MGMT 309 - Ch. 5-8

Strategic alliance

2 or more firm jointly cooperate for mutual gain

Direct investment

Firm headquartered in one country builds/purchases operating facilities/subsidiaries in a foreign country

EU

First and most important international market system

Trade agreement intended to promote international trade by reducing trade barriers and making it easier for all nations to compete in international markets.

General Agreement on Tariffs and Trade

A major stimulus to international trade after it was first ratified in 1948 by 23 countries

General Agreement on Tariffs and Trade (GATT)

Serves as an environmental challenge faced by managers in a global context

Economic environment

While performing the function of organizing in a global economy, managers should

Deal with human resources

Country that remains largely underdeveloped but has a high-potential economy

China

Power tolerance

Individuals assess authority in view of its perceived rightness or their own personal interests

True of the European Union (EU)

It gained potential after the adoption of the Euro

The EU is a market system

Its member countries engage in high levels of trade w/ one another to keep trade barriers to a minimum

basic organizational function that international management has implications for

Leading

An economy based on private ownership of business and allows factors such as supply and demand to determine business strategy

Market economy

incentives for international trade a less-developed country is likely to offer

Market protection through limitation on other importers

Gold's Gym, a U.S. fitness chain, has successfully opened facilities in a few foreign locations. Gold's Gym is therefore most likely a...

Medium-size organization

In contrast to multinational corporations (MNCs), medium-sized organizations doing business abroad are:

More selective about the markets they enter

True of culture in a global economy

Motivational processes vary across cultures

________ take a global perspective by actively seeking new expansion opportunities wherever feasible

Multinational corporations

Challenge encountered when working with oil-producing nations

Political Instability

Characteristic of high-potential/high-growth economies that makes them of such interest to international businesses

Population size

Primary mission of the World Trade Organization

Promote trade among nations

Limit on the number or value of goods that can be traded

Quota

A basic goal of the World Trade Organization (WTO)

Reduce trade barriers through multilateral negotiations

Tax collected on goods shipped across national boundaries

Tariff

Critical issue in decision making in a global economy

The role of goals in an organization

True of Multinational Corporations (MNCs)

They transfer capital and information from one market to another

Joint venture

special type of strategic alliance where partners share ownership in a new enterprise

Power respect

authority is inherent in one's position within heirarchy

Licensing

company allows another to use its trademark, brand name, technology, patent, copyright, or other assets in exchange for royalty

usually first type of international business a firm gets involved in

importing/exporting

Direct investment is advantageous because managerial control:

is more complete

Maquiladoras

light-assembly plants built in north mexico, close to the US border

Quota

limit on number of value of goods that can be traded

Economic community

set of countries that agree to markedly reduce/eliminate trade barriers among member nations Ex: EU, formalized market system, NAFTA, Latin American Integration Association, Caribbean Common Market

Export restraint agreement

sets voluntary limits on goods exported/imported between governments