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BA 60 > Unit 1 - Introduction to International Business > Flashcards

Unit 1 - Introduction to International Business Flashcards

1
Q

Business felt the importance of widening their market areas by being ______ not just ________ or even _______.

A

Global
Domestic
Foreign

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2
Q

It is any LEGITIMATE BUSINESS ACTIVITY that crosses NATIONAL BOUNDARIES.

A

International Business

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3
Q

Why do companies go international? (9: CAM CoM FoG TA)

A
  1. Cheap Labor
  2. Availability of Resources (RM, 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 exposures to competitors
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4
Q

It is the ability of a country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time.

It is something we cannot copy.

A

Absolute Advantage

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5
Q

China prohibits labor union. T or F?

A

False.

SAUDI ARABIA prohibits labor union.

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6
Q

Countries with cheap labor

A
  • particularly developing countries
  • China, India, Philippines, and African continent
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7
Q

Countries with high labor

A
  • European countries
  • Singapore
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8
Q

Countries that reserves top management positions to its nationals.

A

Japan and South Korea

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9
Q

It refers to strategies used to REDUCE or MANAGE THE RISK of financial losses. It often involves making investments or using financial instruments that will offset potential losses in another investment. Essentially, it’s like taking out insurance to protect against uncertain outcomes, such as fluctuations in prices or exchange rates.

A

Hedging

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10
Q

In economic zones, there is tax holiday. T or F?

A

TRUE

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11
Q

If the level of competition is already stiff, they go to a country with lesser competition.

  • Why do companies go international?
A

Avoiding exposures to competitors

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12
Q

Factors that contributed to the acceleration of internatiol business (6: I C CoBain PLa)

A
  1. Industrial Revolution
  2. Commercial Documents
  3. Commercial Law
  4. Banking Institutions
  5. Ports of Entry
  6. Laissez faire
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13
Q

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

A

Industrial Revolution

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14
Q
  • It is the current and developing environment in which disruptive technologies and trends such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial intelligence (AI) are changing the way modern people live and work.
  • It describes the rapid technological advancements in the 21st Century.
A

4IR or Fourth Industrial Revolution

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15
Q

It is improved recording and bookkeeping; the use of commercial and investment papers (e.g. bills of exchange, checks).

A

Commercial Documents

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16
Q

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

A

Commercial Law

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17
Q

This is the reason why goods are able to move at a faster pace from one nation to another than otherwise would be the case.

Example is the use of commercial letters of credit as a means of financing foreign
trade shipments.

A

Banking Institutions

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18
Q
  • It aims to improve the country’s payment infrastructure and ensure a reliable financial ecosystem.
  • Philippines use one payment system established and controlled/managed by BSP.
A

Multi-Interbank Payment System (MIPS)

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19
Q

The two ports of entry managed by BOC.

A

Airport and Seaport

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20
Q
  • 1st world country
  • Its development has a master plan.
  • Continuity Program
A

Singapore

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21
Q

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

A

Ports of Entry

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22
Q

In the Philippines, only articles imported into the country that are subject to duty shall be entered through a customhouse at a port of entry. T or F?

A

FALSE

  • Whether subiect to duty or not, it should enter through a customhouse at a port of entry.
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23
Q

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

A

Laissez Faire

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24
Q

Stages of International Involvement (5: DRIMG)

A
  1. Domestic
  2. Regional Exporter/Exporter
  3. International
  4. Multinational
  5. Global
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25
Q

It operates exclusively within a single country (home country)

A

Domestic

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26
Q

It operates within a GEOGRAPHICALLY DEFINE REGION (trade areas: NAFTA, ASEAN, etc.) that crosses national boundaries.

A

Regional Exporter/Exporter

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27
Q

The MANUFACTURING and ASSEMBLY, MARKERTING 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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28
Q

The companies run INDEPENDENT and mainly SELF-SUFFICIENT subsidiaries in a range of countries; operations are STANDARDIZED

A

Multinational

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29
Q

It is a HIGHLY DECENTRALIZED organization operating across a broad range of countries. Almost all functions (R&D, manufacturing, marketing and sales) are performed in the location around the world.

A

Global

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30
Q

Types of International Business (4: FoLi FraD)

A
  1. Foreign Trade
  2. Licensing
  3. Franchising
  4. Direct Investment
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31
Q
  • It is the most common, most fundamental, largest type of international business.
  • Visible physical goods or commodities move between countries as export or import.
A

Foreign/International Trade

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32
Q

It 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

33
Q
  • It is an option in which a parent company grants another company or firm the right to do business in a prescribed manner.
  • The business model is loaned out to the franchise.
A

Franchising

34
Q
  • There is movement of capital, personnel and other assets.
  • There is much greater level of control over the project or enterprise.
A

Direct Investment

35
Q

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

A

TRUE

36
Q

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

A

Multinational Corporation

37
Q

MNCs should have __________ in more than one country.

A

Control Production Facilities

38
Q

MNCs - more than ____ of its profits are produced outside its home country.

A

25%

39
Q

MNCs - firms that control operations in at least _____ countries. Who said this?

