INBU final

human resource management (HRM)

Activities an organization conducts to use its human resources effectively

expatriate manager

A national of one country appointed to a management position in another country.

staffing policy

Strategy concerned with selecting employees for particular jobs.

corporate culture

The organization’s norms and value systems.

ethnocentric staffing policy

A staffing approach within the multinational enterprise in which all key management positions are filled by parent-country nationals

polycentric staffing policy

A staffing policy in a multinational enterprise in which host-country nationals are recruited to manage subsidiaries in their own country, while parent-country nationals occupy key positions at corporate headquarters.

geocentric staffing policy

A staffing policy where the best people are sought for key jobs throughout a multinational enterprise, regardless of nationality.

expatriate failure

The premature return of an expatriate manager to the home country.

marketing mix

Choices about product attributes, distribution strategy, communication strategy, and pricing strategy that a firm offers its targeted markets.

market segmentation

identifying groups of consumers whose purchasing behavior differs from others in important ways.

intermarket segment

A segment of customers that spans multiple countries, transcending national borders

business analytics

The knowledge, skills, and technology that allow for the exploration as well as deeper investigation of a company’s international business strategies and activities to gain insight and drive future strategy development and implementation.

big data

A massive volume of structured and/or unstructured data that are so large they may be difficult to process using traditional database and software techniques.

international market research

The systematic collection, recording, analysis, and interpretation of data to provide knowledge that is useful for decision making in a global company

concentrated retail system

A retail system in which a few retailers supply most of the market

fragmented retail system

A retail system in which there are many retailers, none of which has a major share of the market.

channel length

The number of intermediaries that a product has to go through before it reaches the final consumer.

exclusive distribution channel

A distribution channel that outsiders find difficult to access.

channel quality

The expertise, competencies, and skills of established retailers in a nation and their ability to sell and support the products of international businesses.

social media

A technology that facilitates the sharing of information and the building of virtual global networks and communities.

source effects

Effects that occur when the receiver of the message (i.e., a potential consumer) evaluates the message on the basis of status or image of the sender.

country of origin effects

A subset of source effects, the extent to which the place of manufacturing influences product evaluations.

noise

The number of other messages competing for a potential consumer’s attention.

push strategy

A marketing strategy emphasizing personal selling rather than mass media advertising.

pull strategy

A marketing strategy emphasizing mass media advertising as opposed to personal selling.

price elasticity of demand

A measure of how responsive demand for a product is to changes in price.

elastic

A small change in price produces a large change in demand.

inelastic

When a large change in price produces only a small change in demand.

strategic pricing

The concept containing the three aspects: predatory pricing, multipoint pricing, and experience curve pricing.

predatory pricing

Reducing prices below fair market value as a competitive weapon to drive weaker competitors out of the market (“fair” being cost plus some reasonable profit margin).

multipoint pricing

Occurs when a pricing strategy in one market may have an impact on a rival’s pricing strategy in another market.

experience curve pricing

Aggressive pricing designed to increase volume and help the firm realize experience curve economies

supply chain management

The integration and coordination of logistics, purchasing, operations, and market channel activities from raw material to the end-customer.

purchasing

The part of the supply chain that includes the worldwide buying of raw material, component parts, and products used in manufacturing of the company’s products and services.

logistics

The part of the supply chain that plans, implements, and controls the effective flows and inventory of raw material, component parts, and products used in manufacturing.

upstream supply chain

The portion of the supply chain from raw materials to the production facility.

downstream supply chain

The portion of the supply chain from the production facility to the end-customer.

total quality management (TQM)

Management philosophy that takes as its central focus the need to improve the quality of a company’s products and services.

Improved quality control reduces costs by

Increasing productivity because time is not wasted producing producing poor-quality products that cannot be sold, leading to a direct reduction in unit costs. Lowering rework and scrap costs associated with defective products. Reducing the warranty costs and time associated with fixing defective products.

Six Sigma

Statistically based methodology/goal for improving product quality and boosting productivity. 99.99966 percent accurate, 3.4 defects per million units.

