International Business Fundamentals Flashcards

Vocabulary flashcards covering key terms and core concepts from Chapters 1 to 4 of International Business.

Globalization

The macro-trend of intense economic interconnectedness among the nations of the world.

International Business

The performance of trade and investment activities across national borders, also known as cross-border business.

Internationalization

The systematic tendency of companies to deepen their international business activities, leading to the widespread diffusion of products, technology, and knowledge worldwide.

International Trade

The exchange of products (merchandise) and services (intangibles) across national borders, typically conducted through exporting and importing.

Exporting

The sale of products or services to customers located abroad from a base in the home country or a third country.

Importing

Also known as global sourcing, the procurement of products or services from independent suppliers or company-owned subsidiaries located abroad for consumption in the home country or a third country.

International Investment

The transfer of assets to another country or the acquisition of assets in that country, including factors of production such as capital, technology, managerial talent, and infrastructure.

International Portfolio Investment

Passive ownership of foreign securities, such as stocks and bonds, for the purpose of generating financial returns without active management control.

Foreign Direct Investment (FDI)

An internationalization strategy in which a firm establishes a physical presence abroad through the acquisition of productive assets such as capital, technology, labor, land, plant, and equipment.

Entrepot Economies

International depot economies—such as Singapore, Hong Kong, and the Netherlands—that import a large volume of products, process some into higher value-added goods, and re-export them to other destinations.

Sharing Economy

A business model in which firms and individuals undertake online peer-to-peer exchange of goods and services.

Commercial Risk

The potential loss or failure resulting from poorly executed business strategies, unsuitable business partners, or poorly timed foreign market entry.

Cross-Cultural Risk

A situation or event in which a cultural misunderstanding puts some human value at stake due to differences in language, lifestyle, customs, and religion.

Country Risk

Also known as political risk, the potentially adverse effects on company operations and profitability caused by developments in the political, legal, and economic environment of a foreign country.

Currency Risk

Also known as financial risk, the risk of adverse fluctuations in exchange rates when conducting international transactions across multiple national currencies.

Focal Firm

The initiator of an international business transaction that designs and produces goods or services, including multinational enterprises, small and medium enterprises, and state-owned enterprises.

Distribution Channel Intermediary

A specialist firm that provides various logistics and marketing services for focal firms as part of international supply chains, operating both abroad and in the focal firm's home country.

Facilitator

A firm or individual with specialized expertise (such as banks, logistics service providers, or freight forwarders) that assists focal firms in carrying out international business transactions.

Freight Forwarder

A specialized logistics service provider that arranges international shipping on behalf of exporting firms.

State-Owned Enterprises (SOEs)

Companies owned by government or public sector entities that participate in international business as suppliers, buyers, and regulators.

Multinational Enterprise (MNE)

A large company with substantial resources that performs various business activities through subsidiaries and affiliates in multiple countries.

Small and Medium-Sized Enterprises (SMEs)

Manufacturers or service providers with fewer than $500$ employees (or fewer than $250$ employees in the European Union).

Born Global Firm

A young entrepreneurial SME that initiates international business activity very early in its evolution, typically within $3$ years of founding, generating over $25\%$ of sales from abroad.

International Entrepreneurship

The process where innovative smaller firms actively pursue global business opportunities regardless of national borders.

Digitalization

The process of enabling or transforming business functions, operations, and activities by leveraging digital technologies and digitized data.

Internet of Things

An online environment enabling machine-to-machine connectivity and data sharing.

Value Chain

The sequence of value-adding activities a firm performs in the course of developing, producing, marketing, and servicing a product.

Decoupling

The trend where multinational enterprises reduce their dependence on sourcing products from suppliers based in China.

Contagion

The tendency for a financial or monetary crisis in one country to spread rapidly to other countries due to integrated national economies.

Offshoring

The relocation of manufacturing and other value-chain activities to cost-effective locations abroad.

Reshoring

The return of manufacturing and service activities back to the firm's home country.

