MGMT 4331 — FULL EXPANDED STUDY GUIDE (Ch. 4, 5, 6, 8, 9)

Practice flashcards covering the core concepts of MGMT 4331, Chapters 4, 5, 6, 8, and 9, including culture, ethics, trade theory, FDI, and regional integration.

Culture

A system of values and norms shared among a group of people that, when taken together, constitute a design for living.

Cross-cultural literacy

Understanding how cultural differences across and within nations affect the way business is practiced.

Values

Ideas about what a group believes to be good, right, and desirable.

Norms

Social rules governing actions toward one another.

Caste system

A social system that determines social position by birth with little change likely.

Class system

A social system that allows social position to change through achievement or luck.

Christianity

A religion with approximately 2.20B followers.

Islam

A religion with approximately 1.60B followers.

English

The most widely spoken language and the language of international business.

Power Distance

Hofstede's dimension measuring the extent to which a society accepts unequal distribution of power.

Uncertainty Avoidance

The degree to which people feel threatened by ambiguous situations, where high avoidance leads to strict rules and low risk tolerance.

Masculinity

A cultural dimension that prefers achievement, competition, and material success.

Femininity

A cultural dimension that prefers cooperation, quality of life, and caring for others.

Ethnocentric Behavior

The belief in the superiority of one's own culture.

Ethical dilemma

A problem involving two possible but ethically unacceptable options.

Methods of resolving ethical dilemmas

1. Hiring and promoting people with strong personal ethics, 2. Building an organizational culture emphasizing ethics, 3. Ethical decision-making processes, 4. Ethics officers, and 5. Moral courage.

Roots of unethical behavior

1. Personal Ethics, 2. Decision-Making Processes, 3. Organizational Culture, 4. Unrealistic Performance Goals, 5. Leadership, and 6. Societal Culture.

Code of Ethics

A formal statement of ethical priorities.

Code of Conduct

Rules outlining expected behaviors.

3-Question Model

1. Is it legal? 2. Is it fair to everybody? 3. Can I proudly share it with people around me?

CSR

The idea that firms should give back to society.

Sustainability

Strategies that allow profit without harming the environment.

Comparative Advantage

Theory of international trade where a country specializes in goods based on lowest opportunity cost.

National competitive advantage determinants

1. Factor Endowments, 2. Demand Conditions, 3. Related and Supporting Industries, and 4. Firm Strategy, Structure, and Rivalry.

Foreign Direct Investment (FDI) threshold

At least 10% ownership.

Greenfield investment

Building new operations from scratch.

Acquisition

Buying existing assets.

When is FDI preferred

When control over technology or strategy is needed.

Levels of economic integration

1. Free Trade Area, 2. Customs Union, 3. Common Market, 4. Economic Union, 5. Political Union.

Maastricht Treaty

The treaty that renamed the European Economic Community to the European Union in 1993.

European Council

The ultimate controlling authority in the EU political structure.

Globalization

The process by which businesses develop international influence or operate on an international scale.

Trade Barriers

Government-imposed restrictions on international trade, such as tariffs and quotas.

Tariff

A tax on imported goods to raise their price and protect domestic industries.

Quota

A limit on the quantity of a good that can be imported or exported during a given time period.

Free Trade

The unrestricted purchase and sale of goods and services between countries.

Trade Surplus

When a country exports more goods and services than it imports.

Trade Deficit

When a country imports more goods and services than it exports.

Multinational Corporation (MNC)

A company that operates in multiple countries beyond its home country.

Foreign Exchange Market

A global decentralized market for trading currencies.

Exchange Rate

The value of one currency for the purpose of conversion to another.

Trade Agreements

A treaty between two or more nations that outlines the terms of trade between them.

NAFTA

a treaty between the USA, Canada, and Mexico to eliminate trade barriers.

EU

a political and economic union of 27 member states located in Europe.

WTO

an intergovernmental organization that regulates international trade.

Import Licensing

Government authorization required to import certain goods into the country.

Trade Promotion Authority (TPA)

Allows the President to negotiate trade agreements that Congress can approve or reject but cannot amend.

Economic Integration

The process of reducing or eliminating trade barriers between countries.

Global Value Chain

The full range of activities that firms engage in to bring a product from conception to delivery.

Outsourcing

The practice of obtaining goods or services from an outside supplier.

Offshoring

The relocation of a business process from one country to another.

