SOM: EXAM 1
High Risk in Globalization
Joint Ventures Foreign Subsidiaries
Common Law
Laws made by judges ruling on cases based on precedents
Standard of living
The amount of goods and services people can buy with the money they have is referred to as standard of living
mixed economy
contains elements of market and command economy
Planned economy
country produces, planned by government
Economics
The study of the production, distribution, and consumption of scarce goods and services
Wrongful injuries in business relationships not covered by contract or criminal law are covered by
Tort Law
indicators for gauging the performance of a national economy
Unemployment rate Gross domestic product (GDP) Price indexes
When a country produces a product more cheaply and easily than any other country, it is said to have a(n)
absolute advantage
Whistleblower
an employee who reports organizational misconduct to the government or public (Sarbanes-Oxley Act)
IMF (International Monetary Fund)
flow of money between nations (short term loans)
What forms of unemployment are unvoluntary?
Structural and Cyclical
Moore's Law
Technology doubles and costs of productions falls in half every 18 months.
What important pieces of legislation is antitrust law based on?
The Sherman Antitrust Act The Federal Trade Commission Act The Clayton Act The Robinson-Patman Act
Stages of economic evolution in order
The agricultural economy The industrial economy The service economy
Market Economy
produced determined by supply and demand
The Sherman Antitrust Act
prohibits the restraint of trade and monopolies
Quality of life
society's general well-being as measured by standard of living, health care, educational opportunities, freedom, happiness, and environmental health
Expropriation
when the government seizes domestic or foreign companies' assets
communism
"from each according to their ability, to each according to their needs"
GATT (General Agreements on Tariff and Trade ) (WTO) Goals
1. promote trade by encouraging fair trade 2. reduce trade barriers 3. establish fair procedures
To be legally enforceable, a contract must meet each of ______ conditions.
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What is the primary motivation for ethical behavior under a compliance-based ethical code?
Compliance-based ethical codes use direct control and the threat of punishment to encourage ethical behavior.
What is the producer price index (PPI)?
A measure of wholesale prices used as an indicator of inflation or deflation
Tariff
A tax on imported goods
Chapter 11
Allows companies to reorganize and continue business operations while paying creditors a portion of their debts
Chapter 13
Allows individuals and small businesses with debts below a certain amount to repay their creditors over a period of time under a court-approved plan
How is Chapter 11 bankruptcy different from Chapter 13 bankruptcy?
Chapter 11 applies only to companies.
Trial
Courts that hear criminal or civil cases not specifically assigned to other courts.
Appellate Courts
Courts that review cases appealed from lower courts considering questions of law but not questions of fact
What are drivers of globalization?
Declining Trade and Investment Barriers Microprocessors and Telecommunications Internet and WWW Transportation technologies
ESG
Environmental, Social, Governance
GDP
Expresses the total value of all of the goods produced within a country's borders in one year
Chapter 7
Forces debtors to turn over assets to a trustee for division among creditors
Moderate Risk in Globalization
Franchising and Foreign Licensing Global outsourcing
What forms of unemployment are voluntary?
Frictional and Seasonal
Fiscal Policy
Government policy that attempts to manage the economy by controlling taxing and spending.
GNI
Gross National Income: how much money is flowing in
Carroll's Global Corporate Social Responsibility Pyramid
Philanthropic, Ethical, Legal, Economic
PPP
Profit, People, Planet
Paradox of value
Pursue the factors of creating profit not just profit.
Economic Systems
What will be produced? How? For Whom? Who Owns?
Statutory
Written laws created by legislative bodies. (Imposed by state)
theory of the invisible hand
individuals' drive for prosperity produces the products that provide benefits to all
Import Quotas
limits on the numbers of a product that can be imported/exported
Five Factors of Production
natural resources, capital, human resources, entrepreneurship, and knowledge
Outsourcing
obtain (goods or a service) from an outside or foreign supplier, especially in place of an internal source
Organizational Layer
position within the hierarchy job title work style
