Global Management Flashcards
AmChams
*American Chamber of Commerce in foreign countries
84 AmChams, located in 59 countries, collect and disseminate extensive information of foreign markets. While membership fees are usually required, the small investment can be worth if for the information received
Anti-dumping duty
A tariff imposed to discourage the underpriced (below foreign country’s) domestic market/sale of foreign goods in the U.S. market, which might hurt U.S. manufacturers
Arbitration clause
A clause in sales contracts detailing how any contract disputes will be settled
Balance sheet
A summary of a person’s or organization’s assets, liabilities and equity as of a specific date
Bilateral trade agreement
A formal or informal agreement involving commerce between two countries . Such agreements sometimes list the quantities of specific goods that may be exchanged between participating countries within a given period
Bureau of Industry and Security
Part of the U.S. Department of Commerce. Responsible for control of exports for reasons of national security, foreign policy and short supply. Licenses on controlled exports are issued and seminars on U.S. export regulations are held domestically
Collectivism
A term to describe any moral, political, or social outlook, that emphasizes the interdependence of every human in some collective group and the priority of group goals over individual goals
Commercial attaché
Commerce expert of the diplomatic staff of their country’s embassy or large consulate
Commercial risk
Risk carried by the exporter (unless insurance is secured) that the foreign buyer may not be able to pay for goods delivered on an open account basis
Consul
A government official residing in a foreign country charged with representing the interests of his country and its national
Copyright
An intangible right granted by law to the creator of a literary, musical, or artistic production to prevent any other person from copying, publishing, and selling those works
Country risk
The financial risk of a transaction which relates to to the political, economic or social instability of a country
Denied persons list (DPL)
A set of lists by the Bureau of industry and security. Individual and firms denied export privileges, specifically for strategic and controlled materials, components and products
Direct exporting
Sale by an exporter directly to a buyer located in a foreign country
Direct foreign investment (DFI)
Investment that is made to acquire a lasting interest in an enterprise operating in an economy other than that of the investor
Due diligence
The systematic investigation, verification and evaluation of information in order to facilitate a decision regarding a proposed transaction. Performing a due diligence investigation is a standard operating procedure prior to: purchasing venture capital, loaning money or offering securities. Can include checking financial references, background checks, etc.
Foreign Corrupt Practices Act (FCPA)
It is unlawful for any United States citizen or firm (or any person who acts on behalf of a U.S citizen or firm) to offer, pay, transfer, or promise to pay, transfer, or promise anything of value to any foreign appointed or elected official for a corrupt purpose to influence a discretionary act of decision of the official and for the purpose of obtaining or retaining business
Free Trade Agreement (FTA)
FTA is an arrangement which establishes unimpeded exchange and flow of goods and services between trading partners regardless of national borders
General Agreement on Tariffs and Trade (GATT)
now the WTO A multilateral treaty adhered to by over 124 nations which provides a set of rules for trade policies and a means for settling disputes among member nations
High-context culture
Communication in a high-context culture expresses much information either in the physical context of the situation or is already internalized in the person
Interest Charge Domestic International Sales Corporation (IC-DISC)
Provides a 20% tax savings for qualifying U.S exporters . The IC-DISC is an entity which serves as a vehicle for export tax savings
Income Statement
Financial statement showing a company’s sales, expenses, and net income or loss for a specific period of time
Intellectual property
The patents, trademarks, service marks, copyrights and trade secrets of a business are considered intellectual property
Inter-American Development Bank (IDB)
The Internet-American Development Bank provides resources to finance Latin American development. The IDB also serves as administrator for special funds provided by several members and nonmember countries. The largest of these funds is the U.S. Social Progress Trust Fund
International Chamber of Commerce (ICC)
Non-governmental organization serving world business. The ICC has members in 110 countries that include companies, industrial associations, banking bodies, and chambers of commerce. The ICC International Court of Arbitration was founded in 1923 to settle international business disputes; it is the leading arbitration institution.
International Finance Corporation (IFC)
A separately organized member of the World Bank group, receiving its funds through stock subscriptions from member countries, revolving loans, and earnings. The IFC encourages the flow of capital into private investment in countries. It makes loans at commercial interest rates, usually as a lender of last resort when sufficient capital cannot be obtained from other sources on reasonable terms.
International Monetary Fund (IMF)
Seeks to stabilize the international monetary system as a sound basis for the orderly expansion of international trade. Specifically, the Fund monitors exchange rate policies of member countries, lends them foreign exchange resources to support their adjustment policies when they experience balance of payment difficulties, and provides them financial assistance through a special “compensatory financing facility” when they experience temporary shortfalls in commodity export earnings.
