BAtxst D. Rose Exam 1
Born global firm (international new venture)
A start-up company that attempts to do business abroad from inception.
North American Free Trade Agreement (NAFTA)
Agreement that created a free-trade area among the United States, Canada, and Mexico.
Regional Economic Integration
Agreements among countries in a geographic region to reduce and ultimately remove tariff and nontariff barriers to the free flow of goods, services, and factors of production between each other
Economic Union
Having all the features of a common market, members also coordinate and harmonize economic policies (in areas such as monetary, fiscal, and taxation) to blend their economies into a single economic entity
Social Complexity
The socially intricate and interdependent ways firms are typically organized
Resources and Capabilities
The tangible and intangible assets a firm uses to choose & implement its' strategies
Value Chain
A series of activities used in the production of goods and services that make a product or service more valuable
Union of South American Nations (UNASUR)
A regional integration mechanism integrating two existing customs unions (Andean Community and Mercosur) in South America
Local Content Requirement (LCR)
A requirement that some specific fraction of a good must be produced domestically.
Trade-Related Aspects of Intellectual Property Rights (TRIPS)
A WTO agreement governing intellectual property rights
International Entrepreneurship
A combination of innovative, proactive, and risk-seeking behavior that crosses national borders and is intended to create wealth in organizations.
Going rate approach
A compensation approach that pays expatriates the prevailing (going) rate for comparable positions in a host country
letter of credit (L/C)
A financial contract that states that the importer's bank will pay a specific sum of money to the exporter upon delivery of the merchandise.
Export Intermediaries
A firm that performs an important middleman function by linking domestic sellers and foreign buyers that otherwise would not have been connected
Labor relations
A firm's relations with organized labor (unions) in both home and host countries
Specialization
A focus on a particular activity or area of study
Relationship Orientation
A focus to establish, maintain, and enhance relationships with customers
Subsidies
A government payment that supports a business or market
Free Trade Areas (FTAs)
A group of countries that remove trade barriers among themselves
Trans-Pacific Partnership (TPP)
A multilateral free trade agreement being negotiated by 12 Asia Pacific countries
Third-party logistics (3PL) provider
A neutral, third-party intermediary in the supply chain that provides logistics and other support services.
Market Orientation
A philosophy that places the highest priority on the creation of superior customer value in the marketplace
Microfinance
A practice to provide micro loans ($50-$300) used to start small businesses with the intention of ultimately lifting the entrepreneurs out of poverty.
Commodization
A process of market competition through which unique products that command high prices and high margins gradually lose their ability to do so, thus becoming commodities
Product Life Cycle Theory
A theory that accounts for changes in the patterns of trade over time by focusing on product life cycles
Theory of Competitive Advantage
A theory that focuses on the relative (not absolute) advantage in one economic activity that one nation enjoys in comparison with other nations
Strategic Trade Theory
A theory that suggests that strategic intervention by governments in certain industries can enhance their odds for international success
Theory of national competitive advantage of industries (Diamond Theory)
A theory that suggests that the competitive advantage of certain industries in different nations depends on four aspects that form a "diamond."
Theory of Mercantilism
A theory that suggests that the wealth of the world is fixed and that a nation that exports more and imports less will be richer (Jean-Baptiste)
Theory of Absolute Advantage
A theory that suggests that under free trade, a nation gains by specializing in economic activities in which it has an absolute advantage. (Adam Smith)
Supply Chain Management
Activities to plan, organize, lead, and control the supply chain.
Psychological contract
An informal, unwritten understanding of expected delivery of benefits in the future for current services
European Union
An international organization of European countries formed after World War II to reduce trade barriers and increase cooperation among its members
venture capitalists
An investor who provides risk capital for early stage ventures
Resource Mobility
Assumption that a resource used in producing a product for one industry can be shifted and put to use in another industry
First-mover advantages
Benefits that accrue to firms that enter the market first and that late entrants do not enjoy
Administrative Policies
Bureaucratic rules that make it harder to import foreign goods
Common Market
Combining everything a customs union has, a common market, in addition, permits the free movement of goods and people
Benchmarking
Comparing an organization's practices, processes, and products against the world's best.
Market Segmentation
Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs
Onshoring
Domestic outsourcing
Stage Models
Model of internationalization that portrays the slow step-by-step (stage-by-stage) process an SME must go through to internationalize its business.
Original Design Manufacturers (ODMs)
Firm that both designs and manufactures products
Original Brand Manufacturers (OBMs)
Firm that designs, manufactures, and markets branded products
Original Equipment Manufacturers (OEMs)
Firm that executes design blueprints provided by other firms and manufactures such products
supply chain
Flow of products, services, finances, and information that passes through a set of entities from a source to the customer.
