Term
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Definition
| Business: is the manufacturing of goods or services in order to make a profit |
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| Term trade is used interchangeably with business |
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| Transactions: exchange of things of value |
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| Domestic Business: business that transacts mainly in the country it was based in |
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| ie owned by Canadians, in Canada, selling to Canadians (Rare) |
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| International Business: economic system of transactions conducted between businesses in different countries |
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| Domestic Transaction: between 2 Canadian companies |
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| International Transaction: between Canadian + non Canadian company |
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| Domestic Market: the customers of a business who are in the same country as the business |
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| Foreign Market: the customers of a business who are in a different country as the business |
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| 5 Ways for businesses to must be international |
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| MUST own retailers or distributors in another country |
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| MUST own manufacturing plant in another country |
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| MUST export to other countries |
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| MUST invest in other country businesses |
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| Trading Partner: Canada businesses make relationship with businesses in another country, so they would be Canadas trading partner. |
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| 1700s trades grew fast after permanent Canadian settlement |
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| Demand for raw materials (beaver pelts, fish, lumber) |
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| Europe manufactured Canadas raw materials |
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| After 7 years war, England and Canada made trade agreements (help war torn France) |
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| near-port cities used to facilitate trade import/exports |
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| Late 1700s, US independence and self reliant |
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| Steam engine 1775 James Watt: revolutionized manufacturing and transporting |
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| Cotton Gin by Eli Whitney: made cotton fibers, traded cotton with Canada |
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| USA did most of Canadas raw material manufacturing |
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Definition
| To this day, US remains as Canadas biggest trading partner |
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| NA Free Trade Agreement (NAFTA) made duty free trade in North America |
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| 1940s Traded with Japan for electronics and cars |
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| China manufacturing (Wal-Mart $15B to China) |
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Term
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| Politics, lack of industrialization, and technology limited trade |
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| Dubai, Egypt, Israel have trades asides from oil |
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| High, educated population |
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| Outsourcing and manufacturing |
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| Although open government, lack of infrastructure and issues troubled trades |
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| India aggressively expanded internationally |
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| Imports: Linen, Rice, diamonds, clothes |
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Definition
| Exports: fertilizers, vegetables, newspaper, copper |
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| Very low exchange with Canada (1% import, 3% export) |
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| Corrupt government, infrastructure problems loom |
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| Lots of primary resource potential |
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Term
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Definition
| South Africa (no-oil) and Morocco (oil/fruits) trading partners: |
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Term
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Definition
| Globalization: where economies and cultures have become integrated through new global communication, investments, trade, and transport |
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Definition
| easy to globalize nowadays |
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Term
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Definition
| global sales, finance, marketing, manufacturing, transportation = globalization |
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Term
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Definition
| international business IS NOT globalization |
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Definition
| businesses can operate internationally but not globally |
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Term
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| global businesses can be affected by global events |
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| not getting returned, lost money |
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| closure of operations forced |
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Definition
| History: Globalization began after WW2 |
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| United Nation first sign of globalization |
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Definition
| Helps negotiate treaties and tariffs |
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Term
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Definition
| Technology: Internet/cellular made trades nearly instant, quick, even at remote places |
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Definition
| China India building big economies |
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Definition
| Large companies want to expand in China/India |
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Definition
| Workers, moneyflow from huge population |
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| Blur of political boundaries |
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| EU collaborated all Europe nations |
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| Interdependence: reliance between 2 or more nations for each others products and services |
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Definition
| eg US relying on China to make goods |
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Term
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Definition
| Primary Industries: Mainly Raw materials |
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Term
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Definition
| Agriculture, Hunting, Fishing, Energy/Mining, Forestry (FEFAH) |
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Term
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Definition
| Western Canada: oil, gas, metals, beef |
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Definition
| Eastern Canada: oil, offshore oil, minerals |
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| Secondary Industries: manufacturing or processing capital goods orconsumer goods |
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Definition
| Canada as good manufacturing paper, oil refining, diamond, paper |
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Definition
| Canada relies on US and China for making other goods |
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Term
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Definition
| Branch Plant: a factory located outside of host country |
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Term
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Definition
| Canada branch plant policy saying you must have a factory to conduct business here |
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Definition
| Disadvantages of branch plants (3) |
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Definition
| Business reduction in roles mainly R&D and execs |
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Definition
| Innovation follows parent company |
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Term
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Definition
| Exports lack made in Canada for Canadians |
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Term
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Definition
| Non-Canadian Materials uses imported materials often |
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Definition
| Foreign secondary + domestic secondary can add value to raw materials |
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Term
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Definition
| Tertiary Industries: provides services for consumers and businesses |
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Term
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Definition
| Retail is the largest (banking, construction, communication) |
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Term
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Definition
| Canadian retail depend on imports |
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Term
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Definition
| Most Canadian retails are owned by foreign places |
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Definition
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Term
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Definition
| most products made in USA, but we have access to those |
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Term
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Definition
| experiences from around the world |
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Term
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Definition
| electronics mostly imported |
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Term
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Definition
| benefit from cheap labour and materials in China and India |
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Definition
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Term
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Definition
| 34 M popn in Canada, 100M popn in USA, 1B+ popn in China |
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Term
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Definition
| BL: make products that suit Chinese demographics |
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Term
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Definition
| Tim Hortons USA locations mean they hire more people |
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Term
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Definition
| Foreign companies in Canada spend more money on R&D |
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Term
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Definition
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Term
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Definition
| (1) Foreign Direct Investments (FDI): done to control all or some of business operations (startups) |
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Term
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Definition
| (2) Foreign Portfolio Investments: stocks/bonds/funds issued by companies to own a part of it |
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Term
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Definition
| HBC went bankrupt if it wasnt for foreign investments backing them up |
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Term
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Definition
| New processes and Technology |
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Term
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Definition
| medical, consumer electronics |
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Definition
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Term
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Definition
| Movies are mostly representing American culture, rare about Canada |
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Term
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Definition
| CRTC regulates how much Canadian TV shows are shown in Canada |
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Definition
| 35% of radio music must be canadian |
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Definition
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Term
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Definition
| Canadians are often aware of Canadian books and TV shows due to recognition |
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Term
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Definition
| Increased foreign ownership of Canadian companies |
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Term
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Definition
| Foreign companies are likely to stay loyal to their come country |
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Term
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Definition
| often leaves Canada in the dark when corporate problems rise |
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Term
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Definition
| R&D is often left in home country, making such jobs not in Canada and lowered profits |
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Term
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Definition
