Ch 5, Ch 4, Ch 3, Ch 2 Int Bus, Ch 1 Int Bus

state of union- President Trump claimed the tariffs imposed on Chinese goods were bringing in billions of dollars per month to the Treasury, but the tariffs are actually being paid by ....

American companies importing those products.

China's infrastructure project in Asia and Africa that is not only massive- spanning across three continents-but also expensive--costing trillions of dollars. Involves building railways, roads, pipelines, oil refineries, power plants, and the like, with the goal of facilitating China's trade with other countries.

Belt and Road Initiative

Belgium, the Netherlands, and Luxembourg are known as the ...... nations.

Benelux

Brazil has attempted to fight poverty and promote income mobility with its ........ program, which provides conditional cash transfers to poor families in exchange for ensuring that children attend school and participate in public health programs.

Bolsa Familia

The ..... Revolution after World War I overthrew the Russian tsar, giving the Communists control of Russia.

Bolshevik

figures released by the ........ government are without any data to back them up. (Contrast this with official economic data in the United States; the U.S. government makes all of its data public, so that any analysis it conducts can be independently verified.

Chinese

law is based on Roman law and French Napoleonic law. It dates back to the Code of Justinian. Justinian was a Roman Emperor who commissioned all of the existing laws to be codified into a single book.

Civil

though the laws "on the books" in China are written in ...... law style, the enforcement style of its legal system is .....

Civil bureaucratic.

The approach adopted by.......... countries involves a much more cooperative relationship between the state, the market, and civil society. Economic and political actors in these countries attempt to reach a CONSENSUS between the state, the market, and civil society.

European

is a special kind of licensing that occurs when a firm in one country allows a firm in another country to use its operating system and intellectual property (such as brand names, logos, and trademarks) in exchange for a royalty payment.

International franchising

during the cold war a number of countries sided with the United States and formed the ........., while a number of countries sided with the Soviet Union and formed the ......... The world's power arrangement was very different from present day.

North Atlantic Treaty Organization (NATO) Warsaw Pact

Recently, the Greece and Macedonia reached a deal to change Macedonia's name to ......... the prime ministers have been jointly nominated for a 2019 Nobel Peace Prize for their diplomatic efforts to come to an agreement and resolve the decades-long dispute.

North Macedonia (the Republic of North Macedonia)

Western European countries are not members of the EU. These include

Norway, Iceland, Switzerland Monaco, Liechtenstein, Andorra, and a number of small Balkan countries.

........ Index , which depicts 192 countries' vulnerability to and readiness to deal with climate change. helps green companies find potential markets.

Notre Dame GAIN (ND-GAIN Index)

The major areas most susceptible to ethical variation, with regard to how an organization treats its employees, are as follows:

Hiring, firing, and career development Wages and compensation Workers' rights and dignity

The most influential study of culture was done by Dutch researcher Geert ......., who analyzed the cultural differences of 116,000 IBM employees in dozens of countries. He originally identified five major dimensions of cultural differences and subsequently added one dimension to his work

Hofstede

...... was a British colony until 1997, when control was given to the Chinese. Although it is technically a part of mainland China, it has traditionally been allowed to operate fairly autonomously.

Hong Kong

...... involves donating to charities and social programs, and/or creating philanthropic departments.

Philanthropic giving

include any adverse changes in the political environment that hurt the value of the firm's business activities.

Political risks

....... refers to the extent to which people accept power differences and a hierarchy in business, government, and life.

Power orientation

Sovereignty would also physically split Canada, and pose a major international issue over the ........ River. The river, which runs through Quebec, is a major shipping route for northern states in the U.S. and the rest of Canada.

St. Lawrence

refers to the fact that many countries that are rich in natural resources are also poor because they fail to diversify their economies in other sectors

The resources curse

CAGE framework basic premise is that the world is not flat, and it is more difficult to operate in a foreign country if it is ...... from your home country.

a great "distance" away distance- geographical + other ways countries differ

Canada has several advantages for international investors and multinational corporations, including the following:

close to US high political/legal stability good education and infrastructure

A ...... is a written statement about the ethical standards and values that should guide the actions of managers and employees.

code of ethics

Following this tradition, the Civil law is based on ........., or extensive codes that detail what is and is not permissible behavior.

codification

africa's history has largely been defined by European ......., which occurred from the 1800s until the 1950s.

colonization

nonverbal mix up examples

come here okay thumbs-up talk to the hand white flowers/even # flowers eating w/ left hand

The principle of ...... provides that a country will usually honor the decisions of foreign courts, as long as the two countries extend reciprocity between one another, the defendant has proper notice, and the foreign judgment does not violate any treaties or domestic statutes.

comity

In recent years, Africa has enjoyed the benefits of a major ....... Africa is rich in natural resources.

commodity boom (oil and mineral deposits)

....law is based on the precedents set by prior judicial decisions, so it relies on the collective wisdom of judges who have heard cases throughout history.

common United States, the United Kingdom, Australia, Canada, and India,

4 classifications of law

common law Civil law religious law bureaucratic law

Fred Hassan, cross-cultural management strategy will be useful in any culture: 1. Establish a ......... by showing people the value of achieving the organization's goals. 2. Demonstrate ..... in the ability of people on your team to achieve the goals. 3. Continually strive to become better through ...... 4. Create an atmosphere in which there is a

common sense of purpose faith education, training, and skill building "will to win."

In 1992, 12 of these newly independent states formed the .......

commonwealth of independent states

Several technological changes have facilitated an increase in globalization as well. These include improved ......, ........, and ......(3)

communications technology transportation methods information processing

When economy is sluggish and the Fed .... rates, it encourages more borrowing in the economy, which causes GDP growth and inflation to increase while unemployment falls

cuts

Putin's regime has developed the most effective ....... in the world, which he uses as a weapon against the West

cyber-army

......will essentially hold a domain name hostage, with the intention of selling it to a legitimate company in the future.

cybersquatters

This component of the globalization index is a more subjective measure of the things a country can do to facilitate globalization. This component includes POLICIES THAT PROMOTE global flows and activities how developed the banking system is, attitudes toward trade in the regulatory environment, business culture, etc.

de jure (ENABLES de facto variables)

Firms that adopt the ...... stance to social responsibility meet all legal requirements but do nothing more. These firms generally believe that their role is to create value for shareholders, not to contribute to society. EX: Big Tobacco companies

defensive

which has worse consequences, deflation or inflation?

deflation one of the factors that caused the Great Depression to be as long and severe as it was.

People who don't have jobs don't spend money, which puts downward pressure on demand and prices.

deflationary spiral:

Americans' .... economic mobility is better than their .... economic mobility.

absolute relative

Two measures of economic mobility are as follows:

absolute mobility relative mobility

Individuals in cultures characterized by uncertainty ...... have a positive response to new opportunities and change, while individuals in cultures characterized by uncertainty ..... prefer a consistent, structured routine to change and uncertainty

acceptance avoidance

Hofstede's 6 Dimensions- uncertainty orientation range

accepting - avoiding

Firms that adopt the .........stance to social responsibility meet all legal and ethical requirements and even go beyond these requirements in some cases. EX: Vodafone participating in social programs in South Africa after it was ASKED TO

accommodative

is the process through which people adopt the behaviors that are considered acceptable in a culture

acculturation

strategic imperative- products/services may be scarce/unavailable at home or cheaper abroad

acquire resources

Defamation- In the United Kingdom there are no truth exceptions or ..... requirements. Therefore, a forum-shopping plaintiff would prefer to bring a case in the United Kingdom than in the United States.

actual malice

The Chinese government regularly monitors the internet to censor content that opposes the Chinese Communist Party's goals, but some analysts believe that the government also adapts its policies to respond to popular sentiments posted online - some call this ...... authoritarianism

adaptive

Currency fluctuations impose at least three different costs on international businesses: ALL HAVE IMPACT ON BOTTOM LINE

administrative time hedging

CAGE- this dimension deals with the ease or difficulty of adapting to the government policies, legal environment, CURRENCY, politics, and institutions of a foreign market.

administrative distance

Countries characterized by ...... goal behavior value money, assertiveness, and material possessions, while countries characterized by ......goal behavior value quality of life, social relevance, and the welfare of others.

aggressive passive

Hofstede's 6 Dimensions- goal orientation range

aggressive - passive

include the already-rich countries of the world, such as the United States, Western Europe, and Japan

developed countries

After the Berlin Wall fell in 1989 and the Cold War ended in the mid-1990s, the world's power arrangement changed. Countries today can be classified into just two groups:

developed countries emerging markets

According to the Swiss Economic Institute, the top 15 most globalized countries share these characteristics ....

developed economies, political stability, a lot are in EU and pretty small

9 ex of cultural clusters

anglo latin america nordic europe germanic europe latin europe sub-sahara africa middle east southern asia eastern europe confucian asia

prohibit a U.S. company from complying with a foreign country's boycott of the products of a country friendly with the United States. These provisions were enacted in the 1950s against the League of Arab States' resolution that called for a worldwide boycott of firms that do business with Israel, which is a strong U.S. ally.

anti-boycott provisions

American tech companies have to manage ...... laws (laws against predatory business practices), which are much stricter in the European Union than in the U.S.

antitrust

a process in which the parties agree to abide by the decision of a private, non-judicial body. `faster, cheaper, more private, and more informal than litigation.

arbitration

EU expansion-controversy surrounding certain countries that want to become members Turkey poses problems because Turkey's move towards a more ....... government in the past couple of years may make it difficult to integrate the country into the EU

authoritarian

refer to the countries that either experienced rapid growth or have potential for future growth that exceeds that of traditional markets.

emerging markets

The communication process requires the sender to ____code messages, which are sent to the receivers who have to ____code those messages

encode decode

South Africa has grown rapidly after the.... and ....

end of apartheid democratic election of Nelson Mandela

Poland decreased the days it took to.... (32%)

enforce a contract

Colonization in Africa caused ongoing political problems, as the colonizers often constructed artificial political borders that cut across ......

ethnic and cultural lines

consists of all of the members of the European Union that have adopted the euro.

eurozone

if businesses want to capitalize on the FULL spending power of the millennial generation, they must ......

expand beyond the US and cater to preferences of millennials in new regions/cultures

Part of South Korea's success is due to its vibrant, ......-led economy. which account for approximately 85% of South Korea's GDP.

export

a policy in which the government subsidizes domestic export industries to boost exports. problems: The cost of these subsidies and nationalization was passed on to taxpayers.

export promotion,

Perhaps the simplest form of international business is .....

exporting and importing.

nationalization has two forms: When the government offers compensation to the private owners, it is called ........., and when it offers no compensation to the private owners, it is called ........

expropriation confiscation.

occurs when a country tries to regulate business activities outside of its borders.

extraterritoriality

Ghosn oversaw Nissan Motor Corporation's turnaround and was forced to lay off workers and shut down plants in Japan. In Japan, these actions are considered to be ......... Just as Japanese workers are loyal to their companies, they expect their companies to be loyal to them, as well.

extreme measures

While a common law judge acts more as a referee, Civil law judges take a more active role as ...... or ......

