Managing in a Global Business Environment Flashcards

Flashcards covering global business management concepts, economic systems, trade agreements, and organizational structures based on lecture notes.

Globalization Political Impact

A negative outcome on political systems characterized by an increase in the number of laws.

Globalization Rate Factor

A condition that results in a higher rate of globalization, specifically reduced trade barriers.

CAGE Analysis

A framework identifying four factors of international difference: Culture, administration, geography, and economy.

Outsourcing Drawback

A major disadvantage to the home country when manufacturing jobs are moved to countries with lower wages, resulting in a loss of manufacturing jobs.

Traditional Economic System impact

A system with poor infrastructure and limited opportunity where the globalization process has shortcomings due to conflicts with other countries.

Market Economy Characteristic

An economic system where firms seek to maximize profits.

Islamic Law Business Impact

A legal system that directly impacts business transactions by forbidding the charging of interest.

International Monetary Fund (IMF)

An institution that helps maintain the availability of global financing to solve trade deficit issues.

World Bank Focus

An international institution whose current focus is supporting structural development.

World Trade Organization (WTO) Criticism

An international body criticized for the impact of high tariffs on agricultural products.

Special Drawing Right (SDR) Valuation

The value of the International Monetary Fund's unit of account, which is based on the value of the five most significant members' currencies.

Protectionism

A policy that provides subsidies and protects a critical industry from international competition.

Open Border Trade Effect

An agreement between two countries to conduct business without tariffs, which serves to improve supply and demand.

North American Free Trade Agreement (NAFTA) Impact

A trade agreement that resulted in the shift of jobs away from low comparative advantage industries.

Tariff-based Agreement Reasoning

A strategy used by a country to protect its economy and provide the opportunity for long-term expansion.

Import Quotas Effect

The impact of health restrictions or limits on imported products, which increases the domestic prices of those products.

Comparative Advantage Trade Outcome

When two countries open trade, jobs will increase in comparative advantage industries.

Trade Protectionism Purpose

A policy implemented by a country specifically to protect an infant industry.

Investment Facilitation Action

An action taken by a country to encourage foreign investment, such as providing tax exemptions.

Customs Union Feature

A level of regional economic integration characterized by unified trading policies with non-members.

Regional Trade Agreement Drawback

A disadvantage of these agreements where they discourage trade with less efficient producers.

USMCA Automobile Regulation

A regulation stating that almost half of all automobile parts must be made by a labor force earning a minimum of $16$ per hour by $2023$.

Central America Free Trade Agreement (CAFTA)

An alliance that supports investment through acquisition in local companies within regions like Costa Rica.

Maximum Profit Currency Situation

For a firm based in Country A manufacturing in Country B, profit is maximized when the currency in Country A is strong relative to the currency in Country B.

Regional Economic Integration Drawback

A negative aspect of integration characterized by increased exclusive internal trade.

Monopoly Creation Factor

A condition that contributing to the creation of a monopoly is the control of natural resources.

Contracts for the International Sale of Goods (CISG)

A convention providing gap fillers for terms not expressly stated in agreements between two companies.

Anti-trust Laws

Legal regulations violated by practices such as price-fixing, price discrimination, restraints, and monopolization.

Socially Ethical Demands Concern

The challenge a company faces when modifications like green packaging meet ethical demands but lead to decreased profitability.

Corporate Social Responsibility (CSR) Goal

The objective of increasing shareholder trust via high ethical standards.

Global CSR Strategy

A strategy to expand initiatives globally, such as engaging stakeholders on the issue of air quality.

Ethical Dilemma Difficulty

The challenge that ethical behaviors are not standardized across the world.

Code of Ethics

An organizational standard where employees follow values and adapt behaviors to the mission regardless of the situation.

Functional Structure

An organizational structure where employees are divided into departments like marketing, production, HR, and IT.

Teams Structure

An organizational structure that helps increase employee creativity, productivity, and mutual accountability.

Product Departmentalization

A type of departmentalization used when a company competes in specific areas like washers, dryers, and refrigerators.

Centralized Decision-making Result

A decision-making structure localized at the highest level, resulting in increased consistency in operations.

Subsidiary

A business agreement where a company holds a direct operating presence by buying and running a company in a target country.

Exporting Disadvantage

A market entry challenge where the costs of transporting goods are high.

Decentralized Manufacturing

A strategy used to solve problems like profit loss from weather-related shipping delays by adding a location in the target country.

Greenfield Venture

A market entry strategy where a company provides assets, takes all responsibility, and assumes significant risk.

Standardization

A marketing strategy where a company maintains the same branding across several foreign markets.

Power Distance

A national cultural dimension referring to how agreeably a society accepts hierarchical differences between people.

Uncertainty Avoidance

A national cultural dimension referring to the amount of ambiguity a society is willing to accept.

Individualistic Culture

A cultural dimension where people are inclined to take care of themselves and family at the cost of the whole society.

Polycentric Approach Disadvantage

A human resources oversight approach that results in less flexibility in adjusting to changing local conditions.

Lean Manufacturing

A supply chain practice used to optimize production efficiency by dramatically decreasing waste.

Value-to-weight Ratio

A factor a company must consider when choosing a facility location to minimize distribution shipping costs.

Country-of-origin Effect

A phenomenon where consumers in a local country do not prefer locally made goods.

Indirect Distribution Channel Advantage

A benefit of using intermediaries that reduces up-front costs by using an existing channel.

Direct Connection Intermediate Layers

When a company wants to connect directly with consumers, the number of intermediary layers used is $0$.

Indirect Distribution Channel

A structure consisting of a producer, a distributor, a retailer, and a consumer.

Equity Shares

A form of funding requiring a low cost of capital that does not require time to mature.

Generally Accepted Accounting Principles (GAAP)

The accounting method used by a U.S. company to record the acquisition of a national supplier.

Financial Statement Utility

The primary way banks and investors use financial records to decide whether to grant access to money.

Forward Contract

A financial tool used to reduce the effects of currency fluctuations with host country subsidiaries.

Transfer Pricing Effect

An action used to reduce tax burdens that often results in lowered profit for the subsidiaries.

Micro Risk

A specific risk for multinational companies, such as the loss of intellectual property.

Usability Stage

A stage of the digital divide where a community has the skills to use technology but does not value it.

Cloud-based File Share

A tool used to share and store business information online $24/7$ for employee access outside the office.

Deep Learning in Manufacturing

An artificial intelligence approach where machines become familiar with common defects in products.

Blockchain

A technology allowing consumers to privately and securely store personal information like social security and credit card numbers.

Fourth Industrial Revolution

An era of significant business change caused by autonomous cars, $3D$ printing, biometrics, and nanotechnology.

AI Adoption in Education

The economic sector that shows a slower pace in adopting artificial intelligence on a global scale.

Enterprise Resource Planning (ERP) System

A system implemented to solve department communication issues and efficiently address daily problems.