| Reduced Exports: foreign branch in Canada does things for Canada and doesnt export |
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Term
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Definition
| Revenues leave Canada pay head offices: Canadian branch helps pay head office costs |
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Term
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Definition
| This lowers actual income and lesser taxation. |
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Term
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Definition
| High jobs like accounting, advertising, and marketing is done in home country |
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Term
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Definition
| Economic destabilization, Global events can influence and impact Canadian economy due to many plugins from foreign businesses |
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Term
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Definition
| Eg 2008 American Buy American campaign negatively affected CDN economy. |
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Term
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Definition
| Canada trades internationally because of 7 main reasons: |
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| Access to inexpensive supplies |
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Definition
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Term
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Definition
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Term
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Definition
| Foreign Portfolio Investment (FPI): investments made on items from foreign countries |
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Term
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Definition
| Joint Ventures are the riskiest |
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Term
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Definition
| High % of ownership reside in foreign country, not home country |
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Term
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Definition
| CDNs purchase stocks, bonds, and financial instruments to make money |
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Term
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Definition
| Dividend: Interest made or amount that can be gained from an investment |
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Term
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Definition
| Short-Term Investments: (Liquid) safe because they can be converted to cash easily |
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Term
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Definition
| Capital Market: investing platform with long-term investments such as bonds, stocks. |
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Term
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Definition
| Stocks are popular way of FPI in New York or Tokyo. |
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Term
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Definition
| Mutual Funds: combined $ from many people are invested and dividends paid |
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Term
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Definition
| CDNs invest in foreign to diversify their portfolio |
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Definition
| Canada is only 2% of worlds stock markets |
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Term
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Definition
| Risk: International markets are interrelated with global events |
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Term
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Definition
| 2008 US Crisis affected global markets |
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Term
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Definition
| Imports: bringing products or services into a country |
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Term
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Definition
| Intended for resale or Business to Business (B2B) |
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Term
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Definition
| Global Sourcing: importing equipment, capital, raw materials from around the world |
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Term
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Definition
| Importing helps keep costs low, improve quality, or access new technologies |
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Term
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Definition
| Services can also be imported |
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Term
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Definition
| Call centers are regularly imported from India |
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Term
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Definition
| Canada Imports: machinery, cars, oil, chemicals, electricity, consumer goods |
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Term
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Definition
| In 2008, Canadas import were ~$490 B |
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Term
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Definition
| Exports: when companies outside of Canada purchase Canadian goods or services |
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Term
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Definition
| Services can also be exported, ie Call centers |
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Term
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Definition
| Canada exports lumber, telecom. equipment, chemicals, plastics, fertilizers, oil, gas, electricity, aluminum |
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Term
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Definition
| In 2008, Canadas exports were ~$443 B |
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Definition
| Exports are vital to Canadas economic success |
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Definition
| #1 CA trading partner is US, who is 77.7% of global exports |
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Definition
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Term
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Definition
| CA imports 1 M barrels/day |
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Definition
| CA exports 3.4 M barrels/day |
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Term
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Definition
| CA imports for Eastern CA because there arent pipelines spanning west-east, only north-south |
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Term
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Definition
| Value Added: amount of worth that is added to a product as it is processed |
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Term
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Definition
| = cost of finished products cost of raw materials |
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Term
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Definition
| Issue: Canada, making mainly primary goods, have little Value added to exports |
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Term
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Definition
| Example: Value addition for furniture |
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Definition
| CDN Lumber sold at $50, zero value added |
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Term
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Definition
| US Furniture Maker sells table at $3000, added $2950 in value |
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Term
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Definition
| CA Furniture store buys table for $3000, sells for $4500, made $1500 in value |
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Term
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Definition
| Licensing Agreement: gives a company permission to use a product, service, brand name, or patent in exchange for free or royalty. |
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Term
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Definition
| Usually applicable in one specific region |
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Term
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Definition
| For Example: Bell Mobility wanted to use UK Virgin brand in CA |
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Definition
| Bell has to pay Virgin a fee for using it in Canada |
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Definition
| Bell therefore has increased profits because of this new brand |
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Term
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Definition
| Exclusive Distribution Rights: a form of licensing where a company is allowed to be the only distributor of a product in a specific geographic area. |
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Term
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Definition
| Strategy often used as an entry into a foreign market |
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Term
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Definition
| Example: Rogers was the exclusive carrier for the iPhone 3G in 08 when it first came out in CA |
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Term
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Definition
| Licensing is used mostly for manufacturing also |
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Term
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Definition
| Senior parent company staff are sent to train foreign manufacturing |
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Term
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Definition
| After they are trained, the foreign employees manage it as parent staff retreats |
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Term
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Definition
| Licensing agreements have little risk but offer limited money returns. |
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Term
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Definition
| Franchising: agreement to use a companys name, services, products, and marketing. |
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Term
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Definition
| Franchisee signs a contract and agrees to follow all the rules with the franchisor |
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Term
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Definition
| They pay franchisor fees for finance, marketing, HR, operations, quality support |
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Term
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Definition
| Examples include Kumon, McDonalds, Wendys, Boston Pizza |
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Definition
| Franchisees have less risk and lots of support from franchisor |
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Term
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Definition
| Often have lesser profit, strict rules, and loss of control |
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Term
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Definition
| Joint Ventures: when 2 businesses, one from a foreign country, form a company with shared ownership |
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Term
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Definition
| 25-40% of all foreign investments are joint ventures |
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Term
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Definition
| Reason: joined so theyll be allowed into countries |
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Definition
| Often joining with govt or companies in China or Cuba with communist |
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Definition
| Trade Winds Inc is a CDN mining company in China to explore |
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Definition
| Companies can gain control of new markets, customers, and products |
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Definition
| May also share financing, technology, cultural, risk reduction |
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Term
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Definition
| However, it may be a risk for investors because 50% of all joint ventures fail |
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Definition
| GM and Toyota joint failed, lost investors money |
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Term
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Definition
| To over come these risks, formal contracts, and attention to detail makes things run smoothly |
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Definition
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Term
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Definition
| Most common type of trade barrier |
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Term
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Definition
| Tariffs are taxes or duties put on imported products or services. |
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Definition
| Purpose to raise the cost of imported goods so consumers will purchase local products |
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Definition
| Protectionism: shielding against foreign competition |
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| Consumers price of products go up |
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| Foreign employees overseas employees lose out on opportunities |
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Definition
| Canada uses NAFTA to void taxes in North America |
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Definition
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Definition
| Government imposed limit on the amount of a product that cam be imported |
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Definition
