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International Business > Midterm IB > Flashcards

Midterm IB Flashcards

1
Q

International Business:

A

1) A business firm that engages in international (cross-border) economic activities and/or (2) doing business abroad

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2
Q

Multinational Enterprise:

A

A firm that engages in foreign direct investments and operates in multiple countries

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3
Q

Foreign Direct Investment (FDI):

A

Investments in, controlling and managing value added activities in other countries

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4
Q

Emerging economies (emerging markets):

A

Economies that only recently established institutional framework that facilitate international trade and investment, typically with low or middle level income and above average economic growth

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5
Q

Gross Domestic Product (GDP):

A

The sum of the value added by resident firms, households and governments operating in an economy.

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6
Q

Purchasing Power Parity (PPP):

A

A conversion that determines the equivalent amount of goods and services different currencies can purchase. This conversion is usually used to capture the difference in the cost of living

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7
Q

Expatriate Assignments:

A

A temporary job abroad with a multinational company

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8
Q

Gross National Product (GNP):

A

Gross Domestic Product plus income from non-resident sources abroad.

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9
Q

Gross National Income (GNI):

A

GDP plus income from non-resident sources abroad. GNI is the term used by the world bank and other international orgs to superseded the term GNP.

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10
Q

Institution Based View:

A

Formal and Informal rules of the game

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11
Q

Resource Based View:

A

Firm specific resources and capabilities

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12
Q

Liability of Outsidership:

A

The inherent disadvantage that outsiders experience in a new environment because of their lack of familiarity.

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13
Q

Globalization:

A

A process leading to greater interdependence and mutual awareness among economic, political and social units in the world and among actors in general.

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14
Q

Liberalization:

A

The removal of regulatory restrictions on business

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15
Q

Waves of Globalization:

A

The pattern of globalization arising from a combo of long term trends and pendulum swings

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16
Q

Triad:

A

Three regions of developed economies (North America, Western Europe, and Japan)

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17
Q

Base of the Pyramid:

A

The vast majority of humanity, about four billion people who make less than 1500 euros a year.

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18
Q

Non-governmental organizations:

A

Organizations, such as environmentalists, human rights activists and consumer groups that are not affiliated with governments.

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19
Q

Cosmopolitans:

A

The people embracing cultural diversity and the opportunities of globalization

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20
Q

Institutional Framework:

A

Formal and informal institutions governing individual and firm behavior

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21
Q

Formal Institution:

A

Institutions represented by laws, regulations and rules

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22
Q

Informal Institutions:

A

Rules that are not formalized but exist in for example norms and values

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23
Q

Regulatory Pillar:

A

The coercive power of governments

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24
Q

Normative Pillar:

A

The mechanism through which norms influence individual and firm behavior

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25
Q

Cognitive Pillar:

A

The internalized, taken-for-granted values and beliefs that guide individual and firm behavior.

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26
Q

Transaction costs:

A

The costs associated with economic transactions

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27
Q

Opportunistic behavior: .

A

Seeking self-interest with guile

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28
Q

Institutional transition:

A

Fundamental and comprehensive changes introduced to the formal and informal rules of the game that affect organizations as players

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29
Q

Political System:

A

A system of the rules of the game on how a country is governed politically.

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30
Q

Totalitarianism (dictatorship)

A

A political system in which one person or party exercises absolute political control over the population

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31
Q

Democracy:

A

A political system in which citizens elect representatives to govern the country on their behalf.

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32
Q

Political Risk:

A

Risk associated with political changes that may negatively impact on domestic and foreign firms

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33
Q

Economic System:

A

Rules of the game on how a country is governed economically

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34
Q

Market Economy:

A

An economy that is characterized by the invisible hand of market forces

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35
Q

Command Economy:

A

An economy in which all factors of production are government or state owned and controlled, and all supply, demand and pricing are planned by the government.

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36
Q

Varieties of capitalisms view:

A

A scholarly view suggesting that economies have different inherent logics or how markets and other mechanisms coordinate economic activity

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37
Q

Liberal Market Economy:

A

A system of coordination primarily through market signals

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38
Q

Coordinated Market Economy:

A

A system of coordinating through a variety of other means in addition to market signals.

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39
Q

Legal System:

A

The rules of the game on how a country’s laws are enacted and enforced.

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40
Q

Civil Law: .

A

A legal tradition that uses comprehensive statutes and codes as a primary means to form legal judgments

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41
Q

Common Law:

A

A legal tradition that is shaped by precedents and traditions from previous judicial decisions.

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42
Q

Case Law:

A

Rules of law that have been created by precedent of cases in court.

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43
Q

Legal Certainty:

A

Clarity over relevant rules applying to a particular situation.

