Exam 2 Flashcards
(106 cards)
1
Q
Floating Exchange Rate
A
When the foreign exchange market determines the relative value of a currency.
2
Q
Pegged Exchange Rate
A
When the value of a currency is fixed relative to a reference currency, such as the U.S. dollar
3
Q
Managed Float System
A
The value of the currency is determined by market forces but managed by the government (AKA dirty-float system)
4
Q
Fixed Exchange Rate
A
Values of a set of currencies are fixed against each other at a mutually agreed-on exchange rate.
5
Q
Dollarization
A
Abandon current currency and adopt another currency (usually the U.S. dollar)
6
Q
European Monetary System (EMS)
A
EU system designed to create a zone of monetary stability in Europe, control inflation, and coordinate exchange rate policies of EU countries.
7
Q
Gold Standard
A
Pegging currencies to gold and guaranteeing convertibility.
8
Q
Gold par value
A
The amount of currency needed to purchase one ounce of gold.
9
Q
Balance-of-trade equilibrium
A
Reached when the income a nation’s residents earn from exports equals money paid for imports.
10
Q
Currency Board
A
Country converts its domestic currency on demand into another currency at fixed exchange rate; means of controlling a country’s currency.
11
Q
Currency Crisis
A
Occurs when a speculative attack on the exchange value of a currency results in a sharp depreciation in the value of the currency or forces authorities to expend large volumes of international currency reserves and sharply increase interest rates to defend the prevailing exchange rate.
12
Q
Banking Crisis
A
A loss of confidence in the banking system that leads to a run-on banks, as individuals and companies withdraw their deposits
13
Q
Foreign Debt Crisis
A
Situation in which a country cannot service its foreign debt obligations, whether private-sector or government debt
14
Q
Equity Loans
A
When corporations sells stock to investors
15
Q
Debt Loans
A
Requires corporations to repay a predetermined portion of the loan amount at regular intervals regardless of how much profit it is making
16
Q
Cost of Capital
A
Price of borrowing money
17
Q
Systematic Risk
A
Movement in a stock’s portfolio’s value that are attributed to macroeconomic forces affecting all firms in an economy.
18
Q
Hot Money
A
Short-term capital
19
Q
Patient Money
A
long-term cross-border capital flows
20
Q
Eurocurrency
A
Any currency banked outside of its country of origin
21
Q
Hedge Fund
A
Investment fund that not only buys financial assets (stocks, bonds, currencies) but also sells them short.
22
Q
Foreign Bonds
A
Bonds sold outside the borrower’s country and denominated in the currency of the country in which they are issued.
23
Q
Euro Bonds
A
Bonds placed in countries other than the ones in whose currency the bonds are denominated.
24
Q
Strategy
A
Actions managers take to attain the firm’s goals
25
Profitability
A ratio or rate of return concept
26
Profit Growth
The percentage increase in net profits over time
27
Value Creation
Performing activities that increase the value of goods or services to consumers
28
Operations
The various value creation activities a firm undertakes
29
Core Competence
Firm skills that competitors cannot easily match or imitate.
30
Location Economies
Cost advantages from performing a value creation activity at the optimal location for that activity.
31
Global Web
When different stages of value chain are dispersed to those locations around the globe where value added is maximized or where costs of value creation are minimized
32
Experience Curve
Systematic production cost reductions that occur over the life of a product
33
Learning Effects
Cost savings from learning by doing.
34
Economies of Scale
Cost advantages associated with large-scale production.
35
Universal Needs
Needs that are the same all over the world, such as steel, bulk, chemicals, and industrial electronics
36
Global Standardization Strategy
A firm focuses on increasing profitability and profit growth by reaping the cost reductions that come from economies of scale, learning effect, and location economies.
37
Localization Strategy
Increasing profitability by customizing the firm's goods and services so that they provide a good match to tastes and preferences in different national markets.
38
Transnational Strategy
Attempt to simultaneously achieve low costs through location economies, economies of scale, and learning effects while also differentiating product offerings across geographic markets to account for local differences and fostering multidirectional flows of skills between different subsidiaries in the firm's global network of operations.
39
International Strategy
Trying to create value by transferring core competencies to foreign markets where indigenous competitors lack those competencies.
40
Organization Architecture
The totality of a firm's organization, including formal organizational structure, control systems and incentives, organizational culture, processes, and people.
41
Organizational Structure
The three-part structure of an organization, including its formal division into subunits such as product divisions, its location of decision-making responsibilities within that structure, and the establishment of integrating mechanisms to coordinate the activities of all subunits.
42
Control Systems
Metrics used to measure performance of subunits
43
Incentives
The devices used to reward appropriate managerial behavior.
44
Processes
The manner in which decisions are made and work is performed within any organization
45
Organizational Culture
Values and norms shared among an organization's employees.
46
People
The employees of the organization, the strategy used to recruit, compensate, and retain those individuals, and the type of people that they are in terms of their skills, values, and orientation.
47
Vertical Differentiation
The centralization and decentralization of decision-making responsibilities
48
Horizontal Differentiation
The division of the firm into subunits
49
Integrating Mechanisms
Mechanisms for achieving coordination between subunits within an organization
50
International Division
Division responsible for a firm's international activities
51
Worldwide Area Structure
Business organization structure under which the world is divided into areas.
52
Worldwide Product Division Structure
Business organizational structure based on product divisions that have worldwide responsibility.