| Protects domestic producers limiting import and reducing foreign competition |
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Term
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Definition
| eg Canada has a quota of 14.5M kg of peanut butter to export to USA |
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Definition
| Tariffs increase once company exceeds quota |
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Term
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Definition
| banning ALL trade on a specific product or with a specific country |
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Definition
| used to pressure foreign countries to change government policies or human rights |
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Definition
| Embargoes increase the price of products as supply decreases |
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Definition
| 2003 Canada embargo for beef with mad cow disease |
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Definition
| Action taken by a country to force another to follow to international trade agreements or norms of conducts |
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Definition
| Similar to embargoes, but Sanctions often only involve banning some products |
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Definition
| Cuba USA sanction for banning trade will continue until Cuba becomes democratic |
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Definition
| Foreign Investment Restrictions |
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Definition
| Laws in Canada influences foreign investment |
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Definition
| Investments Canada Act must review investments to make sure they benefit Canada |
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Definition
| ie investments > $5M with non WTO country must be reviewed |
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Definition
| investments >$312M with WTO country must be reviewed |
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Definition
| trades of uranium, financial, transport, or culture industries must be reviewed |
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Definition
| Bank act, telecom act, transport act also limit foreign ownership |
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Definition
| Transport act limits 25% ownership to all Canadian domestic airlines |
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| Canada faces foreign restrictions too |
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| Canadians face Australias Foreign Investment Review Board for >$5M real estate invests |
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| Countries have different standards for environmental protection, voltage, or health/safety |
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| Companies making products must account for compatibility in foreign standards |
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Definition
| ISO (International Organization for Standardization) can help alleviate this standards issue |
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Term
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Definition
| Exchange Rate: amount of currency in relation to the currency of another country |
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Definition
| Fluctuations cause barriers because of uncertainty in pricing goods accurately |
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Definition
| CAD often quoted with USD because they are largest partners in the world |
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Definition
| Historically CAD was less than USD, at one time low of 1CAD = $0.637 USD |
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Definition
| But now its sometimes higher if not even at most times |
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Definition
| Canada is 7th most traded in the world |
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Definition
| Winners of High Canadian Dollar |
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Definition
| Importers: consumers like high dollar, means pay less CAD for USD products |
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Definition
| Companies gain when importing US goods like machinery etc. |
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Definition
| Canadian Travelers: costs less to spend CAD in USD after conversion |
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Definition
| Major League Sports Teams: teams operating in Canada pay US dollars to players |
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Definition
| If CAD is higher, it costs USD less to pay Canadian players |
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Definition
| Losses of High Canadian Dollar |
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Definition
| Exports: difficult to foreign importers to buy Canadian products |
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Definition
| causes companies to leave Canada for less expensive locations |
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Definition
| Canadian Tourism: high cost in Canada keeps tourists home |
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Definition
| 2009 Passport policies discouraged American visits even more |
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Definition
| Hollywood Movies which were usually made in Canada are no longer |
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Definition
| Canadian Retailers: Canadian shops in USA dont import from Canada, prefer to buy from elsewhere |
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Definition
| Factors affecting the exchange rate |
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Definition
| Floating Rate: no fixed rate in CAD compared to other currencies |
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Definition
| Currency Valuation: demand > supply causing CAD to rise |
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Definition
| Currency Devaluation: supply > demand causing CAD to fall |
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Term
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Definition
| Economic Conditions in Canada: Inflation rate, GDP, unemployment rate have impact |
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Term
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Definition
| Inflation Rate low = good stable prices |
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Term
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Definition
| GDP increase = stable healthy economy |
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Definition
| Low unemployment = good job market |
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Definition
| Interest rates in CA attracts investors here |
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Definition
| Trading Between Countries |
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Term
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Definition
| Export > Imports = more demand for currency |
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Term
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Definition
| Higher Terms of Trade: comparison between exports to imports = Higher currency |
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Definition
| Politics: stability of country affects currency |
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Term
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Definition
| Tension, terrorism, rioting |
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Term
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Definition
| Psychological Factors: historical significance on international market |
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Term
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Definition
| In international uprising, Swiss Franc is refugge, US+Euro are safe. |
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Term
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Definition
| Hard currencies: easily convert to other currencies (CAD, US, Euro) |
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Term
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Definition
| Soft currencies: not easily converted (Yuan, Russian ruble) |
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Term
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Definition
| Canada wasnt affected in 2008 recession because, by comparison, US had more problems while Canadas natural resource was still growing. Thus, CAD still stayed high |
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Term
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Definition
| Currency Speculating: trading or holding foreign currency in anticipation of its changing value |
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Term
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Definition
| Profit from currency fluctuations |
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Term
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Definition
| Canadian companies often trade in USD to avoid currency fluctuations |
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Term
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Definition
| Also trade with other countries in USD to have common currencies |
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Term
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Definition
| Overcome currency fluctuations with multiple bank accounts serving different currencies |
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Definition
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Definition
| Different time zones mean Canada cant call Japan on demand, they must wait for the right time |
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Term
|
Definition
| Communication technologies make it easier, but still a barrier |
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Term
|
Definition
| Call centers business take advantage of this |
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Term
|
Definition
| Text/email can communicate, but real time feedback is hard to happen |
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Term
|
Definition
| Culture: encompasses the knowledge, experience, beliefs, values, attitudes, religion, symbols, and possessions acquired by a group of people who lived in the same region or country for generations. |
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Term
|
Definition
| Subculture: a cultural group within a larger or predominant culture distinguished from it by factors such as class, ethnic background, and religion, and unified by shared beliefs and interests |
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Term
|
Definition
| Counter Culture: A culture that has values or lifestyle that are inopposition to those of a current accepted culture. Members of a counter culture openly reject the established cultural values that surround them. |
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Term
|
Definition
| Culture Determinants: The main factor that shape the culture of a specific group include religion, politics, topology, climate, and history. |
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Term
|
Definition
| Revolves around religion of Islam |
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Term
|
Definition
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Term
|
Definition
| Friday is a holy day, Weekend is Thurs Sat |
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Term
|
Definition
| Clothing is loose because its hot |
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Term
|
Definition
| Women hide everything except hand feet and face |
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Term
|
Definition
| Criminal cases are tried under Sharia (Sunni Islam) courts |
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Term
|
Definition
| Shintoism and Buddhism dominate (caring for nature and logic |
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Term
|
Definition
| Hierarchical, status matters |
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Term
|
Definition
| Kimonos worn by women during special events |
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Term
|
Definition
| Gifts are informal for visits, formal for meetings |
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Term
|
Definition
| Wrapping is often more important |
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Term
|
Definition
| Opened when recipient is invited to do so |
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Term
|
Definition
| Extravagant gifts are not appreciated, sets up inequalities between both parties |
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Term
|
Definition
| Belittle your informal gift at visit (Its only a token but..) |
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Term
|
Definition
| Canadian firms going global must determine the cultural differences |
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Term
|
Definition
| Decide whether or not their business can adapt to foreign culture |
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Term
|
Definition
| Level of cultural awareness will depend on how much business a company does in foreign country |
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Term
|
Definition
| Primary domestic operations that export do not need to care |
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Term
|
Definition
| Manufacturing, retail are more crucial |
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Term
|
Definition
| If foreign culture is similar, no need to spend as much time |
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Term
|
Definition
| If its very different, then you need to spend more time |
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Term
|
Definition
| Businesses in foreign markets need to be aware the difference between cultures |
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Term
|
Definition
| Failure to consider culture could ruin negotiations, marketing, labour, or even death |
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Term
|
Definition
|
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Term
|
Definition
| Culture has a direct impact on the types of products and services that will be successful in other markets |
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Term
