international business - key words

Question 1

What is global sourcing ?

Answer 1

Global sourcing is buying the product from a cheaper supplier.

Question 2

What is outsourcing ?

Answer 2

This is when you get a lower cost firm to make your product.

Question 3

What is trade liberalisation (free trade) ?

Answer 3

Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs or quotas.

Question 4

What are trade barriers ?

Answer 4

Any regulation that restricts international trade, such as quotas, charges, regulations, etc

Question 5

What is a trading bloc ?

Answer 5

A set of countries which engage in international trade together, and are usually related through a free trade agreement or other association. Ex: EU

Question 6

What is the world trade organisation (WTO) and what does it do ?

Answer 6

Is a UN trade organisation with the objectives of removing all barriers to international trade in goods, services, and intellectual property, equitable and speedy resolution of disputes between trading partners, and identification of non-compliance with trade agreements.

Question 7

What is specialisation ?

Answer 7

Is where a nation identifies a industry in which it has an absolute or comparative advantage over rival nations and the concentrates on growing these industries so that they can produce more of their products or services.

Question 8

What is absolute advantage ?

Answer 8

Is where a nation has one (or more) of its industries having an absolute advantage over rival nations. Ex: the nation has industries which are more efficient or has lower production costs so you can make the product cheaper.

Question 9

What is comparative advantage ?

Answer 9

Where a nation has one of industries having a ‘relatively’ lower opportunity cost in what it produces and will therefore specialise in making more of that product and exporting it to other nation.

Question 10

What is corporate social responsibility ?

Answer 10

How companies manage the business processes to produce an overall positive impact on society

Question 11

What is a stakeholder ?

Answer 11

A stakeholder is someone or a group of people who are affected by and affect businesses.

Question 12

What is ethical decision making ?

Answer 12

Means following codes of practice that embody moral values. The objective is to do the right thing, acting with honesty and integrity and taking into consideration of everyone affected by the decision.

Question 13

What are social audits ?

Answer 13

Social audits highlight the progress, or lack of it, of a business that is committed to acting responsibly towards all its stakeholders.

Question 14

What are social cultural differences ?

Answer 14

Come from the fact that individual societies and groups within them may have a distinctive way of life. This will affect their patterns of consumption and the products they favour. But it will also affect the way they do business with one another.

Question 15

What is a tariff ?

Answer 15

Tariffs are taxes placed on specific imported goods. They are sometimes called import or customs duties.

Question 16

What are quotas ?

Answer 16

Quotas are physical limits on the level of specific imports in any one year.

Question 17

What is dumping ?

Answer 17

Means exporting at a price that is less than the true cost of production.

Question 18

What is an infant industry ?

Answer 18

Are those with some prospect of profitability in the long term, provided they are given some protection in the short term while they get started.

Question 19

What is globalisation ?

Answer 19

The worldwide movement towards economic, financial, trade and communications integration.

Question 20

What is global strategy ?

Answer 20

The plans developed by an organization to target growth on a global level for sales of products or services.

Question 21

What is global localisation ?

Answer 21

Where markets differ, businesses need to plan production and marketing strategies to fit cost differences between factories and individual market preferences.

Question 22

What is organic growth ?

Answer 22

Occurs when an individual business increases output. This type of expansion is likely to be steady but secure.

Question 23

What is inorganic growth ?

Answer 23

occurs when a business expand by taking over or merging with another company.

Question 24

What is a takeover ?

Answer 24

Refers the situation where one company is buying another one. This may be an amicable process or a hostile bid.

Question 25

What is a merger ?

Answer 25

Means combining with another company on a collaborative basis

Question 26

What is global marketing ?

Answer 26

refers to the marketing strategies used by businesses when operating in global markets. The elements of the marketing mix may be the same or different according to which part of the global market a business is in.

Question 27

What is economic growth ?

Answer 27

Increase in a country’s productive capacity, as measured by comparing gross national product (GNP)in a year with the GNP in the previous year.

Question 28

What is GDP ?

Answer 28

The value of a country’s overall output of goods and services (typically during one fiscal year) at market prices, excluding net income from abroad.

Question 29

What is an open economy ?

Answer 29

Market-economy mostly free from trade barriers and where exports and imports form a large percentage of the GDP.

Question 30

What is HDI ?

Answer 30

Global index utilize to rank the development of countries by examining the achievements of the inhabitants of the country.

Question 31

What is a joint venture ?

Answer 31

New firm formed to achieve specific objectives of a partnership like temporary arrangement between two or more firms. JVs are advantageous as a risk reducing mechanism in new-market penetration, and in pooling of resource for large projects.

Question 32

What is a distribution channel ?

Answer 32

he path through which goods and services travel from the vendor to the consumer or payments for those products travel from the consumer to the vendor.

Question 33

What is a constraint ?

Answer 33

It restricts an entity, project, or system (such as a manufacturing or decision making process) from achieving its potential

Question 34

What is protectionism ?

Answer 34

Governmental policy aimed at shielding a fragile economy, or a weak or critical sector, from cheaper or better imports through imposition of high duty rates (tariff barriers), quotas, and/or inordinately stringent or time consuming inspection or quality regulations (non-tariff barriers).