fact-finders or advocates

for many foreign investors, the rewards of access to the Chinese market ...... the risk of increased political influence.

far outweigh

arrival of "..... Internet" in Africa was linked to an INCREASE in employment in SKILLED jobs and a DECREASE in employment in UNSKILLED jobs

fast

he Fed's most commonly used tool is to buy and sell securities in order to influence the ....., or the rate of interest that banks charge other banks for overnight loans

federal funds rate

Enemies of the President are subsequently enemies of the Network. Pro-Kremlin forces view Western media as a weapon of propaganda that the state needs to protect itself from, especially the '............' (internal saboteurs)

fifth column

ignore patent laws to gain technological know-how, and then fight for enforcement once a critical mass of knowledge has been gathered.

flout then follow

Asia's share of world output has....../throughout human history.

fluctuated 66% in 1000 CE to 20% in 1800s

There are two categories of international investment:

foreign direct investment foreign portfolio investment

generally involves opening up a subsidiary abroad or purchasing more than 10 percent of a company, giving the purchasing firm ownership and CONTROL of foreign assets.

foreign direct investment (FDI)

involves passive purchases of financial assets (such as stocks or bonds) for reasons other than control. Usually, used to increase the rate of return on their investment portfolios.

foreign portfolio investment (FPI)

occurs when a party to a lawsuit attempts to have the case heard in a country where the laws are most favorable.

forum shopping

4 concerns regarding litigation in foreign countries are as follows:

forum shopping comity arbitration sovereign immunity

Research has shown that a firm is more likely to enter a JOINT VENTURE with a host-country firm when entering a country with a SIMILAR culture but more likely to enter with a ........... (starting a business from scratch) when entering a country with a DISSIMILAR culture.

greenfield investment

measures the value of all FINAL goods and services PRODUCED WITHIN A COUNTRY in a given period of time, usually a year

gross domestic product

authorizes extraterritoriality This law is intended to punish foreign companies in Cuba that use property that the Castro regime confiscated from the United States in the late 1950s. It also allows lawsuits in American courts against foreigners who use this property, and it allows the United States to prevent the executives of companies that use the confiscated assets from entering the United States.

helms-burton act

4 key cultural elements of the Japanese culture

hierarchical structure groupism wa obligation

......-income nations typically include the oil-rich countries, the countries that make up the OECD (the Organization for Economic Cooperation and Development, which includes the U.S., much of Western Europe, and Japan, among others), and SMICS (small and industrialized island countries).

high

In a ........-context culture, the context of a conversation is just as important as the words used. As a result, cultural cues such as nonverbal communication are important for understanding the messages being sent. Japan and most Arab nations have high-context cultures.

high

the main risks for the Chinese economy are the ........... and .........

high amount of debt held by its corporations rising international trade tensions.

Countries in Central America and the Caribbean face significant structural challenges: Without a strong middle class to drive the consumer economy of a country, domestic firms cannot sell their goods and services domestically. This HINDERS economic GROWTH

high poverty/weak middle class

There is a strong positive correlation between having minimal limitations on women, and being a ....., stable growth country

high-income

The World Bank places countries into four groups based on their average income per person:

high-income upper-middle-income lower-middle income lower-income

countries with higher Internet penetration rates tended to have ....GDP per capita.

higher

the jobs report is based on two surveys:

household current employment statistics

Strategic investments in ....... (education and training) improve efficiency, productivity, and competitiveness.

human capital

To avoid double-counting, GDP does not include the value of ...... goods and services, which go into the production of final goods and services.

intermediate For example, the production of a box of cereal IS included in GDP, but the production of the corn, sugar, and paper box used to make that box of cereal IS NOT

any organization that engages in cross- border commercial transactions with individuals, private firms, and/or public-sector organizations.

international business

refers to any business transactions among parties in more than one country.

international business

occurs when the residents of one country supply capital to the residents of another.

international investment

involves a contract in which a firm in one country allows a firm in a foreign country to use its intellectual property in exchange for royalties. Intellectual property includes such things as trademarks, patents, and copyrights.

international licensing

establishes an arrangement in which a firm in one country agrees to manage the assets of a firm in another country for a fee.

international management contract

Today, 10% of world GDP is attributed to ......., and it is worth $1.4 trillion in exports, accounting for 7% of the world's exports and 30% of world services exports. It is also responsible for 1 in 10 jobs

international tourism

...... relationship between vulnerability to climate change and readiness to deal with climate change

inverse

when are social impact bond investors repaid?

investors are only repaid if performance targets are hit.

..... is the currency in which the sale of goods and services is commonly denominated. International transactions are often denominated in U.S. dollars, even when the United States is not a party to the transaction.

invoicing currency

Generally, the major economies are more ........ because their markets are so big that they don't have to look outward

inward-looking

Germany developed a strong aversion to inflation after the German hyperinflation in the 1930s. As a result, German regulations are designed to .......

keep inflation under control.

Japanese firms are often arranged in a large family of companies called a ........ These companies control Japanese industry, and they act as suppliers and financers for each other. MITSUBISHI IS AN EXAMPLE

keiretsu

compromising material (i.e., blackmail) that is used--or threatened to be used- against a public figure.

kompromat

many Canadians who live in rural areas are closer to ....... than they are to large cities in Canada.

large U.S. cities

The U.S. Federal Reserve is the United States' central bank, which is considered a bank of ..... because it acts as a lender of last resort for individual banks that are members of the U.S. Federal Reserve system.

last resort

strategic imperative- What a firm does very well, distinctive strength and advantage over competitors. If a company is successful at home, it is likely to be successful abroad as well.

leverage core competency

The United States has been dominant politically and economically since World War II, so English has become the .......(or DOMINANT LANGUAGE) of international business.

lingua franca

Hofstede's 6 Dimensions- time orientation range

long-term - short-term

The greatest risk of a hard break from the EU is that UK-based companies will

lose their current passporting rights to conduct business with EU clients.

In a ......-context culture, a speaker's words explicitly convey the speaker's intended message. People are very literal, fact-oriented, and consider specific details extremely important. The United States, Canada, United Kingdom, Switzerland, and Germany

low

According to Hall's cultural context approach, cultures can be divided into two groups:

low-context culture high-context culture

1995 to 2012 US' largest export AND import categories were...... (3) (this is INTRAINDUSTRY trade)

machinery/electrical transportation chemicals (also import ONLY mineral products)

Political risks can be further grouped into two categories: .......affects every firm in a country (incr corp tax rate) ......affects a single firm or a group of firms in an industry (nationalization)

macropolitical micropolitical

Estimates are that cutting worldwide transportation costs in half would increase ....... by $377 billion per year and lower the prices of imported goods significantly

manufacturing trade

The European Union's newest members are former Soviet bloc countries that have had to convert their centrally planned economies to .......

market-based economies.

Differences in laws from country to country can have a dramatic impact on a business's profitability and success. For instance, national laws can impact all of the following:

markets a firm can serve prices a firm can charge cost of inputs location decisions

Most of New Zealand's exports are products from pasture lands, such as .....

meat, wool, and dairy products

good example of how culture changes over time.- Oklahoma, which is a very conservative state, voted to approve one of the most progressive bills for .....

medical marijuana legalization.

India is considered a market for global business and investment opportunity because India's population is mostly impoverished, but as the economy expands, India's ........ is likewise expected to expand COMPARED TO OTHER ECONOMIES IN THE SAME STAGE OF DEVELOPMENT, INDIA SCORES BETTER ACROSS ALL MEASURES OF COMPETITIVENESS.

middle class

(income groupings) the best opportunities for growth--emerging economies- tend to be located in the .....

middle.

A significant share of South Africa's economy- about 63% of its GDP- is based on exports, mostly of .....

minerals

firm can minimize exposure to political risk- by leasing capital equipment rather than buying it and by continuously repatriating profits back home. That way, the firm will lose less if the government confiscates its property.

minimize net investment

firm can minimize exposure to political risk- The firm must gather and use information from a number of sources, including official government sources, embassies, chambers of commerce, employees, and the news. The larger a company's proposed investment in a new market, the more resources it should devote to assessing political risk

monitor

Cross-border trade is ...... in Pakistan, Chad, Bangladesh, Equatorial Guinea, Afghanistan, Syrian Arab Republic, Liberia, South Sudan, Iraq, and Angola.

most difficult

When a company is considering a new market, one of the most important considerations is the level of .......... that prevails in that market.

national income

laws directed against foreign firms (3)

nationalization privatization constraints on foreign ownership

The ...... rate of unemployment refers to unemployment that is built into the system (i.e., naturally occurs in any economy) and is not due to fluctuations in the business cycle.

natural

The Arctic has become an important source of ....... and ......., and global warming is opening up several trade routes that pass through the Arctic.

natural resources fish

Scores on the Gini coefficient index are ....... correlated with DTF scores, indicating that on average the level of income inequality tends to be ....... in countries with more business-friendly regulation.

negatively lower

subcategory of emerging market economies Many of these markets are not growing particularly quickly yet, but they have a high potential for future growth

next 11

Japan is also notorious for its ........ barriers that block imports from the rest of the world

non-tariff

Two common areas of miscommunication involve

nonverbal communication and gift- giving and hospitality

Countries in Central America and the Caribbean face significant structural challenges: Coups and military takeovers are common in these countries.

political instability

Countries in Central America and the Caribbean face significant structural challenges, including the following: (5)

political instability US military intervention poor infrastructure/education/economic policies high poverty/weak middle class import limitations

Experienced international managers must engage in a systematic analysis of political risks called a

political risk assessment.

india's 3 challenges- summer of 2012 700 million people lost power for hours

poor infrastructure

Although India is poised to continue growing rapidly in the future, it does face 3 significant challenges:

poor infrastructure govt red tape corruption

International business crosses national boundaries In some of the world's poorest countries, transportation of goods across borders is particularly difficult due to (4 things). These factors can increase transportation costs by as much as 15%, which significantly RESTRICTS TRADE FLOWS.

poor infrastructure, administrative procedures, corruption, multiple checkpoints

Countries in Central America and the Caribbean face significant structural challenges: Part of the reason that the earthquake in Haiti a few years ago was so devastating was because of the country's poor infrastructure.

poor infrastructure/education/economic policies

firm can minimize exposure to political risk- build the support of the foreign government and its citizens by supporting local projects and charities, and by purchasing local raw materials and hiring local labor.

popularizing the firm abroad

Interestingly, of the 61% of global consumers that use social media to address CSR, 34% are sharing ....... information, while only 25% are sharing ....... information about companies and issues they care about.

positive negative if a company is doing something good, people are actually even MORE likely to spread good things about that brand.