|
Definition
| Culture has little impact on the sale of Canadian raw goods |
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Term
|
Definition
| Canadian exports depend on foreign culture though (ie pork in jewish/muslim area) |
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Term
|
Definition
|
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Term
|
Definition
| Financial services are most commonly exported into foreign markets |
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Term
|
Definition
| Peoples attitude towards money is different in every culture |
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Term
|
Definition
| Chinese like to save money, investment firms like to tap into the billions of dollars |
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Term
|
Definition
| Canadian values extend into the workplace by means such as minimum wages, safety, discrimination, and holidays |
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Term
|
Definition
| Rationalization: any attempt to increase a companys effectiveness and efficiency |
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Term
|
Definition
| Ex. Downsizing, layoffs, relocating corporate functions and activities |
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Term
|
Definition
| Many companies find Canadian labour is very expensive for manufacturing jobs |
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Term
|
Definition
| For skilled jobs, Canada is very educated and well fitted for those tasks |
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Term
|
Definition
| Canadians who wish to do business abroad must understand the differences between other countrys values about labour |
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Term
|
Definition
|
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Term
|
Definition
| Child Labour is very prominent in Asia and the Pacific countries |
|
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Term
|
Definition
| To Canadian businesses, this is easy to control, just dont hire kids |
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Term
|
Definition
| But to some nations, it may be ok or they dont care whos working |
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Term
|
Definition
| Some take advantage of kids, putting them in dangerous conditions |
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Term
|
Definition
| If a Canadian business is caught doing this, Canadians will see this as unacceptable and will decline to buy their products |
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Term
|
Definition
|
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Term
|
Definition
| Canadian law prohibits any form of discrimination in the workplace |
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Term
|
Definition
| However, in Saudi Arabia, hiring women can be difficult as their values are different |
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Term
|
Definition
| Homosexuality may also be less welcomed in other countries |
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Term
|
Definition
|
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Term
|
Definition
| Wages reflect standards of living in a country |
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Term
|
Definition
| Canadian manager must ask what is an acceptable or average wage in foreign countries |
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Term
|
Definition
|
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Term
|
Definition
| Cultures may have different norms as part of the workplace than Canada |
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Term
|
Definition
| Lunch breaks: Canada = 1 hour, Mexico = 2 hours, Muslim Countries have times to pray |
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Term
|
Definition
| Labour Unions and benefits may be non-existent in some countries |
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Term
|
Definition
| Different labour cultures affect Canadian branch plants that they must respect |
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Term
|
Definition
|
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Term
|
Definition
| Foreign branches must be aware of indigenous cultures |
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Term
|
Definition
| Positive indigenous effects: employments, medical, roads, water. |
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Term
|
Definition
| Ie Businesses who need educated people might benefit local schools etc. |
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Term
|
Definition
| Historically, it hadnt worked out with indigenous people |
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Term
|
Definition
| Ex French Canada traders abused Native Indians to do resource extraction |
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Term
|
Definition
| Angola and Sierra Leone have rebel forces trading Diamond with bloody conflicts |
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Term
|
Definition
| Exploitation of diamonds for guns harms ecosystems, human life, and animal life |
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Term
|
Definition
| Thousands of indigenous colonies get displaced when companies expand into forests |
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Term
|
Definition
|
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Term
|
Definition
| Men wear suits, tie, jacket, black shoes, dress pants |
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Term
|
Definition
| Women wear blazers, suit, or dress |
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Term
|
Definition
| 10 minutes before meeting |
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Term
|
Definition
| Sits at side of meeting table |
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Term
|
Definition
| Shakes hand, maintains eye contact |
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Term
|
Definition
| Logically paced presentation and scheduling |
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Term
|
Definition
|
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Term
|
Definition
| Monochronic: sees time as linear and sequential, and focus on one thing at at time |
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Term
|
Definition
| Based on contracts, back and forth, formality, fact based, direct |
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Term
|
Definition
| Polychronic: sees many things happening at the same time with participation of many people |
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Term
|
Definition
| Works based on trust, contacts, and lesser formal |
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Term
|
Definition
|
|
Term
|
Definition
| Refers to the personal space and amount of physical contact |
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Term
|
Definition
| Europe, South Americans are closer than North American cultures |
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Term
|
Definition
| Physical contact can involve kissing, touching |
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Term
|
Definition
| Canada: hand shaking, patting on back is appropriate |
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Term
|
Definition
| Latin America: Kissing, hugging, patting is appropriate |
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Term
|
Definition
| Muslim: touching is offensive |
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Term
|
Definition
| Seating can also be different |
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Term
|
Definition
| Canada likes sitting across from eachother, China likes side by side |
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Term
|
Definition
|
|
Term
|
Definition
| Non-Verbal communication is closely related to cultural norms of space. |
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Term
|
Definition
| Ie Japan is strict to have 1 person talking at once, whispering is unacceptable |
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Term
|
Definition
| Some gestures are regarded as offences |
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Term
|
Definition
| Ie OK sign is obscene in Spain |
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Term
|
Definition
|
|
Term
|
Definition
| Expectations for how a business person presents him/herself in a meeting is different |
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Term
|
Definition
| Business cards, dress, punctuality, gifts, greetings, and topics should be considered |
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Term
|
Definition
|
|
Term
|
Definition
| How different in power between people is perceived differently. |
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Term
|
Definition
|
|
Term
|
Definition
| Cultures with superiority because of age, wealth, gender, status, job etc. |
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Term
|
Definition
| Ex. Mexico, India, Indonesia |
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Term
|
Definition
|
|
Term
|
Definition
| Cultures that assume on equality regardless |
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Term
|
Definition
| Assumed based on earned status and how you build yourself |
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Term
|
Definition
|
|
Term
|
Definition
| Ex. Israel, Canada, Austria |
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|
Term
|
Definition
| Uncertainty Avoidance (UAI) |
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Term
|
Definition
| How cultures adapt to change |
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Term
|
Definition
| High Uncertainty Avoidance |
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|
Term
|
Definition
| You like rules, routines, religion, belief |
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Term
|
Definition
|
|
Term
|
Definition
| Little tolerance for outsiders |
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Term
|
Definition
| Ex. Mexico, Japan, Saudi Arabia |
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Term
|
Definition
| Low Uncertainty Avoidance |
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|
Term
|
Definition
| Love risk taking and seeking change |
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Term
|
Definition
| Very high tolerance for difference |
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|
Term
|
Definition
|
|
Term
|
Definition
| Ex. Canada, USA, Sweden, Singapore |
|
|
Term
|
Definition
| Masculinity vs Femininity (MAS) |
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|
Term
|
Definition
| Workplace values of males and females |
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|
Term
|
Definition
|
|
Term
|
Definition
| Something we possess and show |
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Term
|
Definition
| Being assertive, competitive, ambition, accumulative of material goods (collecting) |
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Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| Degree of culture values nurturing, family values, and social support systems |
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|
Term
|
Definition
|
|
Term
|
Definition
| Individualism vs Collectivism (IDV) |
|
|
Term
|
Definition
| Extent to which a person makes their own decisions regarding your education, job, and life partner |
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Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| Ex Canada, USA, Australia |
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|
Term
|
Definition
|
|
Term
|
Definition
| Members have government, churches, and families make decisions for them |
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Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| Long term orientation vs Short term orientation |
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|
Term
|
Definition
|
|
Term
|
Definition
| Having perseverance for long term goals |
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|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| Looking at the present, what are you going to do now. |
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| High IDV: individualistic approach and attitude. Privacy. |
|
|
Term
|
Definition
| Low LTO: short term driven and appreciates cultural traditions |
|
|
Term
|
Definition
| Low PDI: High level of equality. |
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|
Term
|
Definition
| Political System: the type of government by which a country is run |
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|
Term
|
Definition
| Economic System: the way a country organizes its resources and distributes good to citizens |
|
|
Term
|
Definition
| Economic systems try to answer: |
|
|
Term
|
Definition
| What should the country produce and in what quantities? |
|
|
Term
|
Definition
| How should scarce resources such as labour and capital be allocated? |
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|
Term
|
Definition
| How should goods and services be distributed throughout the country? |
|
|
Term
|
Definition
| What should be the price of goods and services? |
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|
Term
|
Definition
| Market Economy: capitalism or private enterprise |
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|
Term
|
Definition
| Businesses, consumers, government run independently of each other |
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|
Term
|
Definition
| Ensure there is a variety and little government control |
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|
Term
|
Definition
| Atmosphere in which citizens and corporations can be successful |
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|
Term
|
Definition
| Private Property: encouraged to own property (real estate, automobiles, furniture..) |
|
|
Term
|
Definition
| Free to rent, sell, trade, or give properties |
|
|
Term
|
Definition
| Profit: encouraged to be profitable because then companies can improve |
|
|
Term
|
Definition
| Profit belongs to the owner of the business and they choose how to spend it |
|
|
Term
|
Definition
| Competition: Companies compete on quality, services, price, reputation & warrantees |
|
|
Term
|
Definition
| competition results in more incentives by the companies to have loyal customers |
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|
Term
|
Definition
|
|
