IB final

Adaptability

Ability to change supply chain configurations in response to longer-term changes in the environment and technology

Agility

The ability to react quickly to unexpected shifts in supply and demand

Alignment

Alignment of interests of various players

Distribution Channel

A set of firms that facilitates the movement of goods from producers to consumers

Market Orientation

A philosophy or way of thinking that places the highest priority on the creation of superior customer value in the marketplace

Market Segmentation

Identifying segments of consumers who differ from others in purchasing behavior

Marketing

Efforts to create, develop, and defend markets that satisfy the needs and wants of individual and business customers

Marketing Mix

The four underlying components of marketing: product, price, promotion, and place

Omnichannel

Integration of different channels available to consumers (such as physical stores and online platforms)

Place

The location where products and services are provided

Price

The expenditures that customers are willing to pay for a product

Price Elasticity

How demand changes when price changes

Product

Offering that customers purchase

Promotion

Communications that marketers insert into the marketplace

Relationship Orientation

A focus to establish, maintain, and enhance relationship with customers

Supply Chain

Flow of products, services, finances, and information that passes through a set of entities from a source to the customer

Supply Chain Management

Activities to plan, organize, lead, and control the supply chain

Third-party logistics (3PL) provider

A neutral, third-party intermediary in the supply chain that provides logistics and other support services

Total cost of ownership

Total cost needed to own a product consisting of initial purchase cost and follow-up maintenance/service cost

Value-based pricing (value pricing)

Setting the price at a level that seems to the customer to have great value compared to the prices of other options

Two key elements in alignment

Power and trust

Overall market share of green products in various industries is

Less than 4%

Balance Sheet Approach

A compensation approach that balances the cost of living differences relative to parent country levels and adds a financial inducement to make the package attractive

Compensation

The determination of salary and benefits

Development

Long-term, broader preparation to improve managerial skills for a better career

Ethnocentric Approach

An emphasis on the norms and practices of the parent company (and the parent country of the MNE) by relying on PCNs

Expatriation

The process of selecting, managing, and motivating expatriates to work abroad

Geocentric Approach

A focus on finding the most suitable managers, who can be PCNs, HCNs, or TCNs

Going Rate Approach

A compensation approach that pays expatriates the prevailing (going) rate for comparable positions in a host country

Host-Country National (HCN)

Individual from the host country who works for an MNE

Human Resource Management (HRM)

Activities that attract, select, and manage employees

Inpatriation

Relocating employees of a foreign subsidiary to the MNE’s headquarters for the purposes of filling skill shortages at headquarters and developing a global mindset for such inpatriates

Labor relation

A firm’s relation with organized labor (unions) in both home and host countries

Parent-Country national (PCN)

Individual who comes form the parent country of an MNE and works at its local subsidiary

Performance Appraisal

The evaluation of employee performance for promotion, retention, or termination purposes

Polycentric Approach

An emphasis on the norms and practices of a host country

Psychological Contract

An informal understanding of expected delivery of benefits in the future for current services

Repatriate

Returning expatriate

Repatriation

The process of facilitating the reutn of expatriates

Staffing

HRM activities associated with hiring employees and filling positions

Talent management

The process through which organizations anticipate and meet their needs for talent in strategic jobs

Third-Country National (TCN)

Individual who is from neither the parent country nor the host country of an MNE

Training

Specific preparation to do a particular job

Work From Anywhere (WFA)

Performing work from any location, which may be far away from the employer’s location

Work From Home (WFH)

Performing work from home, which traditionally is within commuting distance to the employer’s location

Expatriates (Expats)

Non-native employees who work in a foreign country

Activist Shareholder

1) A traditional shareholder interested in maximizing wealth or 2) a social activist eager to promote their agenda

Agency Cost

The cost associated with principal— agent relationships

Agency Relationship

The relationship between principals (such as shareholders) and agents (such as professional managers)

Agency Theory

A theory that focuses on principal—agent relationships (or in short, agency relationships)

Agent

Individual (such as manager) to whom authority is delgated

Bond

Loan issued by a firm and held by creditors

Bondholder

Buyer of bonds

CEO Duality

The CEO doubles as board chair

Chief executive officer (CEO)

The main executive manager in charge of a firm

Concentrated Ownership and Control

Founders start up firms and completely own and control them on an individual or family basis

