Glossary Flashcards
Born-global companies
Companies that start out with a global focus, usually because of their founders’ international experience and knowledge of foreign markets through advances in communications.
Collaborative arrangements
Companies’ working together, such as in joint ventures, licensing agreements, management contracts, minority ownership, and long-term contractual arrangements.
FDI
An acronym for foreign direct investment.
Foreign direct investment
This is sometimes referred to simply as ‘direct investment’. It is an operation in which an investor holds a controlling interest in a foreign company.
Franchising
A contract in which a company assist another on a continuous basis and allows use of its trademark.
Globalization
The widening and deepening of interdependent relationships among people from different nations. The term sometimes refers to the elimination of barriers to international movements of goods, services, capital, technology, and people that influence the integration of world economies.
Institutions
Systems of established and prevalent social rules that structure social interactions, such as language, money, law, systems of weights and measures, table manners and organizations.
Joint ventures
An operation in which two or more companies share ownership. (There are also non-equity joint ventures)
Licensing agreements
Contracts whereby firms allow others to use some assets, such as trademarks, patents, copyrights, or expertise.
Management contracts
Arrangements in which a company provides personnel to perform management functions for another organization.
Merchandise exports and imports
Tangible products - goods - that are respectively sent ‘out’ of and brought ‘into’ a country.
MNC
An acronym for multinational corporation or multinational company and a synonym for multinational enterprise.
Multinational corporation or company (MNC)
A synonym for a multinational enterprise (MNE)
Multinational enterprise (MNE)
Usually signifies any company with foreign direct investments
Off shoring
The dependence on production in a foreign country, usually by shifting from domestic source.
Reshoring
Firm’s bringing operations back to their home countries from abroad and is sometimes called rightshoring.
Rightshoring
Also known as reshoring is the process of shifting production from abroad to the home country.
Royalties
Payments for the use of some assets, such as trademarks, patents, copyrights, or expertise.
Service exports and imports
Non-merchandise international earnings. They are also referred to as invisibles.
Sovereignty
A country’s freedom to “act locally” and without externally imposed restrictions.
Strategic alliance
Refers simply to companies’ working together, such as in joint venture and licensing agreements. However, the terms sometimes refers to an agreement that is of critical importance to a partner or one that does not involve joint ownership.
TNC
An acronym for transnational company.
Transnational company
A term used by the United Nations to refer to a multinational enterprise.
Turnkey operations
Construction projects performed under contract and transferred to owners when they’re operational.
Bargaining school theory
A premise that the terms of a foreign investor’s operations depend on how much the investor and host country need each other.
Consortium
An organization owned by more than two firms.
Coopetition
Refers to situations in which competing firms collaborate on some portions of their operations.
Cross-licensing
An arrangement whereby companies exchange technology or other intangible property rather than compete with each other in every product in every market.
Dependencia theory
A theory holding that emerging economies have practically no power in their dealings with MNEs.
Equity alliance
A collaborative arrangement in which at least one of the companies takes an ownership position (almost always minority) in the other(s).
Internalization
Control through self-handling of foreign operations, primarily because such control is less expensive than to contract with an external organization.
Resource-based view
Each company has a unique combination of resources, capabilities, and competencies.
Acquired group membership
An individual affiliation not determined by birth, such as religion, political membership, and profession.
Ascribed group membership
An individual affiliation determined by birth, such as gender, family, age, ethnicity, and race.
Bicultural
A description of someone which has internalized two different national cultures.
Collectivism
Perspective that the needs of the group take precedence over the needs of the individual; encourages dependence on the organization.
Core value
Values so strong that they are not negotiable.
Cultural collision
A situation whereby contract among divergent culture creates problems.
Cultural distance
A measurement based on cultural factors that indicates the relative similarly of countries culturally.
Cultural imperialism
The imposition of certain elements from an alien culture.
Culture
The shared values, attitudes, and beliefs of a group of individuals.
Culture shock
The frustration resulting from having to absorb a vast array of new cultural cues and expectations.
Deal-focus (DF) culture
A culture in which people are primarily task oriented rather than relationship oriented.
Future orientation
A willingness to delay gratification in order to reap more in the future.
Hierarchy-of-needs theory
A motivation theory that people try to fulfill lower-level needs before moving on to higher-level ones.
High-context cultures
Where most people tend to understand and regard indirect information as pertinent.
Idealism
A preference to establish overall principles before trying to resolve small issues.
Individualism
A construct comparing people’s preference to fulfill leisure time, build friendships, and improve skills independently and outside the organization as opposed to collectively and within the organization.
Low-context cultures
Where people generally regards as relevant only firsthand information that bears directly on the subject at hand.