Competitive Advantage

A condition that allows a company to produce goods or services more effectively than its competitors.

Foreign Direct Investment (FDI)

Investment made by a company or individual in one country in business interests in another country, in the form of establishing business operations or acquiring assets.

Greenfield investment

The establishment of a new operation in a foreign country from the ground up.

Acquisition

The purchase of existing assets in a foreign country to expand business operations.

Ethical decision-making processes

Structured approaches organizations utilize to make choices that align with their ethical standards and values.

Global ethics

The study and implementation of ethical practices across different cultures and geographical boundaries.

Corporate governance

The systems, principles, and processes by which a company is directed and controlled, emphasizing ethical conduct and compliance.

Social responsibility

The obligation of a business to contribute to society and consider the impact of its actions on stakeholders.

Transparency

The practice of being open and honest in business operations, allowing stakeholders to access information about decisions and actions.

Stakeholder theory

A theory that asserts that businesses have responsibilities to a wide range of stakeholders, not just shareholders, including employees, customers, suppliers, and the community.

Corporate social performance

A measure of how well a company adheres to social responsibilities and ethical concerns in its operations.

Sustainability reporting

A report published by a company detailing its economic, environmental, and social impacts, aiming to promote accountability and transparency.

Greenwashing

A deceptive practice where a company exaggerates or fabricates its environmental efforts to appear more environmentally friendly than it actually is.

Corporate philanthropy

The act of a corporation donating its profits, resources, or time to charitable causes and community projects.

Corporate ethics training

Programs aimed at educating employees about the ethical guidelines, values, and legal requirements affecting their work.

Conflict of interest

A situation in which an individual's personal interests or loyalties could potentially influence their professional obligations or decisions.

Whistleblower policies

Protocols established within organizations to protect individuals who report unethical or illegal activities from retaliation.

Business ethics

The principles and standards that guide behavior in the world of business, ensuring actions align with societal norms and laws.

Value-based ethics

Approaches to ethics that prioritize personal values and integrity in decision-making over mere compliance with rules.

Utilitarianism

An ethical theory that determines the rightness of actions based on their outcomes, aiming for the greatest good for the greatest number.

Deontological ethics

An ethical approach focused on adherence to rules, duties, and obligations rather than the consequences of an action.

Comparative Advantage

Theory of international trade where a country specializes in goods based on lowest opportunity cost.

National competitive advantage determinants

Factors that contribute to a nation's ability to compete effectively in the global economy, including Factor Endowments, Demand Conditions, Related and Supporting Industries, and Firm Strategy, Structure, and Rivalry.

Foreign Direct Investment (FDI) threshold

At least 10% ownership is required for investment to be classified as FDI.

When is FDI preferred

FDI is preferred when control over technology or strategy is needed.

Levels of economic integration

Stages of integrating economies: 1. Free Trade Area, 2. Customs Union, 3. Common Market, 4. Economic Union, 5. Political Union.

Maastricht Treaty

The treaty that renamed the European Economic Community to the European Union in 1993.

European Council

The ultimate controlling authority in the EU political structure.

Globalization

The process by which businesses develop international influence or operate on an international scale.

Trade Surplus

When a country exports more goods and services than it imports.

Trade Deficit

When a country imports more goods and services than it exports.

Multinational Corporation (MNC)

A company that operates in multiple countries beyond its home country.

Trade Barriers

Government-imposed restrictions on international trade, such as tariffs and quotas.

Tariff

A tax on imported goods to raise their price and protect domestic industries.

Quota

A limit on the quantity of a good that can be imported or exported during a given time period.

Trade Agreements

Treaties between two or more nations that outline the terms of trade between them.

Free Trade

The unrestricted purchase and sale of goods and services between countries.

Economic Integration

The process of reducing or eliminating trade barriers between countries.

Outsourcing

The practice of obtaining goods or services from an outside supplier.

Offshoring

The relocation of a business process from one country to another.

Foreign Exchange Market

A global decentralized market for trading currencies.

Companies have no responsibility to ensure their supply chain is ethically managed.

False

Corporate Social Responsibility (CSR) can enhance a company's brand reputation.

True

Every business owner is legally obliged to implement an ethics policy.

False

A company can achieve financial success without considering its social impact.

False

Transparency in business can increase customer trust and loyalty.

True

All stakeholders are equally affected by a company’s decisions.

False

Insider trading is considered an ethical business practice.

False

International businesses must comply with local laws and cultural norms.

True