Term
|
Definition
| Freedom of speech, religion, assembly |
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| Centrally Planned Economies: communism or command economy |
|
|
Term
|
Definition
| Government controls all element of the economy and distributes income |
|
|
Term
|
Definition
| Government provides education, healthcare, employment, and housing |
|
|
Term
|
Definition
| Private Property: Restricted. Government owns all housing & businesses like factories, offices, farms. All workers are employed by the government |
|
|
Term
|
Definition
| Profit: Profit belongs to government. No portion belongs to citizens. Governments re-invest revenues into businesses or education, military. Governments control prices to increase revenue when needed |
|
|
Term
|
Definition
| Competition: Limited. Government determines size, price, quality, and amounts. Consumers have little variety |
|
|
Term
|
Definition
|
|
Term
|
Definition
| China and Russia are changing to market economy practices |
|
|
Term
|
Definition
|
|
Term
|
Definition
| Citizens ensured minimum standards |
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| Mixed Economies: Free enterprise systems |
|
|
Term
|
Definition
| Ex. Canada has government services like healthcare and education, yet prosperous businesses and large corporations. |
|
|
Term
|
Definition
| Private Property: owned by individuals, corporations, or government. Government has offices, parks, and schools. It sets regulations that affect private property. |
|
|
Term
|
Definition
| Ex Canada has regulations for ownership of financial institutions and media |
|
|
Term
|
Definition
| Profit: encouraged, but taxed to support government. Federal & provincial level through sales tax, income tax, corporate tax. Municipal collects property taxes |
|
|
Term
|
Definition
| Competition: Strong competition between businesses, but government might be a competitor too. |
|
|
Term
|
Definition
| Ex. Government owned VIA Rail, Canada Post affect DHL, Fedex, UPS etc. |
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| Individuals have little on input on tax spendings |
|
|
Term
|
Definition
|
|
Term
|
Definition
| Government might intervene growth |
|
|
Term
|
Definition
|
|
Term
|
Definition
| Theocratic: based on religion |
|
|
Term
|
Definition
| Monarchy: based on king and queen |
|
|
Term
|
Definition
| Aristocracy: based on rich and wealthy |
|
|
Term
|
Definition
| Democracy: Free and fair elections, rule of law, free speech, assembly, press, and religion |
|
|
Term
|
Definition
| Entitled to education and govern themselves |
|
|
Term
|
Definition
| Accompanied by market economy |
|
|
Term
|
Definition
|
|
Term
|
Definition
| Politicians get concerned with re-election than the overall benefit |
|
|
Term
|
Definition
| Politicians rely on corporate funding may be influenced by corporations |
|
|
Term
|
Definition
| Similar background from politicians (lack of women, minorities, poor) |
|
|
Term
|
Definition
|
|
Term
|
Definition
| New emerging economies lack judicial systems to maintain political stability (latin america) |
|
|
Term
|
Definition
| Autocracy: Ruled by a small group or individual |
|
|
Term
|
Definition
| Believe 1 government will have rational decisions for entire country |
|
|
Term
|
Definition
|
|
Term
|
Definition
| Controls citizens lives including media, professions, businesses, religions |
|
|
Term
|
Definition
| Citizens have no say in government decisions |
|
|
Term
|
Definition
| Ex. North Korea, Cuba are led by a single leader |
|
|
Term
|
Definition
| Tied with centrally planned economy, though some countries have foreign investments |
|
|
Term
|
Definition
| Classifying Economic Development |
|
|
Term
|
Definition
| Countries are classified by economic development. Whether theyre poor, rich, or just getting started |
|
|
Term
|
Definition
| Countries are ranked based on criteria determined by United Nations (UN) and IMF (International Monetary Fund) |
|
|
Term
|
Definition
| Underdeveloped Countries, least developed, or third world |
|
|
Term
|
Definition
| Poor infrastructure, no healthcare, education |
|
|
Term
|
Definition
| Small economies by comparison |
|
|
Term
|
Definition
| Low literacy, limited technology, weak economies |
|
|
Term
|
Definition
| Political issues, corruption, war |
|
|
Term
|
Definition
| Relies predominantly on agriculture or resources |
|
|
Term
|
Definition
| Frequent natural catastrophes result in underdevelopment (Rwanda, Madagascar) |
|
|
Term
|
Definition
| Developing Countries, emerging countries |
|
|
Term
|
Definition
| Improved literacy rates, increased health care access, technological advancements |
|
|
Term
|
Definition
| Shift towards industrialization and manufacturing |
|
|
Term
|
Definition
| Ex. China, Brazil, India, South Africa |
|
|
Term
|
Definition
| Rural shift to cities as well as urbanization |
|
|
Term
|
Definition
| Canadian businesses like Bombardier can benefit by providing for these countries |
|
|
Term
|
Definition
| However, lower labour costs Canada cant match can compete with Canada |
|
|
Term
|
Definition
| Often weak regulatory and legal systems. |
|
|
Term
|
Definition
| Developed Countries, industrialized nations, first world countries |
|
|
Term
|
Definition
| High Income or strong GDP |
|
|
Term
|
Definition
| High literacy rates, good healthcare, education, and technology |
|
|
Term
|
Definition
| Manufacture diverse complex equipment like cell phones, computers, hybrid cars |
|
|
Term
|
Definition
| Strong alliances between developed countries (G8) |
|
|
Term
|
Definition
| Correlation between democracy and economic growth |
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| 2 consecutive quarters of negative GDP |
|
|
Term
|
Definition
| decline in consumer purchases, employment, business growth |
|
|
Term
|
Definition
| Indication in Canada are construction contracts and exports |
|
|
Term
|
Definition
| Trough, Bottom of the cycle |
|
|
Term
|
Definition
| Employment and production at their lowest point |
|
|
Term
|
Definition
|
|
Term
|
Definition
| sometimes worsens to become depression (ie 1930s) |
|
|
Term
|
Definition
| Expansion, recovery, prosperity |
|
|
Term
|
Definition
| growth of employment, wages, production, and profits |
|
|
Term
|
Definition
| Strong investments, businesses created (Ie 2001-2007) |
|
|
Term
|
Definition
|
|
Term
|
Definition
| Top of the business cycle when economy stops expanding and begins contracting |
|
|
Term
|
Definition
| Economic Indicators of the business cycle |
|
|
Term
|
Definition
| Leading indicators: predict where the economy is headed. |
|
|
Term
|
Definition
| adjusts before economy actually experiences change |
|
|
Term
|
Definition
| guides investors, businesses, and governments |
|
|
Term
|
Definition
| Ex. Housing starts are leading indicators because people wont purchase new homes if economy is down |
|
|
Term
|
Definition
| Lagging Indicators: are adjusted after economic changes. |
|
|
Term
|
Definition
| Takes 2-3 quarters for economic change to influence a lagging indicator |
|
|
Term
|
Definition
| Ex. Unemployment rate: takes 6 months for unemployment rate to decrease after change |
|
|
Term
|
Definition
| Coincident Indicators: move in conjunction with the business cycle |
|
|
Term
|
Definition
| Ex International Trade: slumping economies involve less trading |
|
|
Term
|
Definition
| Governments and the Business Cycle |
|
|
Term
|
Definition
| During the 2008-2009 US recession, Canada was affected by decrease in American purchases |
|
|
Term
|
Definition
| Governments increased their spending to stimulate the economy |
|
|
Term
|
Definition
| Canada allotted $12B for infrastructure, $7.8B for homes, $200B for consumers. |
|
|
Term
|
Definition
| USA had a $787B stimulus package to government agencies |
|
|
Term
|
Definition
| Democratic governments may invest in social programs to influence voters decisions before elections |
|
|
Term
|
Definition
|
|
Term
|
Definition
| a country has absolute advantage if it makes a product or service more productively than other countries. |
|
|
Term
|
Definition
| They use the resources more efficiently to manufacture more products. |
|
|
Term
|
Definition
| Country has better technology to produce goods with absolute advantage |
|
|
Term
|
Definition
| Opportunity Cost: is the value of what is forgone |
|
|
Term
|
Definition
| Opportunity cost of being in school is the money you could be making in a job |
|
|
Term
|
Definition
|
|
Term
|
Definition
| When a country has a comparative advantage, it means that country can produce a good at a lower opportunity cost as the other |
|
|
Term
|
Definition
| Countries exporting products in which they have a comparative advantage, and import goods from country with a comparative advantage for that product, both countries will benefit. |
|
|
Term
|
Definition
| Governments role include: IN/OUT Laws, tariffs, trade agreements, immigration laws, currency rates, taxation laws, education, tax treaties, military systems, environmental policies, infrastructures, embargoes |
|
|
Term
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Definition
| Canadian government help intd businesses set up in canada with incentives |
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| But impede with regulations, licenses, and laws. |
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| Government regulates laws such as minimum wage |
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| To start a business in Canada, it is easy to start a business with only one online application |
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| New registered businesses will receive |
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| Corporate income tax account |
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| Payroll deduction information |
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| In China, though, it takes 13 stages of approval to open a business there |
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| Established in foreign countries, it helps foreign businesses operate |
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| Trade offices help investments, exports, R&D, and lower costs by providing expertise |
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| Government Embassies, High commissions, and Consulates |
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| Consular Services in foreign countries help traveling Canadians in case of emergencies |
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| Communications with family after accident |
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| Lost passports or identifications |
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| Embassies: located in capital cities they provide full range of services |
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| High Commissions: Same as embassies, but in Commonwealth countries (GB, Australia) |
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| Permanent Missions: Located in UN, WTO and EU. No consular services |
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| Consulates General: embassy like offices located in major cities |
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| Consulates: located in major cities but do not provide all range of services |
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| Consulates headed by honorary consuls: Located around the world headed by honorary consuls. In places like Uganda and Paraguay. |
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| Offices: Found in major and capital cities to aid with specific projects without consular services. |
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| Organized by DFAIT, Team Canada visits a specific country focused on a specific industry |
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| Provides Canadians a business opportunity to meet potential customers, suppliers etc. |
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| Junior Team Canada are teenagers going abroad to gather business information, contacts, and opportunities. |
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| Brand Canada promotes Canadian Culture to foreign places |
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| Globalization: movement of goods, services, technology, investment, ideas, and people around the world |
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| Happened when trade barriers are reduced after WWII |
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| Positive aspects of globalization: |
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| Lost/fear of lost CDN jobs |
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| Exploitation of cheap labour |
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| Influence of MNCs (Multination corporations) on government |
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| Globalization strategies: companies use different strategies with different parts of the world |
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| Global Strategy: regards world as one big market with decisions made in headquarters |
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| Adv: massive economic scale (produce bulk quantities) |
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| Disadv: require rapid syncing of global countries, and little care for individual cultures |
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| Ethnocentric: the idea that everyone will want and respond to the product the same way |
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| Multidomestic strategy: customizes products and marketing for local culture |
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| Decisions made decentralized |
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| Adv: better political, product, and responsiveness from local people |
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| Polycentric: local management is best strategy for whats best |
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| Transnational strategy: combines the best of global and multidomestic |
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| Maintains needs of local culture, but still stay cohesive to the global scale |
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| Products made cheap centrally, then marketing customizes locally |
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| Geocentric: values both local differences and whats best for company |