ISO 9000
A family of voluntary generic management system standards established by the ISO (International Standards Organization) that are concerned with quality management
Joint Venture
A combination of two or more individuals or legal entities who undertake together a transaction for mutual gain or to engage in a commercial enterprise together with mutual sharing of profits and losses
Legal risk
The risk that business will be affected by changes in laws and regulations, or by existing laws and regulations which it had not properly taken into account
Low-context culture
Conveys most information as explicit statements and little is conveyed by relationships or internalization
Madrid Agreement
Treaty, administered by the World Intellectual Property Organization (WIPO), for the repression of false or deceptive indications on sourced goods. The primary international system for facilitating the registration of trademarks in multiple jurisdictions around the world.
Marginal cost
The increase in the total cost of production that results from manufacturing one more unit output
Market risk
The risk that the value of a portfolio, either an investment portfolio or a trading portfolio, will decrease due to the change in value of the market risk factors are stock prices, interest rates, foreign exchange rates, and commodity prices
Mercoser
Comprised in Argentina, Brazil, Paraguay, and Uruguay. Modeled similarly to the European Community’s Treaty of Rome, it will establish a common external tariff and eliminate barriers to trade services
Multilateral agreement
An international compact involving three or more parties. For example, the World Trade Organization (WTO), has been seeking to promote trade liberalization through multilateral negotiations
Net Income
The remains from earnings after all costs, expenses and allowances for depreciation and probable loss have been deducted
Organization for Economic Cooperation
(OECD)
The Organization for Economic Cooperation and Development was established in 1961 by the industrialized “free market” nations of the world to promote the economic and social welfare of member nations and to stimulate efforts on behalf of developing nations
Overseas Private Investment Corporation (OPIC)
A wholly owned government corporation designed to promote private U.S. investment in developing countries by providing political risk insurance and some financing, including project financing
Patent
A grant by law to an inventor of a device or the right to exclude other persons from making, using, or selling the device
Political Risk
Risk resulting from the political decisions of sovereign governments as well as political and social events in a country. Risks include confiscation, expropriation, nationalization, currency in convertibility, contract frustration, war, civil unrest, revolution and annexation. Can lead to the inability of a debtor to comply with a contract or to the loss, confiscation or damage to goods belonging to an exporter. An exporter may be able to cover the risk by utilizing credit
Power distance
The extent to which the less powerful members of organizations within a country expect and accept that power is distributed unevenly
RoHS
Acronym for Reduction and the use of Hazardous Substances. The RoHS Directive is a European Union ban on the placing on the EU market of new electrical and electronic equipment containing more than agreed levels of six hazardous materials: lead, cadmium, mercury, hexavalent chromium, polybrominated biphenyl (PBB), and polybrominated diphenyl ether (PBDE) flame retardants
Sanctions
An embargo imposed against an individual country by the United Nations or a group of nations in an effort to influence its conduct or its policies
Statement of cash flows
Summarizes sources and uses of cash; indicates whether enough cash is available to carry on routine operations
Statement of owner’s equity
Also known as statement of retained earnings or equity statement. Reports the way that net income and distribution dividends affect the financial position of the company during the accounting period
Subjectivism
The doctrine that knowledge and value are dependent on and limited by your subjective experience
Trade barriers
1: import policies (tariffs and other import charges, quantitive restrictions, import licensing, and custom barriers
2: standards, testing, labeling, and certification
3: governmental procurements
4: export subsidies
5: lack of intellectual property protection
6: service barriers
7: investment barriers
8: other barriers
Trademark
A distinctive identification of a manufactured product of a service taking the form of a name, logo, motto, and so on; a trademarked brand has legal protection and only the owner can use the mark
Transfer pricing
The overpricing of imports and/or underpricing of exports between affiliated companies in different countries for the purpose of transferring profits, revenues or money out of a country in order to evade taxes
Waasenaar Arrangement
An understanding between 40 nations promoting voluntary export control guidelines as well as transparency and greater responsibility in the transfer of conventional arms and dual-use goods and technologies
World Bank
The World Bank assists the development of member nations by making loans when private capital is not available at reasonable terms to finance productive investments
World Trade Organization (WTO)
This organization was the former General Agreement on Tariffs and Trade (GATT) and was created and named by the Uruguay Round 1994
Paris Convention
Major international agreement providing basic right for protecting industrial property. It covers patents, industrial designs, service marks, trade names, indications of source, and unfair competition. Provides two fundamental rights:
1. Nationals of any signatory nation shall enjoy in all other countries of the union the advantages that each nation’s law granted to its nationals
2: any resident has the right to file a patent…