Masculinity-femininity index
A construct measuring attitudes towards achievement and the roles expected of genders.
Monochronic
A term to describe cultures in which most people normally prefer to work sequentially, such as finishing transactions with one customer before dealing with another.
Multicultural
Description of someone who has internalized more than two national culture.
Peripheral values
Those values that are less dominant and more pliable than core values.
Polychronic
A term to describe cultures where most people are more comfortable when working simultaneously on a variety of tasks (multitasking).
Power distance
A measurement of employee preferences of interaction between superiors and subordinates.
Pragmatic
Describe cultures in which people focus more on details than on abstract principles.
Relationship-focus (RF) culture
A culture that puts dealing with friends ahead of business dealings.
Reverse culture shock
The trauma of adjusting to one’s own country after having become partial to aspect of life abroad that are not options back home.
Silent language
The exchange of messages through a host of non spoken and nonwritten cues.
Uncertainty avoidance
A country trait whereby most people feel uncomfortable with ambiguity.
Civil law
A body of rules that delineate private rights and remedies, and govern disputes between individuals in such areas as contract, property, and family.
Commercial law
The area of law that governs the broad areas of business, commerce, and consumer transactions.
Common law system
A legal system based on tradition, precedent, and custom and usage, in which the courts interpret the law based on those conventions; found in the United Kingdom and former British colonies.
Constitutional law
Law that is created and changed by the people.
Country of origin
Where products or services are created, which affects trade in that consumers may prefer to buy goods produced in one country rather than another usually because of quality perceptions or because of nationalism.
Criminal law
Body of laws dealing with crimes against the public and members of the public.
Customary law system
A legal system anchored in the wisdom of daily experience or great spiritual or philosophical traditions.
Democracy
A political system that relies on citizens’ participation in the decision-making process.
Intellectual property (IP)
Property in the form of patents, trademarks, service marks, trade names, trade secrets, and copyrights.
Intellectual property right (IPR)
Ownership rights to intangible assets, such as patent, trademarks, copyrights, and know-how.
Legal system
The rules that regulate behavior, the processes that enforce the laws of a country, and the procedures used to resolve grievances.
Mixed legal system
A legal system that emerges when two or more legal systems function in a country.
Political freedom
The right to participate freely in the political process.
Political risk
Potential changes in political conditions that may cause a company’s operating positions to deteriorate.
Political spectrum
A conceptual structure that specifies and organizes various types of political ideologies.
Political system
The system designed to integrate a society into a viable, functioning unit.
Rule of law
The principle that every member of a society must follow the same law.
Rule of man
Notion that the world and whim of the ruler, no matter how arbitrary, are law.
Theocratic law
A situation whereby a nation’s legal system is based on whatever religious text the ruling religion abides by.
Third Wave of Democratization
Expression to capture the collective set of nations that moved from nondemocratic political systems during 1970s through the 1990s.
Totalitarian system
A political system characterized by the absence of widespread participation in decision-making and suppression of political and civil freedom.
Capability
A distinct type of resource that improves the productivity of related resources owned by the firm.
Concentrated configuration
The design of a value chain whereby a particular activity is performed in one geographic location and serves the world from it.
Configuration
To set up, arrange, and disperse value activities to the ideal locations around the world so that the company can start and sustain operation.
Core competency
A special outlook, skill, capability, or technology that runs through the firm’s operation, weaving together disparate value activities into an integrated value chain; Managers bundle resources and capabilities to create a core competency.
Dispersed configuration
The design of value chain whereby a particular activity is performed in many geographic locations and serves the world market from any to all of its unit.
Economies of scale
The lowering of cost per unit as output increases because of allocations of fixed costs over more units produced.
Global integration
The unification of distinct national economic systems into one global market.
Global strategy
A strategy that increases profitability by achieving cost reductions from experience curves and location economies.
Great by choice
The principle that managers’ choice are the basis of building and sustaining a high-performance enterprise in unpredictable, tumultuous, and fast-moving times.
Industry structure
The makeup of an industry: it’s number of sellers and their size distribution, the nature of the product, and the extent of barriers to entry.
Integration-responsiveness (IR) grid
Schema that helps managers measure the global and local pressures that influence the configuration and coordination of value chain.
International strategy
The effort of managers to create value by transferring core competencies from the home market to foreign markets in which local competitors lack those competencies.
Liability of foreignness
Foreign companies’ lower survival rate in comparison to local companies for many years after they begin operation.
Location advantages
Cost advantages arising from performing a value activity in the optimal location.
Location economies
Cost advantages arising from performing a value activity in the optimal location.
Localized strategy
An approach that emphasizes responsiveness to the unique condition prevailing in different national market.