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| Often very difficult to maintain the balance between the 2 however |
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| Trade Agreement: enforceable treaty between 2 or more countries that addresses the movement of goods and services, eliminates trade barriers, terms of trade, and encourage foreign investment |
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| Canadas trade agreements: NAFTA, EFTA, Canada-Chilie FTA, Canada-Israel FTA |
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| NAFTA: sets rules surrounding movement of goods, services, investments in N.America |
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| Adv: Higher prosperity and efficiency for many companies |
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| Higher paying engineering jobs in Canada |
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| Free flow of resources makes NA a stronger competitor to Asia markets |
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| Trade has tripled for partners (894B) and exchange rate doubled |
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| Disadv: Many manufacturing jobs were lost to Mexico |
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| Mexicos corn, beans, milk industry felt lack of tariffs made it hard to compete |
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| Mexico increased pollution |
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| Factory jobs were often poor in standards |
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| FTAA (Free trade Agreement of the Americas) |
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| N/S America free trade zone making it the largest in the world |
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| Agreement fell through because of Brazil and Venezuela |
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| In 2010, Canada still has pending agreements with Morocco, EU, Korea etc. |
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| Tax Treaties: created to prevent double taxation and tax evasion for people who pay taxes in Canada and other countries for income |
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| Canada has tax treaties with 92+ countries |
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| Tax treaties give businesses more predictable and easily to move things across borders |
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| Taxation framework makes developing countries more favourable |
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| EU: formed to remove many obstacles between movement through small EU countries |
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Definition
| Has its own currency, financial policies, anthem, and flag |
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Definition
| Belgium, France, GB, Ireland, Luxembourg, Portugal, Denmark, Germany, Greece, Italy, Spain, Netherlands, Cyprus, Estonia, Latvia, Malta, Slovakia, Czech Republic, Hungary, Romania, Bulgaria, Lithuania, Poland, Finland, Sweden, and Slovenia |
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| Members must be stable, democratic, and has positive human rights record |
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| Purpose: promote peace, economic growth, cooperation, people bonds, and political integration |
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| Single market allows borders, goods, and investments to flow a lot easier |
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| Collectively the largest GDP, 19.5 Trillion |
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| Leaders switch once every 6 months, most votes majority but some unanimous |
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| Council of EU > European parliament (laws, budgets) > European Commission (day to day) |
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| Some members do not use Euro, while some do. |
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| New members are expected to use Euro, and meet strict policies on inflation, stability, etc. |
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| Adv: Decrease exchange rate fluctuations |
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| Price transparency for comparisons |
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| Eliminate transaction costs |
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| Labour movements (easier to pay) |
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| Disadv: Initial costs (implements accounting software, signs, etc.) |
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| National control (nations cant control certain rates) |
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| EU is CAs 4th largest Foreign investment & 2nd largest export partner @ $90B trades in 2008 |
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| Metals, stones, oil, machinery |
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| In 2009, agreements were made to start free trade (EFTA) |
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| Trade organizations: established to help free flow of goods and services |
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| World Trade Organization (WTO): promotes free trade throughout the world |
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Definition
| Main Purpose: settle trade disputes |
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| 153 members and decisions made by consensus |
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| Purpose: A forum for negotiation |
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| Purpose: Set global rules |
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| Purpose: Dispute Settlement |
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Definition
| WTO also provides protection of intellectual properties |
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Definition
| Invites government to lower protectionist policies |
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| Lower global cost and rise standards of living |
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| Criticisms: WTO destabilizes markets, and drains resources from developing countries |
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Definition
| Ie. Producing beans in USA faster then Madagascar can buy them at lower price |
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| Leads to lowering the already low underdeveloped countries |
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| Overprotection of IP (intellectual properties) make it hard to use them for generic items (Ie generic AIDS drugs) |
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| WTO decisions arent clear and definitive. Ie Canada US Softwood lumber import duties disputes in 2006 |
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| Its been vital to Canadas success as it helps alleviate most of the treaties |
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| Asia-Pacific Economic Co-operation (APEC): created in 1994 to unite countries in Asia |
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Term
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Definition
| Main Purpose: Promote trade in Pacific Rim countries |
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Definition
| 21 members represents 40.5 % of the worlds population |
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Definition
| Foster free trade among its members, increase prosperity and economic growth |
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Definition
| Trade, investments, business facilitation, economic and technical cooperation |
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Definition
| Asides from business, APEC also discusses climate change, and security |
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Definition
| Since APEC, countries have increased trade by 400% |
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Definition
| The group of eight (G8): comprises of major economies of the world |
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| Main Purpose: Discuss Macroeconomic issues |
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| GB, Germany, Canada, France, Italy, Japan, USA, Russia |
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Definition
| Purpose to discuss macroeconomics such as growth, trade freedom, and helping developing countries |
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Definition
| Also discusses terrorism, technology, arms, and crime/drugs, N.Korea, and nuclear weapons |
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Definition
| The group of 20 (G20): established in 1990s to discuss major economies of the world |
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| Main Purpose: Discuss financial stability and growth of developing countries |
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| Build to go beyond the G8 to include India, Brazil, and China |
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Definition
| To strengthen ties throughout the world, growth, and eliminate trade barriers |
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| Also discusses restructuring global financial organizations like IMF and World Bank |
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| Theres been talks to rank Canada lower in the G20 and replace them in the G8 |
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| Plays a very small role in comparison |
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| Organization for Economic Co-operation and Development (OECD) |
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Definition
| Main Purpose: promote democracy |
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Definition
| Established for the advancement of democracy and market economies |
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Definition
| Promote economic growth, expand employment, improve Stand. Of Living, |
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Definition
| Financial stability, helping countries economic development, and enhance world trade |
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Definition
| Provides publication on topics like sustainable development, world health data, statistics etc. |
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Definition
| Their report Economic Survey of Canada is especially useful to Canadian businesses |
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Definition
| World Bank: organization of 186 members that provides monetary support for developing countries |
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Definition
| Main Purpose: Lend money for developing countries |
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Definition
| International Bank for Reconstruction and Development (IBRD) |
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| Works with developing underdeveloped countries |
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| International Development Association (IDA) |
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| Assists the least prosperous countries |
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| Provides loans and grants to poor countries with issues |
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| Helps these countries get proper infrastructure |
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| Canada and other countries donate to the WB |
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| Some say many countries suffered because of the rules it makes for taking loans |
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| They take advantage of the countries they loan to, so that when theyre working well, theyll be advantageous to the countries in the WB |
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Definition
| The International Monetary Fund (IMF) |
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Definition
| Main Purpose: Track and analyze economic trends |
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Definition
| Tracks economic trends, analyzes countries financial performances, and warns governments of financial problems |
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| 186 member including Canada |
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Definition
| Purpose to encourage countries to adopt responsible economic policies |
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| Lending money to emerging developing countries |
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| Provide technical training in banking regulations and policies |
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Definition
| In 1997 Asian economic crisis, IMFs suggestion to increase interest rates made the crisis deepen |
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Definition
| Loans also often come with strict regulations for inflation and other economic constraints |
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Definition
| Other organizations: Organization of Petroleum Exporting Countries (OPEC), World Economic Forum (WEF), International Chamber of Commerce (ICC), Canadian International Trade Tribunal (CITT) |
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Definition
| Canada Trade Assistance Organizations: GLOBE Foundation of Canada, The Fraser Institute, C.D Howe Institute, CIGI Center for International Governance Innovation |
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Definition
| Purpose: Keep peace throughout the world |
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Definition
| Develop friendly relations among nations |
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Definition
| Work to help poor people better lives by eliminating disease, illiteracy, and respect of freedoms |
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| Center for helping nations achieve these goals |
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| Peace keeping and relief with International Labour Organization, IMF, WHO, and UNICEF |
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Definition
| Charter of the UN declares UNs commitment to devote resources to help standards of living, unemployment rate, and economic conditions |
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Definition
| UN Economic and Financial Committee deals with International trade, sustainable development, globalization and poverty elimination |
