Globalization, National Differences, and Culture Vocabulary

A collection of vocabulary flashcards covering the key terms and concepts from lecture chapters 1, 2, 3, and 4 regarding globalization, national systems, economic development, and culture.

factors of production

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

foreign direct investment (FDI)

Direct investment in business operations in a foreign country.

General Agreement on Tariffs and Trade (GATT)

International treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the WTO.

Globalization of markets

Moving away from an economic system in which national markets are distinct entities, isolated by trade barriers and barriers of distance, time, and culture, and toward a system in which national markets are merging into one global market.

Globalization of production

Trend by individual firms to disperse parts of their productive processes to different locations around the globe to take advantage of differences in cost and quality of factors of production.

Globalization

Trend away from distinct national economic units and toward one huge global market.

Group of Twenty (G20)

International organization, established in $1999$, that comprises the finance ministers and central bank governors of the $19$ largest economies in the world, plus representatives from the European Union and the European Central Bank.

international business

Any firm that engages in international trade or investment.

International Monetary Fund (IMF)

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

international trade

A firm exports goods or services to consumers in another country.

Moore’s law

The power of microprocessor technology doubles and its costs of production fall in half every $18$ months.

multinational enterprise (MNE)

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

outward stock of FDI

Total accumulated value of assets owned by firms domiciled in a nation outside of that nation’s borders at a given time.

United Nations (UN)

International organization made up of $193$ countries headquartered in New York City, formed in $1945$ to promote peace, security, and cooperation.

World Bank

International institution set up to promote general economic development in the world’s poorer nations.

World Trade Organization (WTO)

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.

civil law system

A system of law based on a very detailed set of written laws and codes.

Collectivism

A political system that emphasizes collective goals as opposed to individual goals.

command economy

An economic system where the allocation of resources, including determination of what goods and services should be produced, and in what quantity, is planned by the government.

common law

A system of law based on tradition, precedent, and custom; when law courts interpret common law, they do so with regard to these characteristics.

communist totalitarianism

A version of collectivism advocating that socialism can be achieved only through a totalitarian dictatorship.

Communists

Those who believe socialism can be achieved only through revolution and totalitarian dictatorship.

contract law

The body of law that governs contract enforcement.

Contract

A document that specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved.

Copyrights

The exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit.

Democracy

Political system in which government is by the people, exercised either directly or through elected representatives.

Foreign Corrupt Practices Act (FCPA)

U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions.

Individualism

An emphasis on the importance of guaranteeing individual freedom and self-expression.

intellectual property

Products of the mind, ideas (e.g., books, music, computer software, designs, technological know-how); intellectual property can be protected by patents, copyrights, and trademarks.

legal system

System of rules that regulate behavior and the processes by which the laws of a country are enforced and through which redress of grievances is obtained.

market economy (Free market)

An economic system in which the interaction of supply and demand determines the quantity in which goods and services are produced.

Paris Convention for the Protection of Industrial Property

International agreement to protect intellectual property.

Patent

Grants the inventor of a new product or process exclusive rights to the manufacture, use, or sale of that invention.

political economy

The political, economic, and legal systems of a country.

political system

System of government in a nation.

private action

Violation of property rights through theft, piracy, blackmail, and the like by private individuals or groups.

Privatization

The sale of state-owned enterprises to private investors.

product liability

Involves holding a firm and its officers responsible when a product causes injury, death, or damage.

product safety laws

Set certain safety standards to which a product must adhere.

property rights

Bundle of legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource.

public action

The extortion of income or resources of property holders by public officials, such as politicians and government bureaucrats.

representative democracy

Political system in which citizens periodically elect individuals to represent them in government.

right-wing totalitarianism

Political system in which political power is monopolized by a party, group, or individual that generally permits individual economic freedom but restricts individual political freedom, including free speech, often on the grounds that it would lead to the rise of communism.

social democrats

Those committed to achieving socialism by democratic means.

Socialists

Those who believe in public ownership of the means of production for the common good of society.

theocratic law system

A system of law based on religious teachings.

theocratic totalitarianism

Political system in which political power is monopolized by a party, group, or individual that governs according to religious principles.

