International Business Midterm

Front 1

all the forces influencing the life and development of the firm

Back 1

environment

Front 2

forces over which management has no direct control, although it can exert an influence

Back 2

external forces(uncontrollable forces)

Front 3

what are all 11 external forces?

Back 3

competitive, distributive, economic, socioeconomic, financial, legal, physical, political, sociocultural, labor, technological

Front 4

External forces: kinds and numbers of competitors, their locations, and their activities

Back 4

competitve

Front 5

external forces: national and international agencies available for distributing goods and services

Back 5

distributive

Front 6

external forces: variables such as GNP, unit labor cost, personal consumption expenditure that influence a firms ability to do business

Back 6

economic

Front 7

External forces: characteristics and distribution of human population

Back 7

socioeconomic

Front 8

External forces: interest rates inflation rates and taxation

Back 8

financial

Front 9

external forces: the many foreign and domestic laws governing how international firms must operate

Back 9

legal

Front 10

External forces: elements such as topography, climate and natural resources

Back 10

physical

Front 11

External forces: elements of nations politcal climates such as nationalism, forms of government, and international organizations

Back 11

politcal

Front 12

external forces: elements of culture(such as attitudes, beliefs, and opinions) important to international managers

Back 12

sociocultural

Front 13

external forces: composition, skills, attitudes of labor

Back 13

labor

Front 14

external forces: equipment and the technical skills that affect how resources are converted to products

Back 14

technological

Front 15

internal forces that management adminnisters to adapt to changes in the uncontrollable forces

Back 15

internal forces(controllable

Front 16

what are the factors of production in the internal forces?

Back 16

capital, raw materials and people

Front 17

What are the activities of the organization in internal forces?

Back 17

personnel, finance, production and marketing

Front 18

____ __ ______ and ______ __ ___ ________ maker up the internal/controllable forces that management administers to adapt to changes in the uncontrollable forces.

Back 18

factors of production and activities of organization

Front 19

all the uncontrollable forces originating in the home country that surrouns and influence the firms life and development

Back 19

domestic environment

Front 20

interaction between domestic and foreign environmental forces of between sets of foreign environmental forces

Back 20

international environment

Front 21

What is the strategic management process?(5)

Back 21

analyze external and internal environments, define strategic intent and mission, formulate strategies, implement strategies, assess strategic outcomes

Front 22

make the best use of your resources

Back 22

efficiency

Front 23

acheive goals that lead to a sustainable competitive advantage

Back 23

effectiveness

Front 24

What 3 ideals are in the organizational environment?(individual)

Back 24

plans processes configurations

Front 25

What is the decision making process?(6)

Back 25

diagnose problem, generate alternatives, evaluate alternatives, choose best alternative, implement decision, evaluate results

Front 26

all the uncontrollable forces originating outside the home country that surround and influence the firm

Back 26

foreign environment

Front 27

The foreign environment contains 3 difference from the domestic environment?

Back 27

the forces have different values, forces can be difficult to assess, and the forces are interrelated

Front 28

A problem with foreign forces is that they are frequently difficult to assess. This is especially true of ______ and _________ forces.

Back 28

legal and politcal

Front 29

interaction between domestic and foreign environmental forces of between sets of foreign environmental forces. Increased complexity for decision making(decision making more complex)

Back 29

international environment

Front 30

What are some differences between the USA and EU 27?

Back 30

USA= 303 million, 18.1% arable land, about twice the land size of EU 27.. EU 27= 491 million, 22.1% arable land, about 50% the land size of the USA

Front 31

Why work in teams?

Back 31

save costs and increase productivity, improve quality, increase speed, foster innovation, at the baseline: the whole is greater than the sum of its parts

Front 32

5 dysfunctions of a team

Back 32

absense of trust, fear of conflict, lack of commitment, avoidance of accountability, inattention to results

Front 33

an economic philosophy based on the belief that (1) a nations wealth depends on accumulated treasure, usually gold, and (2) to increase wealth government policies should promote exports and discourage imports. (1500-1800)

Back 33

mercantilism

Front 34

Mercantilism occurred with the shift from ____ economies to exchange economies.

Back 34

barter

Front 35

______(gold and silver) was the accepted medium of exchange.

Back 35

specie

Front 36

mercantilism: international trade was conducted under the authority of ________

Back 36

governments

Front 37

the downfall of mercantilism was started by the ______ _______.