DTF scores for trading across borders is ..... correlated with CPI (corruption perceptions index) scores easier to do international trade in a country where the corruption level is low.

positively

Andorra, Monaco, and Liechtenstein are considered ....... countries because they are so small.

postage stamp

People with a long-term outlook or ..... outlook value hard work, dedication, perseverance, and thrift, while people with a short-term outlook or ...... outlook value traditions and social obligations.

pragmatic normative

child labor may actually be ...... in areas where children have no other meaningful opportunities.

preferable

less globalized countries characteristics

primarily Africa, SE Asia, Pacific politically unstable resource-poor low-income many are isolated

Organizational stakeholders include any person or organization that has a stake in the organization's performance or is impacted by the organization's practices. Two categories of stakeholders are as follows:

primary secondary

The Japanese develop relationships and social harmony by spending a lot of time socializing with one another and by opening gifts in .... in Arab countries, gift giving takes place in ...

private public

occurs when government-owned property is converted to private property. State-owned businesses are usually inefficient and unprofitable, this increases economic efficiency, opening up new opportunities for international businesses to get involved.

privatization

Firms that adopt the ....... stance to social responsibility proactively seek opportunities to contribute to society. Some companies actually have separate departments dedicated to improving society EX: McDonald's Ronald McDonald House

proactive

japan's Abenomics didn't work very well because IMPLEMENTATION of the reforms was ....., and the economic plan also included increased ......... taxes, which counterproductively taxed people on the things that they needed to buy.

slow consumption

Collectively, the countries that comprise Central America and the Caribbean have a relatively...... population and a ......... share of world GDP

small

the U.K. is HIGH in .... stratification, but LOW in .... stratification.

social economic

refers to individuals' ability to move from one social stratum to another. can affect how people approach risk taking, entrepreneurship, education, human capital formation, and labor relations, all of which relate to international business

social mobility

refers to people's attitudes about the importance of individuals and groups.

social orientation

Hofstede's 6 Dimensions

social orientation power uncertainty goal time gratification

Keiretsu- Members often rely on an exporting trading company called a ....... to help them export goods, who is almost always a keiretsu member

sogo shosha

Dr. Phalin pointed out 3 exceptions to the rule of poverty, instability, and poor infrastructure in central america/caribbean:

some countries have thriving tourism/off-shore banking some countries are considered upper-middle-income nations growth is projected to be >4%

life after oil- countries are also investing their oil revenues for the future by expanding their foreign investments with government- run investment funds called ......

sovereign wealth funds

millenials are projected to quickly become the generation with the most.....

spending power

The Chinese government is interested in making sure that the rest of the world perceives its political and economic situation as being .....

stable.

Egypt (79%) and India (77%) decreased the days it took to...

start a business

France has a ...... tradition of government involvement in business. As a result, French accounting procedures are highly detailed.

statist

Common law is often supplemented with ....... laws enacted by the legislature.

statutory

The trend towards increasing globalization is driven by ........ that MOTIVATE globalization and ........ that FACILITATE it.

strategic imperatives environmental changes

Two ways in which a country can change or shape its technological environment are as follows:

strategic investments technology transfer

While global poverty has drastically decreased since 1990, poverty in...... has stayed fairly constant

sub-Saharan Africa

Still, many Africans are extremely poor and live as ......... This means that they have to work the fields to have enough food to survive

subsistence farmers

Most of the world's currencies are allowed to FLOAT FREELY, meaning that their values are determined by the forces of

supply and demand.

Rwanda decreased the days it took to... (92%)

transfer property

3 categories of political risk- The risk that the government will prevent the firm from bringing money into and out of the country. Governments often freeze funds in times of crisis. Venezuela, Turkey, and Ukraine countries most likely to freeze funds

transfer risk

.......... in information is the key to having a free market.

transparency

People who use self-deprecating humor are seen as .........in Germany and France, even though self-deprecating humor is often used in the United States, Denmark, and the United Kingdom as a way to convey that the speaker is not arrogant.

unserious

......-income nations include such countries as Russia, Turkey, Mexico, Iran, Malaysia, Costa Rica, Mauritius, and Belize. Emerging market countries (BRICS and Big Ten) tend to be in this group.

upper-middle

as ..... is predicted to increase in Africa, level off in China, increase in the rest of Asia, and decrease in the developed world. Accordingly, the share of global energy used by non-OECD countries will grow significantly in coming decades.

urban population growth

currently has the highest annual inflation rate in the world at over 80,000%.

venezuela

In the United Kingdom, (tangible) merchandise exports and imports are called ..... trade, while (intangible) service exports and imports are called......trade.

visible invisible

Many African economies depend on a few or even just one commodity, which leaves these countries vulnerable to global PRICE CHANGES, thus causing ...... in their economies.

volatility

The ......... refers to the five countries that play the most direct, active role in determining the region's political fate: the United States, Russia, Canada, Norway, and Denmark.

"Arctic Five"

gdp characteristic- spending on final goods and services are counted in GDP figures, even if you might consider it "bad" spending. For example, spending on divorces, hospital stays, and expansion of the U.S. prison system all contributes to increasing GDP.

"agnostic" economic measurement.

For many years, London has been considered the ...... but if Brexit is successful it will no longer be that may move to paris

"gateway to Europe"

it doesn't take an extremely high per capita income to be categorized as a ...... nation

"high-income"

oil-rich countries are coming to realize that oil is a finite resource and that there will have to be ........ These countries have taken steps to diversify their economies.

"life after oil."

triple bottom line 3 P's

"people, planet, and profits."

gdp 5 characteristics

1. only final goods/services 2. only new goods/services 3. counts imputed val of owner-occupied housing 4. only value of goods produced in US 5. agnostic economic measurement

gen Y or millenials were born

1980-2000

........'s tourist arrivals have the fastest growth.

Africa's

Former President Hugo Chavez implemented price controls in Venezuela more than a decade ago. led to severe shortages of food, medicines, and other basic necessities. resulted in ........., as people try to buy the goods at low prices and re-sell them at far higher prices.

BLACK MARKETS

The most promising emerging markets are the BRICS- which includes....... U.S. trade with the BRICS countries is extremely significant- almost as large as the amount of U.S. trade with Canada and Mexico combined.

Brazil, Russia, India, China, and South Africa

Several former COMMUNIST countries are in the European Union. They include Estonia, Latvia, Lithuania, Bulgaria, Slovenia (Yugoslavia), the Czech Republic, Hungary, Poland, Slovakia, and Romania. With the exception of ........ and ........., all of these countries are now considered "high-income" countries by the World Battle

Bulgaria and Romania

have the most time off, with 55 days off per year.

Bulgarians

tool that can be used to measure the "distance" between the home country and other places throughout the world. This provides a basic framework for understanding the challenges that firms face when conducting business in many countries.

CAGE framework

In 2016, the top export country for the majority of U.S. states was .....

Canada

.......'s population is about 1/10 of the size of the United States' population. Nevertheless, it is the world's second-largest country in terms of landmass (second only to Russia).

Canada's

the ......works to disclose the carbon emissions of major companies. Additionally, Google fulfilled its pledge to become 100% green-powered by the end of 2017.

Carbon Disclosure Project

....... is the richest country in the Caribbean

Cayman Islands

China- A secretive investigative unit; known as the ......, was held responsible for these unexplained disappearances. In the past, they have operated under a system called "Shuanggui," which allows for party members to be detained and investigated for indefinite periods of time, without due process. Critics say Mr. Xi has been abusing the anti-corruption campaign as a weapon to sideline and even eliminate political rivals. There have been cases in which torture has been used to extract confessions and has sometimes led to deaths.

Central Commission for Discipline Inspection

With public support, Putin led Russia in fighting the ...../ War. Russia successfully got Chechnya back under its control, but the war devastated the region and killed an estimated 80,000 people.

Chechen

In ....., workers who have been with a company for more than ten years get extra time off, but it is still the hardest working country, with the least amount of time off.

China

is the world's most populous country and the world's oldest continuous civilization.

China

WSJ: "Global Growth to Lose Momentum This Year, World Bank Says." One of the main reasons for this lower estimate is slowing growth in ......., ........., and ........

China, the European Union (EU) and the U.S

.... tourists are by far the world's top spenders, and the U.S. is the world's top tourism earner

Chinese

he world's four largest religions (in order, in terms of number of followers) are

Christianity, Islam, Hinduism, and Buddhism.

refers to the period from the end of World War II until the mid-1990s, during which there was an ideological battle between the United States and the Soviet Union.

Cold War

CIVETS includes....

Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa.

The major areas most susceptible to ethical variation, with regard to how employees treat the organization, are as follows:

Conflicts of interest Secrecy and confidentiality Honesty

.... refers to an organization's obligation to protect and enhance society.

Corporate social responsibility (CSR)

Transparency International is a global nonprofit organization that has established a .........Index (CPI), which ranks countries based on their perceived level of corruption and the effectiveness of public sector anti-corruption efforts, on a scale in which 0 is the most corrupt and 100 is the least corrupt (or the most "clean").

Corruption Perceptions

World Economic Forum (WEF) is in

Davos, Switzerland

rule of law index- top-ranking countries include

Denmark, Norway, and Finland

"Doing Business" Report- scores represent the size of the gap between a given country's score (based on how freely companies are allowed to do business in the country) and a perfect score (of 100).

Distance to Frontier (DTF)

he European Union has its earliest roots in the .........., which was formed in 1951 by six countries: France, Italy, West Germany, Belgium, the Netherlands, and Luxembourg.

European Coal and Steel Community

thought that by making European countries more interdependent, they could prevent another pan-European war such as World War II. industries they chose to unify were integral to the production of instruments of war.

European Coal and Steel Community

1957 France, Italy, West Germany, Belgium, the Netherlands, and Luxembourg established the ....... by signing the Treaty of Rome.

European Economic Community

3 trade blocs that have relaxed barriers to investment and trade among member nations.

European Union (EU) North American Free Trade Agreement (NAFTA) Mercosur (in Latin America)

...... involves producing products in the home country and selling them in another country. ........involves buying products made in other countries.

Exporting Importing

refers to the situation faced by economies that are based entirely on a commodity; these countries take a huge hit when the price of that commodity drops in global markets.

Immiserising trade

.... is the country that houses the world's largest number of poor people.

India

How Employees and the Organization Treat Other Economic Agents- questions from CUSTOMERS

Is advertising truthful? Are products safe?

.......-income nations have per capita incomes of $1,025 or less. Examples include Afghanistan, Haiti, Somalia, South Sudan, Nepal, Zimbabwe, and the Democratic Republic of the Congo.

Lower

Two organizations that provide insurance against political risk are

OPIC and MIGA:

A sad example of the conflict that has resulted from ethnic tensions was the 1993 genocide in ..... in which 800,000 people (minority Tutsis) were hacked to death with machetes (by majority Hutus) within a three-month span of time.

Rwanda

....... refers to whether members of a culture take a long-term or short-term outlook.

Time orientation

two huge global players, topping the lists of both investors and recipients on 2018 UNCTAD World Investment Report

US and China

.... markets where firms get financing

capital

the accounting standards that prevail in ...... law countries are often more flexible than those that prevail in ....... law countries

common Civil

Gini coefficient 1- income is

concentrated in just one person

Economists noticed that uncertainty is significantly higher in ..... countries

developing

net exports =

export- imports

international business parties include

individuals individual companies governments/govt agencies consortia

strategic imperatives (4) that motivate companies to "go global."

leverage core competency acquire resources seek new markets compete with industry rivals

occurs when the government seizes ownership of a private firm

nationalization

2 environmental changes external to the firm have allowed globalization to take place more rapidly in recent years.

political technological

The four primary characteristics of culture are as follows:

1. culture is learned 2. is interrelated with many aspects of society 3. is shared 4. is adaptive

five elements of culture

1. social structure 2. language 3. communication 4. religion 5. values and attitudes

Chronicle of Philanthropy, philanthropic giving fell significantly during the recession, but corporate donations have not risen back to pre-recession levels. In fact, as of a few years ago, cash donations were up by only .....% since the end of the recession, despite corporate profits being at an all-time high.

