Trade Balance
The difference between the monetary value of a nation's exports and imports over a certain period
Trade Surplus
The amount by which the value of a nation's exports exceeds the value of its imports
Trade Deficit
The amount by which the value of imports into a nation exceeds the value of its exports
Economies of Scale
The predictable decline in the average cost of producing each unit of output as a production facility gets larger and output increases (also works for services)
Experience Curve
The rising scale on which efficiency improves as a result of cumulative experience and learning (works for manufacturing and services)
Foreign Direct Investment (FDI)
Direct investments in equipment, structures, and organizations in a foreign country at a level sufficient to obtain significant management control; does not include mere foreign investment in stock markets (Greenfield investments, acquisitions)
Greenfield Investment
The establishment of new facilities from the ground up
Portfolio Investment
The purchase of stocks and bonds to obtain a return on the funds invested
Importing
The transportation of any good or service into a country or region, from a foreign origination point
Exporting
The transportation of any domestic good or service to a destination outside a country or region
Ethnocentrism
The belief that your own culture is superior to other cultures
Socialization
The process of learning the rules and behavioral patterns appropriate to one's society
Acculturation
The process of adjusting and adapting to a culture other than one's own; commonly experienced by expatriate workers
Collectivism
The practice or principle of giving a group priority over each individual in it
Individualism
A social theory favoring freedom of action for individuals over collective or state control
Communication Context
Refers to the degree in which communication (verbal and non-verbal) needs some degree of "interpretation" by the receiver in order to understand the true meaning of the message
Power Distance
The manner in which people of a culture defer to legitimate authority in familial, societal and organizational authority structures
Low Power Distance
People feel free to question and challenge authority
Accept differences in power to a lesser degree
Firms have flat organizational structures with relatively equal relationships between managers and workers
High Power Distance
People generally defer to authority with little or no resistance
People tend to respect inequalities in power
Top management tends to be autocratic, giving little autonomy to lower-level employees
Uncertainty Avoidance
The extent to which people can tolerate risk and uncertainty in their lives
Low Uncertainty Avoidance
People feel comfortable working with limited information or under the premise of uncertainty
High Uncertainty Avoidance
People (and companies) have a more difficult time dealing with risk and uncertainty
Decisions are made slowly
Employees need security (laws)
Monochronic
Having to do with linear time, sequential activities
"Time is Money"
People value punctuality
Sequential, punctual, and reluctant to waste time
Polychronic
Having to do with simultaneous activities, multitasking
"There will always be another opportunity to do tomorrow what was put off today"
Concept of time is more flexible
Environmental Sustainability
State in which the demands placed upon the environment by people and commerce can be met without reducing the capacity of the environment to provide for future generations
Life Cycle Assessment (LCAs)
An evaluation of the environmental aspects of a product or service throughout its life cycle
Cradle-to-Cradle (C2C) Design
Designing products to completely close the production loop, so that all resources needed to produce them are recycled and reused rather than discarded or left to pollute
Carbon Footprint
A measure of the volume of greenhouse gas emissions caused by a product's manufacture and use
Triple-Bottom-Line Accounting
An approach to accounting that measures the firm's social and environmental performance in addition to its economic performance
Does not allow for comparisons across companies because measurements, especially social and environmental areas, are not standa
Natural Capital
Natural resources such as air, land, and water that provide us with the goods and services on which our survival depends
Privatization
The selling of government-owned property to the private sector to gain more efficiency in business operations, to raise money, or to change in political climate/philosophy
Nationalization
The taking of private property by a government to make it public (often temporarily so)
Tariff
Taxes on imported goods for the purpose of raising their price to reduce competition for local producers or stimulate local production
Quota
Numerical limits placed on specific classes of imports
Local Content Requirement
When a foreign company makes products in a country, the materials, parts etc that have been made in that country rather than imported. A minimum level of local content is sometimes a requirement under trade laws when giving foreign companies the right to
Countervailing Duties
Additional import taxes levied on imports that have benefited from export subsidies
Anti-Dumping Duty
A protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value
Subsidy
Financial contributions, provided directly or indirectly by a government, that confer a benefit, including grants, preferential tax treatment, and government assumption of normal business expenses
Country Risk Assessment (CRA)
An assessment of a country's economic situation and politics to determine how much risk to employees, property, and investment exists for the firm doing business there
The Drivers of the Internationalization of Business
1. Political
2. Technological
3. Market
4. Cost
5. Competitive
Globalization
The interconnectedness of na8onal economies and the growing interdependence of buyers, producers, suppliers, and governments around the world
Merchandise Exporters
Top Three:
1. China
2. U.S.
3. Germany
Merchandise Importers
Top Three:
1. U.S.
2. China
3. Germany
Service Exporters
Top Three:
1. U.S.
2. U.K.
3. Germany
Service Importers
Top Three:
1. U.S.
2. China
3. Germany
Major Trading Partners for the U.S. - Exports
Canada
Mexico
China
Major Trading Partners for the U.S. - Imports
China
Canada
Mexico
Approximate Number of Florida Companies that Export
61,000
Florida's rank as an Exporting state
6th largest in the country
What percentage of exporters in Florida are small and medium sized entrepreneurs?
95%
Florida's key export destination
Canada
How many jobs are supported by International Trade in Florida?
2,400,000 jobs, or 23% of total jobs
Culture
A collective programming of the mind that distinguishes the members of one group or category of people from another
Top 3 primary Languages
1. Chinese
2. Spanish
3. English
Examples of Renewable Resources
Sunlight
Wind
Water
Examples of Non-Renewable Resources
Fossil Fuels (coal, natural gas)
Nuclear power
World Energy Consumption by Fuel Type
1. Liquids
2. Coal
3. Natural Gas
4. Renewables
5. Nuclear
World Energy Consumption by Source
Oil - 33%
Coal - 30%
Gas - 24%
Hydro - 7%
Nuclear - 4%
Wind/Geothermal & biomass - 1%
Solar/Biofuels - 0%
Who will pick up the tab for the trade restrictions?
We will (the consumers)