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International Business > Test 1 > Flashcards

Test 1 Flashcards

1
Q

4 risks of international business

A
  • Cross-cultural risk
  • country risk
  • currency (financial) risk
  • commercial risk
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2
Q

Cross cultural risk

A
  • cultural differences
  • negotiation patterns
  • decision making styles
  • ethics
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3
Q

Country risk

A
  • harmful or unstable political system
  • inadequate or underdeveloped legal system
  • government intervention and trade barriers
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4
Q

Currency (financial) risk

A
  • difference in currency
  • foreign taxation
  • inflation and transfer pricing
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5
Q

Commercial risk

A
  • operational problems
  • timing of entry
  • competitive intensity
  • poor execution of strategy
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6
Q

Drivers of market globalization

A
  • worldwide reduction of barriers to trade and investment
  • market liberalization and adoption of free markets
  • industrialization, economic development, and modernization
  • integration of world financial markets
  • advancement of technology
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7
Q

Dimensions of market globalization

A
  • integration and interdependence of national economies
  • growth of global investment and financial flows
  • convergence of buyer lifestyles and preferences
  • globalization of production activities and services
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8
Q

Societal consequences of market globalization

A
  • contagion
  • loss of national power
  • offshoring and the flight of jobs
  • effect on the poor
  • effect on the environment
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9
Q

Contagion

A

Rapid spread of financial or monetary crisis from one country to another

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10
Q

Firm-level consequences of market globalization

A
  • countless new business opportunities
  • new risks and intense competition from foreign competitors
  • more demand from buyers wanting products or components from abroad
  • greater emphasis on proactive internationalization
  • internationalization of firm’s value chain
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11
Q

Distributor

A
  • intermediary

- Have title on product and are liable

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12
Q

Agent or broker

A
  • intermediary

- do not have title on product and are not liable

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13
Q

Trading company

A
  • intermediary

- Find smaller business and buy excess products to then sell

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14
Q

Participants in international business

A
  1. focal firms
  2. distribution channel intermediaries
  3. facilitator
  4. Governments
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15
Q

Focal firms

A

Initiator of an international business transaction

- MNE and SME

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16
Q

Distribution channel intermediary

A

Specialist firm that provides distribution, logistics, and marketing services in the international value chain

17
Q

Facilitator

A

A firm that provides special expertise in banking, the law, customs clearance, or market research

18
Q

Ethnocentric orientation

A

Using our own culture as the standard for judging other cultures

19
Q

Polycentric orientation

A

The person develops a greater affinity for the country in which they work than their home country

20
Q

Geocentric orientation

A

A global mindset in which the person is able to understand a business or market without regard to national boundaries

21
Q

Low context culture

A
  • lots of talking involved

- want to get to know the other person

22
Q

High context culture

A
  • get straight to the point

- don’t want to talk for a long period of time

23
Q

Managerial guidelines for cross-cultural success

A
  • acquire factual and interpretive knowledge
  • avoid cultural bias
  • develop cross cultural skills
24
Q

Ethics

A

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

25
Q

Corruption

A

The abuse of power to achieve illegitimate personal gain

26
Q

Corporate social responsibility (CSR)

A

Manner of operating a business that meets or exceeds the ethical, legal, commercial, and public expectations of customers, shareholders, employees, and communities

27
Q

Sustainability

A

Meeting humanity’s needs without harming future generations

28
Q

Three types of interests that sustainable firms pursue

A
  • Economic
  • social
  • environmental
29
Q

International business

A

Performance of trade and investment activities by firms across national borders

International Business (1 decks)

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