Nearshoring

The relocation of manufacturing and service activities to a nearby foreign country.

Income Distribution

The allocation of GDP and national income among the individual members and groups of a society.

Culture

The set of values, beliefs, customs, arts, and other products of human thought and work that characterize the people of a given society.

Socialization

The process of learning the rules and behavioral patterns appropriate to one's society.

Acculturation

The process of adjusting and adapting to a culture different from one's own.

Iceberg Concept of Culture

A conceptual model dividing cultural components into visible high culture, conscious folk culture, and unseen deep culture.

Monochronic

A rigid time orientation where individuals focus on schedules, punctuality, and treat time as a discrete, limited resource.

Polychronic

A flexible, nonlinear time orientation where individuals emphasize relationships and take a long-term perspective over strict schedules.

Cultural Metaphor

A distinctive tradition or institution strongly associated with a particular society that serves as a guide to deciphering its attitudes, values, and behavior.

Low-Context Culture

A culture that relies heavily on explicit, spoken words and detailed verbal explanations to communicate.

High-Context Culture

A culture that emphasizes nonverbal messages, personal relationships, trust, and indirect communication to maintain social harmony.

Individualism vs Collectivism

A cultural dimension describing whether a person functions primarily as an autonomous individual or as an integrated member of a group.

Power Distance

A cultural dimension measuring how a society tolerates and handles inequalities in power among its people.

Uncertainty Avoidance

The extent to which members of a society tolerate risk, ambiguity, and unpredictable situations.

Ethnocentric Orientation

Using one's own culture as the primary benchmark or standard for evaluating and judging other cultures.

Polycentric Orientation

A host-country mindset in which a manager develops a strong affinity with the country in which business is conducted and adapts to local norms.

Geocentric Orientation

A global mindset enabling a manager to evaluate business opportunities across markets without country-specific biases.

Self-Reference Criterion

The unconscious tendency to view and interpret foreign situations through the perspective of one's own cultural background.

Critical Incident Analysis

A analytical method for resolving problematic cross-cultural interactions by developing objectivity and empathy for other viewpoints.

Corporate Governance

The system of administrative procedures, rules, and structures by which corporations are managed, directed, and controlled.

Sustainability

Meeting current human needs without compromising the ability of future generations to meet their own needs.

Corporate Social Responsibility (CSR)

Operating a business in a manner that meets or exceeds the legal, ethical, and commercial expectations of society and stakeholders.

Ethical Dilemma

A decision-making problem involving two or more options where none yields a morally satisfactory outcome.

Relativism

The belief that ethical truths are not absolute, but vary across different groups, cultures, and environments.

Normativism

The belief that ethical behavioral standards are universal and should be consistently upheld across all locations.

Pyramid of Ethical Behavior

A hierarchical framework for corporate governance comprising legal compliance at the base, ethical behavior in the middle, and CSR at the top.

Corruption

The practice of acquiring power, personal advantage, or influence through illegitimate or illegal means, usually at others' expense.

Bribery

The act of offering, giving, receiving, or soliciting items of value to improperly influence the actions of an official or individual in charge.

Grease Payments

Small payments made to low-level government officials to ensure or speed up the execution of routine, legal administrative actions.

Intellectual Property (IP)

Ideas or mental works created by individuals or firms, including inventions, literary works, software, artistic designs, names, and symbols.

Intellectual Property Rights

Legal claims through which proprietary intangible assets are protected from unauthorized commercial use by third parties.

Trademarks

Distinctive signs, logos, or symbols used by companies to identify and distinguish their products or services in the marketplace.

Copyrights

Legal protections granted to the authors and creators of artistic, musical, software, literary, or television works.

Patents

Exclusive legal rights granted to inventors to make, use, and sell new products, processes, or technologies.

Code of Ethics

A formal document describing the foundational moral principles and values that guide decision-making across an enterprise.

Code of Conduct

An operational document translating general ethical principles into clear rules defining required or prohibited employee actions.