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Globalization

the trend of the world economy toward becoming a more interdependent system

Global village

refers to the "shrinking" of time and space as air travel and the electronic media have made it easier for the people of the globe to communicate with one another.

e-commerce

the buying and selling of products and services through computer networks

global economy

refers to the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets

multinational corporation

multinational enterprise, is a business firm with operations in several countries

multinational organization

a nonprofit organization with operations in several countries

ethnocentric managers

believe that their native country, culture, language, and behavior are superior to all others

parochialism

a narrow view in which people see things solely through their own perspective

polycentric managers

the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone.

Geocentric managers

accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective.

Maquiladoras

manufacturing plants allowed to operate in Mexico with special privileges in return for employing Mexican citizens.

Outsourcing

using suppliers outside of the country to provide goods and services

Global outsourcing

using suppliers outside of the United States to provide labor, goods, or services

Importing

a company buys goods outside of the country and resells them domestically

Exporting

a company produces goods domestically and sells them outside the country

Countertrading

bartering goods for goods

Licensing

a company allows a foreign company to pay it a fee to make or distribute the first company's product or service

Franchising

a form of licensing in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first company's brand name and a package of materials and services

Joint Venture

also known as a strategic alliance, with a foreign company to share the risks and rewards of starting a neew enterprise together in a foreign country

Wholly-owned subsidiary

a foreign subsidiary that is totally owned and controlled by an organization

Greenfield venture

is a foreign subsidiary that the owning organization has build from scratch

Free trade

the movement of goods and services among nations without political or economic obstruction.

Trade protectionism

the use of government regulations to limit the import of goods and services

Tariff

a trade barrier in the form of a customs duty or tax levied mainly on imports

Import quota

a trade barrier in the form of a limit on the numbers of a product that can be imported

Dumping

the practice of a foreign company's exporting products abroad at a lower price than the price in the home market - or even below the costs of production - in order to drive down the price of the domestic product.

Embargo

a complete ban on the import and export of certain products

World Trade Organization (WTO)

designed to monitor and enforce trade agreements

World bank

to provide low-interest loans to developing nations for improving transportation, education, health, and telecommunications

International Monetary Fund (IMF)

designed to assist in smoothing the flow of money between nations

Exchange rate

the rate at which one country's currency can be exchanged for another country's currency

Trade bloc

also known as economic community, is a group of nations within a geographical region that have agreed to remove trade barriers with one another.

North American Free Trade Agreement (NAFTA

a trading bloc consisting of the United States, Canada, and Mexico

European Union (EU)

consistsof 27 trading partners in Europe

Asia-Pacific Economic Cooperation (APEC)

a group of 21 Pacific Rim countries whose purpose is to improve economic and political ties

Association of Southeast Asian Nations (ASEAN)

a trading bloc consisting of 11 countries in Asia

Mercosur

the largest trade bloc in Latin America and has four core members - Argentinga, Brazil, Paraguay, and Uruguay, with venezuala scheduled to become a full member upon ratification by other countries - and a five associate members: Bolivia, Chile, Columbia, Ecuador, and Peru

The Central America Free Trade Agreement (CAFTA-DR

involves the United States and Costa Rica, the Dominican republic, El Salvador, Guatemala, Honduras, and Nicaragua - is intended to reduce tariffs and other barriers to free trade.

Culture

the shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people.

Low-context culture

shared meanings are primarily derived from written and spoken words

High-context culture

people rely heavily on situational cues for meaning when communicating with others.

Hofstede model of four cultural dimensions

- identified four dimensions along which national cultures can be placed 1) individualism/collectivism 2)power distance 3) uncertainty avoidance 4) Masculinity/femininity.

Globe Project

a massive and ongoing cross-cultural investigation of nine cultural dimensions involved in leadership and organizational processes.

Monochromic time

a preference for doing one thing at a time

Polychromic time

a preference for doing more than one thing at a time

Expatriates

people living or working in a foreign country

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