Quiz 2: Chapter 2- The Global Business Environment Flashcards
Globalization
the integration and interdependence of economic, technological, sociocultural, and political systems across diverse geographic regions
GATT
General Agreement on Tariffs and Trade
WTO
World Trade Organization
ASEAN
Association of South Eastern Asian Nations
Three main goals;
1) Accelerating economic growth
2) Promoting social and cultural development
3) Ensuring peace and stability
NAFTA
North American Free Trade Agreement
- 1994
- The treaty eliminates tariffs among the nations
IMF
International international trade organization
EU history
European Union- took current form in 1993, introduced the euro in 1999 and 17 countries have adopted it
MERCOSUR
Includes; Argentina, Brazil, Paraguay, Uruguay, and Venezuela
-established in 1991
the fourth largest regional trading group
seeks to create an economic juggernaut in South America
Comparative Advantage
an economic theory that proclaims countries should specialize in producing goods for which they have the lowest opportunity cost of production
External environement
represents all of the external forces that affect the firm’s business
General environment
Includes the technological, economic, political/legal, and sociocultural dimensions that affect a firm’s external environment
Task environment
includes entities that directly affect a firm on a constant basis and include competitors, suppliers, and customers
General environment
Includes Technological, Economic, Political/legal, & sociocultural aspects
Technological dimensions
the processes, technologies, or systems that a firm can use to produce outputs
Economic dimensions
the general economic environment (GDP, inflation, and unemployment) in the markets where the firm performs activities
Political Dimension
refers to the political events and activities in a market that affect a firm
Legal Dimension
refers to the regulations and laws that a firm encounters in its markets
Sociocultural dimension
demographic characteristics as well as the values and customes of a society
Social values
the deeply rooted system of principles that guide individuals in their everyday choices and interactions
Firms that expand globally need to be sensitive toward
social values and cultures
Task environment
Competitors, Suppliers, & Customers
Competitor
any organization that creates goods or services targeted at a similar group of customers
Suppliers
provides resources or services for a firm to help in its creation of products and services- it is not economical for companies to produce everything in house
Customers
the people or other organizations that buy a firm’s products and services
Internal Environment
a group of parties or factors that directly impact a firm, including owners, the board of directors, employees, and culture
Owners
the people or institutions that maintain legal control of an organization
Board of Directors
a group of individuals elected by the shareholders and charged with overseeing the general direction of the firm
Employees
the people who make the products and provide the services on behalf of an organization allowing the firm to exist