Staffing
HRM activities associated with hiring employees and filling positions
Host-country nationals (HCN)
Individual from the host country who works for the MNE
Parent-country nationals (PCN)
Individuals from parent country of MNE, work at its local subsidiary
Voluntary Export Restraint (VER)
International agreements that show that exporting countries voluntarily agree to restrict their exports (quotas)
Offshoring
International/foreign outsourcing
Development
Long-term, broader preparation to improve managerial skills for a better career
Reshoring
Moving formerly offshored activities back to the home country of the focal firm
Deadweight Costs
Net losses that occur in an economy because of tariffs
Customs Union (CU)
One step beyond a free trade area (FTA), a customs union imposes common external policies on nonparticipating countries
Business process outsourcing (BPO)
Outsourcing business processes to third-party providers. (Can be controversial)
Trade embargos
Politically motivated trade sanctions against foreign countries to signal displeasure
Marketing Mix (4 P's)
Product, Price, Place, Promotion
Inpatriation
Relocating employees of a foreign subsidiary to the MNE's headquarters for the purposes of filling skill shortages at headquarters and developing a global mindset for such inpatriates
Training
Specific preparation to do a particular job
Antidumping duties
Tariff imposed on imports that have been "dumped" (selling below costs to "unfairly" drive domestic firms out of business)
VRIO Framework
The resource-based framework that focuses on the value (V), rarity (R), imitability (I), and organizational (O) aspects of resources and capabilities
Infant industry argument
The argument that new industries should be protected from foreign competition until they are large enough to achieve economies of scale that will allow them to compete
Complementary Assets
The combination of numerous resources and assets that enable a firm to gain a competitive advantage
Casual Ambiguity
The difficulty of identifying the actual cause of a firm's successful performance
Absolute advantage
The economic advantage one nation enjoys that is absolutely superior to other nations
Performance Appraisal
The evaluation of employees' job performance and contributions to their organization.
Factor Endowments
The extent to which different countries possess various factors of production such as labor, land, and technology
Free trade
The idea that free market forces should determine how much to trade with little or no government intervention
Protectionism
The idea that governments should actively protect domestic industries from imports and vigorously promote exports
Political Union (PU)
The integration of political and economic affairs of a region
Asia-Pacific Economic Cooperation (APEC)
The official title for regional economic integration involving 21 member economies around the Pacific
Association of Southeast Asian Nations (ASEAN)
The organization underpinning regional economic integration in Southeast Asia
Expatriation
The process of selecting, managing, & motivating expatriates to work abroad
Total Cost of Ownership (TCO)
Total cost needed to own a product, consisting of initial purchase cost and follow-up maintenance/service cost.
Nontariff Barriers (NTBs)
Trade barrier that relies on nontariff means to discourage imports. NTBs include subsidies, import quotas, export restraints, local content requirements, administrative policies, and antidumping duties
Tariff Barrier
Trade barrier that relies on tariffs to discourage imports
Outsourcing
Turning over an activity to an outside supplier that will perform it on behalf of the focal firm
Trade Deficit
When a nation imports more than it exports
Balance Sheet Approach
a compensation approach that balances the cost of living differences relative to parent country levels and adds a financial inducement to make the package attractive
Small and medium-sized enterprise (SME)
a firm with fewer than 500 employees in the United States, or with fewer than 250 employees in the European Union
Monetary Union
a group of countries that use a common currency
Price elasticity
a measure of the sensitivity of demand to changes in price
General Agreement on Tariffs and Trade (GATT)
a multilateral agreement regulating international trade
World Trade Organization (WTO)
a permanent global institution to promote international trade and to settle international trade disputes
SWOT analysis
a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats
Import Tariff
a tax imposed on imports
Indirect Export
a way to reach overseas customers by exporting through domestic-based export intermediaries
Human Resource Management
activities managers perform to plan for, attract, develop, and retain an effective workforce
Alignment
alignment of interests of various players
Polycentric Approach
an emphasis on the norms and practices of the host country
Ethnocentric Approach
an emphasis on the norms and practices of the parent company (and the parent country of the MNE) by relying on PCNs
Global economic integration
efforts to reduce trade and investment barriers around the globe
Third-country nationals (TCNs)
individual who is from neither the parent country nor the host country of the MNE
Captive Sourcing
setting up subsidiaries to perform in-house work in foreign locations
Classical Trade Theories
mercantilism, absolute advantage, comparative advantage
Modern Trade Theories
product life cycle, strategic trade, national competitive advantage
Geocentric Approach
seek the best people (most suitable), regardless of nationality, for key jobs
Adaptability
the ability to change supply chain configurations in response to longer-term changes in the environment and technology
Agility
the ability to react quickly to unexpected shifts in supply and demand
Repatriation
the act of returning to the country of origin (returning expatriates)
Compensation
the determination of salary and benefits
Balance of Trade
the difference between a country's total exports and total imports
Distribution Channel
the set of firms that facilitates the movement of goods from producers to consumers
Trade Surplus
when a nation exports more than it imports