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AUDITING APPLICATIONS > INTERNATIONAL BUSINESS AND TRADE > Flashcards

INTERNATIONAL BUSINESS AND TRADE Flashcards

1
Q

Refers to the gradual integration and growing interdependence of national economies.

A

Globalization Market

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2
Q

International business became widespread due to the growth of railroads, efficient ocean transport and the rise of large manufacturing and trading firm. It begun in 1830 and peaked around 1880.

A

THE FIRST PHASE

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3
Q

It begun in 1900 and was associated with the rise of electricity and steel production. This phase reached its height just before the great depression, a world-wide economic downturn that begun in 1929.

A

THE SECOND PHASE

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4
Q

Begun after the world wide II. A substantial pent-up demand was created for consumer as well as industrial product to rebuild Europe and Japan.

A

THE THIRD PHASE

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5
Q

It begun in 1980 and featured enormous growth in cross boarder-trade and investment.

A

THE FOURTH PHASE

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6
Q

DRIVERS OF GLOBALIZATION

A
  • WORLDWIDE REDUCTION IN BARRIERS TO TRADE AND INVESTMENTS
  • MARKET LIBERALIZATION AND ADOPTION OF FREE MARKET
  • INDUSTRIALIZATION ECONOMIC DEVELOPMENT AND MODERNIZATION
  • INTEGRATION OF WORLD FINANCIAL MARKETS
  • ADVANCE TECHNOLOGY
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7
Q

Technological Advances and Globalization

A
  1. Technological Advancement
  2. Information
  3. Communication
  4. Manufacturing
  5. Transportation
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8
Q

DIMENSIONS OF MARKET GLOBALIZATION

A
  • Integration and interdependence of national economies. (VALUE CHAIN)
  • Rise of regional economic integration blocs. (NAFTA, APEC)
  • Growth of global investment and financial flows. (BUY & SELL FOREX)
  • Convergence of consumer lifestyles preferences.
  • Globalization of production
  • Globalization of services
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9
Q

the sequence of value adding activities the firm performs in the course of developing, producing, marketing, and servicing a product.

A

Value Chain

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10
Q

STAGES IN THE FIRM’S VALUE CHAIN

A
  • RESEARCH
  • PROCUREMENT (SOURCING)
  • MANUFACTURING
  • MARKETING
  • DISTRIBUTION
  • SALE SERVICE
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11
Q

SOCIETAL CONSEQUENCES OF GLOBALIZATION

A
  • CONTAGION: RAPID SPREAD OF MONETARY OT FINANCIAL CRISIS
  • LOSS OF NATIONAL SOVEREIGNTY
  • OFFSHORING
  • RESHORING
  • EFFECT ON THE POOR
  • EFFECT ON SUSTAINABILITY AND NATURAL REOURSCES
  • EFFECT ON NATIONAL CULTURE
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12
Q

It is a value, beliefs, customs, arts and other products of human thought and works that characterized the people pf a given society.

A

Culture

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13
Q

A situation or event in which a cultural mis understanding puts some human value at stakes.

A

Cross-cultural Risk

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14
Q

DIMENSIONS OF CULTURE

A
  • Values and Attitude
  • Manners and Customs
  • Perception of Time
  • Perception of Space
  • Symbolic Production
  • Material Productions and Creative Expressions
  • Education
  • Social Structure
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15
Q

represents persons judgements about what is good or bad, acceptable or unacceptable, important or unimportant and normal or abnormal.

A

Values and Attitude

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16
Q

are ways of behaving conducting oneself in public and business situations

A

Manners and Customs

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16
Q

time is a strong influence in Business. It affects people expectations about planning, schedule, profit flow, promptness in arriving for works and meetings.

A

Perception of Time

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16
Q

We have our own personal space and feel uncomfortable if others violate it.

A

Perception of Space

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17
Q
  • a symbol can be letters, colors or other characters that communicate a meaning
A

Symbolic Productions

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18
Q

2 Types of Communication

A
  • Verbal Language
  • Non-verbal Communications
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18
Q

National languages, dialect and translation tend to complicate verbal communications. It is sometimes hard to find words to convey the same meaning in different language.

A

Verbal Language

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18
Q

artifacts, objects and technological systems that construct to function within their environment.

A

Material Productions and Creative expressions

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19
Q

refers to pattern of social arrangement and organized relationship that characterize a society.

A

Social Culture

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19
Q

cultural values, ideas, beliefs and traditions are passed from one generation to the next generations.

A

Education

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20
Q

is unspoken and includes facial gesture and expressions.

A

Non-verbal Communications

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21
Q

is a system of common beliefs or attitudes concerning a being or a system of thoughts that consider sacred, divine, moral codes, values, traditions, rituals associated with in this system.

