Chapter 17 Flashcards
resources, markets, and competition 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
Why Businesses Go Global
- Profits—gain profits through expanded operations.
- Customers—enter new markets to gain customers.
- Suppliers—get access to products, services, and materials.
- Capital—get access to financial resources.
- Labor—get access to low-cost, talented workers.
- Risk—spread assets among multiple countries.
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 from abroad.
Tariff’s
are nontax policies that governments enact to discourage imports, such as quotas and import restrictions.
Nontariff barriers
a call for tariff s and favorable treatments to protect domestic firms from foreign competition.
Protectionism
the North American Free Trade Agreement linking Canada, the United States, and Mexico in an economic alliance.
NAFTA
a political and economic alliance of 28 European countries.
EU or European Union
links 21 nations to promote free trade and investment in the Pacific region.
APEC is the Asia-Pacific Economic Cooperation
links 14 southern African countries in trade and economic development efforts.
SADC is the Southern Africa Development Community
extensive international business dealings in many foreign countries.
global corporation or 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 very 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
Universal Facilitators of Leadership Success
- Acting trustworthy, just, honest
- Showing foresight, planning
- Being positive, dynamic, motivating
- Inspiring confidence
- Being informed and communicative
- Being a coordinator and team builder
Universal Inhibitors of Leadership Success
- Being a loner
- Acting uncooperative
- Being irritable
- Acting autocratic