Corporate Governance

The relationship among various participants in determining the direction and performance of corporations

Cost of Capital

The rate of return that a firm needs to pay to capital providers

Cross-listing

Listing shares on a foreign stock exchange

Debt

A loan that a firm needs to pay back at a given time with interest

Default

A firm’s failure to satisfy the teams of a loan obligation

Diffused Ownership

Publicly traded corporations owned by numerous small shareholders but none with a dominant level of control

Equity

The stock in a firm (usually expressed in shares) that represents the owners’ rights

Exit-based Mechanism

Corporate governance mechanism that focuses on exit, indicating that shareholders no longer have patience and are willing to “exit” by selling their shares

Financing

How a firm’s money, banking, investments, and credit are managed

Information Asymmetry

Asymmetric distribution and possession of information between two sides

Inside Director

Member of the board who is a top executive of the firm

Institutional Investor

Professionally managed mutual fund or pension pool

Leveraged buyout (LBO)

Means by which investors, often in partnership with incumbent managers, issue bonds and use the cash raised to buy a firm’s stock

Managerial Human Capital

The skills and abilities acquired by top managers

Outside (Independent) Director

Non-management member of the board

Principal

Individual (such as owner) delegating authority

Principal-Agent Conflict

Conflict between principals and agents

Principal-Principal Conflict

Conflict between two classes of principals: controlling shareholders and minority shareholders

Private Equity

Equity capital invested in private companies that, by definition, are not publicly traded

Related Transaction

Controlling shareholders sell firm assets to another firm they own at below-market prices or spin off the most profitable part of a public firm and merge it with another private firm they own

Separation of Ownership and Control

The dispersal of ownership among many small shareholders, in which control is largely concentrated in the hands of salaried, professional managers who won little (or no) equity

Shareholder

Firm owner

Shareholder Activism

1) activities of large shareholders eager to maximize their returns or 2) activities of small shareholders pushing their own proposals

Shareholder Capitalism

A view of capitalism that suggests that the most fundamental purpose for firms to exist is to serve the economic interests of shareholders (also known as capitalists)

Shareholder Empowerment

Shift in the allocation of power from managers and directors to shareholders

Socioemotional Wealth (SEW)

The stock of affect-related value that the family has invested in the family firm

Stewardship Theory

A “pro-management” theory that suggests that most managers can be viewed as owners’ stewards interested in safeguarding shareholders’ interests

Top Management Team (TMT)

A team consisting of the highest level of executives of a firm led by the CEO

Tunneling

A form of corporate theft that diverts resources from a frm for personal or family use

Voice-Based Mechanism

Corporate governance mechanism that focuses on the shareholders’ willingness to work with managers, usually through the board, by “voicing” their concerns

Accommodative Strategy

A strategy characterized by some support from top managers, who may increasingly view CSR as a worthwhile endeavor

Corporate Philanthropy

Firms’ donation to social causes

Corporate Social Irresponsibility (CSI)

A lack of corporate social responsibility that can result in disasters and scandals

Corporate Social Performance (CSP)

Social performance outcome of a firm’s CSR activities

Corporate Social Responsibility (CSR)

Consideration of, and response to, issues beyond the narrow economic, technical, and legal requirements of a firm to accomplish social benefits along with the traditional economic gains that the firm seeks

Defensive Strategy

Strategy that focuses on regulatory compliance but with little actual commitment to CSR by top management

Environmental, Social, and Governance (ESG) Performance

A performance yardstick consisting of environmental, social and governance dimensions

Fiduciary Duty

A duty required by law

Gini Coefficint

A measure of income distribution, with zero representing perfect equality and one representing perfect inequality (one person holding all the health)

Global Sustainability

The ability to meet the needs of the present without compromising the ability of future generations to meet their needs around the world

Primary Stakeholder Group

A group of constituents on whom a firm relies for its continuous survival and prosperity

Proactive Strategy

A strategy that endeavors to do more than is required in CSR

Reactive Strategy

A strategy that would only respond to CSR causes when required by disasters and outcries

Secondary Stakeholder Group

A group of stakeholders who influence or affect, or are influenced or affected by, a firm but are not engaged in transactions with the firm and are not essential for its survival