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International Business > FINAL EXAM > Flashcards

FINAL EXAM Flashcards

1
Q

Transaction

A

an exchange of things in value

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2
Q

International business

A

Any business that conducts financial transactions outside its native country

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3
Q

Why trade?

A

In order to get the goods we do not have in exchange for the goods we do have

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4
Q

Balance of trade

A

The difference between a country exports and imports

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5
Q

Trade surplus

A

Exports>imports

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6
Q

Trade defeceit

A

imports>exports

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7
Q

Advantages of international trade

A

variety prices and foreign markets, product diversity, lower prices, access to foreign markets, new processes and technologies

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8
Q

Increased foreign ownerships of companies in Canada

A

Foreign companies are loyal to investors and executives in home countries, Research and development are carried out in home country, exports reduced as products manufactured in branch plants stay in Canada

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9
Q

Joint venture

A

Occurs when two businesses, one of which is usually located in a foreign country, form a new company with shared ownership

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10
Q

Licensing agreements

A

Gives a company permission to use a product, service, brand name or patent, in exchange for a fee or royalty

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11
Q

Trade embargo

A

when trade between countries is banned completely

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12
Q

Trade quota

A

a government imposed limit on the amount of product that can be imported in a certain period of time. Protects producers by limiting the amount of product imported and decreasing foreign competition

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13
Q

Trade tariff

A

taxes or duties charged on imported products or services

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14
Q

What are some reasons for the Canadian dollar to be low

A

Inflation, unemployment, GDP, interest rates, politics, physiological factors

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15
Q

The Big Mac index

A

Measures disparities between nations and measures economic health

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16
Q

How can Canada improve Productivity

A

Increasing investment in machinery and equipment, attracting more foreign investment, expanding Canadian investment in foreign countries, rationalization, increasing spending on science and technology, graduating more Canadians in the fields of science, math, computer science, and engineering, encouraging employers to increase and improve training programs, increase post-secondary funding, creating mentorship programs to help immigrants become qualified in their fields of expertise

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17
Q

Competitive advantage

A

A product that a country or company is better at producing than its competitors

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18
Q

Canadas competitive advantage

A

Banking industry, service industry (scientific and technical services), cultural industry, technology sector

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19
Q

Culture

A

Encompasses knowledge, experience, beliefs, values, attitudes, religion, art, symbols, and possessions acquired by a group over time

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20
Q

Cultural determinant

A

Include ethnicity, race, country of origin, language, social grouping

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21
Q

Monochronic

A

Time is linear, sequential

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22
Q

Polychronic

A

Many things happen simultaneously

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23
Q

5 Reasons Canada is attractive to foreign investment

A

Supportive business environment, gateway to the world (geographically and economically), infrastructure advantage (transportation, seaports and air), great place to live and attracts great employees, cultural diversity

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24
Q

What sector is most of Canada’s economy derived from

A

Service industry

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25
Q

Why are Canada’s banks profitable in comparison to the US and EU counterparts

A

Thanks to regulations in Canada’s banking system, banks in Canada were not as badly affected by the 2008recession
The big 6 banks: RBC, TD, CIBC, BMO, Scotia Bank, National Bank

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26
Q

What can affect a country’s productivity

A
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27
Q

Business etiquette in Mexico

A

Personal relationships matter and take time to develop, business decisions are made in a structured hierarchy, do not criticize people in front of others in meetings, time is flexible, appearance matters dress appropriately, a Spanish translator may be needed

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28
Q

Business etiquette in China

A

Managers tend to be directive, business card exchanged at the beginning of meeting, avoid being direct (don’t say no directly), it may take many meetings to come to a conclusion, allow Chinese partners to leave firs

29
Q

Business etiquette in India

A

Never touch/pat someone’s head, don’t open gift in front of gift giver, do not thank hosts after a meal, women should not wear tight/revealing clothing

30
Q

Political system

A

The type of government that runs a country, both economic and political systems have direct effects on how international business is conducted

31
Q

Market economy

A

Known as capitalism/private enterprise, businesses, consumers and government act independently of one another, market forces and self-interest determine what goods are created and sold, government has little direct involvement in business

32
Q

Centrally planned economy

A

communism/command economy, government controls all elements of the economy and how income is distributed, government provides education, healthcare, and housing to all members society

33
Q

Mixed economy

A

Also known as modified free enterprise system, The majority of economies in the world are mixed economies meaning they have characteristics of both centrally planned and market economies

34
Q

Democracy

A

Government through elected representatives, characterized by free and fair elections, the rule of law, free speech, the right to assembly, free press, freedom of religion

35
Q

Autocracy

A

State governed by a single individual or a small group of people with unlimited power

36
Q

Developed economies

A

High per capita income, strong GDP, high standards of living, advances in healthcare and technology, rely less on primary industries and more on tertiary industries, have strong alliances