3

Coca-Cola's ..... Initiative, in which it will enable the economic empowerment of 5 million women entrepreneurs by 2020. empowerment of women is CRITICAL for economic growth.

5by20

shipping a T-shirt from Colombia to the United States costs about ......., which is less than the raw materials (60 cents), the cost of adding the design (90 cents), or the cost of getting the shirt from a warehouse to the customer ($2.70).

7 cents

....... is a proactive approach to shaping ethics in which employees are taught how they should respond to an ethical dilemma.

Ethics training

The ........... is a watchdog that monitors working conditions around the world. Regular inspections help a company gain favor with consumer activists, while providing them with the opportunity to form new business relationships with multinationals

International Labor Organization (ILO)

Before the implementation of the Clean Water Act and the Environmental Protection Agency, in the 1970s, firms dumped trash and waste products into rivers and streams without worrying about the impact on the environment. in the 1990s, the Clean Air Act was passed, and the UN developed the ...... Protocol, an international agreement to lower greenhouse gases. (The U.S. has yet to sign this agreement.)

Kyoto

From LEAST socially responsible to MOST socially responsible, the four basic approaches that a firm can adopt with regard to corporate social responsibility are as follows:

Obstructionist stance defensive stance accommodative stance proactive stance

Trump also asked that Congress pass the United States ........., which would make it so that whenever another country imposes unfair tariffs on a U.S. good, we could charge the exact same tariff on the same product they sell to us.

Reciprocal Trade Act

What Americans might call "........." or corruption, is common in Asian countries, and it is considered the "Asian way."

crony capitalism,

The 3 formal dimensions that can be used to manage social responsibility are as follows:

legal compliance ethical compliance philanthropic giving

Two recent innovations related to social responsibility are: ........impact bonds ........impact bonds

social development

encompasses individual roles in society, social stratification, and social mobility.

social structure

The 4 general steps involved in a corporate social audit are as follows:

• Define specific social goals. • Analyze the resources that the firm devotes to those goals. • Assess whether the firm has successfully achieved those goals. • Recommend courses of action.

mexico gdp per capita

19,900

rule of law index- The United States' global ranking is number

19.

US GDP

19.4 trillion

current inflation rate in the U.S. is about ....% which is right on target

2

mexico gdp

2.46 tril

Recent data show that the risk of slavery has risen in ...... EU countries. This is probably because of the influx of refugees into Europe

20

In 1999, several EU members adopted a common currency, the euro. Although the euro was available for use in computer transactions and digital trades beginning in 1999, paper currency and hard coins were not used in Europe until .....

2002.

2018 UNCTAD World Investment Report- FDI inflows by developed economies dipped below inflows by developing economies for the first and only time in

2013 and 2014.

With about .....% of the world's GDP, the United States has the world's largest economy

23

on the Index of Globalization: The U.S. ranks ....th China is .....th Japan is ...th

24th 87th 35th

United Nations Conference on Trade and Development (UNCTAD). global FDI inflows amounted to about $2 trillion at their peak in 2007, but then they declined to about $1.2 trillion in 2009, after the impact of the financial crisis and global recession. In 2017, total FDI fell by almost .....% from the previous year, which was unusual because global GDP and trade were simultaneously INCREASING

25

It is likely that an exam question will ask how many countries are members of the EU

28

international trade only accounts for....% of U.S. GDP Part of the reason is that the United States is so large

28

One additional note about Japan: Its population is aging, even more so than that of the United States. In fact, by 2025 approximately .....% of the Japanese population will be age 65 or older.

30

recent jobs report released. It was a very positive update, reporting that more than ...... new jobs created, wages are increasing, and although unemployment rose from 3.9% to 4%, this was due to the government shutdown.

300,000

Singapore's exports account for .....% of its GDP, which is possible because it has excellent ports that engage in re-exporting

326

US population

327 mil

canada population

36 mil

Hong Kong's exports are .....% of its GDP! Hong Kong is known as a center for electronics, textiles, banking, and finance, and it is widely viewed as a GATEWAY for businesses to enter the Chinese market.

400

Corruption Perceptions Index- average global score is ....

43

canada GDP per capita

48,300

World Economic Forum, corruption costs the world more than ......% of its GDP, or $2.6 trillion. According to the World Bank, corruption raises the cost of doing business by up to ....% worldwide.

5 10

africa consists of ...... countries

55

US GDP per capita

59,500

Consumption accounts for approximately.....% of US GDP

70

Of 500 major companies analyzed by the Associated Press, ...% reported low net income to the government and much higher adjusted profits to investors.

72

....of the top 20 most unequal countries in the world are in Latin America.

8

One of the key takeaways from the video is that ....% of all financial services take place in London, the world's number one financial center.

80

Researchers estimate that ....% of information is transmitted nonverbally, through hand gestures, eye contact, body posture and position, intonation, facial expressions, and the like.

80% to 90

International trade accounts for ....% of the GDP of the European Union countries. A lot of this trade is trade between EU members.

83

"Doing Business" Report- The United States was ranked ...... in terms of DTF scores.

8th

he Russian government has so much control over news and information sources that Putin's approval rating was about .....% among Russians for a while.

90%

.....attracts the most international tourist arrivals

Europe

Japan's Prime Minister Shinzo Abe implemented ........ a three-pronged economic plan to kick-start the economy with monetary easing, fiscal stimulus, and structural reforms.

"Abenomics,"

China suffered economically during Mao's rule, due to his economic policies and intense persecution of critics. His ........ in the 1950s and 1960s was a series of economic and social reforms that focused on collectivization and central planning. These policies were tremendous failures and resulted in widespread famine and millions of deaths.

"Great Leap Forward"

Denmark and Norway, known as the ..... have played particularly important roles in negotiating deals and maintaining peace among nations with opposing claims to the Arctic.

"Middle Powers,"

Unfortunately, a real estate and stock market bubble in Japan burst in 1989 and led to slow economic growth in the 1990s, which economists have called Japan's .........

"lost decade."

The Central Asian republics include what are sometimes collectively called Kazakhstan, Uzbekistan, Tajikistan, Turkmenistan, and Kyrgyzstan, Azerbaijan

"the - stans."

WSJ: "Global Growth to Lose Momentum This Year, World Bank Says." World Bank released its latest estimates on January 8th, cutting its global-growth forecast for 2019 down to 2.9% (0.2% lower) accounts for roughly $...billion loss to the global economy

$160 bil

formula for unemployment rate UR%=

(#unemployed / labor force) x 100

WSJ: "Global Growth to Lose Momentum This Year, World Bank Says." Other reasons for slowing growth for the global economy include the (1)....... (2) ......crises in some emerging markets, including Argentina and Turkey. Other emerging markets have been affected by (3).........

(1) reduction in global trade due to international trade tensions (between U.S. and China, U.S. and EU, and U.S., Mexico, and Canada) (2) currency crises (3) low commodity prices on products they heavily rely on for most of their economy (Ex: low oil prices are hurting the economies of Venezuela and Middle Eastern countries.)

The Fed's dual mandate is:

(1) to maintain price stability (i.e., keep inflation low, or about 2%) (2) to promote full employment

Average GDP growth in South America is greater than 2%, but Venezuela's GDP growth is barely above ....

- 5%

Sarbanes-Oxley important provisions

-Public Company Accounting Oversight Board sets standards for auditors • prohibits firms from simultaneously auditing and consulting • requirements/liabilities on executives, boards of directors, and auditors. • Section 404 requires firms to "maintain an adequate internal control structure and procedures for financial reporting."

6 most notable differences in accounting practices across countries:

1. valuation/reval of assets 2. valuation of inventories 3. dealing w/ tax authorities 4. accounting reserves 5. capitalization requirements 6. goodwill

firms can use the CAGE framework to do the following:

-differences b/t domestic and foreign mkt -aware of challenges to avoid mistakes -info to choose best market -competitive advantage

roles of language

-primary delineator of cultural groups -shapes how we see the world -offers clues about cultural values -aids in acculturation -differences are an indicator of diversity -indicator of diff in income, education, cultural values -offer companies opportunity to target market segments -competitive weapon -barrier to international trade

... recently surpassed Canada as the United States' largest bilateral trading partner

.China

WSJ: "Global Growth to Lose Momentum This Year, World Bank Says." Last week, economists from Barclay's estimated that for every two weeks of the government shutdown U.S. GDP will decrease by.....%, which translates to a $....billion loss every two weeks. This is significant to the global economy because when the U.S. economy falters, there is a DOMINO EFFECT felt by all other countries around the world.

0.1% $20 bil

Venezuela's inflation rate is .......% and it is predicted to grow to more than 10,000,000% in 2019 HYPERINFLATION

1,200

In 2004, the European Union expanded to include eight former communist countries, as well as Cyprus and Malta. In 2007, the European Union welcomed Romania and Bulgaria. accession of countries between 2000 and 2008 increased new members' GDPs by ..... percentage points and offered existing members an enlarged export market.

1.75

canada GDP

1.77 tril

Three factors that influence one's economic mobility are as follows:

1. Education 2. Savings 3. Neighborhood poverty

A percentage point is equal to...... basis points

100 10 percentage point decrease from 40% to 30%

mexico population

125 mil

The good news is that extreme poverty is on the decline. One estimate is that the proportion of the world population living on less than $1.25 per day dropped from 36% in 1990 to ....% in 2010

18

Before deciding to enter a new market, managers should ask a number of questions to assess the level of political risk there.

1. dictatorship or democracy 2. economy govt control or free markets 3. customers in private or public sector 4. policies changed recently 5. how stable is govt

International business requires an understanding of different legal systems. 4 Areas where laws can vary

1. policies on foreign investment (must take on Chinese partner to start a business there) 2. acquisitions of domestic firms (restriction on # of media outlet shares a foreigner can own) 3. definition of foreign investment and foreign investor 4. how companies can operate within the country (labor laws, min wage, tax)

6 ways religion affects international business:

1. shapes social attitudes 2. constrains business 3. affects product offerings 4. affects ad campaigns 5. shapes consumer behavior 6. int managers must be sensitive to traditions

...... of the 28 EU countries countries use the euro, a common currency that was introduced in 1999

19

.... mobility reflects whether you are better off than you were before or whether you are better off than your parents were.

Absolute

The most ethical companies for 2018 include 3M, ..... (formerly Arthur Andersen, the accounting firm complicit in the Enron scandal), Adobe, Aflac, Allstate, Canon, and many more.

Accenture

..... accounts for more than 40% of the GDP in many of the poorest African countries

Agriculture

The ........... Act, which was passed in the United States in 1789, has recently been interpreted to impose liability on U.S. corporations that benefit from the human rights abuses of foreign governments.