A

Religion

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22
Q

CULTURE’S EFFECT IN INTERANTIONAL BUSINESS AND TRADE

A
  • Managing employee
  • Communicating and interacting with foreign business partners
  • Negotiating and structuring international business ventures.
  • Developing products and services.
  • Preparing advertising and promotional materials.
  • Preparing for international trade fairs and exhibitions.
  • Interacting with current and potentials customers from abroad
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23
Q

MODELS AND EXPLANATIONS OF CULTURE

A

Cultural Metaphor
Low Context Culture
High Context Culture

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24
Q

refers to distinctive traditions and institution that strongly associated with particular society.

A

Cultural Metaphor

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25
Q

a culture that relies on elaborate verbal explanations, putting much emphasis on spoken words.

A

Low Context Culture

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26
Q

a culture emphasizes mom verbal messages and views communication as means to promote smooth harmonious relationships

A

High Context Culture

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27
Q

2 Types of Cultural Orientation

A
  • Ethnocentric Orientation
  • Polycentric Orientation
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28
Q

using our own culture as the standard for judging other culture

A

Ethnocentric Orientation

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29
Q

a host country mindset in which the manager develops a strong attachment to the country in which she or he conducts business.

A

Polycentric Orientation

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30
Q

is about doing the right things for the company, the employees, the community, the government, and the natural environment.

A

Ethical Behavior

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31
Q

4 Key Components of Ethical Behavior

A
  • Ethics
  • Corporate Social Responsibility (CSR)
  • Sustainability
  • Corporate Governance
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32
Q

Moral principles and Values that govern the behavior of people, firms, and governments, regarding right and wrong.

A

Ethics

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33
Q

Refers to operating a business in a manner that meets or exceeds the ethical, legal, and commercial expectations of customers, shareholders, employees, and the communities.

A

Corporate Social Responsibility (CSR)

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34
Q

Means meeting humanity’s needs today without harming the ability of future generations to meet their needs.

A

Sustainability

35
Q

Is the system of procedures and processes by which corporations are managed, directed, and controlled

A

Corporate Governance

36
Q

a predicament concerning major conflicts among different interests when determining the most appropriate course of action is confounded by a set of solutions that are equally justifiable and often equally imperfect.

A

Ethical Dilemma

37
Q

the belief that ethical truths are not absolute but differ from group to group.

A

Relativism

38
Q

the belief that ethical behavioral standards are universal, and firms and individuals should seek to uphold them consistently around the world.

A

Normativism

39
Q

ETHICAL CHALLENGES IN INTERNATIONAL BUSINESS

A
  • Corruption
  • Bribery
  • Unethical Management Practices
  • Harmful Global Sourcing
  • Illicit Products and Marketing
  • Intellectual Property Infringement
40
Q

the practice of obtaining power, personal gain, or influence through illegitimate means and usually occurs at others’ expense.

A

Corruptions

41
Q

HOW CORRUPTION ENCOUNTERED IN INTERANTIONAL BUSINESS

A

Bribery
Embezzlement
Fraud
Extortion and blackmail
Money laundering

42
Q

occurs when a person offers or gives another person a gift, cash, or favor to act dishonestly.

A

Bribery

43
Q

theft or misuse of funds typically placed in one’s care or belonging to one’s employer

A

Embezzlement

44
Q

involves wrongfully deceiving a person or another party to give up asset or cash.

A

Fraud

45
Q

involve threats of harm against another person or party unless payment is received or some other demand is met.

A

Extortion and Blackmail

46
Q

the concealment of the origins of funds obtained through illegal means.

A

Money Laundering

47
Q

UNETHICAL MANAGEMENT PRACTICES

A
  • Harmful Global Sourcing
  • Illicit Products and Marketing
  • Intellectual Property Infringement
48
Q

PIRACY AND COUNTERFEITING HURT THE WORLD ECONOMY IN VARIOUS WAYS

A
  • International Trade
  • Direct Investment
  • Company performance
  • Innovation
  • Tax Revenues
  • Criminal Activity
  • The natural environment
  • Natural Prosperity and wellbeing
49
Q

Settings of Corporate Social Responsibility

A
  • Workplace CSR
  • Marketplace CSR
  • Environmental CSR
  • Community CSR
50
Q

focuses on the firm’s employees and implies thoughtful approach to diversity, recruitment, salary, safety, health, and working conditions.

A

Workplace CSR

51
Q

emphasizes company interactions with customers, competitors, suppliers, and distributors.

A

Marketplace CSR

52
Q

refers to the firm’s activities to minimize or eliminate the creation of pollutants as well as efforts to improve the natural environment.

A

Environment CSR

53
Q

accounts for the firm’s activities aimed at benefiting the community and society.