Local responsiveness
The process of disaggregating a standardized whole into differentiated parts to improve responsiveness to local market circumstances.
Mission
Statement that defines the business, its objectives, and its approach to achieve them.
Primary activities
The line activities that compose the value chain. Specifically, inbound logistics, operation, outbound logistics, marketing, and service.
Resource
Inputs, owned or controlled by the MNE, that support its production process.
Strategy
An integrated and coordinated set of commitments of actions that reflects the company’s present situation, identifies the direction it should go, and determines how it will get there.
Support activities
The general infrastructure of the firm that anchors the day-to-day execution of the primary activities of the value chain.
Transnational strategy
Configuring a value chain to exploit location economies as well as coordinate activities to leverage core competencies while simultaneously responding to local pressure.
Value
A measure of a firm’s capability to sell what it makes for more than the costs incurred to make it; the ultimates purpose of strategy.
Vision
The idealization of what an MNE firm wants to be. It expresses, in broad terms, it’s ultimate goal.
Boundaries
In terms of political environments, and official or perceived point of separation that defines the boundary of a nation. In terms of organization structure, horizontal constraints that follow from having specific employees only do specific unit as well as the vertical constraints that separate employees into specific levels of a precisely stipulated command-and-control hierarchy.
Boundarylessness
State whereby companies build organizations that eliminate the vertical, horizontal, and external boundaries that impede information flows and hinder developing relationships.
Bureaucratic control
System whereby an organization uses centralized authority to install rules and procedures to govern activities.
Centralization
The degree to which high-level, make strategic decisions and delegate them to lower levels for implementation.
Control system
Process by which managers interact extensively with counterparts in setting common goals.
Coordination by plan
System that relies on general goals and detailed objective to coordinate activities.
Coordination by standardization
System whereby rules and procedures apply to units worldwide, thereby enforcing consistency in the performance of activities in geographically dispersed units.
Coordination systems
Systems that synchronize the work responsibilities of the value chain so that the company uses its resources efficiently and makes decision effectively.
Decentralization
The degree to which lower-level managers, usually at or Beloit the country level, make and implement strategic decisions.
Divisional structure
An organization that contains separate divisions based around individual product lines or based on the geographic areas of the markets served.
Functional structure
An organization that is structured according to functional areas of business.
Globality
The state of affairs where one competes with everyone, from everywhere, for everything.
Market control
System whereby an MNE uses external market mechanisms to establish internal performance benchmarks and standards.
Matrix structure
A structure in which foreign units reports (by product, function, or area) to more than one group, each of which shared responsibility over the foreign unit.
Mixed structure
A structure that integrated various aspects of classical structures.
Neoclassical structure
Applies different devices to resolve the shortcomings, such as conformity, rigidity, bureaucracy, and authoritarianism, often found in the classical formâtes of functional and divisional structures.
Network structure
Neoclassical structure whereby a small core organization outsource value activities to linked firms whose core competencies support greater innovation.
Organizational culture
The shared meaning and beliefs that shape how employees interpret information, make decisions, and implement actions.
Organization structure
The formal arrangement of roles, responsibilities, and relationships within an organization.
Organization
The specification of the framework for work, development of the systems that coordinate and control what work is done, and cultivation for common workplace culture among employees.
Unity-of-command principle
An unbroken chain of command and communication should flow from the CEO to the entry-level worker.
Vertical differentiation
The specification of the degrees of centralization and decentralization of decision-making in an organization.
Virtual organization
A form of company that acquired strategic capabilities by creating a temporary network of independent companies, suppliers, customers, and even rivals.
Deontological approach
An approach which asserts that moral reasoning occurs independent of consequences.
Foreign Corrupt Practices Act (FCPA)
A law that criminalizes certain types of payment by U.S companies, such as bribes to foreign government officials.
Normativism
A theory stating the universal standards of behavior (based on people’s own values) exist that all culture should follow, making nonintervention unethical.
Relativism
A theory stating that ethical truths depend on the groups holding them, making intervention by outsider unethical. The belief that behavior had meaning and can be judged only in its specific cultural context.
Stakeholder
The collection of groups, including stockholders, employees, customers, and society at large, that company must satisfy to be successful.
Sustainability
The ability to meet the needs of the present without compromising the ability of future generations to meet their own needs, while taking into account what is best for the people and the environment.
Teleological approach
An approach based on the idea that decisions are made based on the consequences of the action.
Utilitarianism
A consequence-based approach to moral reasoning that judges an action to be right if it does the most good to the most people.
Political ideology
The body of complex ideas, theories, and aims that constitue a sociopolitical program.
