MAN 3600 Exam 1 review
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1. The Nature of In- - business activities taking place in more than one country.
ternational Busi- all value-adding techniques -- including sourcing, manufacturing, and marketing
ness (IB) -- can be performed in international locations
international trade can involve products, services, capital, technology, know-how,
and labor
firms internationalize through various entry strategies, such as exporting and
foreign direct investment (FDI)
2. Dimensions of elements of international business:
International - globalization of markets
Business - international trade
- international investment
- participants: firms, intermediaries, facilitators, governments
- international business risks
- foreign market entry strategies
3. international performance of trade and investment activities by firms across national borders
business - Multinational Enterprises (MNEs)
- Multinational Corporations (MNCs)
4. globalization of ongoing economic integration and growing interdependency of countries world-
markets wide
5. international exchange of products and services across national borders; typically through
trade exporting and importing
6. exporting sale of products or services to customers located abroad
7. importing (or procurement of products or services from suppliers located abroad for consump-
global sourcing) tion in the home country or a third country
8.
, MAN 3600 Exam 1 review
Study online at https://quizlet.com/_hz7qvx
international in- transfer of assets to another country or the acquisition of assets in that country
vestment (also known as 'foreign direct investment' (FDI))
9. international passive ownership of foreign activities through financial means such as stock and
portfolio bonds in order to generate returns
investment - do not seek any ownership
EX: Yahoo invested in Alibaba
10. WTO World Trade Organization
11. IMF International Monetary Fund
12. The Flows of In- -knowledge (ideas)
ternational Busi- -trade in products
ness -trade in services
-direct investment
13. Leaders in Trade - China
(in $) - United States
- Germany
14. Leaders in Trade - Belgium
(% of GDP) - Netherlands
- South Korea
15. Companies move emerging markets / developing nations
factories to ______
because of the
cheap labor
costs.
16. Internal Business 1. international business ...
and Its Risks - is conducted across national borders
, MAN 3600 Exam 1 review
Study online at https://quizlet.com/_hz7qvx
- uses distinctive business methods
- is in contact with countries that differ in terms of culture, language, political
system, economic situation, and other factors
2. stated differently, when they venture abroad, firms encounter multiple major
types of risk
17. Types of Interna- - cross-cultural risk
tional Business - commercial risk
Risks - currency (financial) risk
- country risk
18. Cross-Cultural 1. *cultural differences:* risk arising from differences in language, lifestyle, atti-
Risk tudes, customs and religion, where a cultural miscommunication jeopardizes a
culturally-valued mindset or behavior
2. *negotiation patterns:* negotiations are required in many types of business
transactions
3. *decision-making styles:* managers make decisions continually on the opera-
tions and future direction of the firm
4. *ethical practices:* standards of right and wrong vary considerably around the
world
(EX: bribery is relatively accepted in some countries in Africa, but is generally
unacceptable in Sweden)
19. Country (Politi- - government intervention, protectionism, and barriers to trade and investment
cal) Risk - bureaucracy, red tape, administrative delays, corruption
- lack of legal safeguards for intellectual property rights
- legislation unfavorable to foreign firms
- economic failures and mismanagement
- social and political unrest and instability
, MAN 3600 Exam 1 review
Study online at https://quizlet.com/_hz7qvx
20. Currency (Finan- 1. *currency exposure:* general risk of unfavorable exchange rate fluctuations
cial) Risk
2. *asset valuation:* risk that exchange rate fluctuations will adversely affect the
value of the firms assets and liabilities
3. *foreign taxation:* income, sales, and other taxes vary widely worldwide, with
implications for company performance and profitability
4. *inflation:* high inflation, common to many countries, complicates business
planning, and the pricing of inputs and finished goods
21. Commercial Risk - weak partner
- operational problems
- timing of entry
- competitive intensity
- poor execution of strategy
22. The Risks of In- - always present but manageable
ternational Busi- - managers need to understand, anticipate, and take proactive action to reduce
ness: Conclusion their effects
- some risks are extremely challenging
23. Who participates 1. *multinational enterprise (MNE):* a large company with substantial resources
in IB? and a network of subsidiaries and affiliates located in multiple countries (e.g.
