chapter 17- globalization

Question 1

insourcing

Answer 1

the creation of domestic jobs by foreign employers

Question 2

nontariff barriers

Answer 2

nontax policies that governments enact to discourage imports, such as quotas and import restrictions

Question 3

importing

Answer 3

the process of acquiring products abroad and selling them in domestic markets

Question 4

foreign subsidiary

Answer 4

a local operation completely owned by a foreign firm

Question 5

globalization gap

Answer 5

the situation that results from large global firms gaining disproportionately from the global economy versus smaller firms and many countries

Question 6

international business

Answer 6

a company that conducts commercial transactions across national boundaries

Question 7

foreign corrupt practices act

Answer 7

a law that makes it illegal for US firms and their representatives to engage in corrupt practices overseas

Question 8

corruption

Answer 8

illegal practices to further one’s business interests

Question 9

child labor

Answer 9

the full-time employment of children for work otherwise done by adults

Question 10

licensing

Answer 10

a business arrangement in which one firm pays a fee for rights to make or sell another company’s products

Question 11

protectionism

Answer 11

a call for tariffs and favorable treatments to protect domestic firms from foreign competition

Question 12

outsourcing

Answer 12

the shifting of local jobs to foreign locations to take advantage of lower-wage labor in other countries

Question 13

most favored nation status

Answer 13

granting a trading partner the most favorable treatment for imports and exports

Question 14

sweatshops

Answer 14

organizations that employ workers at very low wages, for long hours, and in poor working conditions

Question 15

globalization

Answer 15

the process of growing interdependence among elements of the global economy

Question 16

global economy

Answer 16

an economic environment in which resources, markets and competition are worldwide in scope

Question 17

joint venture

Answer 17

a company that operates in a foreign country through co-ownership with local partners

Question 18

political risk

Answer 18

possible loss because of instability and political changes in foreign countries

Question 19

world trade organization (WTO)

Answer 19

a global institution established to promote free trade and open markets around the world

Question 20

global manager

Answer 20

a manger who is culturally aware and informed on international affairs

Question 21

exporting

Answer 21

a business practice in which local products are sold abroad

Question 22

global strategic alliance

Answer 22

a business arrangement in which each partner hopes to achieve through cooperation things they couldn’t do alone

Question 23

global sourcing

Answer 23

a business approach in which firms purchase materials or services around the world for local use

Question 24

global corporation or multinational corporation (MNC)

Answer 24

a company that has extensive international business dealings in many foreign countries

Question 25

currency risk

Answer 25

possible loss because of fluctuating exchange rates

Question 26

tariffs

Answer 26

taxes governments levy on imports from abroad

Question 27

political-risk analysis

Answer 27

a forecast of how political events may impact foreign investments

Question 28

transactional corporationi

Answer 28

an MNC that operates worldwide on a borderless basis

Question 29

greenfield venture

Answer 29

the establishment of a foreign subsidiary by building an entirely new operation in a foreign country

Question 30

franchising

Answer 30

a business arrangement in which a firm pays a fee for rights to use another company's name and operating methods