Totalitarianism

Form of government in which one person or political party exercises absolute control over all spheres of human life and opposing political parties are prohibited.

Trademarks

The designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products.

tribal totalitarianism

Political system in which a party, group, or individual that represents the interests of a particular tribe (ethnic group) monopolizes political power.

United Nations Convention on Contracts for the International Sale of Goods (CISG)

A set of rules governing certain aspects of the making and performance of commercial contracts between sellers and buyers who have their places of businesses in different nations.

World Intellectual Property Organization (WIPO)

International organization whose members sign treaties to agree to protect intellectual property.

Deflation

Economic situation when consumers expect prices to decrease tomorrow than what they are today.

Deregulation

Removal of government restrictions concerning the conduct of a business.

economic risk

The likelihood that events, including economic mismanagement, will cause drastic changes in a country’s business environment that adversely affect the profit and other goals of a particular business enterprise.

Entrepreneurs

Those who first commercialize innovative new products and processes; entrepreneurial activity provides much of the dynamism in an economy.

first-mover advantages

Advantages accruing to the first to enter a market.

gross domestic product (GDP)

Measures the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Gross National Income (GNI)

Measures the total income earned by all residents of a country, including wages, salaries, profits, rents, and income from foreign investments, minus income paid to non-residents.

Human Development Index (HDI)

Attempt by the United Nations to assess the impact of a number of factors on the quality of human life in a country.

Innovation

Development of new products, processes, organizations, management practices, and strategies.

late-mover disadvantages

Handicaps experienced by being a late entrant in a market.

legal risk

The likelihood that a trading partner will opportunistically break a contract or expropriate intellectual property rights.

political risk

The likelihood that political forces will cause drastic changes in a country’s business environment that will adversely affect the profit and other goals of a particular business enterprise.

purchasing power parity (PPP)

Adjustment in GDP per capita to reflect differences in the cost of living.

caste system

A system of social stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual’s lifetime.

class consciousness

Tendency for individuals to perceive themselves in terms of their class background.

class system

A system of social stratification in which social status is determined by the family into which a person is born and by subsequent socioeconomic achievements; mobility between classes is possible.

cross-cultural literacy

Understanding how the culture of a country affects the way business is practiced.

Culture

System of values and norms that are shared among a group of people and that when taken together constitute a design for living.

ethical system

A set of moral principles, or values, that is used to guide and shape behavior.

Ethnocentrism

Behavior that is based on the belief in the superiority of one’s own ethnic group or culture; often shows disregard or contempt for the culture of other countries.

Folkways

Routine conventions of everyday life.

Group

An association of two or more individuals who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other’s behavior.

Mores

Norms seen as central to the functioning of a society and to its social life.

Norms

Social rules and guidelines that prescribe appropriate behavior in particular situations.

power distance

Theory of how a society deals with the fact that people are unequal in physical and intellectual capabilities.

Religion

A system of shared beliefs and rituals concerned with the realm of the sacred.

social mobility

The extent to which individuals can move out of the social strata into which they are born.

social strata

Hierarchical social categories often based on family background, occupation, and income.

social structure

The basic social organization of a society.

Society

Group of people who share a common set of values and norms; that is, people who are bound together by a common culture.

Symbolic behavior

The use of symbols—such as words, gestures, and images—to convey meanings beyond their literal interpretation, serving as non-verbal cues that facilitate communication.

Values

Abstract ideas about what a society believes to be good, right, and desirable.

individualism versus collectivism

Theory focusing on the relationship between the individual and their fellows, contrasting loose social ties with tight collectives such as extended families.

uncertainty avoidance

The extent to which cultures socialize members to accept ambiguous situations and to tolerate uncertainty.

masculinity versus femininity

Theory of the relationship between gender and work roles, contrasting differentiated sex roles and masculine achievement with less distinguished roles.

long-term versus short-term orientation

Theory of the extent to which a culture programs its citizens to accept delayed gratification of their material, social, and emotional needs.