Alien Tort Claims

The approach adopted in......... countries holds that the state, the market, and civil society are SEPARATE ENTITIES that operate antagonistically and compete with one another. In fact, corruption is perceived when the ties between businesses and the government become TOO CLOSE

Anglo-Saxon

According to the state, market, civil society CSR model, stereotypical behaviors exist in three regions of the world:

Anglo-Saxon approach Asian approach Continental European approach

The ........ of the Organization for Economic Cooperation and Development, which was developed in 2000, criminalizes bribery by establishing legally binding standards.

Anti-Bribery Convention

the ...... movement whose aim is to incite a global war against American imperialism under the leadership of Putin. The movement views Ukraine as a Western actor that is progressively leading a fascist war. The building of nationalism is seen as a protectionist reaction against foreign enemies.

Anti-Maidan

refers to a series of uprisings that occurred in Tunisia, Egypt, Libya, and Syria in 2011.

Arab Spring

How Employees and the Organization Treat Other Economic Agents- questions from SUPPLIERS

Are a company's suppliers ethical? Are their subcontractors ethical? Does the company hold suppliers to an ethical standard?

How Employees and the Organization Treat Other Economic Agents- questions from STOCKHOLDERS

Are the company's financial disclosures honest and complete?

How Employees and the Organization Treat Other Economic Agents- questions from LABOR UNIONS

Are working conditions safe? Are workers allowed to negotiate for wages?

world average Internet penetration rate was about 50% as of January 2017. regions with higher-than-average North America (88%), Europe (84%), Oceania (68%), and South America (66%). regions with lower-than-average Africa (29%), South Asia (33%), and Central Asia (48%). MORE internet users in ...... than in any other region because there are so many people in ......; in fact, ......... accounts for LESS THAN TEN percent of the world's internet users.

Asia North America

The approach adopted in ....... countries involves a close relationship between the government and the private sector, with civil society playing a relatively minor role.

Asian

Working conditions are often poor in the countries where garments are made. In 2013, a .........garment factory collapsed, killing more than 1,000 people. This disaster, the worst in the history of the garment industry, brought attention to poor working conditions.

Bangladeshi

Islamic banking has been around since the 600s, and it is different from traditional Western banking in two ways:

Banks cannot charge interest, and profits must be earned on tangible assets. Profits and losses are shared by the business and lender.

Mao's .......... in the 1960s and 1970s sought to instill Communist orthodoxy in the country. During this period, the Communist party sought to remove the cultural remnants of capitalism and the former regime so that the country's Communist ethos would reign supreme.

Cultural Revolution

.. refers to the collective beliefs, behaviors, customs, attitudes, and values that make societies distinguishable from one another.

Culture

An organization called the ...... ranks international companies using the Ethics Quotient rating system. Ratings are based on a company's scores for several different considerations, including its innovation and reputation, ethics and compliance program, corporate governance and leadership, corporate citizenship and responsibility, and culture of ethics.

Ethisphere Institute

a map of Europe showed that people in .... countries are much more likely than to regard their own culture as superior to others.

Eastern European

The United States witnessed its worst accounting scandal in history in 2001, when the bad deeds of ......, a major U.S. energy company, came to light.

Enron

U.S. and Canadian firms can choose either LIFO/FIFO approach, whereas ..... is required in the United Kingdom and Brazil.

FIFO

Most of the international trade during the Cold War occurred between ...... nations. Second World nations were politically powerful, but they largely avoided commerce with the First World.

First World

the .......(1976) provides that the actions of foreign governments against U.S. firms are generally beyond the jurisdiction of U.S. courts.

Foreign Sovereign Immunities Act

More than other EU members, ..... has lobbied for protectionist policies.

France

......-income nations include those nations with per capita incomes of $12,476 or more.

High

decreases in the growth rate of energy use correspond with decreases in global..... growth.

GDP global energy usage and GDP are still INCREASING; smaller growth means that the RATE at which they are increasing is getting SLOWER

gross national income =

GDP + Net Inc

world uncertainty index- uncertainty has a positive correlation with economic policy uncertainty and stock market volatility, and it has a negative correlation with

GDP growth.

Per Capita GDP=

GDP/population

3 political changes have facilitated globalization in recent decades

General Agreement on Tariffs and Trade (GATT) World Trade Org (WTO) EU, NAFTA, MERCOSUR

a multilateral agreement intended to reverse restrictions on foreign investment and international trade. was successful in bringing tariff rates down significantly.

General Agreement on Tariffs and Trade (GATT, 1947)

...... currently has the FOURTH-largest ECONOMY in the world, and it is the world's THIRD-largest EXPORTER.

Germany

most 3 influential members of the European Union are

Germany, France, and the United Kingdom.

Today, a major lingering problem in South America is income inequality. One index measure of income inequality is the ....., which ranges from 0 to 1

Gini coefficient

ranks countries based on ability to grow, attract, and retain talent.

Global Talent and Competitiveness Index (GTCI)

inexorable integration of markets, nation-states, and technologies to a degree never witnessed before, in a way that is enabling individuals, corporations, and nation-states to reach around the world farther, faster, deeper, and cheaper than ever before.

Globalization

worldwide economic, social, technological, cultural, and political integration among individuals, groups of people, companies, and nations

Globalization

Every year the WEF has a different theme, and this year's theme is.......-which represents the "Internet of Things," the world's digitization and "technologization" of basically everything, as well as the advent of artificial intelligence.

Globalization 4.0

..... refers to the way in which people are motivated to achieve goals.

Goal orientation

Many sites (including YouTube, Twitter, and Facebook) are blocked by the "........" Chinese alternatives to many of the blocked Western sites have grown to be very popular, although they are monitored for posts about sensitive issues.

Great Firewall of China.

.....is the poorest country in the Caribbean

Haiti

a strategy in which a person or company takes action now to offset or minimize future risks. (not something that businesses operating solely in the domestic sphere have to worry about.)

Hedging

Today, nearly 66% of the world's extremely poor people live in just five countries:

India, China, Nigeria, Bangladesh, and the Democratic Republic of the Congo.

...... is the belief that the interests of the individual take precedence over the interests of the group ...... is the belief that the interests of the group take precedence over the interests of the individual.

Individualism collectivism

A video presented in class suggested that the United States might not have had a financial crisis if it had used .... banking rather than Western banking. However, other analysts point out that a ..........., and that the root of the problem may not have been addressed by a more conservative Islamic banking system.

Islamic subprime asset is still a subprime asset

While Saudi Arabia has the largest overall economy, ..... has the highest per-capita income in the Middle East

Israel

Studying international business will expose you to good ideas from abroad. For example, JUST-IN-TIME (JIT) inventory management systems originated in ....... and later caught on in the United States.

Japan

With a GDP of $5.43 trillion, ...... has the world's third-largest economy

Japan

One controversial attitude about social stratification has to do with skin color. number of commercials from India and other Asian countries in which companies are marketing products that make the skin lighter. Companies that sell skin- whitening products include such major consumer products companies as ..... (with brands such as Neutrogena) and .... (owns Dove), the company that created the "Love Your Body" campaign, which clearly stands in stark contrast to the attitude behind skin lightening products.

Johnson & Johnson Unilever.

During inflationary periods, ___IFO increases reported cost of goods sold and reduces reported profits (and thus taxes), while ___IFO provides a better estimate of the true value of the firm's inventory.

LIFO FIFO

....mobility is a situation in which the economic class you are born into has no effect on the economic class that you end up in.

Perfect economic

.......refers to the organization's conformity with regional, national, and international laws. The firm's internal departments are typically expected to adhere to laws relating to finances, human rights, and human resources.

Legal compliance

Civil law is the basis of the law in only one state in the United States-

Louisiana

......-income nations include such countries as Armenia, Morocco, Nigeria, Guatemala, Bangladesh, and Vietnam.

Lower-middle

.......-income nations have per capita incomes between $1,026 and $4,035.

Lower-middle

A firm can minimize its exposure to political risk in 5 ways:

MONITOR balance minimize net investment popularize firm abroad get insurance

Islamic banks were .........profitable than conventional Western banks before the 2008 financial crisis. Initially, the banks also did not see much loss in profit; however, as the crisis deepened, Islamic banks had a ........ decline in profitability compared with Western banks.

MORE steeper

In 1993, the ....... converted the European Economic Community to the European Union.

Maastricht Treaty

After ............ in 1976, China's leaders implemented a series of free market reforms that legalized some small businesses and privatized agriculture. Trade liberalization and free market policies have led to several decades of outstanding economic growth.

Mao's death

6 Economic agents

customers, competitors, stockholders, suppliers, dealers, and labor unions

An island nation with a population of 127 million, Japan has achieved strong economic growth in the past due to a strong partnership between the .................. and the highly concentrated industrial sector.

Ministry of International Trade and Industry (MITI)

are small- to medium-sized German manufacturing firms that make up the backbone of the German economy, accounting for MORE THAN HALF of German output. specialize in product niches, often in manufacturing machines that produce output. They focus on producing HIGH-QUALITY, well-engineered products that they export to the rest of the world.

Mittelstand

The ........ Index is one organization's attempt to characterize the risk that a person in a country will end up in slavery.

Modern Slavery

A World Bank subsidiary called the ............. provides similar insurance guarantees for firms' major projects in very risky markets, to attempt to encourage economic growth in poor countries, most of which are in the areas of infrastructure, finance, agribusiness, manufacturing, and services.

Multilateral Investment Guarantee Agency (MIGA)

engage in foreign direct investment, which is taking ownership or control over value-adding (i.e. profit-contributing) activities in foreign operations. Therefore, these firms are extensively involved in international business.

Multinational corporations (MNCs) Also called multinational enterprise or organization

6 groupings of emerging markets

NICs BRICS CIVETS MINTS Big Ten Next 11

The party has recently established a new investigative agency called the ........, which allows for the detention and interrogation process to be applied to people outside the party without a court order or other form of explanation. The system they operate under is now called "Liuzhi" which means retention in place, and officials say it is subject to legal and procedural checks that prevent abuses; but, people can be. detained for months without access to lawyers or courts.

National Supervisory Commission

"Doing Business" Report- the country where doing business was ranked as easiest was .....

New Zealand.

The Berlin Wall fell in 1989 and the USSR collapsed in 1991, leaving 15 former Soviet republics to declare their independence. These newly independent countries were called .........

Newly Independent States (NIS)

subcategory of emerging market economies that includes the countries that have recently undergone industrialization.

Newly Industrialized Countries (NICs)

During a concert in western Ukraine, Russian rapper ........ was handed a Ukrainian flag and wore it by tying it around his waist. He had taken the gesture to be a sign of friendship between countries, but Russian pro-Kremlin media called him a traitor

Noize MC

(OECD), a group of 34 market-oriented democracies of which the United States is a member.

Organization for Economic Cooperation and Development

in the high-income, developed countries in the ....... (OECD), such as the U.S., women are restricted in under 27% of economies

Organization of Economic Cooperation and Development

In the United States, the ............provides insurance against foreign-exchange inconvertibility, insurrections, revolutions, and nationalization. This insurance is only available to companies doing business in countries that have bilateral investment treaties with the United States.

