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24 terms

Business in Action Chapter 3

STUDY
PLAY
Economic Globalization
The increasing integration and interdependence of national economics around the world
Economies of Scale
Savings from buying parts and materials, manufacturing, or marketing in large quantities.
Balance of Trade
Total value of the products a nation exports minus the total value of the products it imports, over some period of time
Trade Surplus
Favorable trade balance created when a country exports more than it imports
Trade Deficit
Unfavorable trade balance created when a country imports more than it exports
Balance of Payments
Sum of all payments one nation receives from other nations minus the sum of all payments it makes to other nations, over some specified period of time.
Exchange Rate
Rate at which the money of one country is traded for the money of another.
Free Trade
International trade unencumbered by restrictive measures
Fair Trade
A voluntary approach to trading with artisans and farmers in developing countries, guaranteeing them above-market prices ad a way to protect them from exploitation by larger, more powerful trading partners
Protectionism
Government policies aimed at shielding a country's industries from foreign competition
Import Quotas
Limits placed on the quantity of imports a nation will allow for a specific product.
Embargo
Total ban on trade with a particular nation (a sanction) or of a particular product
Dumping
Charging less than the actual cost or less than the home-country price for goods sold in other countries
Export Subsidies
A form of financial assistance in which producers receive enough money from the government to allow them to lower their prices in order to complete more effectively in the world market.
Trading Blocs
Organizations of nations that remove barriers to trade among their members and that establish uniform barriers to trade with nonmember nations
Stereotyping
Assigning a wide range of generalized attributes, which are often superficial to or even false, to an individual based on his or her membership in a particular culture or social group.
Ethnocentrism
Judging all other groups according to the standards, behaviors, and customs of one's own group
Importing
Purchasing goods or services from another country and bringing them into one's own country
Exporting
Selling and shipping goods or services to another country
Foreign Direct Investment (FDI)
Investment of money by foreign companies in domestic business enterprises
Multinational Corporations (MNC's)
Companies with operations in more than one country
Multidomestic Strategy
Decentralized approach to international expansion in which a company creates highly independent operating units in each new country
Global Strategy
Highly centralized approach to international expansion, with headquarters in the home country making all major decisions
Transnational Strategy
Hybrid approach that attempts to reap the benefits of international scale while being responsive to local market dynamics