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44
Q

Property Rights:

A

The legal rights to use an economic property (resource) and to derive income and benefits from it

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45
Q

Intellectual Property Rights:

A

Rights associated with the ownership of intellectual property

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46
Q

Patents:

A

Legal rights awarded by government authorities to inventors of new technological ideas, who are given exclusive (monopoly) rights to derive income from such inventions

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47
Q

Copyrights:

A

Exclusive legal rights of authors and publishers to publish and disseminate their work

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48
Q

Trademarks:

A

exclusive legal rights of firms to use specific names, brands and designs to differentiate their products from others

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49
Q

Corporate Governance:

A

Rules by which shareholders and other interested parties control corporate decision makers

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50
Q

Informal Institutions:

A

Rules that are not formalized but exist in for example norms, values and ethics

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51
Q

Ethnocentrism:

A

A self centered mentality by a group of people who perceive their own culture, ethics, and norms as natural, rational, morally right

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52
Q

Culture:

A

The collective programming of the mind that distinguishes the members of one group or category of people from another

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53
Q

Artifacts of culture:

A

The visible surface of culture

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54
Q

Context:

A

The underlying background upon which interaction takes place

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55
Q

Low-Context Culture:

A

A culture in which communication is usually taken at face value without much reliance on unspoken context

56
Q

High Context Culture:

A

A culture in which communication relies a lot on the underlying unspoken context, which is as important as the words used.

57
Q

Cluster:

A

Countries that share similar cultures together

58
Q

Civilization:

A

The highest cultural grouping of people and the broadest level of cultural identity people have

59
Q

Power Distance:

A

The extent to which less powerful members within a country expect and accept that power is distributed unequally.

60
Q

Individualism:

A

The perspective that the identity of an individual is fundamentally his or her own

61
Q

Collectivism:

A

The idea that the identity of an individual is primarily based on the identity of his or her collective group

62
Q

Masculinity:

A

Values traditionally associated with male role, such as assertive, decisive and aggressive

63
Q

Femininity:

A

Values traditionally associated with female role such as compassion, care and quality of life

64
Q

Uncertainty Avoidance:

A

The extent to which members in different cultures accept ambiguous situations and tolerate uncertainty

65
Q

Long-Term Orientation:

A

A perspective that emphasizes perseverance and savings for future betterment

66
Q

Corporate Language:

A

The language used for communication between entities of the same MNE in different countries

67
Q

Lingua Franca:

A

The dominance of one language as a global business language

68
Q

Holy:

A

An item or activity that is treated with particular respect by a religion

69
Q

Taboo:

A

An item or activity considered unclean by a religion

70
Q

Secular Society:

A

A society where religion does not dominate public life

71
Q

Ethics:

A

The principles, standards and norms of conduct governing individual and firm behavior

72
Q

Code of Conduct:

A

A set of guidelines for making ethical decisions

73
Q

Ethical Relativism:

A

A perspective that suggests that all ethical standards are relative

74
Q

Ethical Imperialism:

A

The absolute belief that ‘there is only one set of Ethics (with the capital E), and we have it’

75
Q

Corruption:

A

The abuse of public power for private benefits, usually in the form of bribery

76
Q

In-Group:

A

Individuals and firms regarded as part of “us”

77
Q

Out Group:

A

Individuals and firms not regarded as part of “us”

78
Q

Cultural Intelligence:

A

An individuals ability to understand and adjust to new cultures

79
Q

Resource-based view:

A

A leading perspective in global business that posits that firm performance is fundamentally driven by firm specific resources.

80
Q

Primary Resources:

A

The tangible and intangible assets as well as human resources that a firm uses to choose and implement as strategies.

81
Q

Capability:

A

Firm-specific abilities to use resources to achieve organizational objectives.

82
Q

Tangible Assets:

A

Assets that are observable and easily quantified.

83
Q

Intangible Assets:

A

Assets that are hard to observe and difficult (or sometimes impossible) to quantify

84
Q

Human Resources:

A

Resources embedded in individuals working in an organization.

85
Q

Organizational Culture:

A

Employees’ shared values, traditions and social norms within an organization.

86
Q

Value Chain:

A

A chain of activities vertically related in the production of goods and services

87
Q

VRIO Framework:

A

The resource-based framework that focuses on the value creation (v), rarity (r), imitability (i), and organizational (o) aspects of resources.

88
Q

Casual Ambiguity:

A

The difficulty of identifying the casual determinants of successful firm performance.

89
Q

Social Complexity:

A

The socially complex ways of organizing typical of many firms.

90
Q

Appropriability:

A

The ability of the firm to appropriate the values for itself

91
Q

Benchmarking:

A

An examination of resources to perform a particular activity compared against competitors.

92
Q

Outsourcing:

A

Turning over an organizational activity to an outside supplier that will perform it on behalf of the firm.

93
Q

Offshoring:

A

Moving an activity to a location abroad.

94
Q

Offshore Outsourcing:

A

Outsourcing to another firm doing the activity abroad.

