Quiz 2: Chapter 2- The Global Business Environment Flashcards Preview

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Flashcards in Quiz 2: Chapter 2- The Global Business Environment Deck (28):
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Globalization

the integration and interdependence of economic, technological, sociocultural, and political systems across diverse geographic regions

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GATT

General Agreement on Tariffs and Trade

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WTO

World Trade Organization

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ASEAN

Association of South Eastern Asian Nations
Three main goals;
1) Accelerating economic growth
2) Promoting social and cultural development
3) Ensuring peace and stability

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NAFTA

North American Free Trade Agreement
-1994
-The treaty eliminates tariffs among the nations

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IMF

International international trade organization

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EU history

European Union- took current form in 1993, introduced the euro in 1999 and 17 countries have adopted it

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MERCOSUR

Includes; Argentina, Brazil, Paraguay, Uruguay, and Venezuela
-established in 1991
the fourth largest regional trading group
seeks to create an economic juggernaut in South America

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Comparative Advantage

an economic theory that proclaims countries should specialize in producing goods for which they have the lowest opportunity cost of production

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External environement

represents all of the external forces that affect the firm's business

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General environment

Includes the technological, economic, political/legal, and sociocultural dimensions that affect a firm's external environment

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Task environment

includes entities that directly affect a firm on a constant basis and include competitors, suppliers, and customers

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General environment

Includes Technological, Economic, Political/legal, & sociocultural aspects

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Technological dimensions

the processes, technologies, or systems that a firm can use to produce outputs

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Economic dimensions

the general economic environment (GDP, inflation, and unemployment) in the markets where the firm performs activities

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Political Dimension

refers to the political events and activities in a market that affect a firm

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Legal Dimension

refers to the regulations and laws that a firm encounters in its markets

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Sociocultural dimension

demographic characteristics as well as the values and customes of a society

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Social values

the deeply rooted system of principles that guide individuals in their everyday choices and interactions

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Firms that expand globally need to be sensitive toward

social values and cultures

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Task environment

Competitors, Suppliers, & Customers

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Competitor

any organization that creates goods or services targeted at a similar group of customers

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Suppliers

provides resources or services for a firm to help in its creation of products and services- it is not economical for companies to produce everything in house

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Customers

the people or other organizations that buy a firm's products and services

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Internal Environment

a group of parties or factors that directly impact a firm, including owners, the board of directors, employees, and culture

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Owners

the people or institutions that maintain legal control of an organization

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Board of Directors

a group of individuals elected by the shareholders and charged with overseeing the general direction of the firm

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Employees

the people who make the products and provide the services on behalf of an organization allowing the firm to exist