Globalization Key Terms

Created by

Elizabeth Cushman(Spring 2007 IBUS student)

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Globalization

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Foreign Market Entry

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Foreign Market Entry Globalization of Markets

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Foreign Market Entry Business Operations

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Foreign Market Entry Business Operations

Production Methodologies

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Foreign Market Entry Business Operations

Marketing

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Foreign Market Entry Business Operations

Human Resource Management

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Foreign Market Entry Globalization of Production

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Institutions

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Political Systems

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Economic Systems

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Economic SystemsMarket Systems

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Economic SystemsEconomic Integration

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Economic SystemsForeign Exchange Market

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Legal Systems

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Legal SystemsSystems

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Legal SystemsProperty Rights

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Legal SystemsTrade Documents

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Legal SystemsEthics

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International Trade

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International TradeExports and Imports

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International TradeRestrictions on Trade

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International TradeFree Trade Theories

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International TradeCounter Trade

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Societal Environment

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Outline – Foreign Market Entry

Globalization of Markets• Foreign Direct Investment

– Stock of FDI• Green Field Investment• Strategic Commitment• Licensing

– Cross Licensing• Exporting

– Importing• Wholly Owned Subsidiary• Turnkey Project• Joint Venture• Franchising

Globalization of Production• Benefits

– Value Creation– Core Competence– Experience Curve– Economies of Scale– Location Economies– Learning Effects

• Strategies– Multi-Domestic Strategy– International Strategy– Global Strategy– Transnational Strategy

• Ecletic Paradigm• First Mover

Advantage/Disadvantage– Late Mover Disadvantage– Pioneering Costs

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Outline – Foreign Market Entry Production Methodologies

– Product Life Cycle– Distribution/Logistics– Total Quality Management

(TQM)• Six Sigma• Total Process

Management (TPM)• Toyota Production

System (TPS)• ISO 9000

– Just-in-Time inventory (JIT)

• Lean Manufacturing

Marketing– Infant Industry– Marketing Mix

• Push Strategy• Pull Strategy

– Pricing• Strategic Pricing• Elastic/Inelastic• Multipoint Pricing• Predatory Pricing

– Distribution Channels• Exclusive

Distribution Channel• Channel length• Concentrated Retail

System• Fragmented Retail

System

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Outline – Foreign Market Entry Human Resource

ManagementCompensation/Benefits

• Balance Sheet Approach• Behaviors/Staffing Policies• Ethnocentric• Polycentric• Geocentric• Management• Repatriate Management• Expatriate Management• Expatriate Failure• Inpatriate

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Outline - Institutions

Institutions• Organization for Economic Cooperation and Development (OECD)• Export-Import Bank• International Accounting Standards Committee• United Nations (UN)• World Bank• World Trade Organization (WTO)• International Court of Justice (ICJ)• International Monetary Fund (IMF)

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Outline – Political Systems Political Systems

– Democracy• Representative Democracy

– Theories• Individualism• Collectivism

– Totalitarianism• Theocratic Totalitarianism• Communist Totalitarianism• Right-Wing Totalitarianism• Tribal Totalitarianism

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Outline – Economic Systems Market Systems

• Market Economy• Mixed Economy• Command Economy

Economic Integration• Efficient/Inefficient Market• Gross Domestic Product (GDP)• Gross National Product (GNP)• Degree of Integration

– Free Trade Area– Customs Union– Common Market– Economic Union– Political Union

• Translation Exposure• Law of One Price• Purchasing Power Parity (PPP)

– Lag Strategy

Foreign Exchange Market• Exchange Rates

– Convertibility• Non-Convertible• Freely-Convertible• Capital Flight• Externally Convertible

– Forward Exchange Rates– Currency Speculation– Foreign Exchange Risk– Spot Exchange Rates– Government Regulation

• Floating Exchange Rate• Pegged Exchange Rate• Gold Standard• Dirty Floating System• Fixed Exchange Rate

– Arbitrage– Currency Swap

• Hedge Fund– Short Selling

• Strategies– Lead Strategy– Lag Strategy

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Outline – Legal System

Systems• Common Law• Civil Law• Theocratic Law• Contract Law

Property Rights• Conventions

– Trade Related Aspects of Intellectual Property Rights (TRIPS)

– Paris Convention for Protection of Industrial Property

– Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

– United Nations Convention on Contracts for the International Sale of Goods

Product Liability– Violation

• Private Action• Public Action• Foreign Corrupt

Practices Act– Copyrights/Trademarks– Royalties

Trade Documents– Letter of Credit– Bill of Lading– Draft

• Slight Draft• Time Draft

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Outline – Legal System

Ethics• Utilitarian Approach• Kantian Ethics• The Friedman Doctrine• Universal Declaration of Human Rights• Cultural Relativism• Vail of Ignorance• The Righteous Moralist• Ethical Dilemma• The Naïve Immoralist• Ethical Strategy• Sarbanes-Oxley (SOX)

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Outline – International Trade Exports and Imports

• Export Management Company• Balance-of-Payments Account• Current Account• Balance-of-trade Equilibrium

Restrictions on Trade• Tariffs

– Ad Valorem Tariffs– Specific Tariffs

• Import Quota– Voluntary Export Restraint– Quota Rent

• Administrative Trade Policies– Local Content

Requirements– Dumping

• Countervailing Duties

• Antidumping Policies

Free Trade Theories• Mercantilism• Learning Effects• Positive-Sum Game/Zero-Sum

Game• Trade Creation/Trade Diversion• Comparative Advantage/Absolute

Advantage Counter Trade

• Buybacks• Barter• Offset• Switch Trading• Counter-Purchase

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Outline – Societal Environment Societal Environment

– Values– Social Strata

• Social Mobility– Caste System– Class System

– Norms• Mores• Folkways

– Power Distance– Individualism vs. Collectivism– Uncertainty Avoidance– Masculinity vs. Femininity