Caterpillar and Samsung)
2. *small and medium-sized enterprise (SME):* 500 or fewer employees and
comprising over 90% of firms
3. *born global firm:* a young, entrepreneurial SME that undertakes substantial
international business at or near its inception
4. *non-governmental organizations:* non-profit organizations pursue special
Study online at https://quizlet.com/_hz7qvx
1. The Nature of In- - business activities taking place in more than one country.
ternational Busi- all value-adding techniques -- including sourcing, manufacturing, and marketing
ness (IB) -- can be performed in international locations
international trade can involve products, services, capital, technology, know-how,
and labor
firms internationalize through various entry strategies, such as exporting and
foreign direct investment (FDI)
2. Dimensions of elements of international business:
International - globalization of markets
Business - international trade
- international investment
- participants: firms, intermediaries, facilitators, governments
- international business risks
- foreign market entry strategies
3. international performance of trade and investment activities by firms across national borders
business - Multinational Enterprises (MNEs)
- Multinational Corporations (MNCs)
4. globalization of ongoing economic integration and growing interdependency of countries world-
markets wide
5. international exchange of products and services across national borders; typically through
trade exporting and importing
6. exporting sale of products or services to customers located abroad
7. importing (or procurement of products or services from suppliers located abroad for consump-
global sourcing) tion in the home country or a third country
8.
, MAN 3600 Exam 1 review
Study online at https://quizlet.com/_hz7qvx
international in- transfer of assets to another country or the acquisition of assets in that country
vestment (also known as 'foreign direct investment' (FDI))
9. international passive ownership of foreign activities through financial means such as stock and
portfolio bonds in order to generate returns
investment - do not seek any ownership
EX: Yahoo invested in Alibaba
10. WTO World Trade Organization
11. IMF International Monetary Fund
12. The Flows of In- -knowledge (ideas)
ternational Busi- -trade in products
ness -trade in services
-direct investment
13. Leaders in Trade - China
(in $) - United States
- Germany
14. Leaders in Trade - Belgium
(% of GDP) - Netherlands
- South Korea
15. Companies move emerging markets / developing nations
factories to ______
because of the
cheap labor
costs.
16. Internal Business 1. international business ...
and Its Risks - is conducted across national borders
, MAN 3600 Exam 1 review
Study online at https://quizlet.com/_hz7qvx
- uses distinctive business methods
- is in contact with countries that differ in terms of culture, language, political
system, economic situation, and other factors
2. stated differently, when they venture abroad, firms encounter multiple major
types of risk
17. Types of Interna- - cross-cultural risk
tional Business - commercial risk
Risks - currency (financial) risk
- country risk
18. Cross-Cultural 1. *cultural differences:* risk arising from differences in language, lifestyle, atti-
Risk tudes, customs and religion, where a cultural miscommunication jeopardizes a
culturally-valued mindset or behavior
2. *negotiation patterns:* negotiations are required in many types of business
transactions
3. *decision-making styles:* managers make decisions continually on the opera-
tions and future direction of the firm
4. *ethical practices:* standards of right and wrong vary considerably around the
world
(EX: bribery is relatively accepted in some countries in Africa, but is generally
unacceptable in Sweden)
19. Country (Politi- - government intervention, protectionism, and barriers to trade and investment
cal) Risk - bureaucracy, red tape, administrative delays, corruption
- lack of legal safeguards for intellectual property rights
- legislation unfavorable to foreign firms
- economic failures and mismanagement
- social and political unrest and instability
, MAN 3600 Exam 1 review
Study online at https://quizlet.com/_hz7qvx
20. Currency (Finan- 1. *currency exposure:* general risk of unfavorable exchange rate fluctuations
cial) Risk
2. *asset valuation:* risk that exchange rate fluctuations will adversely affect the
value of the firms assets and liabilities
3. *foreign taxation:* income, sales, and other taxes vary widely worldwide, with
implications for company performance and profitability
4. *inflation:* high inflation, common to many countries, complicates business
planning, and the pricing of inputs and finished goods
21. Commercial Risk - weak partner
- operational problems
- timing of entry
- competitive intensity
- poor execution of strategy
22. The Risks of In- - always present but manageable
ternational Busi- - managers need to understand, anticipate, and take proactive action to reduce
ness: Conclusion their effects
- some risks are extremely challenging
23. Who participates 1. *multinational enterprise (MNE):* a large company with substantial resources
in IB? and a network of subsidiaries and affiliates located in multiple countries (e.g.
Caterpillar and Samsung)
2. *small and medium-sized enterprise (SME):* 500 or fewer employees and
comprising over 90% of firms
3. *born global firm:* a young, entrepreneurial SME that undertakes substantial
international business at or near its inception
4. *non-governmental organizations:* non-profit organizations pursue special