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Definition
| Corporate Social Responsibility (CSR): is defined as the duty of a companys management to work in the best interests of the society it relies on for resources |
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Definition
| It may take many forms like: Charitable donations, treating employees ethically, Being environmentally conscious, Ensuring safe working environments, sponsoring local teams, creating and promoting diverse workplaces |
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| Dissuades governments from implementing regulations that might interfere businesses |
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Definition
| Attract and retain employees, especially if employees can make a say with practices |
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Definition
| Nike and Gap traditionally had poor CSR practices |
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Definition
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Definition
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Definition
| Spending time and employee energy on CSR |
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Definition
| Often distract customers from problems a company may be creating (Ie Tobacco company with good CSR detracts people from thinking smoking is good) |
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Definition
| CSR looks good one one side, but does it bad in other countries |
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Definition
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Term
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Definition
| Important to stay consistent in CSR strategies worldwide |
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Definition
| Todays consumers can easily look up bad practices |
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Definition
| Companies need to tell employees about CSR practices too through codes of conduct etc. To prevent fraudulent activities or immoral practices |
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Definition
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Term
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Definition
| When a company wants to know how its doing, it asks stakeholders |
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Term
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Definition
| Primary stakeholders: customers, investors, suppliers, competitors who have direct impact to the organizations profitability and success |
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Definition
| Secondary stakeholders: do not directly affect the companys profit like community, media |
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Definition
| When doing a stakeholder analysis, they must determine who has the most influence on the decision making process |
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Term
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Definition
| Business Ethics: refers to the set of rules or guidelines that management or individuals follow to make decisions for their company |
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Term
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Definition
| Include laws, companys code of ethics, and personal values of the decision maker |
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Term
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Definition
| Is this honest? Will this be fair to stakeholders? How will this impact the companys reputation? |
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Term
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Definition
| Global Ethical Reasoning: Ethical decisions are more complex for global companies |
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Term
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Definition
| Ethical Imperialism: there is a universal truth standard across all cultures |
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Term
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Definition
| If something is wrong in one country, its wrong in all countries |
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Definition
| Cultural Relativism: Different cultures should be respected as one is not seen as better than another |
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Term
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Definition
| For these, different countries will have different ethics or practices |
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Term
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Definition
| The UN has Universal Declaration of Human rights that define minimum human rights |
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Definition
| Environmental Issues: the ability to meet human consumption while maintaing the environment needs to be considered. |
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Definition
| Natural environment is critical for businesses, it must be respected and sustained |
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Definition
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Term
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Definition
| 1984 gas leak from Union Carbide Plant in India killed 3000 |
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Definition
| Oil Spills Exxon Valdez in 1989 and BP in 2010 |
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Definition
| Canadian waterways polluted with mercury from coal-burning power plants |
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Definition
| Ghana, Lake Songor is shrinking because of salt mining, diverting water for irrigation |
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Term
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Definition
| Governments have agreements like Rio Declaration on Environment and Development and Kyoto Protocol agree to limit greenhouse gas emissions and other limits |
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Term
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Definition
| US Canada and China have withdrew from it because it impedes with economic growth |
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Term
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Definition
| Johannesburg World Summit on Sustainable Development seeked to preserve natural resources, and world consumption |
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Term
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Definition
| Unfortunately, US president didnt attend, making it hard to have decisions |
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Term
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Definition
| In 2009, in efforts to maintain global temperature increase to 2 degrees, 100B were put in to help developing countries reduce emissions |
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Definition
| Sweatshops: factories of underdeveloped and developing countries where working environments are unsafe and employees treated unfairly |
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Term
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Definition
| Often employs children age 14 |
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Term
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Definition
| Paid very little with overtime pay cheated |
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Term
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Definition
| Workers cannot take sick days, breaks, and work 12 hours a day |
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Term
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Definition
| Hot environments and untrained workers make for dangerous work environments |
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Term
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Definition
| Global competitiveness, corporate greed, and consumers expectation of low prices cause sweatshops |
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Term
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Definition
| Companies shouldnt stop using factories in developing countries, but instead make sure they do it right there and invest money in making more ethical |
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Term
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Definition
| As consumers, we can boycott or buy only certain items from companies to reflect how we feel |
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Term
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Definition
| Corporate corruption: refers to the involvement in illegal activities to further ones business interests |
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Term
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Definition
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Term
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Definition
| Garth Drabinsky and Myron Gottleib involved in accounting scheme were found guilty in overstating profits, under-representing costs and inflated value of assets |
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Term
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Definition
| Sentenced in 2009 to jail |
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Term
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Definition
| Hollinger Inc. Conrad Black was found guilty of fraud obstruction of justice by US Securities Exchange Commision (SEC) and misappropriated millions of dollars |
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Term
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Definition
| Fined $125,000 and forfeited $6.1M and sentenced to 6.5 years in prison |
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Term
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Definition
| Bernard Madoff: Spent years defrauding investors $50B in Ponzi scheme which pays returns to current investors using new investors money rather than profits. Sentenced to 150 years in prison |
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Term
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Definition
| Corporate crimes (white collar crimes) impact the world more than real crimes |
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Term
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Definition
| Gifts and Tips are not considered a bribe, just a low cost symbol of friendship |
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Term
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Definition
| Grease: smaller payments to encourage faster negotiations and speed up business people are bribes |
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Term
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Definition
| Commissions: Large payments made to facilitators or go between business negotiations. Not bribes and happens often (realtors, Best Buy) |
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Term
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Definition
| Bribes: money presented to induce people to do things, are illegal |
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Term
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Definition
| Corruption of Foreign Officials Act makes it illegal to accept a bribe in Canada or globally |
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Term
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Definition
| Dumping: selling products in a foreign country below the cost of production or below the price in home country |
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Term
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Definition
| To get rid of excess production in home country without affecting home country prices |
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Term
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Definition
| Predatory Dumping: reduces price of products an sells them in foreign country to remove competitors |
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Term
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Definition
| Companies speak to CBSA (Canadian Borders Services Agency) or CITT about possible dumping |
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Term
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Definition
| Poverty: Biggest problem on earth, one quarter of population lives in poverty |
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Term
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Definition
| Microcredit: when one family is given a small grant to start businesses (farming, small shop) |
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Term
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Definition
| Lending circles have entrepreneurs make money and repay it, then lending it to someone else |
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Term
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Definition
| NGO focus can be diverse and care about various things. |
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Term
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Definition
| Ie Doctors without Borders, Greenpeace, Amnesty International, World Vision etc. |
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Term
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Definition
| Free the Children: Craig Keilburgers NGO goes around the world spreading awareness about children in sweatshops and money |
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Term
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Definition
| They also help build schools and infrastructure to get children to success |
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Term
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Definition
| Fairtrade Labelling Organizations International (FLO) |
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Term
|
Definition
| Improves trading relationships for producers around the world |
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Term
|
Definition
| Helps maintain a fair and honest trade between all members of the supply chain |
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Term
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Definition
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Term
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Definition
