International Business Concepts Review

Flashcards covering key concepts in international business and economics.

Multinational Enterprise

A company made up of entities in more than one nation, operating under a decision-making structure with a common strategy.

Social Desirability Bias

The tendency of respondents to provide answers designed to please the interviewer rather than reflect their true beliefs or feelings.

Trade Surplus

The amount by which the value of a nation's exports exceeds the value of its imports.

IFRS

The accounting standards of the International Accounting Standards Board.

Licensing

A contractual arrangement where one firm grants access to its patents, trade secrets, or technology to another firm for a fee.

Price

The element of the marketing mix defined as the value exchanged between the customer and the company for a product.

Functional Currency

The primary currency of a business.

Environmental Screening

The evaluation process where a firm scans the world for changes in environmental forces that might affect it.

Stakeholder Theory

An understanding of how a business operates that takes into account all identifiable interest holders.

Turnkey Project

An export of a firm’s technology, management expertise, and possibly capital equipment.

Industrial Products

Products that generally require less adaptation when being sold internationally.

Exchange Rate

The price of one currency stated in terms of another.

Self-Reference Criterion

The unconscious reference to your own cultural values when judging the behavior of others in a new and different environment.

Nationalization

The process of taking privately owned property and converting it to a publicly owned asset.

Balance of Payments

The record of a country’s transactions with the rest of the world.

Global Mindset

The two components include intellectual and global emotional intelligence.

Consumer Price Index

A measure used to evaluate inflation.

Domestic Environment

The uncontrollable forces originating in the home country that influence the life and development of the firm.

Gold Standard

A monetary system that defines the value of its currency in terms of a fixed amount of gold.

Brain Drain

The loss by a country of its most intelligent and best-educated people due to labor immigration.

Current Rate Method

The method that translates assets and liabilities at the rate in effect the day the balance sheet is produced.

Tariffs

Taxes on imported goods for the purpose of raising their price to reduce competition.

Market Screening

A process to identify markets by analyzing environmental forces to eliminate the less desirable ones.

Product

An element of the marketing mix defined as the means by which a company satisfies a customer's needs.

Vision Statement

The desired future position of an organization if it can acquire the necessary competencies.

Mission Statement

Defines the organization’s purpose and scope.

Marketing Mix

A set of strategic decisions made about the product and its promotion, pricing, and distribution.

Floating Exchange Rate

A condition where exchange rates are determined by supply and demand.

Power Distance

One of Hofstede’s dimensions measuring the extent to which members of a society expect power to be distributed.

Social Loafing

The tendency of some people to put forth less effort when they are members of a group.

Environment

All the forces that influence the life and development of the firm.

Economies of Scale

The predictable decline in the average costs of producing each unit of output as production increases.

Mercantilism

A traditional trade theory that views precious metals as the only source of wealth.

Trade Deficit

The amount by which the value of imports into a nation exceeds the value of its exports.

Quotas

Numerical limits placed on specific classes of imports.

Treaty

An agreement between countries, also known as a convention, compact, or protocol.

Antitrust Laws

Laws that prevent inappropriate large concentrations of power due to price fixing, monopolies, etc.

Purchasing Power Parity

A means of adjusting exchange rates so they reflect equivalent purchasing power.

Population Density

A measure of the number of inhabitants per area unit.

Gross Domestic Product

The total monetary value of all goods and services produced within a nation.

Spot Rate

The exchange rate between two currencies for delivery within 2 business days.

Monetary Policies

Government policies that control the amount of money in circulation and its growth rate.