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IU BUS-D 270 Davis Midterm
Theocratic Totalitarianism - โ โ a political system in which political power is monopolized by a party, group, or individual that governs according to religious principles
Constitutional Law - โ โ guarantees open and just political order
Criminal Law - โ โ protects social order
Civil and Commercial Law - โ โ ensure fairness and efficiency in business transactions
intellectual property - โ โ intangible property that is the result of creativity (such as patents or trademarks or copyrights)
Expansion of Cross-National Cooperation - โ โ 1. To gain reciprocal advantages
- To attack problems jointly that one country acting alone cannot solve
- To deal with areas of concern that lie outside the territory of any nation
G20 countries - โ โ 19 of the worlds most economically important countries plus representation from the EU
-80% of world trade
-85% of world production
-2/3 of world population
income inequality - โ โ disproportionate salaries in top execs
merchandise exports and imports - โ โ trade in goods, tangible products such as clothing, computers, and raw materials
service exports and imports - โ โ Terms used for non-merchandise international earnings โ referred to as "invisibles"
Franchising - โ โ A contractual agreement between a franchisor and a franchisee that allows the franchisee
competitive factors of international business - โ โ product strategy (cost/differentiation), resources and experience, competitor capability
direct exporting - โ โ practice by which a company sells its products directly to buyers in a target market (low cost, moderate control)
exporting via a local distributor - โ โ entering and agreement with a local distributor to sell your products in a foreign market (low cost, low control)
Licensing - โ โ entering foreign markets through developing an agreement with a licensee in the foreign market (low cost, low control)
sales operation - โ โ setting up a sales team in a new market to sell good produced in the old market (moderate cost, moderate control)
Equity Investment - โ โ funds received by a business in exchange for a percentage ownership of the business
Acquisition - โ โ the buying of a whole company, a patent, or a license to produce someone else's product (high cost, high control)
Greenfield - โ โ establishment of a brand new facility built from the ground up (very high cost, high control)
Outsourcing vs. Offshoring - โ โ Outsourcing is when you give work to a company you do NOT own. Offshoring is sending work abroad to a facility you DO own.
Core Values - โ โ strong and non negotiable
Peripheral Values - โ โ less dominant and more pliable
Culture - โ โ shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people
Cultural Diversity - โ โ enables businesses to gain unique knowledge
Cultural Collision - โ โ When two divergent cultures come in contact. The major problems of cultural collision arise under two conditions, When a company implements practices that are less effective than intended, When a company's employees encounter
Autocratic - โ โ having unlimited power
Paternalistic - โ โ the system of governing a country as a father would a child
individulaism - โ โ giving priority to one's own goals over group goals and defining one's identity in terms of personal attributes rather than group identifications
collectivism - โ โ giving priority to the goals of one's group (often one's extended family or work group) and defining one's identity accordingly
uncertainty avoidance - โ โ A national culture attribute that describes the extent to which a society feels threatened by uncertain and ambiguous situations and tries to avoid them.
future orientation - โ โ how much should people delay gratification by planning and saving for the future
fatalism - โ โ belief that events are determined by forces beyond one's control
low-context culture - โ โ a culture in which people are expected to be direct and to say what they mean
high-context culture - โ โ people rely heavily on situational cues for meaning when communicating with others
Monochronic - โ โ The use of time that emphasizes punctuality, schedules, and completing one task at a time.
Polychronic - โ โ the use of time that emphasizes flexible schedules in which multiple tasks are pursued at the same time
culture shock - โ โ the disorientation that people experience when they come in contact with a fundamentally different culture and can no longer depend on their taken-for-granted assumptions about life
polycentricism - โ โ Openness towards other cultures in which a company practices international business with local preferences and techniques to deal with local market conditions.
Ethnocentrism - โ โ Belief in the superiority of one's nation or ethnic group.
free country - โ โ exhibits open political competition, respect for civil liberties, independent civic life, and independent media
partly free country - โ โ Exhibits limited political rights and civil liberties, corruption, weak rule of law, ethnic and religious strife, unfair elections, and censorship
not free country - โ โ has few to no political rights and civil liberties. The government allows minimal to no exercise of personal choice, relies on the rule of man as the basis of law, constrains religious and social freedoms, and controls a large share, if not all, of business activity.
Full Democracy - โ โ A political system based on a constitution that guarantees rights and freedoms, election of rulers and representatives who agree to govern according to the constitution, majority rule, protection of minority rights, voter choice among political parties, recognition of fair and free elections, and an independent judiciary.
flawed democracy - โ โ attempts to be a democracy, but has problems that prevent it from being
truly so. It may suffer from vote buying or corruption of political officials. It may include a large amount (but not total) of power in the hands of unelected institutions like judges, bureaucrats, or the military
Hybrid Regime - โ โ a class of regime that appears to be neither fully democratic nor fully authoritarian, such as electoral authoritarianism, delegative democracy, and illiberal democracy
Political Risk - โ โ The likelihood that political forces will cause drastic changes in a country's business environment that will adversely affect the profit and other goals of a particular business enterprise.
Systematic Risk - โ โ risk of breakdown in the financial system, particularly due to spillover effects from one market into others
procedural political risk - โ โ The institution of obstacles by a government in order to make operations more difficult for a company.
distributive risk - โ โ A result of the profits generated by foreign companies in the local economy. If the host country questions the distributive justice of the
Rule of Law - โ โ principle that the law applies to everyone, even those who govern
Productive business activity requires - โ โ property rights
minimize cost and complications of settling disputes
rules to reduce risk
rules to protect contractual partners against abuse
Operational Concerns - โ โ -starting a business
-entering and enforcing contracts
-hiring and firing workers
-closing a business
Strategic Concerns - โ โ -product origin and local content
-marketplace behavior
-legal jurisdiction
-product safety and liability
-IP protection
Sovereignty - โ โ Ability of a state to govern its territory free from control of its internal affairs by other states.
Globalization - โ โ the process of broadening international relationships among people who are divided by national boarders
Reduction of Barriers - โ โ movement of goods, services, capital, technology, and people
Indiana's largest European Trading Partner - โ โ Germany
How do you measure globalization? - โ โ -25% of global production is sold outside of its country of origin
-restrictions are decreasing
-world trade is growing (more rapidly than production)
Why is globalization growing? - โ โ Technology
liberalization of cross boarder trade
consumer pressures
increase in global comp
Born Global Company - โ โ founded as an international company
Representative Democracy - โ โ A system of government in which citizens elect representatives, or leaders, to make decisions about the laws for all the people.
multiparty democracy - โ โ a democracy in which at least three parties compete for power
Parliamentary - โ โ democratic form of government in which the party (or a coalition of parties) with the greatest representation in the parliment (legislature) forms the government, its leader becoming prime minister or chancellor
Social Democracy - โ โ political ideology in which there is a gradual transition from capitalism to socialism instead of a sudden violent overthrow of the system
Facism - โ โ A political system headed by a dictator that calls for extreme nationalism and racism and has no tolerance for opposition
secular totalitarianism - โ โ political system in which leaders rely on military and bureaucratic power