Back 37

industrial revolution

Front 38

The industrial revolution introduced the benefits of ___ _______, lowered ____, increased supplies of _____

Back 38

mass production, prices, goods

Front 39

theory that a nation has absolute advantage when it can product a larger amount of a good or service for the same amount of inputs as can another country or when it can produce the same amount of a good or service using fewer inputs than could another country.

Back 39

absolute advantage

Front 40

Who is known for absolute advantage?

Back 40

Adam Smith

Front 41

These are the core concepts from ____ ____ dealing with _____ _____. "the real wealth of a nation is an increase in the quality of living of its citizens" "the goal is to increase per capita income" "societys primary element is human labor"

Back 41

Adam Smith and absolute advantage

Front 42

seperation of the production process into distinct stages using several people rather than one worker producing the entire good or service

Back 42

division of labor

Front 43

a problem of ______ _____ is what happens to trade if one country has an ____ ____ in both products.

Back 43

absolute advantage

Front 44

theory that a nation having absolute disadvantages in the production of two goods with respect to another nation has a comparitive or relative advantage in the production in the production of the good in which its absolute disadvantage is less.

Back 44

comparative advantage

Front 45

Who is known for compatative advantage?

Back 45

David Ricardo (1817)

Front 46

what are the two core principles of barter?

Back 46

nations wealth depends on accumulated treasure, and government should promote exports and discourage imports

Front 47

"produce and export those goods and services for which it is relatively more productive than other countries" "import those goods and services for which other countries are relatively more productive than it is"

Back 47

the theory of comparitive advantage

Front 48

incorporates the concept of opportunity cost: value of what is given up to get the good

Back 48

comparative advantage

Front 49

What theory does this describe?: What determines the products for which a country will have a comparative advantage? factor endowments vary among countries. Goods vary according to the types of factors that are used to produce them.

Back 49

heckscher-ohlin theory

Front 50

A country will have a comparitive advantage in producing products that intensively use resources(factors of production) it has in an abundance relates to the _____ ___ theory

Back 50

heckscher ohlin

Front 51

China is known for _____ Saudi Arabia is known for ___ Argentina is known for _____

Back 51

labor, oil, and wheat

Front 52

US imports and exports, 1947. $3.093 million of capital + 170 person years of labor products (a bundle of US imports worth $1 million).. $2.551 million of capital + 182.3 person years of labor products.. (a bundle of US exports worth $1 million)

Back 52

the leontief paradox

Front 53

oriented toward the demand side of trade. "customers tastes are stongly affected by income levels; therefore a nations income per capita level determines the kinds of goods they will demand."

Back 53

linder theory of overlapping demand

Front 54

Linder theory of overlapping demand: Results in intra industry trade: "__ ___ ___ ______ __ ___ ____ ____."

Back 54

a two way exchange of the same goods

Front 55

explains why a product that begins as export eventually becomes import.

Back 55

vernons international product life cycle theory (IPLC)

Front 56

the manufacturing of products passes through three stages in the IPLC theory.

Back 56

new product, maturing product, standardized product

Front 57

This theory bridges the gap between older trade theories and the newer globally competitive market in which capital, technology, information and the firms are highly mobile. It answers the questions "why does international investment occur?"

Back 57

contributions of IPLCT

Front 58

the intense competitiveness of _______ market forces manufacturers to continually develop and fine tune new products.

Back 58

japanese

Front 59

production technology application of IPLC

Back 59

technology life cycle

Front 60

as a plant gets larger and output increase, the average cost of producing each unit of output decreases. As firms product more products, they learn ways to improve production efficiency

Back 60

economies of scale and experience curve

Front 61

economies of scale with the existence of differentiated products- Paul Krugman(geographic concentration

Back 61

imperfect competition

Front 62

pattern of trade in goods subject to scale economies may be determined by historical factors. _____ _____ may be able to gain large market share, but there is evidence for a "second mover" advance

Back 62

first mover

Front 63

taxes on imported goods for the purpose of raising their price to reduce competition for local producers or stimulate local production

Back 63

tarriff barriers

Front 64

all forms of discrimination against imports other than import duties

Back 64

nontariff barriers

Front 65

_______ ______ can help overcome these trade barrier problems.

Back 65

international institutions

Front 66

a body of 27 european countries dedicated to economic and politcal integration. Romania and Bulgaria joined in 2007.

