question

The buying and selling of goods and services

answer

business

question

the buying and selling of goods and services from people of different countries

answer

global business

question

corpartions that own businesses in two or more countries

answer

mutlinational corporations

question

occurs when a current company buildsn anew business or acquires a new business in a foreign country

answer

direct forieng investment

question

Why do governments use trade barriers?

answer

to make it more expensive or difficult to buy or consume imported

question

the use of trade barriers to protect local economies and their workers from foreign competition

answer

protectionism

question

a direct tax on imported goods

answer

tariff

question

nontax method of increasing the cost or reducing the volume of imported goods

answer

nontarriff barrier

question

specific limit on the amount of imported products

answer

quota

question

a voluntary exporting quota set by a country due to the improting country threating the use of quotas

answer

voluntary export restraints

question

established to protect the health of citizens

answer

government import standards

question

as products are imported they are examined by customs agent who cedides which category the product lies in

answer

customs classification

question

the 5 nontarriff barriers

answer

1) Quotas 2) Voluntary export restraints 3) Government import standards 4) Subsidies 5) customs classifications

question

General Agreement on Tariffs and Trade

answer

An agreement to regulate trade among 120 countries to reduce tariffs and restrictions on trade

question

What was the general agreement on Tariffs and Trade replaced by?

answer

The World trade organization

question

tariff and non-tariff barriers are reduced or eliminated within these zones

answer

regional trading zones

question

world trade organization

answer

replacement for the general agreeement on tariffs and trade and is the adminsitration for trade agreements between countries

question

How are trade disputes between countries settled?

answer

By an arbitration panels of the WTO

question

Do countries at the WTO have veto power?

answer

Not anymore

question

maastricht treary

answer

formed the european union by combining twelve different european currencies and economies into one

question

NAFTA

answer

liberalized trade between US CANADA and mexico

question

CAFTA - DR

answer

central american free trade agreement: US, dominciin republic, and central america

question

UNASAR

answer

union of south american nations: permits free movement between nations by creating a common infastructure and interoceanic highway that establishes the region as a single market by elimainting tariffs

question

ASEAN

answer

association of southeast asian nations

question

APEC

answer

asia pacific economic cooperation

question

The two largest and most important trading groups in ASIA

answer

1) APEC 2) ASEAN

question

increase choice, competition, and purchasing power and decrease prices

answer

trade agreements

question

the two choices when a company decides to go global

answer

consistency or adaption

question

does consistency or adaption simplify decisions?

answer

consistencyn

question

modifying your standards to adpat to differences in foreign customers, government, and regulatory agencies

answer

adaption

question

the steps for the phase model of going global

answer

1) exporting 2) Cooperative contracts 3) Strategic alliances 4) Wholly owned affiliates

question

selling domestically made products to foreign markets

answer

exporting

question

Advantages of exporting

answer

1) Makes company less dependant on domestic sales 2) gives company more control

question

Disadvantages of exporting

answer

1) Goods subject to trade barriers (tariff and non tariff) 2) Transportation Costs

question

A domestic company, the licensor, allow a foreign company, the licensse to produce its product, provide its service, or use its brand name in a foriegn market for royalty payments

answer

licencing - cooperative contracts

question

Advantage of licensing

answer

1) earn money without investing more money 2) companies can avoid trade barriers

question

Disadvantages of licensing

answer

1) give up control over product qualtiy 2) Licensses can become competitors

question

A collection of networked firms in which the manufacturer or marketer of a product or service, the franchiser, licenses the entire businesss to another person or organization, the franchise

answer

Franchising - 2nd type of cooperative contract

question

Advantages of franchising

answer

1) Fast way to enter a foriegn market 2) Gives franchiser additonal cash flows

question

Disadvantages of Cooperative contracts

answer

1) Loss of control 2) Culture Bound

question

When companies combine key resources, costs, risk, technology, and people

answer

strategic alliance

question

When two existing companies collaborate to a form a third company

answer

joint venture

question

Advantages of strategic alliances

answer

1) Companies avoid trade barriers 2) Companies only bear part of the costs 3) Partners can learn from each other

question

Disadvantages of strategic alliances

answer

1) Profits have to be shared 2) Merging of cultures

question

Foreign offices, plants, or facilities that are 100 percent owned by the parent company

answer

wholly owned affiliates

question

advantages of wholly owned affiliaties

answer

1) parent company recieves all of the profits and has complete control

question

Disadvantages

answer

1) losses for the parent company can be enormous

question

Companies that are founded with an active global strategy

answer

Global new ventures

question

Companies that are founded with an active global strategy 2 characteristics

answer

1) their leaders communicate their global strategy from incpetion 2) Bring a product or service to market several foriegn markets at a time

question

The key metric in deciding where to go global

answer

Growth potential

question

The two factors that create growth potential

answer

1) Foriegn competition 2) Purchasing power

question

measured by comparing the cost of a standard set of goods in several countries

answer

purchasing power

question

Qualitative factors that affect location strategy

answer

1) Workforce Quality 2) Company Strategy

question

Quantitative factors that affect location strategy

answer

1) Kind of facility being built 2) trade Barriers 3) Exchange rates 4) Transportation and labor rates

question

The two types of political risk in conducting global business

answer

1) Political uncerainty 2) Policy unceratinty

question

political uncertainty

answer

Risk in major changes to political regimes

question

Policy uncertainty

answer

refers to the risk assocaited with chaanges in laws and government policies

question

used when the risks of conducting business in a foriegn conutry are too great

answer

avoidance strategy

question

active strategy to prevent or reduce political risks

answer

control

question

makes use of joint ventures and collaborative contracts to deal with political risk

answer

cooperations

question

divesting or selling businesses to avoid risk

answer

avoidance

question

limits a company's exposure to risk associated with foreign ownership of a business

answer

cooperation

question

The set of share values and beleifs that affects the perceptions, decsions, and behavior of the people from a particular country

answer

national culture

question

the extent to which people in a country accept that power is distributed unequally in society and organizations

answer

power distance

question

the degree to which societies believe that individuals should be self-sufficent

answer

individualism

question

captures the difference between highly assertive and highly nurturing cultures

answer

masulinity and feminity

question

the degree to which peolpe in a country are uncomfortable with unstructued, ambigous, and unpredicatabel situations

answer

uncertainty avoidance

question

adderesses wherether cultuers are orietnated to the presnet and seek immediate gratification or to the futrue and defer graitication

answer

short term/long term orientation

question

expatriate

answer

someone who lives and works outside his or her native country

question

The chance of success of expatriates can be increased by

answer

1) cross cultural training 2) consideration of spouse 3) Consideration of family 4) consideration of dual career issues

question

training for expatriates that focuses on special critical diffeences between cultures

answer

documentary training

question

training for expatraites in which they practice adpating to cultural differenes

answer

cultural simulations

question

placing trainees in ethical neighborhood for three hours to talk to residents about cultural differences

answer

field simulation training

question

assesses how well managers and family are likely to adapt to foriegn cultures

answer

adaptability screeing

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