Economic Globalization
the tendency toward an international integration and interdependency of goods, technology, information, labor and capital, or the process of making this integration happen.
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.
self-reference criterion
Unconscious reference to your own cultural values when judging behaviors of others in a new and different environment
Transnational Corporation
An enterprise made up of entities in more than one nation, operating under a decision-making system that allows a common strategy and coherent policies.
Association of Southern Asian Nations (ASEAN)
Agreement among Southeast Asian nations that began as a security agreement, grew to a free trade agreement, and is continuing toward a common market, known as AFTA
Bretton Woods
1944 conference at which allied nations' treasury and central bank representatives met to establish the International Monetary Fund and the World Bank
Common market
Customs union that includes mobility of services, people, and capital within the union.
Common market of the south
Currently a South American customs union of Argentina, Paraguay, Brazil, Uruguay, and Venezuela (suspended since 2016), with associate members Chile, Bolivia, Colombia, Ecuador, and Peru.
Council of the European Union
The EU's primary policy-setting institution.
Customs Union
Collaboration that adds common external tariffs to an FTA
Doha Development Agenda
WTO extended conference on trade, also known as the Doha Round
Economic Integration
Integration on economic and political levels
Economic and social council (ECOSOC)
UN body concerned with economic and social issues such as trade, development, education, and human rights.
Economic and Monetary Union (EMU)
EU group that established use of the euro in the 18-century euro zone.
European Commission
Body responsible for the European Union's day-to-day operations
European parliament
EU legislative body whose members are popularly elected from member-nations.
European Union
A body of 28 European countries committed to economic and political integration.
Formal Institutions
Institutions that influence behavior through laws and regulations
Free trade area (FTA)
Area in which tariffs among members have been eliminated, but members keep their external tariffs.
General assembly
Deliberative body of the UN made up of all member-nations, each with one vote regardless of size, wealth, or power
Informal Institutions
institutions that influence behavior through norms, values, customs, and ideologies.
International Court of Justice (ICJ)
UN body that makes legal decisions involving disputes between national governments
International Monetary Fund (IMF)
Institution that fosters global monetary cooperation, financial stability, international trade, high employment and sustainable economic growth, and reduction of poverty.
New Institutional theory
Understanding of institutions as social constructs, a collection of norms that structure the relations of individuals to one another
North American Free Trade Agreement (NAFTA)
Agreement creating a free trade area among Canada, Mexico and the US
Organization for Economic Co-operation and Development (OECD)
Group of developed countries dedicated to promoting their own and other nations' economic expansion
Per-value
Stated value
Secretariat
The staff of the United Nations, headed by the secretary-general.
Security Council
Main peacekeeping body of the United Nations, a within-country analysis of groups of consumers, as the basis for market selection.
Special drawing rights (SDRs)
An international reserve asset established by the IMF; the unit of account for the IMF and other international organizations
Trade-related intellectual property rights (TRIPS)
The WTO agreement that protects copyrights, trademarks, trade secrets, and other intellectual property matters.
United Nations (UN)
World Bank
Institution that lends money for development projects focused on reducing poverty
World Trade Organization (WTO)
An international organization that establishes and helps implement rules of trade between nations.
Direct Investment
The purchase of sufficient stock in a firm to obtain significant management control
Dynamic capability theory
Theory that for a firm to successfully invest overseas, it must have not only ownership of unique knowledge or resources, but also the ability to dynamically create, sustain, and exploit these capabilities over time.
Eclectic theory of international production
Theory proposing that for a firm to invest in facilities overseas, it must have three kinds of advantages: ownership specific, location specific, and internationalization
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.
Greenfield investment
The establishment of new facilities from the ground up.
Internalization theory
Theory that to obtain a higher return on its investment, a firm will transfer its superior knowledge to a foreign subsidiary that it controls, rather than sell it in the open market.
International product life cycle (IPLC)
A theory explaining why a product that begins as a nation's export eventually becomes its import.
