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57 Cards in this Set
- Front
- Back
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Foreign Direct Investment (FDI)
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direct investment in business operations in a foreign country; active, hands-on involvement
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Foreign Portfolio Investment (FPI)
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investment in foreign financial instruments; passive, hands-off involvement
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General Agreement on Tariffs and Trade (GATT)
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international agreement developed by UN in 1947, signed by 23 major economic powers in 1948 that committed signatories to lowering trade barriers, founded WTO in 1994
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globalization
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trend away from distinct national economies toward one worldwide economy
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globalization of markets
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moving away from national markets isolated by trade barriers and barriers of distance, time, and culture, and toward a system in which national markets are merging into a single global market
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globalization of production
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trend by firms to locate each part of its productive process to wherever they can take advantage of differences in cost and quality
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international business
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any firm that engages in international trade or investment
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multinational enterprise (corporation) (MNE or MNC)
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a firm that owns business operations in more than one country
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stock of FDI
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the total accumulated value of foreign-owned assets at a given point in time
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flow of FDI
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amount of FDI that has taken place over a given period of time (most commonly, one year)
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World Trade Organization
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successor organization to GATT, a self-standing institution chartered with authority to adjudicate trade disputes between nations and render a decision by which both parties must abide
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Division of Labor
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the way various tasks are apportioned within a social grouping
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Civil law
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a system of law based on a very detailed set of written laws and codes
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collectivism
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either a philosophy or a political system embodying the notion that collective goals are primary and individual goals are expendable
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command economy
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an economic system based on the premise of central planning, whereby the government mandates what goods must be produced and what services supplied
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common law
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a system of law based on tradition, precedent, and custom, often within the context of a constitution outlining basic rights and principles
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communism
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an atheistic, materialist, collectivist philosophy manifested in a political system that does not recognize individual rights, private property in the means of production, and thus has a command economy
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contract
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an agreement that specifies mutually agreed upon terms for an exchange (a quid pro quo)
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copyright
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the granting, by law, of exclusive rights for authors, composers, artists, and publishers to profit from their creative efforts
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democracy
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political system characterized by the principle of majority rules
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deregulation
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a policy of reducing what are believed to be needlessly costly, counterproductive government restrictions and controls on business
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economic risk
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the possibility that changes in the business climate outside a business' control in a foreign country
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Human Development Index
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a more advanced way of comparing standards of living between countries than merely citing income per capita figures. Measured 3 ways:
1. life expectancy at birth 2. educational attainment 3. whether average incomes are adequate enough to pay for basic needs |
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individualism
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political philosophy holding that individual rights should be protected from gov't encroachments
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legal risk
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the possibility that a foreign business partner will opportunistically break a contract or violate your intellectual property rights
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market economy
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aka the private property order; in which prices and the quantities of goods and services produced are a function of supply and demand decisions made voluntarily by private owners of property
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mixed economy
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an economy where some sectors feature private ownership and free-market mechanisms, while other sectors have significant government ownership (or control) and planning
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patent
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the granting of exclusive rights to the manufacture, use, or sale of a newly-invented or discovered procss or product
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political risk
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the likelihood of a political changed causing drastic changes in a country's business environment
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privatization
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the sale of state-owned enterprises to private investors
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purchasing power parity (PPP)
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an adjustment to the raw measure of GDP (gross domestic product)per capita income to reflect differences in cost of living
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socialism
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the political system characterized by government ownership of the means of production
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theocracy
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rule by religious authorities claiming to be fulfilling God's laws
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totalitarianism
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political system in which the government has power to govern every aspect of the lives of citizens
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trademarks
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the granting of exclusive rights to specific designs, names, and images used to differentiate or identify their company or product
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caste system
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a system of social stratification in which social position is determined by the family into which a person is born and is stuck there
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cross-cultural literacy
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understanding how the culture of a country affects the way business is practiced
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ethnocentric behavior
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acting on the belief in the superiority of one's own ethnic group or culture, or showing disregard or contempt for foreign cultures
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guanxi
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Chinese word: literally, "relations," but in a business context it refers to having connections
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mores
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norms seen as central to the functioning of a society
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norms
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social rules and guidelinesfor what behavior is appropriate in a given situation
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values
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abstract ideas about what is believed to be good, right, desireable
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Geert Hofstede
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Dutch social scientist who studied cultural difference that affect they was individuals behave in business contexts. 5 variables:
1. power distance 2. individualism 3. masculinity 4. uncertainty avoidance 5. long term vs. short term orientation |
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Cultural relativism
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the belief that firms should adopt the ethical norms prevalent in the culture where they are operating
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ethical dilemma
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a situation in which there is no ethically acceptable solution
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facilitating payments
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aka "speed money" or "grease payments," these are "tips" that foreigners customarily insist upon receiving in order to expedite things, rather than bribes to win contracts
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Foreign Corrupt Practices Act
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1977 law in the US outlawing the bribing of foreign government officials to gain business
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organization culture
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the values and norms that are shared by the organization's employees
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righteous moralist
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one who claims that a MNE's home-country ethical standards should be followed in foreign countries
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social responsbility
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the idea that businesspersons should consider the social consequences of their business activities
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utiliarian ethics
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the belief that the morality of deeds and policies are determined by their consequences
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Ethnocentric staffing policy
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a MNE's staffing policy that fills all key management positions with parent-country nationals
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expatriate failure
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the premature departure of an expat from a host country
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expatriate manager
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a manager working in a country other than his own
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geocentric staffing policy
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a staffing policy in which the best people are sought for key jobs regardless of nationality
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human resources management (HRM)
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the activites an organization carries out to use its personnel effectively
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polycentric staffing policy
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a staffing policy in which host-country nationals are chosen to manage subsidiaries in their own country, while parent-country nationals occupy key positions at HQ
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