SOM: EXAM 1

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High Risk in Globalization

Joint Ventures Foreign Subsidiaries

Common Law

Laws made by judges ruling on cases based on precedents

Standard of living

The amount of goods and services people can buy with the money they have is referred to as standard of living

mixed economy

contains elements of market and command economy

Planned economy

country produces, planned by government

Economics

The study of the production, distribution, and consumption of scarce goods and services

Wrongful injuries in business relationships not covered by contract or criminal law are covered by

Tort Law

indicators for gauging the performance of a national economy

Unemployment rate Gross domestic product (GDP) Price indexes

When a country produces a product more cheaply and easily than any other country, it is said to have a(n)

absolute advantage

Whistleblower

an employee who reports organizational misconduct to the government or public (Sarbanes-Oxley Act)

IMF (International Monetary Fund)

flow of money between nations (short term loans)

What forms of unemployment are unvoluntary?

Structural and Cyclical

Moore's Law

Technology doubles and costs of productions falls in half every 18 months.

What important pieces of legislation is antitrust law based on?

The Sherman Antitrust Act The Federal Trade Commission Act The Clayton Act The Robinson-Patman Act

Stages of economic evolution in order

The agricultural economy The industrial economy The service economy

Market Economy

produced determined by supply and demand

The Sherman Antitrust Act

prohibits the restraint of trade and monopolies

Quality of life

society's general well-being as measured by standard of living, health care, educational opportunities, freedom, happiness, and environmental health

Expropriation

when the government seizes domestic or foreign companies' assets

communism

"from each according to their ability, to each according to their needs"

GATT (General Agreements on Tariff and Trade ) (WTO) Goals

1. promote trade by encouraging fair trade 2. reduce trade barriers 3. establish fair procedures

To be legally enforceable, a contract must meet each of ______ conditions.

6

What is the primary motivation for ethical behavior under a compliance-based ethical code?

Compliance-based ethical codes use direct control and the threat of punishment to encourage ethical behavior.

What is the producer price index (PPI)?

A measure of wholesale prices used as an indicator of inflation or deflation

Tariff

A tax on imported goods

Chapter 11

Allows companies to reorganize and continue business operations while paying creditors a portion of their debts

Chapter 13

Allows individuals and small businesses with debts below a certain amount to repay their creditors over a period of time under a court-approved plan

How is Chapter 11 bankruptcy different from Chapter 13 bankruptcy?

Chapter 11 applies only to companies.

Trial

Courts that hear criminal or civil cases not specifically assigned to other courts.

Appellate Courts

Courts that review cases appealed from lower courts considering questions of law but not questions of fact

What are drivers of globalization?

Declining Trade and Investment Barriers Microprocessors and Telecommunications Internet and WWW Transportation technologies

ESG

Environmental, Social, Governance

GDP

Expresses the total value of all of the goods produced within a country's borders in one year

Chapter 7

Forces debtors to turn over assets to a trustee for division among creditors

Moderate Risk in Globalization

Franchising and Foreign Licensing Global outsourcing

What forms of unemployment are voluntary?

Frictional and Seasonal

Fiscal Policy

Government policy that attempts to manage the economy by controlling taxing and spending.

GNI

Gross National Income: how much money is flowing in

Carroll's Global Corporate Social Responsibility Pyramid

Philanthropic, Ethical, Legal, Economic

PPP

Profit, People, Planet

Paradox of value

Pursue the factors of creating profit not just profit.

Economic Systems

What will be produced? How? For Whom? Who Owns?

Statutory

Written laws created by legislative bodies. (Imposed by state)

theory of the invisible hand

individuals' drive for prosperity produces the products that provide benefits to all

Import Quotas

limits on the numbers of a product that can be imported/exported

Five Factors of Production

natural resources, capital, human resources, entrepreneurship, and knowledge

Outsourcing

obtain (goods or a service) from an outside or foreign supplier, especially in place of an internal source

Organizational Layer

position within the hierarchy job title work style


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