Overseas Private Investment Corporation (OPIC)

Naturally, the less-democratic countries in the area are the biggest fans of Belt and Road Initiative, which make the plan even riskier. The flagship project of the BRI is .......

Pakistan

The .....Canal connects the Atlantic Ocean and the Pacific Ocean; 5% of global trade goes through it.

Panama

Greenberg's language diversity index measures the probability that two people in a country meeting at random would speak different languages The country with the most language diversity was ......, and the country with the least language diversity (only one language) was ....

Papua New Guinea North Korea.

Last year all the world's major leaders attended Davos, This year, however, ........, .........., and ........... will not be attending due to serious ongoing domestic crises in their respective countries

President Trump, UK Prime Minister Theresa May, and French president Emmanuel Macron

..... stakeholders (such as investors, customers, and employees) are directly affected by the firm's practices and have an economic stake in its performance.

Primary

The Kremlin backed youth group known as .............. popular culture centered around patriotism and loyalty to President Putin. Each member subscribes to the Project network manifesto and models their behavior in Putin's image.

Project Network

...... work ethic emphasizes achievement, hard work, frugality, and the glorification of God. In contrast, Hinduism emphasizes spirituality over material possessions or economic success. Islam places a greater emphasis on one's obligation to society.

Protestant

The World Justice Project, a global nonprofit organization, has developed a ....... Index, which ranks countries on a scale that measures the extent to which they enforce regulations measured based on different factors, including the kinds of laws in the country, whether the public has access to information about them, whether the public has the ability to change the laws, and whether a country enforces laws fairly.

Rule of Law

......... started with the highest GDP and was able to double it. Although some of the other Eastern European and Central Asian nations were also able to experience growth, overall, most have stagnated with minimal growth.

Russia

following enron scandal, In 2002, Congress enacted the ....... Act, which increased and strengthened accounting regulations and requirements.

Sarbanes-Oxley

..... has the largest economy in the Middle East. Oil accounts for approximately 45% of its GDP and 90% of its exports

Saudi Arabia

Belfast Accord (also known as the Good Friday Agreement) was signed, Northern Ireland- which is part of the UK- has had an open border with the country of Ireland. Because Ireland and the UK are both in the EU, they are part of the ...... Agreement, which allows for the free movement of EU citizens.

Schengen

....... stakeholders (such as NGOs, the news media, and the local community) are not directly involved with the firm, though they may be impacted by corporate decisions.

Secondary

Great Britain founded ........ as a trading colony in 1819. achieved independence in 1965 known as a regional TECHNOLOGICAL HUB, and it is an important center for OIL refining, with a burgeoning communications and financial services sector.

Singapore

...... impact bonds are a way for the public to help nonprofit organizations scale proven preventative interventions while shifting the financial risk away from the government. The government contracts with an intermediary to act as a broker. The intermediary raises capital from impact investors and then transfers multiyear funding to a nonprofit service provider, which scales up its operation to provide preventative interventions to a larger group of people.

Social

refers to an ORGANIZATION'S obligation to protect and enhance society. An organization has a responsibility to behave well in its interactions with the natural, social, and political environment.

Social responsibility (also called corporate social responsibility)

"Doing Business" Report- The country ranked most difficult to do business in was

Somalia (in East Africa).

By far, the most economically successful African country has been ....... African continent's "ECONOMIC POWERHOUSE."

South Africa

Anglo - Australia, Canada, Ireland, New Zealand, ......., United Kingdom, the United States

South Africa (white sample)

...... has the world's fastest broadband speeds as well as the lowest broadband costs

South Korea

he four tigers include the high-income Asian nations of

South Korea, Singapore, Taiwan, and Hong Kong

Many American, European, and Japanese firms use ....... as major sites of production for goods that require low-skill labor, such as textiles, as the cost of labor in these countries is lower than in China. FDI-generated exports have caused these economies to grow relatively rapidly in recent years, making these countries solid middle-income nations.

Southeast Asia

Perhaps the most important factor in understanding the economics and politics of Eastern Europe and Central Asia is understanding the history and influence of the ........., which controlled these regions for decades.

Soviet Union

.....theory, which suggests that China's strategy is to set up a string of naval bases across the Indian Ocean, so that China can station ships there and guard shipping routes through the region. China gaining that much power could have a potentially huge impact on international maritime trade

String of Pearls

The world's least-developed countries (also called non-high-income countries) tend to be concentrated in ... only LDC in western hemisphere

Sub-Saharan Africa Haiti

Countries with high political risk include many in economically depressed areas such as

Sub-Saharan Africa, Latin America, Central Asia, and the Middle East.

The .... Canal, which cuts through Egypt, opened in the 1860s and provided the United Kingdom a route to its colonies in Asia.

Suez

Global Talent and Competitiveness Index (GTCI) top five countries

Switzerland, Singapore, the United Kingdom, the United States, and Sweden.

Most of Australia's population lives along the coast, and 40% of the population lives in either ..... or ......

Sydney or Melbourne

...... is the virtually the only independent television channel in Russia but has periodically been taken off the air in some parts of Russia directed by the Kremlin. A propaganda campaign has been launched against them citing it as a factor of the "fifth column." has since been kicked out of their studios and forced to broadcast from a Moscow apartment because people believe they are fascists and traitors to Russia.

TV Rain

After the Chinese Communist Party took over mainland China in 1949, 2 million nationalists fled the country and established what they considered a new country- the REPUBLIC OF CHINA- in what we now know as

Taiwan

an indicator that measures and ranks the level of progress in different countries. assesses human development in a country based on achievements in health, knowledge, and standard of living

The Human Development Index (or Historical Index of Human Development)

... is sometimes called the "cradle of civilization" because the earliest components of human societies (including agriculture, governments, legal codes, and alphabets) evolved there.

The Middle East

exports more cotton than any other country in the world.

The United States

In 1989, the Chinese government cracked down on protesters in the ........, which has become an iconic symbol of China's opposition to democracy and free speech. Violent backlash from these protests drew criticism from the U.S. and other governments, but due to censorship it is not known about in China

Tiananmen Square Massacre

six different strokes of unemployment rates, which range from ...... (the strictest definition) to .....(the most generous definition, which includes discouraged workers) The U-3 number is reported EVERY MONTH and lies right in the middle.

U-1 U-6

The ......... Act of 2010 was passed by the British government to prevent corruption by any company conducting business in the United Kingdom. applies internationally: Any company with a business footprint in the U.K. cannot engage in any bribery anywhere in the world.

U.K. Anti-Bribery

state of union- President Trump also talked about the .......which- if passed- will replace NAFTA. Trump claimed that it would allow for more cars to be manufactured in the U.S

U.S.-Mexico-Canada Agreement (USMCA)

Countries in Central America and the Caribbean face significant structural challenges: the United States keeps a watchful eye on the region and doesn't hesitate to get involved in political affairs.

US military intervention

In 2014, Russia invaded ......., whose president was opening up to relations with the West Russians rally around Putin, but his attempts to weaken neighboring countries have been at the expense of the Russian people.

Ukraine

The European Union is unlikely to allow ..... to join because it is large, poor, unstable, and highly corrupt. For example, former president Viktor Yushchenko is widely believed to have been poisoned with radiation by Russian FSB operatives

Ukraine

..... describes how people respond to uncertain or ambiguous situations.

Uncertainty orientation

Although ....., ....., and ........ the applied to join the European Economic Community in 1961, France's president vetoed their entry. It wasn't until 1973 that the European Economic Community expanded to include these three countries.

United Kingdom, Ireland, and Denmark

......-income nations have per capita incomes between $4,036 and $12,475.

Upper-middle

rule of law index- bottom-ranking countries are

Venezuela, Cambodia, and Afghanistan

is ranked higher than China in the World Bank Doing Business Report. able to use its population full of workers and buyers (the average age is 30) to take advantage of its central location in the region.

Vietnam

In 1974, a nonprofit organization called ......... launched a campaign in which it exposed Nestle's questionable marketing tactics. The organization dubbed Nestle "the baby killer

War on Want

is a measure of the difficulty of accessing clean water.

Water stress (Many high stress countries are in less developed areas but Australia is a high stress)

........ occurs when employees report an organization's unethical or illegal conduct.

Whistle-blowing

attendees include presidents, prime ministers, business leaders, and CEOs. Throughout the forum, they address many issues including global security and weak economic recovery.

World Economic Forum (WEF)

Replaced GATT in 1995 Unlike the GATT, it has a dispute settlement mechanism that allows one country to present evidence of unfair trade practices conducted by another country. It also has protections for intellectual property rights and monitors the trade of services.

World Trade Organization (WTO)

President Donald Trump has taken a tough stand on China. He has said that Chinese President ....... will need to compromise with the United States on trade and other issues in the future.

Xi Jinping

GDP equation

Y = C + I + G + NX consumption + investment +govt spending + net exports

....... amounted to less than 0.5% of world GDP in 1980, but it is about 2.75% of world GDP today

`Foreign direct investment

The following are 4 companies that have taken steps to seem more socially responsible:

chipotle nike (sweatshop scandal) waste management unilever (leader in sustainability)

one person translates the document into another language and a second person translates it back to see if it matches the original text.

backtranslation

firm can minimize exposure to political risk- A firm must be sure that the rates of return in the market offset the risks of operating there. In addition, it is wise to maintain a diversified portfolio of projects of different risk levels.

balance

a new legal classification offered in several states. These private companies enjoy certain tax benefits based on the contributions they make to the environment and to society in general. protected from shareholder lawsuits against the company for not trying to maximize profits. EX: for every pair bought, Warby Parker donates a pair to someone in the developing world

benefit corporations (B-corps),

3 reasons for inequality in South America: Birth rates tend to be higher for poorer people, which means that a child born into a poor family has few financial resources to work with.

birth rates

Doing business internationally differs from doing business domestically in six aspects:

boundaries currencies legal systems cultures resources skills & knowledge

law is simply whatever the bureaucrats say it is, regardless of the "official" law of the country

bureaucratic

Why take int business

business skills future competitors business techniques cultural literacy money

n her article "Chinese Politics, Economy, and Rule of Law," Yu Keping, a Chinese legal scholar, differentiates the rule ...... law (bureaucratic law in which the Communist Party defines the law) from the rule ...... law (in which the Communist Party is held accountable under the law).

by of

CSR- The .........includes citizens, labor unions, churches, charitable groups, and non-governmental organizations, all of which contribute to public opinion and public policy.

civil society

an accounting method that companies can use to delay the recognition of expenses by recording them as a fixed asset and depreciating it over several periods.

capitalization

unethical supply chain that powers the ..... market. like most electronics, are primarily made of tin and manufactured in factories with horrible working conditions.

cellphone

large families of corporations that work together and play a major role in the South Korean economy. EX: LG, Samsung, Kia

chaebol

...millennials' total income is projected to surpass the total income collected by American millennials in the next 15 years

chinese

Mikhail Khodorkovsky, a Russian oil tycoon who was once Russia's richest man, criticizing Putin in public, Putin threw him in jail for alleged fraud, embezzlement, and money laundering. The facts of his case were so unconvincing that Amnesty International labeled Khodorkovsky a "prisoner of ..........." He was pardoned and released in December 2013, after ten years in prison.

