M1 Chapter 4 International Management

Question 1

globalization

Answer 1

the broadening interdependence among people from all parts of the world.

Question 2

international business

Answer 2

The process by which an organization engages in international economic activities.

Question 3

export

Answer 3

A product that is sold abroad.

Question 4

import

Answer 4

A product that is bought from abroad.

Question 5

trade deficit

Answer 5

Occurs when a nation (or the sum total of all firms within that nation) import, or consume, more than they import.

Question 6

trade surplus

Answer 6

Occurs when a nation exports more than it imports.

Question 7

international trade

Answer 7

the means by which goods and services from one country are made available to individuals in another country

Question 8

protectionism

Answer 8

The process by which governments actively promote exports and limit imports.

Question 9

tariff

Answer 9

A tax that is imposed on goods brought in from one country to another.

Question 10

General Agreement on Tariffs and Trade (GATT)

Answer 10

Also known as GATT, it was the first free trade agreement after World War II.

Question 11

On January 1, 1995, GATT formally became…

Answer 11

the World Trade Organization (WTO)

Question 12

European Coal and Steel Community (ECSC)

Answer 12

Formed in 1951 by six European countries, its purpose was to facilitate the trade of coal and steel.

Question 13

ECSC became…

Answer 13

The European Union

Question 14

The objective of the European Union is…

Answer 14

to create a single market for all Europeans.

Question 15

the Euro

Answer 15

The European Union’s currency.

Question 16

North American Free Trade Agreement (NAFTA)

Answer 16

A regional trading alliance that provided the basis for Canada, the United States, and Mexico to become a single market.

Question 17

ASEAN

Answer 17

Association of Southeast Asian Nations

Question 18

Global outsourcing

Answer 18

the process by which organizations engage in the international division of labor.

Question 19

exporting

Answer 19

Firms maintain their production facilities within their home nation and sell their goods in foreign countries.

Question 20

licensing

Answer 20

Refers to when a corporation in one country makes resources available to companies in another country.

Question 21

direct investing

Answer 21

When the company is involved in the direct management of its assets, regardless of location.
ie: IKEA

Question 22

Political risk

Answer 22

The risk that is associated with political changes that may negatively affect an organization.

Question 23

exchange rate

Answer 23

The price of one currency in terms of another currency.

Question 24

Purchasing power parity

Answer 24

uses a conversion to determine how much goods and services different currencies can purchase.

purchasing power parity is the “law of the price”.

Question 25

legal system

Answer 25

Describes the way in which laws and regulations are developed and enforced within a country.

Question 26

national legal systems are typically classified into three categories:

Answer 26

1) common law,
2) civil law, and
3) theocratic law.

Question 27

common law

Answer 27

A legal system where opinions become precedent for decisions in future cases. It is the legal system that is used in most English speaking countries today.

Question 28

civil law

Answer 28

A legal system that uses statutes to form legal judgments.

Question 29

Theocratic law

Answer 29

A law system that is based on religious teachings.

Question 30

Islamic based law is the…

Answer 30

only surviving theocratic law system in the world

Question 31

International Management

Answer 31

Describes how managers engage in planning, organizing, leading and controlling across nations, cultures, and the international environment.

Question 32

Culture

Answer 32

The collective set of norms, ideas, beliefs and ways of thinking of a group of individuals.

Question 33

three of the most common ways to identify culture:

Answer 33

1) nationality,
2) language and
3) religion.

Question 34

Geert Hofstede

Answer 34

Expert on culture; proposed a way to examine the influence that national culture has on individual behavior
Created a typology of culture

Question 35

Power distance

Answer 35

A cultural dimension that refers to the extent to which the power in society is distributed unequally.

Question 36

Uncertainty avoidance

Answer 36

A cultural dimension that refers to the extent to which members in a culture accept or avoid ambiguous situations and uncertainty.

Question 37

Collectivism

Answer 37

A cultural dimension that refers to the idea that an individual’s identity is fundamentally tied to the identity of his or her collective group.

Question 38

Individualism

Answer 38

refers to the idea that an individual’s identity is fundamentally his or her own.

Question 39

Masculinity stands for….

Answer 39

preference for achievement, heroism, assertiveness, and material success.

Question 40

Femininity reflects the values of…

Answer 40

relationships, cooperation, group decision-making and quality of life.

Question 41

Global Leadership and Organizational Behavior Effectiveness (GLOBE)

Answer 41

Conducted by Robert House and colleagues, this is the study that identified nine different cultural dimensions.

Question 42

Expatriation

Answer 42

The process of leaving one’s home country to work in a foreign country.

Question 43

expatriate failure

Answer 43

Includes premature returns, unmet business goals, and career displacement of an expatriate.

Question 44

expatriate preparation program

Answer 44

a program to help expatriates deal with the challenges of working abroad.

Question 45

corporation’s international environment

Answer 45

Includes the organization’s foreign operations, goals and objectives.