Chapter 3 Flashcards
What is globalization?
extent which ….
- trade & investments
- information
- social & cultural ideas
- political cooperation
flow between countries
What is exporting?
- maintain its production facilities within the home nation and transfers its products for sale in foreign countries
- modest resource cost & limited risk
What is outsourcing
- engaging in the international division of labor so that work activities can be done in countries with the cheapest sources of labor and supplies
What is a joint venture?
A company shares costs and risks with another firm
What is a joint venture?
A company share costs and risks with another firm
What is franchising?
- a business where the owner licenses its operations
- gives away its products, branding, and knowledge in exchange for a fee
What is licensing?
formal agreement that gives a company the right to …
- manufacture
- distribute
- sell or use a product, brand, or technology owned by another company
What is GATT?
- General Agreement on Tariffs & Trade
- set of rules to ensure nondiscrimination, clear procedures, negotiation of disputes, participation of lesser-developed countries in international trade
- helped with establishment of WTO
What is WTO?
- World Trade Organization
- maturation of GATT into a permanent global institution
- monitor international trade and legal authority to settle disputes on trade issues
What is MNC?
- Multi-national corporation
- worldwide business system in which foreign affiliates act in close alliance and cooperation with one another
- receives more than 25% of revenue from operations outside home country
- controlled by single management authority
- see entire world as one market (global business view)
What is a political risk?
- risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments
What is political instability?
- includes riots, revolutions, civil disorders, and frequent changes in government
What are the two key factors in the international environment?
High-context culture - people are sensitive to circumstances surrounding social exchanges
Low-context culture - communication to spread facts and information
How has China changed international landscape?
- fastest-growing middle class
- largest or variety of products and services (stronger in manufacturing)
- issues with gov. restrictions and censorship
How has India changed the international landscape?
- 2nd to china in pop.
- rising power in software design, services and precision engineering