53
Global Matrix Structure
Horizontal differentiation proceeds along two dimensions: product division and areas
54
Knowledge Network
Network for transmitting information within an organization that is based on informal contacts between managers within an enterprise and on distributed information systems.
55
Personal Control
Achieving control by personal contact with subordinates
56
Bureaucratic Control
Achieving control through establishment of a system of rules and procedures.
57
Output Control
Achieving control by setting goals for subordinates, expressing these goals in terms of objective criteria, and then judging performance by a subordinate's ability to meet these goals.
58
Cultural Control
Achieving control by persuading subordinates to identify with the norms and value systems of the organization (self-control).
59
Performance Ambiguity
Occurs when the causes of good or bad performance are not clearly identifiable.
60
MITI
Japan's ministry of International Trade and Industry
61
Sogo Shosha
Japanese trading companies: a key part of keiretsu, the large Japanese industrial groups
62
Export Management Company (EMC)
Export specialist that acts as an export marketing department for client firms
63
Letter of Credit
Issued by a bank, indicating that the bank will make payments under specific circumstances
64
Bill of Exchange
An order written by an exporter instructing an importer, or an importer's agent, to pay a specified amount of money at a specified time
65
Draft
An order written by an exporter telling an importer what and when to pay
66
Sight Draft
A draft payable on presentation to the drawee.
67
Time Draft
A promise to pay by the accepting party at some future date
68
Bill of Lading
A document issued to an exporter by a common carrier transporting merchandise. It serves as a receipt, contract, and a document of title.
69
The Export-Import Bank (EXIM) of the US
Agency of the U.S. government whose mission is to provide aid in financing and facilitate exports and imports.
70
Countertrade
The trade of goods and services for other goods and services.
71
Barter
The direct exchange of goods or services between two parties without a cash transaction.
72
Counterpurchase
A reciprocal buying agreement
73
Offset
Agreement to purchase goods and services with a specified percentage of proceeds from an original sale in that country from any firm in the country
74
Switch Trading
Use of a specialized third-party trading house in a countertrade arrangement.
75
Buyback
Agreement to accept a percentage of a plant's output as payment for contract to build a plant.
76
Production
Activities involved in creating a product
77
Supply Chain Management
The integration and coordination of logistics, purchasing, operations, and market channel activities from raw material to the end-customer.
78
Purchasing
The part of the supply chain that includes the worldwide buying of raw material, component parts, and products used in manufacturing of the company's products and services.
79
Logistics
The part of the supply chain that plans, implements, and controls the effective flows and inventory of raw material, component parts, and products used in manufacturing.
80
Upstream Supply Chain
The portion of the supply chain from raw materials to the production facility.
81
Downstream Supply Chain
The portion of the supply chain from the production facility to the end-customer.
82
Total Quality Management (TQM)
Management philosophy that takes as its central focus the need to improve the quality of a company's products and services.
83
Six Sigma
Statistically based methodology for improving product quality
84
ISO 9000
Certification process that requires certain quality standards that must be met
85
Minimum Efficient Scale
The level of output at which most plant-level scale economies are exhausted.
86
Flexible Manufacturing Technology/ Lean Production
Manufacturing technology designed to improve job scheduling, reduce setup time, and improve quality control.
87
Mass Customization
The production of a variety of end products at a unit cost that could once be achieved only through mass production of a standardized output.
88
Flexible Machine Cells
Flexible manufacturing technology in which a grouping of various machine types, a common material handles, and a centralized cell controller produces a family of products.
89
Global Learning
The flow of skills and product offerings from foreign subsidiary to home country and from foreign subsidiary to foreign subsidiary.
90
Offshore Factory
A factory that is developed and set up mainly for producing component parts or finished goods at a lower cost than producing them at home or in any other market
91
Source Factory
A factory whose primary purpose is also to drive down costs in the global supply chain.
92
Server Factory
A factory linked into the global supply chain for a global firm to supply specific country or regional markets around the globe.
93
Contributor Factory
A factory that serves a specific country or worldregion
94
Outpost Factory
A factory that can be viewed as an intelligence-gathering unit
95
Lead Factory
A factory that is intended to create new processes, products, and technologies that can be used throughout the global firm in all parts of the world.
96
Make-or-buy Decision
The strategic decision concerning whether to produce an item in-house or purchase it from an outside supplier
97
Global Distribution Center (Warehouse)
A facility that positions and allows customization of products for delivery to worldwide wholesalers or retailers or directly to consumers anywhere in the world; also called a global distribution warehouse.
98
Global Inventory Management
The decision-making process regarding the raw material, work-in-process (component parts), and finished goods inventory for a multinational corporation.
99
Packaging
The container that holds the product itself. It can be divided into primary, secondary, and transit packaging.
100
Primary Packaging
Holds the product itself
101
Secondary/ Case lot Packaging
Designed to contain several primary packages (bulk)
102
Transit Packaging
When a number of primary and secondary packages are assembled on a pallet or unit load for transportation
103
Transportation
The movement of inventory through the supply chain
104
Reverse Logistics
The process of moving inventory from the point of consumption to the point of origin in supply chains for the purpose of recapturing value or proper disposal.
105
Just in Time (JIT)
Inventory logistics system designed to deliver parts to a production process as they are needed, not before.
106
Global Supply Chain Coordination
The shared decision-making opportunities and operational collaboration of key global supply chain activities
