Chapter 2: Terms Flashcards
International Business
A firm that engages in international (cross-border) economic activities and or the action of doing business abroad.
Multinational enterprises (MNE)
A firm that engages in foreign direct investments and operates in multiple countries.
Foreign direct investment (FDI)
Investments in, controlling and managing value-added activities in other countries.
Emerging economies (Markets)
Economies that only recently established institutional frameworks that facilitate international trade and investment, typically with low- or middle-level income and above average economic growth.
BRIC
Brazil, Russia, India and China
Gross domestic product (GDP)
The sum of value added by resident firms, households and governments operating in an economy.
Gross national product (GNP)
Gross domestic product 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.
Purchasing power parity (PPP)
A conversion that determines the equivalent amount of goods and services different currencies can purchase. This conversion is usually used to capture the differences in cost of living in different countries.
Expatriate assignment
A temporary job abroad with a multinational company
An institution-based view
Suggests that success and failure of firms are enabled and constrained by the different rules of the game.
Drawback: If we push this view to its logical extreme, then firms’ performance around the globe would be entirely determined by their environments
A resource-based view
Suggests that success and failure of firms are enabled and constrained by internal resources and capabilities.
Liability of outsidership
That inherent disadvantage that outsiders experience in a new environment because of their lack of familiarity
Industry 4.0
Disruptions of operations and supply chains through advances in digital technologies.
Views on globalisation
- new business opportunities.
- growing inequality around the world.
- Increased competition for jobs, especially for low-skilled workers.
- more similar and that eliminates the distinctiveness of our national cultures and identities.
Globalisation
A process leading to greater interdependence and mutual awareness among economic, political and social units in the world and among actors in general.
Liberalisation
The removal of regulatory restrictions on business.
Waves of globalisation
The pattern of globalization arising from a combination of long-term trends and pendulum swings.
Triad
Three regions of developed economies (North America, Western Europe and Japan).
Base of the pyramid
The vast majority of humanity, about four billion people, who make less than €1500 a year.
The global economic pyramid
Top tier: Per capita GDP/GNI > €15 000, Approximately one billion people.
Second tier: Per capita GDP/GNI €1 500 – €15 000, Approximately one billion people.
Base of the pyramid: Per capita GDP/GNI < €1500, Approximately four billion people.
Risk management
The identification and assessment of risks and the actions taken to minimise their impact.
Ethnocentric perspective
A view of the world through the lens of one’s own culture.
Not-invented-here syndrome
The tendency to distrust new ideas coming from outside of one’s own organisation or community.