A

Community CSR

54
Q

Endorsers of Sustainability

A
  • Economic Development Experts
  • Environmentalists
  • Human Rights Activists
55
Q

SUSTAINABLE BUSINESS PRACTICES

A
  • Beneficial agricultural processes
  • Water conservation
  • Air quality protection
  • Reduced energy and fuel consumption
  • Increased use of solar and development energy
  • Improved work process
56
Q

TYPES OF SUSTAINABILITY INTERESTS

A
  • Economic Interest
  • Social Interest
  • Environmental Interest
57
Q

refers to the firm’s economic impact on the localities where it does business.

A

Economic Interest

58
Q

refers to how the firm performs relative to societies and social justice, often termed in hiring.

A

Social Interest

59
Q

refer to the extent of the firm’s contribution to preserving environmental quality, commonly known as environmental impact.

A

Environment Interest

60
Q

THE ROLES OF CORPORATE GOVERNANCE

A

(a) a set of values that serve as a guide for employees; and
(b) a set of ground rules for guiding behavior, which include criteria for acceptable decision-making, used by all employees.

61
Q

ETHICAL STANDARD APPROACHES FOR CORPORATE GOVERNANCE

A
  • Utilitarian Approach
  • Rights Approach
  • Fairness Approach
  • Virtue Approach
  • Common good Approach
62
Q
  • Provides the most good or the least harm.
  • Produces the greatest balance of good over harm. (to customers, employees, shareholders, the community, and the natural environment)
A

Utilitarian Approach

63
Q
  • Protects and respects the moral rights of everyone involved.
  • Based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved
A

Rights Approach

64
Q

Treats everyone equally and fairly.

A

Fairness Approach

65
Q

Emphasizes virtues that provide for the full development of our humanity.

A

Virtue Approach

66
Q
  • Emphasizes the welfare of the entire community or nation.
  • Asks what action contributes most to the quality of life of all affected people
A

Common Good Approach

67
Q

institutionalizing appropriate behavior in the organization’s culture so it becomes part and parcel of strategy.

A

Going deep

68
Q

continues effort to understand how CSR and sustainability affect every aspect of the firm’s operations worldwide.

A

Going Wide

69
Q

requires the firm to examine its global operations to identify and improve local issues.

A

Going Local

70
Q

FRAMEWORK FOR MAKING ETHICAL DECISIONS

A
  1. Identify the problem
  2. Examine the facts
  3. Create alternatives
  4. Implement course of action
  5. Evaluate results
71
Q

The belief that national prosperity is the result of a positive balance of trade, achieved by maximizing exports and minimizing imports.

A

Mercantilism

72
Q

Relative absence of restrictions to the flow of goods and services between nations.

A

Free Trade

73
Q

The idea that a country benefits by producing only those products it can produce using fewer resources.

A

Absolute Advantage Principle -

74
Q

It may be beneficial for two countries to trade with each other as long as one is relatively more efficient at producing a product needed by the other.

A

Comparative Advantage Principle

75
Q

an economic theory that explains international trade based on differences in factor endowments between countries.

A

Factor proportions theory and the Leontief Paradox

76
Q

trade was growing fastest among industrialized countries with similar factors of production.

A

International Product Cycle Theory

77
Q

an economic theory that explains international trade based on differences in factor endowments between countries.

A

New Trade Theory

78
Q

DETERMINANTS OF NATIONAL COMPETITIVENESS

A
  • Demand conditions
  • Firm Strategy, Structure and rivalry
  • Factor Conditions
  • Related Supporting Industries
  • Industrial Cluster
79
Q

nature of home-market demand for specific products and services.

A

Demand conditions

80
Q

nature of domestic rivalry and conditions in a nation that determines how firms are created, organized, and managed.

A

Firm Strategy, Structure and rivalry

80
Q

is a proactive economic development plan a government launched to build or strengthen a particular industry, often implemented in collaboration with the private sector.

A

National Industrial Policy

80
Q

a concentration of businesses, suppliers, and supporting firms in the same industry located at a particular geographic location, characterized by a critical mass of human talent, capital, or other factor endowments.

A

Industrial Cluster

81
Q

FEATURES OF NATIONAL INDUSTRIAL POLICIES

A
  • Tax incentives
  • Monetary and fiscal policies
  • Educational systems
  • Infrastructure
  • Legal and regulatory systems
81
Q

nation’s resources such as labor, natural resources, and advanced factors as capital, technology, entrepreneurship, advanced work force skills, and know-how.

A

Factor Conditions

81
Q

these are innovative start-ups that initiate international business soon after their founding.

A

Born Global Firms

81
Q

presence of clusters of suppliers, competitors, and skilled workforce.

A

Related Supporting Industries

82
Q

integrates country-based theories with firm-based theories to determine national competitiveness

A

MICHAEL PORTER’S DIAMOND MODEL

83
Q

was developed by the scholars in the 1970s to describe how companies expand abroad.

A

internationalization process model

84
Q

emphasized FDI is the preferred entry strategy of MNEs.

A

FDI-BASED EXPLANATIONS

85
Q

refers to the total value of assets that MNEs invest abroad.

A

FDI STOCK

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