labor
Possible profit loss because of fluctuating exchange rates
Currency risk
Possible loss because of instability and political changes in foreign countries
Political risk
Forecasts how political events may have an impact on foreign investments
Political-risk Analysis
Culturally aware and informed on international affairs
Global manager
