Globalization - Answers✔The widening set of interdependent relationships among people from
different parts of the world that happens to be divided into nations. Sometimes refers to the
elimination of barriers to international movements of goods, services, capital, tech, and people
that influence the integration of world economies.
International Business - Answers✔All commercial transactions, including sales, investments, and
transportation, that take place between two or more countries.
Born-Global Company - Answers✔Start out with a global focus because of their founders'
international experience.
Clustering/Agglomeration - Answers✔New companies locating in areas with numerous
competitors and suppliers → suppliers and human talent gravitate to these areas; they gain easier
access to the resources needed for international moves.
Sovereignty - Answers✔Freedom to "act locally" and without externally imposed restrictions
Merchandise Exports - Answers✔Tangible products sent out of the country.
Merchandise Imports - Answers✔Goods brought into a country.
Service Exports/Imports - Answers✔Terms used for non-merchandise international earnings →
referred to as "invisibles"
Turnkey Operations - Answers✔Construction projects performed under contract and transferred
to owners when they're operational.
Management Contracts - Answers✔Arrangements in which one company provides personnel to
perform general or specialized management functions for another.
Licensing Agreements - Answers✔A contract used when one company allows another to use its
assets (trademarks, patents, copyrights, or expertise).
Royalties - Answers✔Received earnings from licensing agreements. They can also come from
franchise contracts.
ALL RIGHTS RESERVED.
Franchising - Answers✔A mode of business in which one party (the franchisor) allows another
(the franchisee) to use a trademark as an essential asset of the franchisee's business. As a rule, the
franchisor also assists continuously in the operation of the franchisee's business, perhaps
providing supplies, management services, or technology.
Foreign Direct Investment (FDI) - Answers✔The investor takes a controlling interest in a foreign
company.
Joint Venture - Answers✔When two or more companies share ownership of an FDI.
Portfolio Investment - Answers✔A non-controlling financial interest in another entity. It usually
takes two forms: stock in a company or loans to a company (or country) in the form of bonds,
bulls, or notes purchased by the investor.
Strategic Alliance - Answers✔Sometimes used to mean the same, but it usually refers either to an
agreement that is of critical importance to one or more partners or to an agreement that does not
involve joint ownership.
Multinational Enterprise (MNE) - Answers✔Usually refers to any company with foreign direct
investments, synonymous with: multinational corporation or multinational company (MNC)
Offshoring - Answers✔The dependence on production in a foreign country, usually by shifting
from domestic source.
Culture - Answers✔Learned norms based on the values, attitudes, and beliefs of a group of
people.
Cultural Collision - Answers✔When two divergent cultures come in contact. The major
problems of cultural collision arise under two conditions, When a company implements practices
that are less effective than intended, When a company's employees encounter distress because of
difficulty in accepting or adjusting to foreign behaviors
Deal-Focus (DF) Culture - Answers✔People are primarily task-oriented → DF people view RF
people as time-wasters.
Relationship-Focus (RF) Culture - Answers✔Put dealings with friends ahead of business
dealings → RF people view DF people as offensively blunt
Bicultural/Multicultural - Answers✔When you have internalized more than one national culture
→ when you hold dual or multiple nationalities, have parents from another country, or have lived
abroad.
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