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BA 60 > Unit 1 - Introduction to International Business > Flashcards

Unit 1 - Introduction to International Business Flashcards

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1
Q

Business felt the importance of widening their market areas by being ______ not just ________ or even _______.

A

Global
Domestic
Foreign

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2
Q

It is any LEGITIMATE BUSINESS ACTIVITY that crosses NATIONAL BOUNDARIES.

A

International Business

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3
Q

Why do companies go international? (9: CAM CoM FoG TA)

A
  1. Cheap Labor
  2. Availability of Resources (RM, Labor/Manpower, Management, Technology)
  3. Market Expansion/Emergence of New Markets
  4. To compete (globally)
  5. To maximize profits
  6. Foreign Competition
  7. Global Competition
  8. Tax Incentives
  9. Avoiding exposures to competitors
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4
Q

It is the ability of a country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time.

It is something we cannot copy.

A

Absolute Advantage

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5
Q

China prohibits labor union. T or F?

A

False.

SAUDI ARABIA prohibits labor union.

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6
Q

Countries with cheap labor

A
  • particularly developing countries
  • China, India, Philippines, and African continent
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7
Q

Countries with high labor

A
  • European countries
  • Singapore
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8
Q

Countries that reserves top management positions to its nationals.

A

Japan and South Korea

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9
Q

It refers to strategies used to REDUCE or MANAGE THE RISK of financial losses. It often involves making investments or using financial instruments that will offset potential losses in another investment. Essentially, it’s like taking out insurance to protect against uncertain outcomes, such as fluctuations in prices or exchange rates.

A

Hedging

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10
Q

In economic zones, there is tax holiday. T or F?

A

TRUE

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11
Q

If the level of competition is already stiff, they go to a country with lesser competition.

  • Why do companies go international?
A

Avoiding exposures to competitors

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12
Q

Factors that contributed to the acceleration of internatiol business (6: I C CoBain PLa)

A
  1. Industrial Revolution
  2. Commercial Documents
  3. Commercial Law
  4. Banking Institutions
  5. Ports of Entry
  6. Laissez faire
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13
Q

It is the period in the 18th and 19th centuries which, in Western Europe, was characterized by rapid industrialization and the widespread mechanization of production processes.

A

Industrial Revolution

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14
Q
  • It is the current and developing environment in which disruptive technologies and trends such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial intelligence (AI) are changing the way modern people live and work.
  • It describes the rapid technological advancements in the 21st Century.
A

4IR or Fourth Industrial Revolution

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15
Q

It is improved recording and bookkeeping; the use of commercial and investment papers (e.g. bills of exchange, checks).

A

Commercial Documents

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16
Q

It is the fair practice by traders to protect the interests of the parties involved.

A

Commercial Law

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17
Q

This is the reason why goods are able to move at a faster pace from one nation to another than otherwise would be the case.

Example is the use of commercial letters of credit as a means of financing foreign
trade shipments.

A

Banking Institutions

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18
Q
  • It aims to improve the country’s payment infrastructure and ensure a reliable financial ecosystem.
  • Philippines use one payment system established and controlled/managed by BSP.
A

Multi-Interbank Payment System (MIPS)

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19
Q

The two ports of entry managed by BOC.

A

Airport and Seaport

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20
Q
  • 1st world country
  • Its development has a master plan.
  • Continuity Program
A

Singapore

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21
Q

It is simply a domestic port open to both foreign and coastwise trade.

A

Ports of Entry

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22
Q

In the Philippines, only articles imported into the country that are subject to duty shall be entered through a customhouse at a port of entry. T or F?

A

FALSE

  • Whether subiect to duty or not, it should enter through a customhouse at a port of entry.
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23
Q

It is a doctrine which demand the minimum interference by the government in economic and political affairs.

A

Laissez Faire

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24
Q

Stages of International Involvement (5: DRIMG)