conscience

groups of companies working together to produce a product or service

consortia

.........., in which a task force of higher managers formally and thoroughly analyzes how effective the firm's social responsibility efforts have been.

corporate social audit

CPI- Many more countries are perceived as being highly ....... than highly ......., which is influential to international business.

corrupt clean

india's 3 challenges- Bribes are considered a necessary part of doing business in many industries. Prime Minister Narendra Modi is pushing for a cashless society and even banned large bills in 2018, in attempt to fight bribery and corruption.

corruption

involves dishonest or fraudulent conduct, such as bribery, kickbacks, and embezzlement.

corruption

Russian politics has been marked by ....... and .......

corruption and graft

gdp characteristic- The government uses available data to estimate what a homeowner would pay if he or she were renting his or her home. That value is included in GDP (as consumption), even though no money actually changes hands.

counts imputed value of owner-occupied housing

United States, accounting standards are meant to provide transparent and fair information to outsiders because firms rely on PUBLIC INVESTORS In Germany and Japan, companies rely mainly on PRIVATE BANKS, so accounting standards there focus on the needs of ....... rather than the general public

creditors

successful international businesspeople are aware of their implicit biases, and strive to achieve ......... through research, experience, and training

cross-cultural literacy

CAGE four key dimensions associated with globalization ..... (distances)

cultural administrative geographic economic

approach to classifying cultures is to group them together into ...................--countries that share cultural dimensions and common business practices, such as foreign market entry methods. Often based primarily on geography and language.

cultural clusters

phenomenon that cultures are becoming increasingly similar over time.

cultural convergence

CAGE- This dimension deals with the differences or similarities in the language, religion, or values of two regions.

cultural distance

Those in favor of Quebecois independence, about 1/3 of Quebec's population, argue that it is ........from the rest of Canada. However, the majority of Quebecers do not support the sovereignty movement, due to ECONOMIC and LOGISTIC concerns

culturally and historically distinct

This component of the globalization index includes flows and activities that CAN BE MEASURED trade, foreign investment, the amount of international phone calls, levels of international tourism, as well as the number of embassies in a country, the number of treaties a nation signs, and the number of international organizations it is a part of, etc.

de facto

The KOF (the Swiss Economic Institute) created an overall globalization index with two sub-indices: .......... and ........... globalization. This index shows a steady increase in globalization since 1980.

de facto and de jure

The Fed can also change the ......, or the rate of interest that the Fed charges member banks for loans in its role as a lender of last resort.

discount rate

If a company operates in only one country and something bad happens in that market, its entire revenue stream may be shut down. If the company operates in several countries and something bad happens in just one of them, the impact of the negative event will be much less pronounced.

diversify revenue streams

Latin American, Middle Eastern, and African cultures [do/do not] place such an emphasis on punctuality and promptness

do not

According to a graph shown in class, the number of people in poverty in China has ...... dramatically since the 1980s, and the number of people in or above the middle class has ......

dropped skyrocketed

a country might tightly control the export of ...... products, which can be used for both civilian and military uses.

dual-use

....... is a practice in which a country promotes its exports by selling them at a lower price abroad than they would cost at home. This allows Japanese firms to drive other firms out of the industry and gain a larger share of the export market.

dumping

Cross-border trade is ...... in Poland, Slovak Republic, Romania, Portugal, Austria, Spain, Netherlands, Luxembourg, Belgium, and Italy.

easiest

3 Impacts of MNCs on Host Countries

economic political cultural

There may be a relationship between ease of trade and level of ......., and suggests that making it easier to trade across borders promotes economic growth.

economic development

CAGE- This dimension incorporates factors such as per capita income, the human resource base, infrastructure, and technology. These factors will influence how a company produces and markets its products in a country.

economic distance

60 Minutes report, thousands of U.S. companies are losing billions of dollars because of Chinese government-sponsored .....

economic espionage

3 Impacts of MNCs on Host Countries- if a local economy becomes dependent on a single MNC, and that MNC decides to shut down or to impose layoffs or cutbacks, the local economy will suffer.

economic impact

advantages of mass production. A company's average unit costs FALL as its production QUANTITY RISES, so it has an incentive to increase its volume by expanding into new markets.

economies of scale

strategic imperative- seek new markets allows 2 things

economies of scale revenue stream diversification

import substitution in South America failed in practice. The problem was that small domestic markets were not large enough to allow domestic firms to take advantage of .....

economies of scale.

3 reasons for inequality in South America: Those who receive an education become relatively rich, while those who do not remain poor.

education

3 reasons for persistent income inequality in South America are as follows:

education birth rates ineffective public spending

total sanction: a comprehensive prohibition against all commerce with a country.

embargo

possibilities as to what the outcome of the Brexit negotiations will be remain closely linked to the EU, as part of the European Economic Area or through sector-specific ...... a hard break from the EU in which trade relationships with the UK and EU will revert to ...... rules, meaning that the UK would lose passporting rights and their business would be restricted with the EU. There is also a possibility that negotiations fail, and the UK leaves the EU in 2019 without any ..... on their future cooperation.

free trade agreements WTO agreement

According to Ghosn (Nissan CEO), it is important to show compassion and care for employees and to ...... the logic of such an extreme move to workers.

fully explain

CAGE- This dimension covers aspects such as physical remoteness, transportation and communication infrastructure, country size, and common borders or ports.

geographic distance

the amount that the acquiring firm paid in excess of the acquired firm's book value

goodwill

after World War II, India relied (with mixed success) on ....... ownership of businesses in key industries to spur economic growth.

government

india's 3 challenges- You have to jump through a lot of hoops to do business in India, which makes foreign direct investment less attractive.

govt red tape

when government officials "skim money off the top" by misappropriating public funds for private or personal gain

graft

...... refers to whether a society places an emphasis on fun and enjoyment in life.

gratification orientation

an international trade theory asserting that countries which are GEOGRAPHICALLY CLOSE and are ECONOMICALLY ALIKE(i.e., have similar per-capita GDPs) will have similar demand patterns, causing them to trade more with one another.

gravity model,

Countries with ..... protection for intellectual property are more likely to attract high- tech foreign investment and innovation,

greater

government intervention is ..... in EU countries than in the United States.

greater

Countries in Central America and the Caribbean face significant structural challenges: The United States and the European Union have imposed a number of trade restrictions on these countries, particularly in the sugar and textile industries.

import limitations

After World War II, many South American countries attempted to grow through ........, a policy under which a government restricts imports with tariffs and non- tariff barriers in order to develop strong domestic industries.

import substitution

reducing transportation costs in Sub-Saharan Africa (one of the world's poorest places) by 10% would ........exports by nearly ......%

increase exports by 5%

Beginning in 1991, this country implemented a series of market reforms and privatization that attracted significant inflows of foreign direct investment. As a result, GDP has grown an average of over 7%, as of 2018. Economy is doing the best out of the BRICS countries

india

in 2017 this country surpassed France to become the 6th largest economy

india

is the world's second most populous country (with 1.28 billion people) and the WORLD'S LARGEST DEMOCRACY, thus it has an influence on the global demand for products similar to China's.

india

Hofstede's 6 Dimensions- social orientation range

individual - collective

Societies with a ........ orientation let people pursue the satisfaction of their natural drives (including their sex drive) freely. Societies with a ..... orientation regulate and suppress the individual's ability to gratify these drives.

indulgent restrained

Hofstede's 6 Dimensions- gratification orientation range

indulgent - restrained

3 reasons for inequality in South America: A government that cannot effectively redistribute income cannot effectively address income inequality.

ineffective public spending

The Central Asian republics all share a number of characteristics that contribute to a common heritage, including the following:

influenced by russia during cold war common language/religion scarce amount of arable land low per-capita income significant fossil fuel reserves

Strategic investments in ......... (such as utility systems, communications, and highways) facilitate the production and distribution of goods.

infrastructure

......rights (such as protection for patents, trademarks, and copyrights) play another important role in the technological environment. Many firms' core competencies and competitive advantage are based on these rights

intellectual property rights

In the 2000s, Russia was benefitting from increases in ..... and raw materials prices, which led its economy to grow rapidly

oil

extremely wealthy businessmen who run the country's largest companies. caused by Russia president Boris Yeltsin

oligarchs

recently the Communist Party has used several high- profile disappearances to intimidate others into compliance, all of them occurring under unclear circumstances after crossing Chinese authorities. 3 examples

one of China's wealthiest investors world-famous movie star head of lnterpol and China's Vice Minister of Public Security

approximately .... of the world's GDP comes from TRADE

one-third

the Fed has three major tools for accomplishing its two objectives:

open market operations changing discount rate changing reserve requirement

3 categories of political risk- The threat that a change in the laws, tax codes, environmental standards, insurrections, or terrorism will impact the firm's operations or its workers' safety.

operating risk

Russian Project Network is known for its promotion of conservative values based on ...... religion. The manifesto outlines its opposition to same-sex marriage and the promotion of the institution of the family.

orthodox

Three categories of political risk are as follows:

ownership operating transfer

3 categories of political risk- The threat of confiscation or expropriation of company property. For example, in April 2017 the Maduro government seized General Motors' assets in Venezuela.

ownership risk

Japan will give patent protection for even small improvements to existing inventions. This has led to "..............." in which a company files for a patent on small modifications to existing inventions, prohibiting the company that originally made the invention from making improvements on it.

patent flooding,

China (by 69%) and Colombia (by 48%) reduced the days it took to....

pay taxes

the percentage of the population with access to the internet an important indicator of how connected a country or region is to the rest of the world.

penetration rate

We typically measure a country's relative "richness" or "poorness" on a global scale by looking at ......measures of income

per-capita

change in percentage points =

percent - percent

percent is a measure of .....

percent change

Gini coefficient 0- income is

perfectly equally distributed

China's policies are somewhat paradoxical. On one hand, the Chinese Communist Party has opened up the Chinese economy and given Chinese citizens significant free-market freedoms. On the other hand, the Chinese Communist Party still restricts .......

personal freedoms

Essentially all Russian internet and television news outlets are government-owned propaganda tools, creating a modem CULT OF....... by depicting Putin as the strong Russian leader.

personality

A severe economic crisis struck Asia in the late 1990s, coinciding with a widespread currency collapse. During this time, Asia's market share of GDP FELL, but its ........adjusted measure of GDP market share ROSE.

purchasing power parity cost of living fell by even more than Asia's GDP

enron illegally manipulated its financial statements such that its successful ventures were reflected on the books, but its unsuccessful ventures were shifted into fake partnerships called ....

raptors

receiving goods, repackaging them or modifying them slightly, and then sending them back out as exports to other countries.

re-exporting

is informally defined as two consecutive quarters of negative GDP growth

recession

law is based on one particular faith or religion

religious

Another way that countries can constrain MNCs is by inhibiting their ability to ...... earnings- that is, bring profits earned abroad back home.

repatriate

The Fed's least commonly used tool is to change the ......., or the fraction of deposits that banks must keep as reserves, either as money in the vault or money on deposit with the Fed.

