Test 1 Flashcards by Liam Quinn

2 Drivers of Globalization

Declining Trade/Investment Barriers

2. Technology

How well did you know this?

Not at all

Perfectly

General Agreement on Tariffs and Trade (GATT)

International treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the WTO

How well did you know this?

Not at all

Perfectly

World Trade Organization (WTO)

The organization that succeeded the General Agreement on Tariffs and Trade (GATT) as a result of the successful completion of the Uruguay Round of GATT negotiations

How well did you know this?

Not at all

Perfectly

International Money Fund (IMF)

International institution set up to maintain order in the international monetary system

How well did you know this?

Not at all

Perfectly

World Bank

International institution set up to promote general economic development in the world’s poorer nations

How well did you know this?

Not at all

Perfectly

United Nations

An international organization made up of 193 countries headquartered in New York City, formed in 1945 to promote peace, security, and cooperation

How well did you know this?

Not at all

Perfectly

Moore’s Law

The power of microprocessor technology doubles

and its costs of production fall in half every 18 months

How well did you know this?

Not at all

Perfectly

Multinational Enterprise (MNE)

A firm that owns business operations in more than one country

How well did you know this?

Not at all

Perfectly

Collectivism

A political system that emphasizes collective goals as opposed to individual goals

How well did you know this?

Not at all

Perfectly

Individualism

freedom of expression, economic self-interest

How well did you know this?

Not at all

Perfectly

Command Economy

An economic system where the allocation of
resources, including determination of what goods and services should be produced, and in what quantity, is planned by the government

How well did you know this?

Not at all

Perfectly

Totalitarianism

Form of government in which one person or

political party exercises absolute control over all spheres of human life and opposing political parties are prohibited

How well did you know this?

Not at all

Perfectly

Theocratic Totalitarianism

A political system in which political power is monopolized by a party, group, or individual that governs according to religious principles

How well did you know this?

Not at all

Perfectly

Common Law

A system of law based on tradition, precedent, and custom; when law courts interpret common law, they do so with regard to these characteristics

How well did you know this?

Not at all

Perfectly

Civil Law

A system of law based on a very detailed set of written laws and codes

How well did you know this?

Not at all

Perfectly

Property Rights

Bundle of legal rights over the use to which a

resource is put and over the use made of any income that may be derived from that resource

How well did you know this?

Not at all

Perfectly

Private Action

The theft, piracy, blackmail, and the like by private individuals or groups

How well did you know this?

Not at all

Perfectly

Public Action

The extortion of income or resources of property

holders by public officials, such as politicians and government bureaucrats

Gross National Income (GNI)

The yardstick for measuring economic activity of a country, this measures the total annual income of a nation’s residents

Purchasing Power Parity (PPP)

An adjustment in gross domestic product per capita to reflect differences in the cost of living

Innovation thrives best with: (5)

a market economy with strong incentives
Strong Property Rights
Democracy (usually)
Favorable Geography
Education

Human Development Index; three measures:

Life expectancy at birth
educational attainment
Average Income, PPP

Deregulation

Removal of government restrictions concerning the conduct of a business

Legal System

laws protecting private property rights and providing mechanisms for contract enforcement

Benefits to doing business in a country: (3)

1. size of the economy 2. present wealth 3. future growth

Costs/Risks of doing business in a country: (3)

1. corruption 2. Lack of infrastructure 3. Legal costs

Cross-cultural Literacy

Understanding how the culture of a country affects the way business is practiced

Culture

A system of values and norms that are shared among a group of people and that when taken together constitute a design for living

Folkways

Routine conventions of everyday life

3 Most predominant religions:

1. Christianity 2. Islam 3. Hinduism

What causes culture? (6)

1. Religion 2. Political Philosophy 3. Economic Philosophy 4. Education 5. Social Structure 6. Language

2 main drivers of cultural change:

1. Globalization | 2. Economic Progress

Most common ethical issues in business: (5)

1. employment practices 2. human rights 3. environmental regulations 4. corruption 5. the moral obligation of multinational corporations

Social Responsibility

The idea that businesspeople should consider the social consequences of economic actions when making business decisions

Ethical Dilemma

A situation in which there is no ethically acceptable solution

The roots of ethical behavior: (6)

1. Societal culture 2. Decision-making process 3. Leadership 4. Unrealistic Performance goals 5. Personal Ethics 6. Organization culture

The Friedman Doctrine

Only social responsibility of business is to make a profit (within the law)

Cultural Relativism

The belief that ethics are culturally determined | and that firms should adopt the ethics of the cultures in which they operate

Righteous Moralist

The belief that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries

Naive Moralist

The belief that if a manager of a multinational | sees that firm from other nations are not following ethical norms in a host nation, that manager should not either

Rights Theories

A twentieth-century theory that recognizes that | human beings have fundamental rights and privileges that transcend national boundaries and cultures

Just Distribution

A distribution of goods and services that is considered fair and equitable

Rawl's veil of Ignorance

everyone is imagined to be ignorant of all of his or her particular characteristics, for exam- ple, race, sex, intelligence, nationality, family background, and special talents

Abenomics "three arrows"

1. Massive fiscal stimulus 2. monetary easing from the Bank of Japan 3. structural reforms