INB

What is management?

The process of completing activities with and through other people.

What is international management?

The application of management concepts and techniques across borders, adapted to different economic, political, legal, and cultural settings.

What is an MNC?

A multinational corporation — a firm with operations, assets, or subsidiaries in more than one country. Example: Toyota.

Is international business a new phenomenon?

No. Cross-border trade is ancient. What has changed is the scale, speed, and share of world output involved.

How does social media affect international business?

It increases connectedness and the speed of information flow across borders, lets consumers influence brands and demand in multiple markets at once, and shortens the time a firm has to respond to reputational events.

What is globalization?

The increasing integration of national economies into a single interdependent world market for goods, services, capital, and labor.

Globalization vs. internationalization — what is the difference?

Internationalization is a firm doing business across borders. Globalization is economies and markets merging into one interdependent system. A firm internationalizes; the world globalizes.

What is offshoring?

Relocating a business or manufacturing process to another country. Ownership typically stays inside the same firm.

What is outsourcing?

Contracting a process out to a different company. It may be domestic or foreign — the defining feature is a different company, not a different country.

How do offshoring and outsourcing differ on two axes?

Offshoring = different COUNTRY. Outsourcing = different COMPANY. Offshore outsourcing = both at once.

What are the main arguments FOR globalization?

Lower consumer prices, wider availability of goods, efficiency gains from comparative advantage, and access to capital and technology for developing economies.

What are the main arguments AGAINST globalization?

Offshoring does not create jobs at home, the race to the bottom, downward pressure on wages and working conditions, and profit-driven decisions that override local welfare.

What is the "race to the bottom"?

Competition among countries to attract foreign investment by lowering wages, labor protections, taxes, and environmental standards.

Who are the most visible critics of globalization?

NGOs, labor unions, and anti-globalization activist groups.

Why does anti-globalization sentiment rise even as globalization deepens?

Because the gains are dispersed and the losses are concentrated. Displaced workers and regions bear visible, localized costs, which fuels populist and nationalist backlash even while aggregate integration continues.

What does BRIC stand for?

Brazil, Russia, India, China. BRICS adds South Africa.

Who are the G7?

United States, United Kingdom, France, Germany, Italy, Japan, Canada.

Who are the E7?

The Emerging Seven — China, India, Brazil, Russia, Indonesia, Mexico, Turkey.

What is the projection about the E7 and the G7?

The E7 economies are projected to surpass the G7 economies in combined size, with a crossover point commonly cited around 2030.

What is the WTO and when was it formed?

The World Trade Organization — the global body that sets and enforces rules of international trade and settles disputes between members. Created in 1995, succeeding the GATT of 1947.

What was NAFTA and what replaced it?

The North American Free Trade Agreement, in force from 1994, creating a free trade area among the US, Canada, and Mexico. Replaced by the USMCA in 2020.

What is CAFTA-DR?

The Central America–Dominican Republic Free Trade Agreement — the US plus Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic.

Put GATT, NAFTA, WTO, CAFTA-DR, and USMCA in order.

GATT 1947, NAFTA 1994, WTO 1995, CAFTA-DR mid-2000s, USMCA 2020.

Where is economic integration most pronounced?

North America, Europe, and the Pacific/Asia region.

What is foreign direct investment (FDI)?

Investment in physical assets or a controlling stake in another country — property, plant, equipment, or ownership of a foreign operation.

How does FDI differ from portfolio investment?

FDI involves a lasting interest and some degree of control over a foreign operation. Portfolio investment is passive holding of foreign securities with no control.

What two demographic forces are shifting global economic power?

Shrinking working-age populations in developed economies, and rapid population and economic growth in emerging economies — China economically, India demographically.

What is a market economy?

Private ownership of enterprise, with prices and output determined by supply and demand. Government's role is limited to enforcing rules and preserving competition, not setting prices.

What is a command economy?

The government owns or directs the means of production and sets prices, supply, and output targets.

What is a mixed economy?

A system combining private enterprise with significant state ownership or planning, where the government intervenes directly in key sectors.

What are the four learning objectives of Chapter 1?

