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global business exam

Terms in this set (50)

mercantilism
an economic philosophy advocating that countries should simultaneously encourage exportd and discourage imports
fdi
foreign direct investment
World Trade Organization (WTO)
a trade organization that replaced the old General Agreement on Tariffs and Trade (GATT)
first mover advantage
economic and strategic advantage gained by being the first company to enter an industry
acquistion
the act of obtaining something, especially as an addition to a larger collection, something obtained
roll conflict
A situation in which a person is expected to play two incompatible roles. For example, a boss will suffer role conflict if forced to fire an employee who is also a close friend.
Sullivan principles
the names of two corporate codes of conduct, developed by the African-American preacher Rev. Leon Sullivan, promoting corporate social responsibility:
tragedy of the commons
the tendency for a common resource to be overused
Foreign Corrupt Practices Act
makes it illegal for US firms and their representatives to engage in corrupt practices overseas
convention on combating bribery of foreign public officals in internstionsl business transactions
the convention excludes facilitating payments made to expedite routine government action from the convention
social responsibility
a firm's obligation to improve its positive effects on society and reduce its negative effects
ethical dilemma
a situation in which more than one side of an issue can be supported with valid arguments
cultural relativism
the practice of judging a culture by its own standards
Righteous Moralist
a multinational's home country standards of ethics should be followed in foreign countries
naive immoralist
Approach that accepts ignoring ethical norms if others do so too.
universal declaration of human rights
fundamental rights that transcend national borders and cultures
Just Distribution
A distribution of goods and services that is considered fair and equitable
free trade
international trade free of government interference
absolute advantage
the ability to produce a good using fewer inputs than another producer
David Ricardo
English economist who argued that the laws of supply and demand should operate in a free market
tariff sealing
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teriff rate quota
a trade policy tool used to protect a domestically-produced commodity or product from competitive imports. A TRQ combines two policy instruments that nations historically have used to restrict imports
subside
settle down; descend; grow quiet
Important Quota
A limit on the number of products in certain categories that a nation can import.
export incentives
are a form of assistance that governments provide to firms or industries within the national economy, in order to help them secure foreign markets
Leontief's paradox
economics is that a country with a higher capital per worker has a lower capital/labor ratio in exports than in imports.
Smith Connally Act
required unions to wait 30 days prior to striking allowing the President to seize the plant
dumping
selling goods in another country below market prices
first mover advantage
any advantage that comes to a firm because it exploits an opportunity before any other firm does
subsidy
a government payment that supports a business or market
Franchising Advantages
Low development costs and risks
greenfeild investment
is a type of foreign direct investment (FDI) where a parent company builds its operations in a foreign country from the ground up.
value to rate ratio
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imf
international monetary fund
Diversifying
Investing in different types of securities.
differential advantage
a company's competitive edge such as lower price, superior quality or unique product features
relative advantage
product's degree of superiority and attractiveness to customers over similar existing products
competitive advantage
providing greater value for customers than competitors can
Export Administration Act
Once controlled the type of goods that could be exported to certain "unfriendly" countries
Buy America Act
Govt. policy that makes govt people buy 51% American made goods
globabl commons
eart unowened resources
mission statement
an outline of the fundamental purposes of an organization
promissory note
a written contract with a promise to pay a supplier a specific sum of money at a definite time
Business Ethics
The use of ethics in making business decisions
Stock of FDI
the total accumulated value of foreign-owned assets at a given time
Flow of FDI
the amount of FDI undertaken over a given time period
Outflows of FDI
Flow of foreign direct investment out of a country
Inflows of FDI
Flow of foreign direct investment into a country
international theory
thebargument that firms prefer fdi over licensing
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