Back 66

european union

Front 67

court that rules on issues related to EU policies

Back 67

european court of justice(ECJ)

Front 68

group that establishes use of euro in the 12 country euro zone. when the euro was adopted, the rate for exchanging members currencies into Euros was irrevocably fixed. The three countries from "old EU" that do not participate are Denmark, Sweden and the United Kingdom.

Back 68

European Monetary Union (EMU)

Front 69

a multinational body of 153 members that deals with rules of trade between nations.

Back 69

WTO

Front 70

outgrowth of _____ _____ __ ____ __ ____, that functioned to encourage trade between nations (GATT)

Back 70

general agreement on tariffs and trade

Front 71

____ principles: trade will be without discrimination, trade should be freer with trade barriers negotiated downward, trade should be predictable, trade should be more competitive, trade should be more beneficial for less developed countries, encouraging development and economic reform

Back 71

WTO

Front 72

wto agreement that protects copyrights, trademarks, trade secrets, and other intellectual property matters.

Back 72

trade related intellectual property rights (TRIPS)

Front 73

organization for economic cooperation and development. Group of developed countries dedicated to promoting economic expansion in its members nations

Back 73

OECD Organization for economic cooperation and development

Front 74

international organization of 191 member nations dedicated to the promotion of peace and global stability: has many functions related to business.

Back 74

united nations

Front 75

security alliance of 26 north american and european nations

Back 75

north atlantic treaty organization NATO

Front 76

group of government leaders from industrialized nations that meets regularly to discusss issues of concern

Back 76

group of eight G8

Front 77

exchange rates affect activities of both _______ and ________ firms

Back 77

domestic and international

Front 78

improve accuracy of financial planning

Back 78

stable exchange rates

Front 79

reduce surprises of unexpected rate changes

Back 79

predictable exchange rates

Front 80

identical item must have an identical price in all countries when expressed in a common currency

Back 80

law of one price

Front 81

monetary policy directly affects interest rates and money supply. fiscal policy indirectly affects taxes and spending

Back 81

money supply

Front 82

high employment raises wages, which are embodied in consumer prices

Back 82

employment

Front 83

high rates lower borrowing and spending, which lowers inflation

Back 83

interest rates

Front 84

exchange rates adjust to maintain PPP(purchasing power parity)

Back 84

adjustment

Front 85

nominal interest rate= real interest rate + inflation rate

Back 85

fisher effect

Front 86

difference in nominal interest rates supported by two nations currencies will cause an equal but opposite change in their spot exchange rates

Back 86

international fisher effect

Front 87

international monetary system that linked nations currencies to specific values of gold. in place from 1700s to 1939. reduced exchange rate risk. restriced monetary policies. corrected trade imbalances. ended by competitive devaluation

Back 87

gold standard

Front 88

international monetary system based on value of US dollar(1944-1973). fixed exchange rates, built in flexibility, world bank and IMF, ended by weak US dollar

Back 88

bretton woods agreement

Front 89

formalized the system of floating exchange rates as the new international monetary system

Back 89

jamaica agreement

Front 90

in the jamaica agreement, there are two float systems. ______ float system- currencies float with government intervention, ____ float system- currencies float without government intervention

Back 90

managed and free

Front 91

way of life of a group of people--the behaviors, beliefs, values, and symbols that they accept, generally without thinking about them, and that are passed along by communication and imitation from one generation to the next

Back 91

culture

Front 92

language, behavior, nonverbal communication, symbolic meanings, cultural norms, cultural values, cultural beliefs, cultural traditions

Back 92

culture as an iceberg

Front 93

what are Hofstedes 5 cultural dimensions?

Back 93

power distance index, individualism, masculinity, uncertainty avoidance index, long term orientation

Front 94

principles that explain what is good right and is bad wrong and that prescribe a code of conduct and decision making based on these definitions. Recent corporate scandals caused by managerial misconduct, unethical behavior harms stock price, decisioins to buy a firms goods and services partly based on customers perception in its ethics. employee fraud costs firm $600 billion a year

Back 94

business ethics

Front 95

people who are affected by a firms performance and who have claims on its performance

Back 95

stakeholders

Front 96

who are the two capital market stakeholders?

Back 96

shareholders, major suppliers of capital

Front 97

who are the organizational stakeholders?

Back 97

employees and managers

Front 98

What are the 4 product market stakeholders?

Back 98

primary customers, suppliers, host communities, and unions

Front 99

the duty a company has to conduct its affairs ethically and in a manner that benefits both employees and the larger society

Back 99

corporate social responsibility CSR