37
Q

Economy in transition

A

moves from centrally planned economy to Markey economy, transition includes decreasing the role of government, privatization, problems like inflation, increased unemployment, and widening income gaps are possible during transition

38
Q

Developing economies

A

move away from agriculture and natural resources toward more industrialization, manufacturing and technology, these economies are often characterized by lack of social services, poor infrastructure and low literacy levels

39
Q

The business cycle

A

Economies expanding and contracting over time (recession, trough, expansion, peak)

40
Q

Fiscal policy

A

The way government at all levels, collect and spend money

41
Q

Monetary policy

A

A set of decisions a countries federal government makes through its central bank

42
Q

Trade agreement

A

An enforceable treaty by two or more countries that address the movement of goods and services. Eliminates trade barriers, establishes terms of trade, and encourages foreign investment

43
Q

Trade organization

A

Group established to help with free flow of goods and services between countries

44
Q

Global strategy

A

Regards world as one big market, product and marketing are uniform across the globe, key decisions are centralized at the corporate headquarters, allows companies to take advantage of economies of scale, develops product faster, and co-ordinate activities

45
Q

Multi-domestic strategy

A

Tries to customize products, services, and marketing to local culture, effective when cultural differences are prominent, decisions are decentralized, less political and exchange rate risks, increased product differentiation, greater responsiveness to local needs

46
Q

Transnational strategy

A

Tries to combine best elements of global and multi-domestic strategies, attempts to respect needs of the local market while maintaing efficiency of global strategy, products are manufactured at least expensive source, while Human Resources and marketing are managed at local levels

47
Q

Criticisms of CSR

A

Costs companies’ money which reduces profit, Companies spend valuable time and employee energy on CSR instead of concentrating on maximizing shareholders wealth, good corporate practices can be used to distract customers from problems a company may be creating, companies may use CSR to enhance their reputation with domestic consumers but may not act ethically in other countries

48
Q

Stakeholder analysis

A

Analyzes which stakeholders have the most power and influence in the decision making process

49
Q

Primary stakeholder

A

Including customers, suppliers, competitors and employees, directly affect the companies profitability. They are of critical importance and their interests should be considered first

50
Q

Business ethics

A

A set of rules or guidelines that management or individuals follow to make good decisions for their company. Includes domestic and international law, the company’s code of ethics and corporate governance, and the personal values of the individual making the decision

51
Q

Ethical imperialism

A

certain universal truths or values are standard across all cultures, if something is wrong in one country it is wrong in all countries

52
Q

Cultural relativism

A

States that the values are of different cultures should be respected, as the ethics of one culture are not seen as better than this of another

53
Q

Subzidizing

A

Occurs when the importing of a good is helped through financial assistance from the foreign government

54
Q

Microcredit

A

The granting of very small loans-often as little as $100-to spur entrepreneurship. Money from private or corporate investors is used to start a small business

55
Q

Test of disclosure

A

“How would we feel if everyone knew about the
decision we made?” If they are not concerned, they
have likely made an ethical decision. If they are
concerned, they have probably not made the right
choice.

56
Q

Main purpose of marketing

A

Sell the output of production

57
Q

Penetration pricing

A

entering market at a lower price than the competition

58
Q

Price skimming

A

Entering market at a high price during the introductory phase

59
Q

Premium pricing

A

Setting the price higher than the competitions price to evoke the illusion of luxury and high quality

60
Q

Discount pricing

A

Often used in B2B situations where the producer wants to sell high volumes to a wholesaler or retailer

61
Q

Psychological pricing

A

Setting a price at $199 will sell more product than $200

62
Q

Ethnocentrism

A

A belief that your own culture, values, beliefs and customs represent the right way of doing things, and that value systems of other countries are not important

63
Q

Demographics

A

Are studied by dividing a large market into age, gender, education, marital status, lifestyle and household formation

64
Q

Discretionary income

A

The amount left after the necessities of life have been paid

65
Q

Logistics

A

The acquisition, transportation, and storage of materials from the point of origin to the point of consumption. Part of the daily routine of manufacturing companies, retail stores, service businesses, homeowners, and government agencies. Successful logistics gets the right item to the right place at the right time in the right quantity at the right price. Can be domestic, international or a combination of both.

66
Q

Forward logistics

A

The steps that involved delivering products from producer to consumer

67
Q

Reverse logistics

A

The activities that occur after the product has been sold and received by customer

68
Q

Horizontal integration

A

Method of expanding by acquiring competitors

69
Q

Supply chain

A

The sum of all activities involved in moving raw materials, processed goods, and finished products into an organization and moving the semi-processed or finished goods out of the organization toward the end consumer.

International Business (5 decks)

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