Chapter 1

Question 1

Title of Chapter 1

Answer 1

Globalizing Business

Question 2

International business (IB)

Answer 2

(1) A business (firm) that engages in international (cross-border) economic activities and/or
(2) the action of doing business abroad

Question 3

Multinational enterprise (MNE)

Answer 3

A firm that engages in foreign direct investment.

Question 4

Foreign direct investment (FDI)

Answer 4

Investment in, controlling, and managing value-added activities in other countries

Question 5

Global Business

Answer 5

Business around the globe

Question 6

Emerging economy

Answer 6

A term that has gradually replaced the term “developing country” since the 1990s

Question 7

Emerging market

Answer 7

A term that is often used interchangeably with “emerging economy”

Question 8

Purchasing power parity (PPP)

Answer 8

A conversion that determines the equivalent amount of goods and services that different currencies can purchase

Question 9

Gross domestic product (GDP)

Answer 9

The sum of value added by resident firms, households, and governments operating in an economy

Question 10

Gross national product (GNP)

Answer 10

GDP plus income from non-resident sources abroad

Question 11

Gross national income (GNI)

Answer 11

GDP plus income from non-resident sources abroad

• GNI is the term used by the World Bank and other international organizations to supersede the term GNP

Question 12

BRICS

Answer 12

Brazil, Russia, India, China, and South Africa

Question 13

Great Transformation

Answer 13

Transformation of the global economy that is embodied by the tremendous shift in economic weight and engines of growth toward emerging economies in general and BRIC(S) in particular

Question 14

Triad

Answer 14

North America, Western Europe, and Japan

Question 15

The Base of the pyramid (BoP)

Answer 15

Economies where people make less than US $2,000 per capita per year

Question 16

Reverse innovation

Answer 16

An innovation that is adopted first in emerging economies and is then diffused around the world

Question 17

Group of 20 (G-20)

Answer 17

The group of 19 major countries plus the EU whose leaders meet on a biannual basis to solve global economic problems

Question 18

Expatriate manager (expat)

Answer 18

A manager who works abroad

Question 19

International premium

Answer 19

A significant pay raise when working overseas

Question 20

Liability of foreignness

Answer 20

The inherent disadvantage that foreign firms experience in host countries because of their non-native status

Question 21

Globalization

Answer 21

The close integration of countries and peoples of the world

Question 22

Risk management

Answer 22

The identification and assessment of risks and the preparation to minimize the impact of high-risk, unfortunate events

Question 23

Scenario planning

Answer 23

A technique to prepare and plan for multiple scenarios (either high- or low-risk)

Question 24

Semiglobalization

Answer 24

A perspective that suggests that barriers to market integration at borders are high, but not high enough to insulate countries from each other completely

Question 25

Nongovernmental organization (NGO)

Answer 25

An organization that is not affiliated with governments