International Business Fundamentals

Globalization

The shift toward a more integrated and interdependent world economy.

Globalization of Markets

The merging of historically distinct national markets into one global marketplace.

Globalization of Products

Designing, producing, and selling products using resources and operations from multiple countries.

Drivers of Globalization

Declining trade and investment barriers, and improvements in communication and transportation.

Foreign Direct Investment (FDI)

Investment by a company or individual in business operations located in another country.

Multinational Enterprise (MNE)

A company that has business operations in more than one country.

Collectivism

A political system where group goals are emphasized over individual goals.

Individualism

A political philosophy emphasizing individual freedom, personal achievement, and individual choice.

Democracy

A political system where government is ultimately controlled by the people through elected representatives.

Totalitarianism

A political system where one person or party controls all aspects of public and private life.

Market Economy

An economy in which supply and demand determine production, prices, and private ownership.

Command Economy

An economy in which the government determines production, distribution, and prices.

Common Law

A legal system based heavily on tradition, precedent, and previous court decisions.

Foreign Corrupt Practices Act (FCPA)

A U.S. law prohibiting companies from bribing foreign government officials to obtain business.

Patents

Intellectual property rights that protect new inventions and technological innovations.

Gross Domestic Product (GDP)

The total market value of goods and services produced within a country over a specific period.

GDP per capita on PPP

GDP per person adjusted for differences in the cost of living between countries.

Human Development Index (HDI)

A measure of development considering income, education, and life expectancy.

Deregulation

Reducing government rules and restrictions on businesses to increase competition.

Privatization

Selling government-owned businesses or assets to private owners.

Culture

A system of values and norms shared by a group of people.

Social Stratification

The hierarchical division of society into different social classes based on wealth or occupation.

Power Distance

Hofstede dimension measuring the extent to which a society accepts unequal power distributions.

Uncertainty Avoidance

Hofstede dimension measuring how uncomfortable people feel with uncertainty and ambiguity.

Long-Term Orientation

A cultural focus on persistence, planning for the future, and long-term rewards.

Friedman Doctrine

The view that a business's only social responsibility is to maximize shareholder profits legally.

Cultural Relativism

The belief that ethical standards depend on local cultural norms and practices.

Utilitarian Ethics

The idea that ethical actions produce the greatest good for the greatest number of people.

Kantian Ethics

The principle that people should be treated as ends in themselves, never merely as means.

Corporate Social Responsibility (CSR)

The idea that businesses should consider social and environmental impacts alongside profits.