(1) Assess the implications of globalization for countries, industries, firms, and communities. (2) Review the major trends in global and regional integration. (3) Examine the changing balance of economic power, trade, and investment among countries. (4) Analyze the major economic systems and recent developments among them.

What are the three learning objectives of Chapter 2?

(1) Introduce the political systems that characterize different regions and countries. (2) Present an overview of the legal and regulatory environment in which MNCs operate. (3) Review key technological developments and discuss their future implications.

How do political systems influence how a country's people manage and do business?

They set the rules for property rights, contract enforcement, market entry, taxation, and expropriation risk — determining which strategies are viable and how much political risk a firm carries.

What two dimensions are political systems evaluated through?

Political ideology, and the degree of individualism versus collectivism.

What is political ideology?

The body of ideas a group holds about how society should be organized and governed.

What does someone who believes in individualism think about government oversight?

They oppose it. Individual freedom and self-interest come first, and government intervention should be minimal.

What does a leader who believes in collectivism think about individualism?

That collective goals outrank individual ones, and that individual freedom can legitimately be constrained to serve the group.

If not profit, what is the goal under socialism?

Collective welfare — equitable distribution of output, pursued through state ownership of the means of production.

What is the difference between democracy and totalitarianism?

Democracy is government by the people, usually through elected representatives, with civil liberties, rule of law, and limited terms. Totalitarianism is monopoly power held by one person or party, with no meaningful opposition or elections and restricted civil liberties.

What are the four forms of totalitarianism?

Communist, theocratic, tribal, and right-wing.

Can a democracy exist without two parties?

Yes. Multiparty and dominant-party democracies both exist. What defines a democracy is genuine electoral competition, free and fair elections, and protected civil liberties — not the number of parties.

What is common law, and where does it come from?

A legal system built on tradition, precedent, custom, and judicial interpretation. Originated in England; used in the UK, US, Canada, Australia, and India.

What is civil (code) law, and where does it come from?

A system based on a detailed written codification of rules, where judges apply the code rather than build precedent. Derived from Roman law; the most widespread system worldwide — continental Europe, Latin America, Japan.

What is Islamic law, and where is it derived from?

Law derived from religious sources, principally the Qur'an and the Sunnah, governing conduct including commerce — for example the prohibition on interest (riba). Applied in Islamic countries, often alongside civil or common law.

What is socialist law, and where does it come from?

A system derived from Marxist socialist doctrine, emphasizing state ownership of property and subordination of law to state economic goals. Historically the USSR, China, and other communist states.

Which legal system does the US use, and which is most common worldwide?

The US uses common law. Civil (code) law is the most widely used system worldwide.

What is the principle of sovereignty?

A state has supreme authority within its own territory and is free from external interference — no government can dictate another government's actions inside its own borders.

What are the three jurisdictional principles?

Nationality — a country has jurisdiction over its citizens and firms anywhere in the world. Territoriality — a country has jurisdiction over anyone inside its borders. Protective — a country has jurisdiction over conduct abroad that harms its national security or interests.

What is the doctrine of comity?

The principle that nations extend mutual respect to each other's laws, institutions, and judicial decisions — out of courtesy and reciprocity rather than legal obligation.

What is the act of state doctrine?

The rule that courts of one country will not sit in judgment on the legality of acts a foreign government carries out within its own territory.

What is the FCPA?

The Foreign Corrupt Practices Act of 1977 — US law prohibiting US firms and their agents from bribing foreign government officials to obtain or retain business. It also imposes accounting and recordkeeping requirements. Small facilitating payments for routine administrative actions are a narrow exception.

What are the four key technological developments discussed?

The Internet of Things, blockchain, artificial intelligence and machine learning, and robotics — including combinations of these.

What is the Internet of Things?

A network of physical devices embedded with sensors and connectivity that collect and exchange data — applied to supply chains, logistics, and manufacturing.

What is blockchain, and why does it matter internationally?

A distributed, tamper-resistant ledger that allows trusted record-keeping without a central intermediary. Applications include trade finance, supply chain provenance, and cross-border contracts.

Why do these technological developments matter to MNCs?

They reshape cost structures, supply chains, and where work is physically located, and they create new regulatory exposure around data privacy, cross-border data flows, and intellectual property.