Mercantilism
An economic philosophy based on the belief that (1) a nation's wealth depends on accumulated treasure, usually precious metals such as gold and silver; and (2) to increase wealth, government policies should promote exports and discourage imports.
Monopolistic advantage theory
Theory that foreign direct investments is made by firms in industries with relatively few competitors, due to their possession of technical and other advantages over indigenous firms.
National competitiveness
A nation's relative ability to design, produce, distribute, or service products within an international trading context while earning increasing returns on its resources.
Oligopolistic Industry
An industry with a limited number of competing firms
Overlapping demand
the existence of similar preferences and demand for products and services among nations similar levels of per capita income
Resource endowment
The land, labor, capital, and related production factors a nation possesses.
Strategic behavior theory
Theory suggesting that strategic rivalry between firms in an oligopolistic industry will result in firms closely following and imitating each other's international investments in order to keep a competitor from gaining an advantage.
Ad valorem duty
An import duty levied as a percentage of the invoice value of imported goods.
Compound duty
A combination of specific and ad valorem duties
Countervailing duties
Additional import taxes levied on imports that have benefited from export subsidies
Nationalization
The taking of private property by a government to make it public
Nontariff barriers (NTBs)
All forms of discrimination against imports other than import duties
Orderly marketing arrangements
Formal agreements between importing and exporting countries
Specific Duty
A fixed sum levied on a physical unit of an imported good
Tariffs
Taxes on imported goods for the purpose of raising their price to reduce competition for local producers or stimulate local production
Variable levy
An import duty set at the difference between world market prices and local government-supported prices.
Voluntary export restraints (VERs)
Export quotas imposed by the exporting nation
Atlas conversion factor
the arithmetic average of the current exchange rate and the exchange rates in the two preceding years, adjusted by the ratio of domestic inflation to the combined inflation rates of the euro zone, Japan, the UK, and the US.
Emerging Market economies
Economies with per-capita incomes in the low to middle range that are in a transition toward developed status
GINI index
A measure of the degree to which family income within a country is distributed equally
Unit labor costs
Total direct labor costs divided by units produced
Vertical Integration
the production by a firm of inputs for its own manufacturing processes.
Biomass
A category of fuels whose energy source is photosynthesis, through which plants transform the sun's energy into chemical energy.
Concentrating Solar Thermal Power (CSP)
A system using mirrors or lenses to collect sunlight for heating water that powers an electrical generator.
Heavy oil
Oil that does not flow easily, presently sources from oil sands and oil bearing shale
Life cycle assessment (LCA)
An evaluation of the environmental aspects of a product or service throughout its life cycle
Rare earths
17 elements used in defense and technology applications
Shale
a fissile rock (capable of being split) composed of laminated layers of claylike, fine-grained sediment.
Solar photovoltaic power (PV)
power based on the voltage created when certain materials are exposed to light
Topography
The surface features of a region
Triple-bottom-line accounting (3BL)
An approach to accounting that measures the firm's social and environmental performance in addition to its economic performance.
United Nations Global Compact
A voluntary reporting scheme for businesses that covers critical areas affecting the conduct of international business - human rights, labor, the environment, and anti-corruption efforts.
Hype Cycle
emerging trends - innovation trigger, peek of expectations, disillusionment, enlightenment
Diamandis' 6 D's of Exponentials
Digitize, Deceptive, Disruptive, Dematerialize, Demonetize, Democratize
Achievement vs ascription
what a person does vs who a person is
Monochronic
having to do with linear time, sequential activities
Polychronic
Having to do with simultaneous activities, multitasking
Neutral vs affective
The withholding of emotion contrasted with its expression
Particularist
condition in which context determines what concepts apply
Specific vs diffuse
Life divided into public and private spheres contrasted with life undifferentiated
Global Leadership 4 overlapping dimensions of complexity
1. Multiplicity
2. Interdependence
3. Ambiguity
4. Dynamism
Mintzberg's global leadership roles
Monitor, spokesperson, liaison, leader, negotiator, innovator, decision maker, change agent