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MGMT test 2 chap 8

Terms in this set (31)

Global business
the buying and selling of goods and services by people from different countries
multinational corporation
a corporation that owns businesses in two or more countries
direct foreign investment
a method of investment in which a company builds a new business or buys an existing business in a foreign country
trade barriers
government-imposed regulations that increase the cost and restrict the number of imported goods
Tariff
A tax on imported goods
non tariff barriers
non tax methods of increasing the cost or reducing the volume of imported goods
Protectionism
The use of trade barriers to shield domestic firms from foreign competition
Trading Zones
areas in which tariff and non tariff barriers on trade between countries are reduced or eliminated.
Trading zones
North america, central america, south america, Africa, southeast Asia, Asia pacific, Europe
Consistency
when a MNC has offices, manufacturing plants, and distribution facilities in different countries and runs them using the same rules, guidelines, policies, and procedures. *simple, cheaper
Local adaption
modifying rules, guidelines, policies, and procedures to adapt to differences in foreign customers, governments, and ,regulatory agencies *complex, better sales
exporting
selling domestically produced products to buyers in other countries
cooperative contract
an agreement in which a foreign business owner pays a company a fee for the right to conduct that business in his or her country
Licenseing
domestic company receives royalty payments for allowing licensee to product the licencors product, sell its service, or use its brand name in foreign market.
Franchising
collection of networked firms in which the franchiser, licenses the entire business.
strategic alliance
company combine resources, cost,risk,technology, and people.
wholly owned affiliates
foreign offices, facilities, and manufacturing plants that are 100 percent owned by the parent company
global new ventures
new companies that are founded with an active global strategy and have sales, employees, and financing in different countries
purchasing power
the relative cost of a standard set of goods and services in different countries
Political Risk
Risk of major changes in political regimes that can result from war, revolution, death of leaders, social unrest, or other influential events.
policy uncertainty
the risk associated with changes in laws and government policies that directly affect the way foreign companies conduct business
national culture
the set of shared values and beliefs that affects the perceptions, decisions, and behavior of the people from a particular country
power distance
the extent to which a society accepts the fact that power in organizations is distributed unequally
Individualism
the degree to which individuals should be self sufficient
Collectivism
subordinate to the group, whats best for others.
Masculinity
preference for assertiveness, competition, material success, and achievement
Femininity
a preference for cooperation, modesty, caring for the weak and quality of life
long-term orientation
oriented to the future and defer gratification
short-term orientation
oriented to the present and seek immediate gratification
Indulgence
allows for free gratification of desires/impulses
Restraint
Social norms suppress gratification of desires/impulses
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