International Business Exam 1 GOOD Semenov

Globalization

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

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 the productive processes to different locations around the globe to take advantage of national differences in the cost and quality of factors of production

Factors of Production

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

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

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

International Monetary Fund (IMF)

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

World Bank

international institution set up to promote general economic development in the world's poorer nations

United Nations

an international organization made up of 191 countries and headquarters in New York City, formed in 1945 to promote peace, security, and cooperation

International Trade

occurs when a firm exports goods or services to consumers in another country

Foreign Direct Investment (FDI)

direct investment in business operations in a foreign country

Moore's Law

the power of microprocessor technology doubles and its cost of production falls in half every 18 months

Stock of Foreign Direct Investment

the total cumulative value of foreign-owned assets at a given time

Multinational Enterprise (MNE)

a firm that owns business operations in more than one country

International Business

any firm that engages in international trade or investment

Political Economy

the political, economic, and legal systems of a country

Political System

the system of government in a nation

Collectivism

a political system that emphasizes collective goals over individual goals

Socialism

a political philosophy advocating substantial public involvement, through government ownership, in the means of production and distribution

Communists

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

Social Democrats

those committed to achieving socialism by democratic means

Privatization

the sale of state-owned enterprises to private investors

Individualism

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

Democracy

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

Totalitarianism

form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties

Representative Democracy

a political system in which citizens periodically elect individuals to represent them

Communist Totalitarianism

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

Theocratic Totalitarianism

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

Tribal Totalitarianism

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

Right-Wing Totalitarianism

a 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, frequently on the grounds that it would lead to the rise of communism

Market Economy

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

Command Economy

an economic system in which the government plans the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold

Legal System

system of rules that regulates behavior and the processes by which the laws are enforced and through which redress of grievances is abstained

Common Law

a system of law based on tradition, precedent, and custom

Civil Law System

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

Theocratic Law System

a system of law based on religious teachings

Contract

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

Contract Law

the body of law that governs contract enforcement

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 business in different nations

Property Rights

the 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

Private Action

the theft, piracy, blackmail, and the like by private individuals or groups

Public Action

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

Foreign Corrupt Practices Act

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

Intellectual Property

products of the mind, such as computer software, a screenplay, a music score, or the chemical formula for a new drug; can be protected by patents, copyrights, and trademarks

Patent

grants the inventor of a new product or process exclusive rights for a defined period to the manufacture, use, or sale of that invention

Copyright

the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see it

Trademark

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

World Intellectual Property Organization

an international organization whose members sign treaties designed to protect intellectual property

Paris Convention for the Protection of Industrial Property

international agreement to protect intellectual property; dates to 1883 and has been signed by some 170 nations

Product Safety Laws

set certain safety standards to which a product must adhere

Product Liability

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

cross-cultural literacy

understanding how the culture of a country affects the way business is practiced

culture

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

values

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

norms

social rules and guidelines that prescribe appropriate behavior in particular situations

society

a group of people who share a common set of values and norms

folkways

routine conventions of everyday life

mores

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

social structure

the basic social organization of a society

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.

social strata

hierarchical social categories often based on family background, occupation, and income

social mobility

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

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 individuals lifetime

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

class consciousness

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

religion

a system of shared beliefs and rituals concerned with the realm of the sacred

ethical system

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

power distance

Theory of how a society deals with the fact that people are unequal in physical and intellectual capabilities. High power distance cultures are found in countries that let inequalities grow over time into inequalities of power and wealth. Low power distance cultures are found in societies that try to play down such inequalities as much as possible.

individualism vs collectivism

Theory focusing on the relationship between the individual and his or her fellows. In individualistic societies, the ties between individuals are loose and individual achievement is highly valued. In societies where collectivism is emphasized, ties between individuals are tight, people are born into collectives, such as extended families, and everyone is supposed to look after the interests of his or her collective.

uncertainty avoidance

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

masculinity vs femininity

Theory of the relationship between gender and work roles. In masculine cultures, sex roles are sharply differentiated and traditional "masculine values" such as achievement and the effective exercise of power determine cultural ideals; in feminine cultures, sex roles are less sharply distinguished, and little differentiation is made between men and women in the same job.

long-term vs short-term orientation

The theory of the extent to which a culture programs its citizens to accept delayed gratification of their material, social, and emotional needs. It captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors.

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.