International Business Management

Globalization of markets - correct answer Refers to the convergence of a distinct and separate national markets in a country to one global market around the world. (markets in industrial goods and materials that serve a universal need are most global) Globalization of Production - correct answer Refers to the outsourcing of the production process to minimize cost and get the best production quality Why are production systems being globalized? - correct answer Because companies want to lower the costs of production and get the best production quality (land, heat, labor, energy and capital) so that they can compete more effectively. What is the purpose of global institutions such as WTO, IMF and World Bank? - correct answer To help manage, regulate and police the global marketplace and encourage the establishment of multinational treaties to govern global business WTO's purpose - correct answer To police the world trading system and insure that the companies stay true to the rules that were laid down How do declining trade and investment barriers contribute toward the globalization of production and markets? - correct answer They allow companies to choose the best place to produce their product as well as making it seem as if there is only one global market What is the role of new technology in facilitating the globalization of production and markets? - correct answer This technology has allowed for lower communication costs and it has allowed consumers to get products around the world much faster and cheaper How has the world output and trade picture changed over the last half century? - correct answer Developing nations (CHINA) have began to take over more market share as the developed nations (US) lost overall market share. How has the nature of FDI changed over the last century? - correct answer FDI for developing nations has began to increase while the for the developed nations it began to decrease. Collectivism - correct answer A political system that stresses a group or collective goal rather than an individual goal Socialism - correct answer A political system in which the state/government owns all the companies and their production, distribution and exchange. Individualism - correct answer A political system that stresses individual goals rather than a collective goal Market Economy - correct answer The goods and services as well as price of product produced by a company are based off of supply and demand Command Economy - correct answer The determination of what goods and services are sold by the government Common Law - correct answer A system of law based on tradition, precedent, and customs. Civil Law - correct answer A system of law based on a very detailed set of rules and codes. Theocratic Law - correct answer A system of law based of religious teachings What is the impact of high levels of corruption on economic growth in a nation? - correct answer By taking away profits, politicians and leaders reduce the returns to business investment which in return reduces incentive for businesses to invest in that country which in turn leads to lower economic growth. Foreign corrupt practices act - correct answer This act insures that US companies to not offer or accept bribes to get into other countries Most supportive international business systems - correct answer Democracies, market-based economy, stong-legal system that protects property rights and limits corruption Purchasing Power Parity - correct answer An adjustment to gross domestic product per capita to reflect the differences in cost of living Human Development Index - correct answer An index based on projected life expectancy, amount/quality of education, and whether incomes are sufficient to meet basic needs in the country What do economists believe to be the key determinants of economic progress? - correct answer Innovation and entrepreneurial activity Strategy - correct answer A way that managers decide to achieve the company goals Value Creation - correct answer The amount of value a firm creates= costs of production - the value that consumers perceive in it's products Primary Activities - correct answer Production, Marketing & Sales, R&D, and Customer Service Support Activities - correct answer Logistics, HR, Information systems