International Business Flashcards
Globalization
awareness, understanding, and response to global developments and linkages
Import-Export trade
the sale and purchase of tangible goods and services to and from another country
Foreign direct investment
the establishment or expansion of operations of a firm in a foreign country; like all investments, a transfer of capital is assumed
Multinational corporations
companies that invest in countries around the globe
Gross Domestic Product (GDP)
total monetary value of goods produced and services provided by a country over a one-year period
Macroeconomic Level
- level of business concerns at which trading relationships affect individual markets
- an analysis of a national economy with a focus on overall perspectives and workings
Microeconomic Level
- level of business concerns that affect an individual firm or industry
- allows firms to achieve economics of scale that cannot be achieved in domestic markets
- permits firms to hone their competitive skills by meeting the challenge of foreign products
Culture
an integrated system of learned behavior patterns that are characteristic of the members of any given society
Acculturation
the process of adjusting and adapting to a specific culture other than from one’s own
High context culture
culture in which behavioral and environmental nuances are an important means of conveying information (Japan, Saudi Arabia)
Low context culture
culture in which most information is conveyed explicitly rather than through behavioral and environmental nuances (North America, Northern European)
Change agent
an institution or person or product who facilitates change in a firm or in a host country
Cultural imperialism
promoting Western behaviors and values along with products and into other cultures, encouraging homogeneous demand across markets
Cultural universals
manifestations of the total way of life of any group of people
Concrete elements of Culture
- language
- infrastructure
- education
- social institutions
Abstract elements of culture
- religion
- values and attitudes
- manneres and customs
- aesthetics
Backtranslation
retranslation of a text to the original language by a different person from the one who made the first translation, useful in finding translation errors
Economic infrastructure
the transportation, energy, and communication systems in a country
Social infrastructure
the housing, health, education, and other social systems in a country
Financial infrastructure
facilitating financial agencies in a country, such as banks
Marketing infrastructure
facilitating marketing agencies in a country
Cultural convergence
increasing similarity among cultures accelerated by technological advances
Social stratification
the division of a particular population into economic classes
Reference groups
a group, such as the family, coworkers, professional trade associations, that provides the values and attitudes that influence and shape behavior
Values
shared beliefs or group norms that have been internalized by individuals
Attitudes
evaluations of alternatives based on these values
In-depth studies
market research tool that is used for gathering detailed data after studying consumer needs across markets
Self-reference criterion
unconscious reference to one’s own cultural values
ethnocentrism
regarding one’s culture as superior to other cultures
Cultural dimensions
- individualism
- power distance
- uncertainty avoidance
- masculinity
- long term vs. short-term orientation
- indulgence vs. restraint
Experiential knowledge
acquisition of cultural competence through personal involvement
Area briefings
training programs that provide factual preparation prior to an overseas assignment
Cultural assimilator
training program in which trainees for overseas must respond to scenarios of specific situations in a particular country
Sensitivity training
human relations training that focuses on personal and interpersonal interactions; training that focuses on enhancing an expatriate’s flexibility in situations quite different from those at home
Field experience
experience acquired in actual rather than laboratory settings; training that exposes a corporate manager to a cultural environment
Culture shock
pronounced reactions to the psychological disorientation that most people feel when they move for an extended period of time into a markedly different culture
National sovereignty
the supreme right of nations to determine national policies; freedom from external control
Domestic policy
public policy concerned with national issues but that may have direct or indirect bearing on foreign trade and investment
Quality of life
the standard of living combined with environmental and cultural factors; determines the level of well-being of individuals
Standard of living
the level of material affluence of a group or nation, measured as a composite of quantities and qualities of goods
Foreign policy
the area of public policy concerned with relationships with other countries
General Agreement on Tariffs and Trade (GATT
international code of tariffs and trade rules signed by 23 nations in 1947; headquartered in Geneva, Switzerland; 159 members currently; now part of the WTO
-Initial focus on reduction of high tariffs that restricted border trade
Most Favored Nation (MFN)
a term describing a GATT clause that calls for member countries to grant other member countries the same most favorable treatment they accord any country concerning imports and exports, now also known as normal trade relations
World Trade Org (WTO)
the institution that supplanted GATT in 1995 to administer international trade and investment accords
General Agreement on Trade in Services (GATS)
a legally enforceable pact among GATT participants that covers trade and investments in the services sector
-Provides the legal ground rules for international commerce
Three main purposes:
- Help trade flow as freely as possible
- Serve as forum for trade negotiations
- Settle trade disputes among member nations
