Flashcards About Management Chapter 4
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globalization
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the trend of the world economy toward becoming a more interdependent system
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global village
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the "shrinking" of time and space as air travel and the electronic media have made it easier for the people around the globe to communicate with one another
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e-commerce
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the buying and selling of products and services through computer networks
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global economy
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the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets
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multinational corporation
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a business firm with operations in several countries
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multinational organization
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a nonprofit organization with operations in several countries
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Ethnocentric managers
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believe that their native country, culture, language, and behavior are superior to all others
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parochialism
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a narrow view in which people see things solely through their own perspective
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Polycentric managers
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take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone
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Geocentric managers
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accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective
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maquiladoras
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manufacturing plants allowed to operate in Mexico with special privileges in return for employing Mexican citizens
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outsourcing
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using suppliers outside the company to provide goods and services
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Global outsourcing/offshoring
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using suppliers outside the United States to provide labor, goods, or services
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importing
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a company buys goods outside the country and resells them domestically
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exporting
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a company produces goods domestically and sells them outside the country
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countertrading
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bartering goods for goods
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licensing
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a company allows a foreign company to pay it a fee to make or distribute the first company's product or service
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Franchising
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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
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joint venture
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also known as a strategic alliance, with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country
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wholly-owned subsidiary
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a foreign subsidiary that is totally owned and controlled by an organization
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greenfield venture
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A foreign subsidiary that the owning organization has built from scratch.
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free trade
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the movement of goods and services among nations without political or economic obstruction
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trade protectionism
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the use of government regulations to limit the import of goods and services
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tariff
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a trade barrier in the form of a customs duty, or tax, levied mainly on imports
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import quota
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a trade barrier in the form of a limit on the numbers of a product that can be imported
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dumping
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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
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embargo
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a complete ban on the import or export of certain products
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World Trade Organization (WTO)
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designed to monitor and enforce trade agreements
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World Bank
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provides low-interest loans to developing nations for improving transportation, education, health, and telecommunications
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International Monetary Fund (IMF)
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designed to assist in smoothing the flow of money between nations
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trading bloc
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also known as an economic community, is a group of nations within a geographical region that have agreed to remove trade barriers with one another
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North American Free Trade Agreement (NAFTA)
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a trading bloc consisting of the United States, Canada, and Mexico
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European Union (EU)
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consists of 28 trading partners in Europe
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Asia-Pacific Economic Cooperation (APEC)
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a group of 21 Pacific Rim countries whose purpose is to improve economic and political ties
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Association of Southeast Asian Nations (ASEAN)
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a trading bloc consisting of 10 countries in Asia
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Mercosur
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The largest trade bloc in Latin America and has five core members—Argentina, Brazil, Paraguay, Uruguay, and Venezuela—and seven associate members: Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname. Besides reducing tariffs by 75%, Mercosur nations are striving for full economic integration, and the alliance is also negotiating trade agreements with NAFTA, the EU, and Japan.
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Central America Free Trade Agreement (CAFTA-DR)
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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.
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Most favored nation trading status
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Describes a condition in which a country grants other countries favorable trading treatment such as the reduction of import duties.
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exchange rate
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The rate at which the currency of one area or country can be exchanged for the currency of another's.
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culture
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The shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people.
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low-context culture
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Shared meanings are primarily derived from written and spoken words.
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high-context culture
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People rely heavily on situational cues for meaning when communicating with others, relying on nonverbal cues as to another person's official position, status, or family connections.
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GLOBE project
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A massive and ongoing cross-cultural investigation of nine cultural dimensions involved in leadership and organizational processes.
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monochronic time
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A preference for doing one thing at a time. In this perception, time is viewed as being limited, precisely segmented, and schedule driven.
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Polychronic time
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A preference for doing more than one thing at a time. Here time is viewed as being flexible and multidimensional.
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Expropriation
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Defined as a government's seizure of a domestic or foreign company's assets.
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Foreign Corrupt Practices Act
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The act makes it illegal for employees of U.S. companies to make "questionable" or "dubious" contributions to political decision makers in foreign nations.
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expatriates
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People living or working in a foreign country.