A
  • six
  • Raymond Vernon
40
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 Corporation

41
Q

All transnational corporations are considered multinational corporations. T or F?

A

FALSE

42
Q

All transnational corporations are considered multinational corporations. T or F?

A

FALSE

43
Q

Why do we categorize corporations?

A
  • It is for REGULATION
  • The way we regulate SMEs is different from transnational corporations.
44
Q

Foreign firms make themselves home in all three of the world’s most important makets. Which continents are these?

A
  • North America
  • Europe
  • Asia
45
Q

Foreign firms make themselves home in all three of the world’s most important makets. Which continents are these?

A
  • North America
  • Europe
  • Asia
46
Q

They make global decisions on strategic decisions but they let local units decide tactical questions along packaging, marketing and advertising.

A

Glocalize

47
Q

It is the tendency to avoid using or buying products, research, standards, or knowledge from external origins.

A

“Not Invented Here” Syndrome (a parochial attitude)

48
Q

What do they do with markets they cannot penetrate?

A

They find ALLIES.

49
Q

Contributions of MNCs to host countries (4: OBTH)

A
  1. They contribute to output and employment
  2. They contribute to balance of payments
  3. Technology Transfer
  4. Transfer of Human Capital
50
Q

One reason we allow PEZA zones.

A

Technology Transfer

51
Q
  • It reflects the movement of foreign currency.
  • It is a comprehensive record of a country’s economic transactions with the rest of the world over a specific period.
A

Balance of Payments (BOP)

52
Q

BSP maintains dollars coming in than dollars coming out. T or F?

A

True

53
Q

The Philippinesw maintain ____ foreign currencies whom we have the most transactions with and ____ freely convertible foreign currencies namely: _____ , _____ , and _____.

A
  • 15 FCs
  • 3 FCs
  • US dollar, Euro, and Yen
54
Q
  • if we have much FCs maintain by BSP: BOP _______
  • if we have much FCs going out: BOP ______ (alarming)
A
  • BOP surplus
  • BOP deficit
55
Q

While production goes up, the less will be the cost per unit (up to a certain point only)

A

Economies of Scale

56
Q

they use transfer pricing

A

Financial Flexibility

57
Q

Those who occupy certain political positions are also the ones engaged in big businesses (practice by international businesses; prohibited by law - they divest in papers)

A

Booty Capitalism

58
Q

Benefits derived by MNCs (9: BLLAS D FIM)

A
  1. Brand image and goodwill advantagw
  2. Lower input cost
  3. Large size and economies of scale
  4. Superior technical know-how
  5. Diversification of risk
  6. Financial Flexibility
  7. Information Advantage
  8. Management Experience and Expertise
59
Q

Problems faced by MNCs (5: CHOBD)

A
  1. Cultural Differences
  2. Host country regulations/policies
  3. Operational Difficulties
  4. Business Ricks
  5. Different Legal Systems
60
Q

price of a foreign currency that one dollar can buy

A

Exchange Rate

61
Q

Weaker currency makes exportation expensive but stimulates imports. T or F?

A

FALSE

62
Q

What do you call when:
- we need more local currency to buy one dollar?
- we need less local currency to buy one dollar?

A
  1. Depreciation of Currency
  2. Appreciation of Currency
63
Q

If peso appreciates, there is positive effect to importer. T or F?

A

TRUE

64
Q

If peso appreciates, there is positive effect to importer. T or F?

A

TRUE

65
Q

If peso depreciates, there is negative effect to exporter. T or F?

A

FALSE

66
Q

We restrain the goods we export to other countries due to some political or economic considerations

A

Voluntary Export Restraint

67
Q

It is selling exports at a price that is less than “normal value.”

A

Product Dumpimg

68
Q

It is money in which exchanges into another country’s currency is not allowed.

A

Blocked Currency

69
Q

It is the refusal to sell to a specific country.

A

Embargo

70
Q

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

A

Boycott

71
Q

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

A

Quota

72
Q

It is a latin term which means according to value or in proportion to the value; based on a fixed percentage of the value of the good.

A

AD VALOREM

73
Q

It is a tax imposed on a stipulated amount per unit weight or some other measure of quantity.

A

Specific Duty

74
Q

It combines both specific and ad valorem taxes on a particular item, that is, a tax per unit plus a percentage of value.

A

Compound Duty

75
Q
  • It is a tax or duty imposed by a government on imported or exported goods.
  • It is 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.
  • It is used for various purposes, including protecting domestic industries from foreign
    competition and generating revenue for the government,
A

Tariffs

76
Q
  • It is a tax or duty imposed by a government on imported or exported goods.
  • It is 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.
  • It is used for various purposes, including protecting domestic industries from foreign
    competition and generating revenue for the government,
A

Tariffs

77
Q

It is the transformation of a society from an agrarian economy to an industrial one.

A

Industrialization

78
Q
  • It refers to government policies that restrict international trade to help domestic industries.
  • Nations utilize legal barriers, exchange barriers, and psychological barriers to restrain entry of unwanted goods.
A

Protectionism

BA 60 (5 decks)

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