A
  1. Domestic
  2. Regional Exporter/Exporter
  3. International
  4. Multinational
  5. Global
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25
It operates exclusively within a single country (home country)
Domestic
26
It operates within a GEOGRAPHICALLY DEFINE REGION (trade areas: NAFTA, ASEAN, etc.) that crosses national boundaries.
Regional Exporter/Exporter
27
The MANUFACTURING and ASSEMBLY, MARKERTING and SALES are decentralized beyond the home region; however, key decisions are made and coordinated from a CENTRAL OFFICE.
International
28
The companies run INDEPENDENT and mainly SELF-SUFFICIENT subsidiaries in a range of countries; operations are STANDARDIZED
Multinational
29
It is a HIGHLY DECENTRALIZED organization operating across a broad range of countries. Almost all functions (R&D, manufacturing, marketing and sales) are performed in the location around the world.
Global
30
Types of International Business (4: FoLi FraD)
1. Foreign Trade 2. Licensing 3. Franchising 4. Direct Investment
31
- It is the most common, most fundamental, largest type of international business. - Visible physical goods or commodities move between countries as export or import.
Foreign/International Trade
32
It takes place when a licensor grants a foreign firm the right to use intangible or intellectual property for a specific period of time in return for a royalty.
Licensing
33
- It is an option in which a parent company grants another company or firm the right to do business in a prescribed manner. - The business model is loaned out to the franchise.
Franchising
34
- There is movement of capital, personnel and other assets. - There is much greater level of control over the project or enterprise.
Direct Investment
35
Firms that participate in IB solely by exporting or licensing technology are not multinational. T or F?
TRUE
36
They are the principal instruments in the expansion of business on an international scale.
Multinational Corporation
37
MNCs should have __________ in more than one country.
Control Production Facilities
38
MNCs - more than ____ of its profits are produced outside its home country.
25%
39
MNCs - firms that control operations in at least _____ countries. Who said this?
- six - Raymond Vernon
40
It is a firm that is structured so that business is conducted or ownership is held across a number of countries or that is organized into global product divisions.
Multinational Corporation
41
All transnational corporations are considered multinational corporations. T or F?
FALSE
42
All transnational corporations are considered multinational corporations. T or F?
FALSE
43
Why do we categorize corporations?
- It is for REGULATION - The way we regulate SMEs is different from transnational corporations.
44
Foreign firms make themselves home in all three of the world’s most important makets. Which continents are these?
- North America - Europe - Asia
45
Foreign firms make themselves home in all three of the world’s most important makets. Which continents are these?
- North America - Europe - Asia
46
They make global decisions on strategic decisions but they let local units decide tactical questions along packaging, marketing and advertising.
Glocalize
47
It is the tendency to avoid using or buying products, research, standards, or knowledge from external origins.
“Not Invented Here” Syndrome (a parochial attitude)
48
What do they do with markets they cannot penetrate?
They find ALLIES.
49
Contributions of MNCs to host countries (4: OBTH)
1. They contribute to output and employment 2. They contribute to balance of payments 3. Technology Transfer 4. Transfer of Human Capital
50
One reason we allow PEZA zones.
Technology Transfer
51
- It reflects the movement of foreign currency. - It is a comprehensive record of a country's economic transactions with the rest of the world over a specific period.
Balance of Payments (BOP)
52
BSP maintains dollars coming in than dollars coming out. T or F?
True
53
The Philippinesw maintain ____ foreign currencies whom we have the most transactions with and ____ freely convertible foreign currencies namely: _____ , _____ , and _____.
- 15 FCs - 3 FCs - US dollar, Euro, and Yen
54
- if we have much FCs maintain by BSP: BOP _______ - if we have much FCs going out: BOP ______ (alarming)
- BOP surplus - BOP deficit
55
While production goes up, the less will be the cost per unit (up to a certain point only)
Economies of Scale
56
they use transfer pricing
Financial Flexibility
57
Those who occupy certain political positions are also the ones engaged in big businesses (practice by international businesses; prohibited by law - they divest in papers)
Booty Capitalism
58
Benefits derived by MNCs (9: BLLAS D FIM)
1. Brand image and goodwill advantagw 2. Lower input cost 3. Large size and economies of scale 4. Superior technical know-how 5. Diversification of risk 6. Financial Flexibility 7. Information Advantage 8. Management Experience and Expertise
59
Problems faced by MNCs (5: CHOBD)
1. Cultural Differences 2. Host country regulations/policies 3. Operational Difficulties 4. Business Ricks 5. Different Legal Systems
60
price of a foreign currency that one dollar can buy
Exchange Rate
61
Weaker currency makes exportation expensive but stimulates imports. T or F?
FALSE
62
What do you call when: - we need more local currency to buy one dollar? - we need less local currency to buy one dollar?
1. Depreciation of Currency 2. Appreciation of Currency
63
If peso appreciates, there is positive effect to importer. T or F?
TRUE
64
If peso appreciates, there is positive effect to importer. T or F?
TRUE
65
If peso depreciates, there is negative effect to exporter. T or F?
FALSE
66
We restrain the goods we export to other countries due to some political or economic considerations
Voluntary Export Restraint
67
It is selling exports at a price that is less than “normal value.”
Product Dumpimg
68
It is money in which exchanges into another country's currency is not allowed.
Blocked Currency
69
It is the refusal to sell to a specific country.
Embargo
70
The country imposes absolute restriction against the purchase and importation of certain goods from other countries.
Boycott
71
It is a specific unit or peso limit applied to a particular type of good.
Quota
72
It is a latin term which means according to value or in proportion to the value; based on a fixed percentage of the value of the good.
AD VALOREM
73
It is a tax imposed on a stipulated amount per unit weight or some other measure of quantity.
Specific Duty
74
It combines both specific and ad valorem taxes on a particular item, that is, a tax per unit plus a percentage of value.
Compound Duty
75
- It is a tax or duty imposed by a government on imported or exported goods. - It is typically levied as a percentage of the value of the goods being imported or exported, although it can also be a fixed amount per unit. - It is used for various purposes, including protecting domestic industries from foreign competition and generating revenue for the government,
Tariffs
76
- It is a tax or duty imposed by a government on imported or exported goods. - It is typically levied as a percentage of the value of the goods being imported or exported, although it can also be a fixed amount per unit. - It is used for various purposes, including protecting domestic industries from foreign competition and generating revenue for the government,
Tariffs
77
It is the transformation of a society from an agrarian economy to an industrial one.
Industrialization
78
- It refers to government policies that restrict international trade to help domestic industries. - Nations utilize legal barriers, exchange barriers, and psychological barriers to restrain entry of unwanted goods.
Protectionism

BA 60 (5 decks)

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