UNIT 1 Flashcards

1
Q

any business activity that crosses national boundaries. ​

A

international business

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2
Q

Why do companies go international?

A

cheap labor
2. availability of resources
- raw materials
- labor/manpower
- management
- technology​
3. market expansion/emergence of new markets
4. to compete (globally)
5. to maximize profits
6. foreign competition
7. global competition
8. tax incentives
9. avoiding exposure to competitors

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3
Q

the period in the 18th and 19th centuries which, in Western Eurpe, was characterized by rapid industrialization and the widespread mechanization of production processes.

A

Industrial Revolution

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4
Q

improved recording and bookkeeping; the use of commercial and investment papers

A

Commercial documents

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5
Q

fair practice by traders to protect the interests of the parties involved.

A

Commercial law

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6
Q

it is because of _____________ that goods are able to move at a faster pace from one nation to another than otherwise would be the case

A

commercial banks

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7
Q

it is simply a domestic port open to both foreign and coastwise trade.

A

Ports of Entry

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8
Q

doctrine which demand the minimum interference by the government in economic and political affairs.

A

Laissez faire

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9
Q

operate exclusively within a single country (home country)

A

domestic

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10
Q

operate within a geographically defined region that crosses national boundaries.

A

Regional Exporter/Exporter

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11
Q

manufacturing and assembly, marketing and sales are decentralized beyond the home region; however, key decisions are made and coordinated from a central office.

A

International

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12
Q

companies run independent and mainly self-sufficient subsidiaries in a range of countries; operations are standardized

A

multinational

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13
Q

highly decentralized organization operating across a broad range of countries.

A

Global

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14
Q

Almost all functions (R&D, manufacturing, marketing and sales) are performed in the location around the world.

A

Global

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15
Q

most common, most fundamental, largest type of international business

A

International trade

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16
Q

Visible physical goods or commodities move between countries as export or import

A

international trade

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17
Q

takes place when a licensor grants a foreign firm the right to use intangible or intellectual property for a specific period of time in return for a royalty.

A

licensing

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18
Q

an option in which a parent company grants another company or firm the right to do business in a prescribed manner.

A

franchising

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19
Q

there is movement of capital, personnel and other assets

A

direct investment

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20
Q

much greater level of control over the project or enterprise

A

direct investment

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21
Q

they are the principal instruments in the expansion of business on an international scale

A

Multinational Corporations

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22
Q

control production facilities in more than one country

A

multinational corporations

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23
Q

more than 25% of its profits are produced outside its home country

A

multinational corporations

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24
Q

firms that control operations in at least six countries

A

multinational corporations

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25
Q

it is a firm that is structured so that business is conducted or ownership is held across a number of countries or that is organized into global product divisions.

A

multinational corporations

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26
Q

T/F
Firms that participate in IB solely by exporting or licensing technology are not multinational

A

true

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27
Q

T/F
Foreign firms become global by establishing a presence in North America, Europe, and Asia.

A

True

28
Q

T/F
Developing products exclusively for local markets is a key strategy for foreign firms seeking to go global.

A

False | not a key strategy

29
Q

T/F
“Glocalization” refers to making global strategic decisions while allowing local units to manage tactical aspects like packaging and marketing.

A

True

30
Q

T/F
Overcoming the “not invented here” syndrome is important for foreign firms in their global expansion efforts.

A

True

31
Q

T/F
Opening senior positions only to local employees is a common strategy for foreign firms aiming to globalize.

A

False | also to foreign employees

32
Q

T/F
When unable to penetrate certain markets, foreign firms often seek alliances with local companies.

A

True

33
Q

Contributions of MNCs to host countries

A
  1. They contribute to output and employment
  2. They contribute to balance of payments
  3. Technology transfer
  4. Increased productivity and output
  5. Transfer of human capital
  6. Increased choice for locals
34
Q

T/ F
Foreign firms contribute to output and employment in host countries.

A

True

35
Q

T/F
Foreign firms have no impact on the balance of payments of the countries they operate in.

A

False | have impact

36
Q

T/F
Technology transfer is one of the benefits of foreign firms entering a market.

A

True

37
Q

T/F
Foreign firms facilitate the transfer of human capital to local populations.

A

True

38
Q

T/F
Increased choice for locals is a benefit of foreign firms operating in their markets.

A

True

39
Q

T/F
MNCs benefit from superior technical know-how in their operations.

A

True

40
Q

T/F
The large size of MNCs does not provide any advantages related to economies of scale.

A

False | provides

41
Q

T/F
MNCs often enjoy lower input costs compared to smaller firms.

A

True

42
Q

T/F
Brand image and goodwill are disadvantages for MNCs in competitive markets.

A

False | Advantage

43
Q

T/F
Access to low-cost financing is a benefit derived by MNCs.

A

True

44
Q

T/F
Financial flexibility through transfer pricing is a strategy used by MNCs.

A

True

45
Q

T/F
MNCs have an information disadvantage compared to local firms.

A

False | advantage

46
Q

T/F
Management experience and expertise are benefits that MNCs typically possess.

A

True

47
Q

T/F
Diversification of risk is not a benefit for MNCs operating in multiple markets.

A

False | indeed a benefit

48
Q

The exchange rate is the price of a foreign currency that one dollar can buy.

A

Business Risk

49
Q

Weaker currency makes importation expensive but stimulates exports.

A

Business Risks

50
Q

Host country policies are very much different from their home country

A

Host country policies

51
Q

government policies that restrict international trade to help domestic industries.

A

Protectionism

52
Q

T/F
Host countries adopt protectionist policies to protect infant industries from foreign competition.

A

True

53
Q

T/F
One reason for protectionist policies is to ensure the home market is shielded from international market pressures.

A

True

54
Q

T/F
Keeping money at home, including local currency and foreign reserves, is not a concern for host countries.

A

False | indeed a concern

55
Q

T/F
Protectionist measures can encourage capital accumulation within a host country.

A

True

56
Q

T/F
Conservation of natural resources is often a rationale for implementing protectionist policies.

A

True

57
Q

T/F
The industrialization of a low-wage nation is unrelated to the adoption of protectionist policies.

A

False | significant reason to the adoption

58
Q

T/F
Host countries adopt protectionist policies to maintain employment and reduce unemployment levels.

A

True

59
Q

T/F
National security is not a reason for implementing protectionist policies.

A

False | indeed a reason

60
Q

T/F
Increasing the size of domestic businesses can be a motivation for protectionist measures.

A

True

61
Q

T/F
Retaliation against foreign trade practices is a irrelevant reason for the adoption of protectionist policies.

A

False | irrelevant

62
Q

a tax or duty imposed by a government on imported or exported goods.

A

tariff

63
Q

typically levied as a percentage of the value of the goods being imported or exported, although it can also be a fixed amount per unit.

A

tariff

64
Q

various purposes, including protecting domestic industries from foreign competition and generating revenue for the government

A

tariff

65
Q

specific unit or peso limit applied to a particular type of good

A

quota

66
Q

country imposes absolute restriction against the purchase and importation of certain goods from other countries.

A

boycott

67
Q

refusal to sell to a specific country.

A

embargo