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BUAD384
Global Business Environment Ch1-5
| Term | Definition |
|---|---|
| Globalization | refers to the trend towards a more integrated global economic system |
| World Trade Organization (WTO) | the international organization that regulates trade among nations |
| International Monitory Fund (IMF) | stables currency in the world |
| World Bank | leads for infrastructure in developing countries by giving loans to developing countries |
| United Nations (UN) | promotes world peace |
| Barriers to Trade | culture, language, limited internet (some countries), distance, time zones |
| Global of Production | the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor energy, land, and capital) |
| Globalization of markets | merging of historically distinct & separate national markets into one huge global market |
| General Agreement on Tariffs & Trade (GATT) | treaty that countries sign to lover trade barriers & to promote free trade |
| Multinational Enterprise (MNE) | a firm that owns business operation in more than one country |
| North American Free Trade Agreement (NAFTA) | agreement between the U.S., Mexico, and Canada to promote free trade |
| Comparative advantage | doing what you do best & let the other countries do what they do best & then trade |
| 10% surprise | cross-border economic & other business activities between other countries fall in the 5-15% |
| Democracy | political system in which government leaders are elected directly by the wide participation of the people or by their representatives |
| Collectivism | What is best for the group |
| Individualism | What is best for you |
| Totalitarian System | political system in which individuals govern without the support of the people, tightly control people's lives, and do not tolerate opposing viewpoints |
| Political system | system of governance in a nation |
| Privatization | the sale of state-owned enterprises to private investors |
| Market Economy | all productive activities are privately owned as opposed to being owned by the state |
| Command Economy | the government plans the goods & services that a country produce, the quantity at which they are produced, & the price at which they are sold |
| Mixed Economy | between a market and command economy |
| Intellectual Property | -property that results from people's intellectual talents and abilities -can be protected by patents, copyrights, & trademarks |
| Patents | grants the inventor the new product exclusive rights for a period of time |
| Copyrights | exclusive legal rights to authors, composers, playrights, artists, & publishers |
| Trademarks | for designs & names |
| Gross National Income (GNI) | measures the total annual income of a nation's residents |
| Human Development Index (HDI) | a composite statistic of life expectancy, education, and income indices used to rank countries into four tiers of human development. |
| What facilitates innovation? | -The more economic freedom a country has the more economic growth they achieve -Businesses need strong protection of property rights so that their profit isn't going to criminals of the state |
| Why is the middle class important? | They are more likely to get involved because they have the means, money, & are willing to seek them out |
| Theocracy | political system in which a country's religious leaders are also its political leaders |
| Civil law | -written law -contracts in civil law are short than in common law |
| Capitalism | an economic system based on private ownership of capital |
| Common law | -based on history & tradition -contracts in common law are more detailed, specific, & longer than civil law |
| Culture | a system of values & norms that are shared among a group of people |
| Values | abstract ideas about what a society believes to be good, right, & desirable |
| Norms | social rules & guidelines that prescribe appropriate behavior in particular situations |
| 3 main methods of managing political risk: | adaption, information gathering, political influence |
| Companies can incorporate risk in four ways: | -Partnerships, Localization, Development Assistance, and Insurance |
| Information Gathering: | gathering information that will help them predict and manage political risk |
| Lobbying: | policy of hiring people to represent a company's views on political matters |
| Country's Legal System: | a set of laws and regulations, including the processes by which its laws are enacted and enforced and the ways in which its courts hold parties accountable by their actions |
| Nationalism | devotion of a people to their nation's interest and advancement |
| A common law legal system reflects three elements: | -Tradition: a country's legal history -Precedent: past cases that have come before the courts -Usage: how laws are applied in specific situations |
| Foreign Direct Investment (FDI) | occurs when a firm invests resources in business activities outside its home country |
| Intellectual Property (IP) | property that results from people's intellectual talent and abilities - IP laws are designed to compensate people whose property rights are violated |
| Foreign Corrupt Practices Act | prohibits U.S. companies from paying bribes to foreign government officials in order to gain business |
| Social Responsibility | the idea that business people should take the social consequences of economic actions into account when making business decisions |
| Socialism | belief that social and 3conomic equality is obtained through government ownership and regulation of the means of production |
| Representative Democracy | Democracy in which citizens elect individuals from their groups to represent their political views |
| Communism | belief that social and economic activity can be obtained only by granting the government ownership and control over all types of economic activity |
| Property Rights | legal rights to resource and any income they generate |
| Corporate Social Responsibility | Practice of companies going beyond legal obligations to actively balance commitments in investors, customers, other companies, and communities |
| Three Layers of Activity (CSR) | traditional philanthropy, risk management, strategic |
| Centrally Planned Economy | economic system in which a nations land, factories, and other economic resources are owned by the government, which plans nearly all economic activity |
| International Trade | purchase, sale or exchange of goods and services across national borders |
| Comparative Advantages | inability of a nation to produce a good more efficiently than other nations but an ability to produce that good more efficiently than it does any other good |
| Subsidies | financial assistance to domestic producers in the form of cash payments, low-interest loans, tax breaks, product price supports, or other firms |
| tariff | government tax levied on a product as it enters or leaves a country |
| quota | restriction on the amount of a good that can enter or leave a country during a certain period of time |
| embargo | complete ban on trade in one or more products with a particular country |
Created by:
NickUD
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