International Business, Economic Development, Culture, and Business Ethics***

Vocabulary flashcards derived from lecture notes covering globalization, political and economic systems, cultural principles, and global business ethics.

Globalization of markets

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

Globalization of production

The sourcing of goods and services from locations around the world to take advantage of national differences in the cost of the factors of production.

Multinational enterprise (MNE)

Any business that has productive activities in 2 or more countries.

Political system

System of government in a nation, assessed in terms of the degree to which it emphasizes collectivism versus individualism and is democratic or totalitarian.

Socialists

Those who believe in public ownership of the means of production for the common good of society, tracing modern roots to Karl Marx.

Democracy

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

Representative democracy

A form of democracy where elected representatives vote on behalf of constituents.

Totalitarianism

A form of government in which one person or political party exercises absolute control over all spheres of human life, and opposing political parties are prohibited.

Communist totalitarianism

A version of totalitarianism that advocates achieving socialism through totalitarian dictatorship.

Theocratic totalitarianism

A form of totalitarianism where political power is monopolized by a party, group, or individual that governs according to religious principles.

Market economy

An economic system in which the goods and services a country produces and the quantity in which they are produced is determined by supply and demand.

Command economy

An economic system in which the government plans the goods and services a country produces, the quantity in which they are produced, and the price at which they are sold.

Mixed Economy

An economic system that combines elements of both market-driven private enterprise and state intervention or public ownership.

Mixed economy

An economic system that combines elements of both market-driven private enterprise and state intervention or public ownership.

Common law

A legal system based on tradition, precedent, and custom, found in most of Great Britain's former colonies including the US.

Civil law

A legal system based on a detailed set of laws organized into codes, found in more than 80 countries including Germany, France, Japan, and Russia.

Theocratic law

A legal system based on religious teachings, with Islamic law being the most widely practiced.

Contract law

The body of law that governs contract enforcement, specifying conditions under which an exchange is to occur and detailing rights and obligations of parties.

Intellectual Property

Is any property that is the product of an individuals mind.

Property rights

Legal rights over the use to which a resource is put and over the use made of any income derived from that resource.

Private action

Theft, piracy, blackmail, and the like by private individuals or groups such as organized crime.

Public action

Action where public officials extort income or resources from property holders.

Patents

Legal rights that give the inventor exclusive rights to the manufacture, use, or sale of an invention.

Product liability

Holds a firm and its officers responsible when a product causes injury, death, or damage.

Gross domestic product GDP

Measures the total monetary or market value of all the finished goods and services produces within countries borders in a specific time period

Purchasing power parity (PPP)

An adjustment to gross domestic product (GDP) that provides a more direct comparison of living standards in different countries.

Human development index (HDI)

A measure of development that assesses life expectancy at birth, educational attainment, and incomes.

Innovation

New products, new processes, new organizations, new management practices, and new strategies.

Entrepreneurs

Individuals who are the first to commercialize innovative new products and processes.

Privatization

The transfer of ownership of state property to private individuals.

Cross-cultural literacy

An understanding of how cultural differences across and within nations can affect the way business is practiced.

Culture

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

Values

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

Norms

The social rules that govern the actions of people towards one another.

Folkways

Routine conventions of everyday life.

Mores

Norms that are central to the functioning of a society and its social life.

Social stra

Hierarchical division of all societies into social categories or strata, often defined by 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 closed system of stratification where social position is determined by the family into which a person is born.

Class consciousness

A condition where people perceive themselves in terms of their class background, shaping their relationships with members of other classes.

Ethics

Accepted principles of right or wrong that govern the conduct of a person, members of a profession, or actions of an organization.

Business ethics

Accepted principles of right or wrong governing the conduct of business people.

Ethical strategy

A strategy or course of action that does not violate accepted ethical principles.

Ethical dilemma

Situations in which no available course of action is absolutely acceptable from an ethical or moral perspective.

Tragedy of the commons

Occurs when a resource held in common by all but owned by no one is overused by individuals, resulting in its degradation.

Facilitating payments

Also known as speed money, payments excluded from bribery prohibitions that are made to expedite or secure routine government actions.

Friedman doctrine

A straw man ethical view stating that the social responsibility of business is to increase profits, as long as the company stays within the rules of law.

Cultural relativism

The belief that ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate.

Righteous moralist

The view that a multinational enterprise's home country standards of ethics are appropriate for companies to follow in foreign countries.

Naive immoralist

The view that if a manager of a multinational enterprise sees firms from other nations not following ethical norms in a host nation, that manager should not either.

Utilitarian approach to ethics

An ethical approach holding that the moral worth of actions or practices is determined by their consequences, favoring actions that produce the greatest good for the greatest number of people.

Rights theories

Ethical perspectives holding that human beings have fundamental rights and privileges that transcend national boundaries and culture.

Justice theories

Ethical theories focusing on the attainment of a just distribution—one that is fair and equitable—of economic goods and services.

Code of ethics

A business's formal statement of ethical priorities.