95
Q

Domestic Outsourcing:

A

Outsourcing to a firm in the same country.

96
Q

Captive offshoring:

A

Setting up subsidiaries abroad-the work done is in house but the location is foreign.

97
Q

Nearshoring:

A

Offshoring to a nearby location, i.e within Europe.

98
Q

Original Equipment Manufacturer:

A

(OEM) A firm that executes the design blueprints provided by other firms and manufactures such products.

99
Q

Original Design Manufacturer:

A

(ODM) A firm that both designs and manufacturers products.

100
Q

Original Brand Manufacturer:

A

(OBM) A firm that designs, manufacturers and markets branded products.

101
Q

Dynamic Capabilities:

A

Higher level capabilities that enable an organization to continuously adapt to new technologies and changes in the external environment.

102
Q

Exporting:

A

Selling Abroad

103
Q

Importing:

A

Buying from abroad

104
Q

Trade Deficit:

A

An economic condition in which a nation imports more than it exports

105
Q

Trade Surplus:

A

An economic condition in which a nation exports more than it imports

106
Q

Balance of trade:

A

The aggregation of importing and exporting that leads to the country level trade surplus or deficit.

107
Q

Classical Trade Theories:

A

The major theories of international trade that were advanced before the 20th century, which consists of mercantilism, absolute advantage and comparative advantage

108
Q

Modern Trade Theories:

A

The major theories of international trade that were advanced in the 20th century which consist of product life cycle, strategic trade and national competitive advantage.

109
Q

Theory of Mercantilism:

A

A theory that holds the wealth of the world (measured in gold and silver) is fixed and that a nation that exports more and imports less would enjoy the net inflows of gold and silver and thus becoming richer.

110
Q

Protectionism:

A

The idea that governments should actively protect domestic industries from imports and vigorously promote exports

111
Q

Free Trade:

A

Trade uninhibited by trade barriers

112
Q

Theory of absolute advantage:

A

A theory suggesting that under free trade, each nation gains by specializing in economic activities in which it has absolute advantage

113
Q

Absolute Advantage:

A

The economic advantage one nation enjoys that is absolutely superior to other nations

114
Q

Theory of Comparative Advantage:

A

A theory that focuses on the relative (not absolute) advantage in one economic activity that one nation enjoys in comparison with other nations

115
Q

Comparative Advantage:

A

Relative (not absolute) advantage in one economic activity that one nation enjoys in comparison with other nations

116
Q

Opportunity Cost:

A

Given the alternatives (opportunities), the cost of pursuing one activity at the expense of another activity.

117
Q

Resource (Factor) Endowments:

A

The extent to which different countries possess various resources (factors) such as labor, land and technology.

118
Q

Factor endowment theory (or Heckscher-Ohlin Theory):

A

A theory that suggests that nations will develop comparative advantage based on their locally abundant factors.

119
Q

Product Life Cycle Theory:

A

A theory that accounts for changes in the patterns of trade over time by focusing on product life cycles.

120
Q

Strategic Trade Theory:

A

A theory that suggests that strategic intervention by governments in certain industries can enhance their odds for international success.

121
Q

First mover advantage:

A

Advantage that first entrants enjoy and do not share with late entrants.

122
Q

Strategic Trade Policy:

A

A trade policy that conditions or alters a strategic relationship between firms

123
Q

Theory of national competitive advantage of industries (or ‘diamond’ model):

A

A theory that suggests that the competitive advantage of certain industries in different nations depends on four aspects that form a diamond.

124
Q

Resource Ability:

A

The ability to move resources from one part of a business to another

125
Q

Trade barrier: .

A

Trade barriers that rely on tariffs to discourage imports

126
Q

Nontariff barrier (NTB):

A

Trade barriers that rely on nontariff means to discourage imports.

127
Q

Import Tariff:

A

A tax imposed on imports

128
Q

Deadweight loss:

A

Net losses that occur in an economy as the result of tariffs.

129
Q

Subsidy:

A

Government payments to (domestic) firms

130
Q

Import Quote:

A

Restrictions on the quantity of imports

131
Q

Voluntary export restraint (VER):

A

An international agreement in which exporting countries voluntarily agree to restrict their exports.

132
Q

Local Content Requirement:

A

A requirement that a certain proportion of the value of the goods made in one country originate from that country.

133
Q

Administrative Practices:

A

Bureaucratic rules that make it harder to import foreign goods.

134
Q

Antidumping duty:

A

Costs levied on imports that have been ‘dumped’ (selling below costs to ‘unfairly’ drive domestic firms out of business)

135
Q

Infant Industry argument:

A

The argument that temporary protection of young industries may help them to attain international competiveness in the long run.

136
Q

Trade embargo:

A

Politically motivated trade sanctions against foreign countries to signal displeasure.

International Business (1 decks)

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