reserve requirement

Individuals in cultures with high power .....accept the inherent authority a person has because of his or her position in a hierarchy, whereas individuals in cultures with power ......... place less importance on a person's place in a hierarchy

respect tolerance

Hofstede's 6 Dimensions- power orientation range

respect - tolerance

In 2018 the biggest worries of Global CEOs were: ........., ......., emerging (disruptive) technology risk, environmental (climate change) risk, and operational risk.

return to territorialism cyber-security risk

cold war- the world's countries were divided into three groups: First World countries included Second World countries included Third World countries included

rich Western countries: the United States and its allies (including Japan) the Soviet Union and its allies. middle- and low-income nations in Latin America, Africa, and most of Asia.

human development index data show that the more educated regions of the world tend to also be .....

richer

supply and demand model: a reduction in costs causes a ..... which lowers the equilibrium price

rightward shift of the supply curve

Russian currency

ruble

As a result of drug-related corruption and violence, Mexico has a lack of.......... which describes a country's legal system and whether enforcement of its laws is proper, fair, and efficient

rule of law.

world's largest oil producer and the second-largest oil exporter.

russia

young British citizen in the 1700s, ......... was an apprentice at a mill. He learned how to run the mill, and he eventually brought that knowledge to America and became a major contributor to the American Industrial Revolution. his wife, developed a revolutionary new kind of thread and he encouraged his wife to apply for U.S. patent protection, and Hannah became the first American woman to successfully apply for a U.S. patent.

samuel Slater

limit on commerce with a country tend to be limited in scope

sanction

3 laws directly affecting int bus

sanction embargo extraterritoriality

The United States and Canada have the ......... ($600 billion in 2017) bilateral trade relationship in the world.

second-largest

speaking any common language does not necessarily eliminate possible misinterpretations- 2 examples

self-deprecation misinterpretation of words

- unconsciously using one's own culture as a reference point to understand the rest of the world.

self-reference criterion

US exports- By 2020, ........ exports are projected to surpass goods exports in the 100 largest metro areas.

services

The .......holder model holds that a firm's goal is to maximize the firm's profits for shareholders.

share

About 80% of Venezuelans want Maduro out of office, prompting him to bring the country closer to authoritarian rule and to attempt to ........

silence the opposition

an ambiguous, informal hierarchy o "pecking order" that ranks politicians and businessmen and redistributes wealth and power, based on their adherence to unspoken rules. In Russia, for example, the primary rule is to not challenge Putin.

sistema

Two important concepts related to business and politics in Russia are ........... and ............

sistema and kompromat:

The............environment is the foundation for a country's economy, and a country's resources determine what kind of ......... environment will prevail and what kind of products and services it will produce and export.

technological

6 aspects of globalization

technological economic social spatial cultural biological

A particularly useful technique for altering the technological environment is ................, which occurs when a foreign firm's know-how is passed on to home-country firms or individuals.

technology transfer

southeast asian countries with low wage rates

thailand indonesia malaysia vietnam

more than 75% of all of Canada's exports go to ......

the U.S

Just last week, ..... became the world's largest oil producer.

the United States

EU expansion-controversy surrounding certain countries that want to become members Macedonia poses problems because Greece feels that it should have the right to .......

the name "Macedonia."

country that bases its civil and criminal law on religion is called a .

theocracy

Japan is facing its ...... "lost decade" of a stagnant economy at this point.

third

According to new research, Russian oligarchs' money kept abroad is equivalent to the total assets possessed by citizens' households in Russia, and this offshore money belonging to oligarchs is..... times the size of Russia's foreign reserves.

three

some nations that have chosen not to be part of the European Union. They include several high-income countries (Iceland, Switzerland, Norway, Andorra, Monaco, and Liechtenstein) and many middle-income countries (Albania, Bosnia-Herzegovina, Kosovo, Montenegro, Serbia, and Macedonia). Development in many of the middle-income countries listed above was hindered by a decade of ......... in Yugoslavia in the 1990s. This region is currently politically stable, but it has not yet economically recovered.

warfare and genocide

in LDCs like Afghanistan or Haiti, passing the strictest laws protecting intellectual property .....[will or will not] .....make it a good place for investment,

will not still lack political stability, an educated workforce, decent infrastructure, etc.

Research has shown that introducing more ..... into the workforce could lead to significant social and economic benefits, including increased incomes, improvements in child welfare rates, higher savings rates, and increases in GDP.

women

A company operating in a foreign country has to abide by its laws, including laws intended to regulate the domestic economic environment. These laws include laws that relate to (4)

workforce management finances marketing developing/using technology

measures global uncertainty based on how frequently any variant of the word "uncertainty" appears in country's quarterly Economist Intelligence Unit reports. These reports come from British news magazine The Economist, whose Intelligence Unit publishes countryreports

world uncertainty index

The U.S. dollar plays an important role in the global marketplace for the following 3 reasons:

world's invoicing currency investors flee to safety in buying $ (flight capital) US huge recipient of long-term FDI

change in percent =

x1 - x2 / x1 * 100

is the global economy growing?

yes, just at a slower rate than previously predicted

China's currency has two interchangeable names: the ...... and the ......

yuan renminbi.

..... mobility reflects whether you are better off compared to everyone else around you.

• Relative

The triple bottom line is the idea that corporations must balance three objectives when formulating and implementing strategies:

•Fulfilling economic mission to create value for stakeholders/ profits for shareholders • Protecting the natural environment • Enhancing society's general welfare

The .......... is a U.S. law that prevents U.S. firms, their employees, or agents from bribing foreign government officials to influence official actions or policies or to gain or retain business.

Foreign Corrupt Practices Act (FCPA)

some analysts are calling this the "Age of ....." The potential power of social media to affect the bottom line of a company means that companies have no choice but to be socially responsible.

Damage.

How Employees and the Organization Treat Other Economic Agents- questions from DEALERS

Do the company's employees treat dealers fairly?

How Employees and the Organization Treat Other Economic Agents- questions from COMPETITORS

Does the company bribe vendors? Does it steal competitors' ideas?

reflects one's ability to move up or down the economic ladder during one's lifetime and across generations.

Economic mobility

...... behavior refers to behavior that conforms with generally accepted social norms, while ...... behavior refers to behavior that does not conform to generally accepted social norms.

Ethical unethical

...... refers to organizational members' adherence to basic ethical standards. This can be achieved through ethics committees, ethics training, and guidelines/codes.

Ethical compliance

simply refers to an INDIVIDUAL'S beliefs about what is right and what is wrong.

Ethics

..... is a company that examines companies' supply chain, discovers where slavery or child labor might be involved, and then helps those companies mitigate the damage to their reputation through effective public relations.

Modern Slavery Consulting

The 2 informal dimensions that can be used to manage social responsibility are as follows:

Organization leadership and culture whistle-blowing

refers to the grouping of people based on socioeconomic status, including birth, occupation, and educational achievement, as well as other attributes.

Social stratification

In Russian business culture, a parallel term to guanxi is ....... Though Russia still has an "economy of favors," using ..... was particularly prevalent during the Soviet regime in Russia, when resources were communally owned.

blat

These approaches (Anglo-Saxon approach, Asian approach, Continental European approach) can be remembered simply as .......

competition, collusion, and consensus.

A ....... impact bond is a performance-based investment instrument that finances development programs in low-resource countries. investors work with an intermediary to fund a service provider in a low-resource country. The investors, intermediary, host government, and service providers all agree on a metric of success, such as reducing HIV infections by a certain amount or increasing access to clean water. Investors are paid their principal plus interest if the program succeeds, and they stand to lose some or all of their principal if the program fails.

development

This is a great way for governments and international organizations (like the IMF or the World Bank) to harness the private sector's flexibility and drive for success, while helping socially conscious investors and host governments achieve development goals.

development impact bond

SIBs and DIBs are examples of ........-based policy, which only funds programs that have a proven track-record of success. based on the notion that we should take advantage of BIG DATA

evidence

Products that are most likely to have been produced using slave labor at some point in the supply chain include: laptops, computers, and mobile phones; garments; ......... ......... (which is used for chocolate as well as makeup); and sugarcane.

fish; cocoa

Due to the inefficient ruling bureaucracy in China, developing ...... with someone is sometimes the only way to get things done.

good guanxi

There are two ways that a company can be pushed toward acting ethically:

government regulations and corporate efforts.

banks report more about their ..... financing—times when the bank financed projects that were good for the environment—and they report less about their ....... financing—times when it financed projects that were harmful to the environment.

green brown

....... is when a company makes overstated or untrue claims about its commitment to the environment.

greenwashing

describes a personal connection between two people in which each person can count on the other to extend favors or preferential treatment. You might think of it as the reciprocal exchange of favors or "MUTUAL BACK-SCRATCHING."

guanxi

How m.em.bers of society define the family influences how they view them.selves within society, their priorities in life, and how they will interact with coworkers.

individual roles in society,

CSR- The....... organizes inputs, manages production processes, and allocates outputs to people in society. The economic system influences the environment.

market

Organizations can demonstrate social responsibility in their relationships with their environments, including the ......., ........., and ...... environments.

natural, social, political

..... (favoring friends and family, particularly in giving them jobs) is typically more common and acceptable in China than in the United States.

nepotism

Firms that adopt the ......... stance to social responsibility take as little action as possible to address environmental and social problems. When their actions run afoul of the law, they try to deny responsibility. EX: Nestle denied responsibility for unethical marketing tactics for its baby formula in Africa

obstructionist

BP's initial response could be described as .......... in violation of legal standards, delayed action to fix the problem. blamed other people and companies for the leak, and it grossly underestimated the destruction the oil spill would cause, continuously downplaying the negative environmental impact of the spill. comments made by CEO Hayward demonstrated just how out of touch BP was with the crisis. told reporters that he "wanted his life back," offending many, especially considering eleven people died as a result of the disaster. Over time, the company's reaction has transitioned from ........, to ........, to potentially .....

obstructionist defensive accommodative

The following are some generalizations about ethics and ethical behaviors: -People have their ....... about what is ethical and unethical -People from the ...... are more likely to hold similar ethical beliefs than people from different cultures. -What is "ethical" often depends on ....... -People may ...... from beliefs about ethical behavior depending on the situation. -Ethical values are impacted by national customs and cultures, which instill .......—what a person feels is important in life.

own individual, personal beliefs same culture the circumstances deviate values

The newer model is the ......holder model, which holds that firms should consider the needs of all organizational stakeholders—and not only shareholders—when making decisions.

stake

CSR- The ....... passes and enforces the laws that organizations must abide by. The type of government and the legal system in place therefore influences the political and social environment.

state

One model of CSR policy formation holds that the interplay between the ......., ........., and ......of a given region will determine public policy, social norms, and what practices are acceptable in business.

state, the market, and civil society

There are two models that firms can choose from when developing a strategy to fulfill their economic mission:

the shareholder model and the stakeholder model.

guanxi is becoming less important in China as the country adopts more Westernized practices. Chinese business culture is therefore becoming more .......-oriented and less personal-relationship-oriented.

transaction

The Japanese even have a word for the importance of group harmony,

wa.