ISO 9000

Certification process that requires certain quality standards that must be met

minimum efficient scale

The level of output at which most plant-level scale economies are exhausted.

flexible manufacturing technology

Manufacturing technology designed to improve job scheduling, reduce setup time, and improve quality control.

lean production

See flexible manufacturing technology.

mass customization

The production of a variety of end products at a unit cost that could once be achieved only through mass production of a standardized output.

flexible machine cells

Flexible manufacturing technology in which a grouping of various machine types, a common materials handler, and a centralized cell controller produce a family of products.

global learning

The flow of skills and product offerings from foreign subsidiary to home country and from foreign subsidiary to foreign subsidiary.

offshore factory

A factory that is developed and set up mainly for producing component parts or finished goods at a lower cost than producing them at home or in any other market.

source factory

A factory whose primary purpose is also to drive down costs in the global supply chain. Managers of this factory have more of a say in certain decisions.

contributor factory

A factory that serves a specific country or world region.

outpost factory

A factory that can be viewed as an intelligence-gathering unit. Often placed near a competitor’s headquarters.

lead factory

A factory that is intended to create new processes, products, and technologies that can be used throughout the global firm in all parts of the world.

make-or-buy decision

The strategic decision concerning whether to produce an item in-house (“make”) or purchase it from an outside supplier (“buy”).

global distribution center

A facility that positions and allows customization of products for delivery to worldwide wholesalers or retailers or directly to consumers anywhere in the world; also called a global distribution warehouse.

global inventory management

The decision-making process regarding the raw materials, work-in-process (component parts), and finished goods inventory for a multinational corporation.

packaging

The container that holds the product itself. It can be divided into primary, secondary, and transit packaging.

transportation

The movement of inventory through the supply chain.

reverse logistics

The process of moving inventory from the point of consumption to the point of origin in supply chains for the purpose of recapturing value or proper disposal.

just in time (JIT)

Inventory logistics system designed to deliver parts to a production process as they are needed, not before.

blockchain technology

A database mechanism that allows for the transparent sharing of information within a business network such as a supply chain.

global supply chain coordination

The shared decision-making opportunities and operational collaboration of key global supply chain activities.

just-in-case

A strategy, where the firm holds a larger buffer stocks of critically important inventory just-in-case of future supply chain disruptions.

MITI

Japan’s Ministry of International Trade and Industry

export management company (EMC)

Export specialist that acts as an export marketing department for client firms.

letter of credit

Issued by a bank, indicating that the bank will make payments under specific circumstances.

bill of exchange

An order written by an exporter instructing an importer, or an importer’s agent, to pay a specified amount of money at a specified time.

sogo shosha

Japanese trading companies; a key part of the keiretsu, the large Japanese industrial groups.

draft

An order written by an exporter telling an importer what and when to pay.

sight draft

A draft payable on presentation to the drawee

time draft

A promise to pay by the accepting party at some future date

bill of lading

A document issued to an exporter by a common carrier transporting merchandise. It serves as a receipt, a contract, and a document of title.

The Export-Import Bank (EXIM Bank) of the United States

Agency of the U.S. government whose mission is to provide aid in financing and facilitate exports and imports.

countertrade

The trade of goods and services for other goods and services.

barter

The direct exchange of goods or services between two parties without a cash transaction.

counterpurchase

A reciprocal buying agreement.

offset

Agreement to purchase goods and services with a specified percentage of proceeds from an original sale in that country from any firm in the country.

switch trading

Use of a specialized third-party trading house in a countertrade arrangement.

buyback

Agreement to accept a percentage of a plant’s output as payment for contract to build a plant.

strategic alliances

Cooperative agreements between potential or actual competitors.

timing of entry

Entry is early when a firm enters a foreign market before other foreign firms and late when a firm enters after other international businesses have established themselves.

first-mover advantages

Advantages accruing to the first to enter a market.

first-mover disadvantages

Disadvantages associated with entering a foreign market before other international businesses.

pioneering costs

Costs an early entrant bears that later entrants avoid, such as the time and effort in learning the rules, failure due to ignorance, and the liability of being a foreigner.

exporting

Sale of products produced in one country to residents of another country.

turnkey project

A project in which a firm agrees to set up an operating plant for a foreign client and hand over the “key” when the plant is fully operational.

licensing agreement

Arrangement in which a licensor grants the rights to intangible property to a licensee for a specified period and receives a royalty fee in return.

franchising

A specialized form of licensing in which the franchiser sells intangible property to the franchisee and insists on rules to conduct the business.

joint venture

A cooperative undertaking between two or more firms.

wholly owned subsidiary

A subsidiary in which the firm owns 100 percent of the stock.

strategy

Actions managers take to attain the firm’s goals

profitability

A ratio or rate of return concept.

profit growth

The percentage increase in net profits over time.

value creation

Performing activities that increase the value of goods or services to consumers.

operations

The various value creation activities a firm undertakes

core competence

Firm skills that competitors cannot easily match or imitate.

location economies

Cost advantages from performing a value creation activity at the optimal location for that activity.

global web

When different stages of value chain are dispersed to those locations around the globe where value added is maximized or where costs of value creation are minimized.

experience curve

Systematic production cost reductions that occur over the life of a product