Learning Objectives And Definitions From Chapter 1 Of Global Business Today, 7Th Ed.

Front 1

Understand what is meant by the term "globalization."

Back 1

Globalization: Trend away from distinct nat'l economic units and toward one huge global market
Globalization of Markets: Moving away from an economic system in which nat'l markets are distinct entities, isolated by trade barriers, and barriers of distance, time, and culture, and toward a system in which nat'l markets are merging into one global market
Globalization of Production: Trend by individual firms to disperse parts of the productive processes to different locations around the globe to take advantage of nat'l differences in the cost and quality of factors of production.

Front 2

Factors of Production

Back 2

Inputs into the productive processes of a firm, including labor, management, land, capital, and technological know-how

Front 3

General Agreement on Tariffs and Trade (GATT)

Back 3

International treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the World Trade Organization (WTO)

Front 4

World Trade Organization (WTO)

Back 4

Organization that succeeded the General Agreement on Tariffs and Trade (GATT) as a result of the successful completion of the Uruguay Round of GATT negotiations.

Front 5

International Monetary Fund (IMF)

Back 5

International institution set up to maintain order in the international monetary system.

Front 6

World Bank

Back 6

International Institution set up to promote general economic development in the world's poorer nations

Front 7

United Nations (UN)

Back 7

An international organization made up of 191 countries and headquartered in New York City, formed in 1945 to promote peace, security, and cooperation

Front 8

Recognize the main drivers of globalization

Back 8

1. The decline in barriers to the free flow of goods, services, and capital that has occurred since the end of the World War II
2. Technological change, particularly the dramatic development in recent years in communication, information processing, and transportation technologies

Front 9

International Trade

Back 9

Occurs when a firm exports goods or services to consumers in another country.

Front 10

Foreign Direct Investment (FDI)

Back 10

Direct investment in business operations in a foreign country.

Front 11

Moore's Law

Back 11

The power of microprocessor technology doubles and its cost of production falls in half every 18 months

Front 12

Describe the changing nature of the global economy

Back 12

In the 1960s, the US economy was dominant in the world, US firms accounted for most of the FDI in the world economy, US firms dominated the list of large multinationals, and roughly half the world was closed to Western businesses. By the mid-1990s, the US share of world output had been cut in half, with major shares now being accounted for by Western European and SE Asian economies. The US share of worldwide FDI had also fallen, by about two-thirds. US multinationals were now facing competition from a large number of Japanese and European multinationals. In addition, the emergence of mini-multinationals was noted.

Front 13

Stock of FDI

Back 13

The total cumulative value of foreign-owned assets at a given time

Front 14

Multinational Enterprise (MNE)

Back 14

A firm that owns business operations in more than one country.

Front 15

Explain the main arguments in the debate over the impact of globalization

Back 15

The benefits and costs of the emerging global economy are being hotly debated among businesspeople, economists, and politicians. The debate focuses on the impact of globalization on jobs, wages, the environment, working conditions, and national sovereignty.

Front 16

Understand how the process of globalization is creating opportunities and challenges for business managers.

Back 16

Managing an int’l business is different from managing a domestic business for at least four reasons:
1. Countries are different
2. The range of problems confronted by a manager in an int’l business is wider and the problems themselves more complex than those confronted by a manager in a domestic business.
3. Managers in an int’l business must find ways to work within the limits imposed by governments’ intervention in the int’l trade and investment system,
4. Int’l transactions involve converting money into different currencies

Front 17

International Business

Back 17

Any firm that engages in int'l trade or investment.