| Retail stores that sell fair trade products in N.America like handicrafts from artisans in underdeveloped countries |
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Definition
| The International Organization for Standardization (ISO) |
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Term
|
Definition
| Largest standards developing organization implementing 17500 standards worldwide |
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Term
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Definition
| ISO helps ensure that all companies are able to produce the same way at the same level of quality and dimensions |
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Term
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| Marketing: the sum total of all the activities involved in getting goods and services from original producer to the ultimate consumer |
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| Includes market research, product development, pricing, advertising, promotion, sales, and logistics |
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| Purpose is to sell the output of production. |
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| Finds data to solve marketing problems |
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| Primary Data: data collected first hand. Secondary Data: data collected by a third party |
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| Statistics can be used to help determine how well a product will sell given different ways it could be produced |
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| Companies use data as well as additional research to refine their products so it will appeal to the largest audience when released |
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| Using data collected throughout the stages, companies can determine the best pricing for products to be sold attractively to the most amount of people |
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| Advertising and Promotion |
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| After producing the product, companies will need to convince consumers that their products are worth their price |
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| Ads can outline unique creative designs, environmental concerns, and other special features |
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| It can take many forms like internet ads, billboards, posters, TV radio ads, newspaper ads, sponsorships, endorsements |
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| A company must know where to sell their products |
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| Craft Shows attract alot of people to one location at once where products can be shown off |
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| Retailers can be dealt so theyll carry and sell your product |
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| Own store can be setup to exclusively sell your product, although one can be expensive |
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| Online mediums can reach a great audience and have transactions done easy and cheap |
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| Management of the flow of goods and services both in and out of an organization |
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| Companies must worry about packaging, warehousing, inventory, and management of goods |
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| Product: modifications must be made to adapt a foreign culture |
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| Packaging weights: units must be converted |
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| Packaging colours: some colours are more appealing or have special meanings in different countries |
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| Legal Requirements: some countries require materials or restrict materials from being in products. |
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| Label Requirements: Special product labeling rules may also apply |
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| Language Requirements: translate your packaging |
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| Ingredients: Some countries restrict the consumption of certain foods due to religious or other reasons. Also, some countries restrict the amount of harmful ingredients like MSG or salts in their imports |
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| Some countries may have different styles or more advanced than others |
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| Companies need to be aware of different traditions and current trends in foreign country before adapting or selling products there |
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| Place: Where to manufacture or sell specific products |
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| Centralized Strategy: all manufacturing and marketing is performed in one location |
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| This strategy limits foreign expansion as the central plant may become overly large |
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| Decentralized Strategy: means they will setup manufacturing plant in another country, or hire sales force there to do everything in foreign country |
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| E-Commerce: online distribution of goods make it the fastest way by far to carry out sales |
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| E-Distribution: companies can use online distribution channels like EBay and Amazon to host their products for sale globally online |
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| Customers can quickly and easily pay with methods like PayPal |
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| E-commerce transaction types: |
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| B2C: business to consumer operated by major retailers |
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| B2G: business to government sells things to various governments |
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| B2B: business to business sells things online to other businesses |
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| Sales Agents: combines centralized strategy with decentralized one |
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| Hire someone to go to foreign country with stocks and sell there |
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| Sales agents go with customized marketing and sales processes suitable for foreign market |
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| Trade shows: collection of manufacturers and distributors of similar products rent a space and display a booth |
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| Attracts thousands of potential customers in and often quickly sells fast and make money |
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| Between businesses, one can also get attention and make deals within a trade show |
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| Branch Plants: most expensive way, but includes staffing a foreign location to do all its operations |
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| Adv: Lower shipping costs |
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| Import regulations and tariffs are no longer an issue |
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| Product modifications are easier |
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| Companies can sell rights to use a patent or trademark for a fee as they take it to do other things with it |
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| A Royalty is often paid as a percentage of the products sold |
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| Manufacturing Agreement: anyone in a foreign country can have a contract to manufacture products of another company under their license |
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| Some manufacturers can rebrand the product or market it as their own with more fees |
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| Distribution Agreements: Retailers can pay royalties to carry someone elses products and sell them in a foreign country. |
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| In return, the retailer will promise not to sell a competitors product in the same store |
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| If interest is high, the 2 can negotiate agreements for selling these products |
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| Franchising Agreements: are a form of licensing agreement that turns the ownership of a manufacturing or distribution company over to a local franchisee. |
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| Under certain restrictions and fees, a franchisee can use all the brands and products of the parent company |
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| Acquisitions: To remove competitions in a foreign country, a larger company can choose to buy out a smaller company to make it part of them |
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| Acquisitions may also be used to acquire new skills, patents, or key people |
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| Price: when picking a price for a product to sell in a foreign country, its important to consider the following factors |
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| Labour Costs: when products are manufactured in foreign locations, its often lower than if it were to be produced in Canada |
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| Shipping Costs: When shipping products to farther locations, it may be very expensive to do so if the distances are farther |
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| Duties and Tariffs: taxes and fees when importing to another country can hike up the prices |
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| Legal costs: Modifications for adaptation to foreign country and foreign country approvals may have taken some money so its good to consider those in as well |
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| Competition and consumer interest in foreign country should also be considered |
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| Promotion: When doing ads in a foreign country, you should consider the following methods |
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| Using existing ads: some companies may get away using the same ads for foreign nations because both countries are very similar in culture (Ie US & Canada) |
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| Translating Ads: The same ads may work, but require some tweaking to translate the language or units to the foreign country |
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| Companies should be careful translating slogans to foreign countries as translations often make them not mean the same thing |
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| Creating the ads: it may be worthwhile just to scrap the old ads and make new ads unique for the foreign market |
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| Consumers: Companies must know about the foreign target market before they do business there |
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| Canadian businesses should avoid Ethnocentrism |
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| Ethnocentrism: is a belief that your own culture is the right way of doing things and the values of others arent important |
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| To avoid it, you should visit the foreign country and feel how its like to live there |
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| Read country profiles on the Internet to see how its like there |
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| Offer products in language to suit their demands |
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| Market Size: tells companies if its worthwhile to sell products there to enough people |
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| Demographic Information: is information about the people living in target country should also be considered before selling there |
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| Culture, spending habits, and income levels should also be known |
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| Competition: Its important to consider who youll be competing with in the foreign country |
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| Direct Competition: are those who provide products or services that are almost identical to the products or services you provide |
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| Indirect Competition: Any other product of service that is geared towards getting money from your target consumers are considered your indirect competition |
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| Competitive Advantage: refers to the ability of one company to produce a product more cheaply than another company. |
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| The following factors may cause a company to create products at a lower cost |
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| Lower cost production: a competitor might haveeconomies of scale that allows them to make products far cheaper |
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| Lower distribution costs: companies may be more ahead and already has manufacturing plants in foreign country so they can do things cheaper |
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| Product differentiation: Difference in flavour, quality, and packaging, colour, scent, and so on can deter a customer to their product |
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| Brand equity: is the value of a products brand in the market, essentially the number of consumers who can identify the brand. |
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| Canadian Consumers shop globally |
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| Canadian consumers choose products from all over the world |
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| This allows international businesses to be able to take advantage of Canadian consumers |
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| Opportunities for Canadian Businesses |
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| People starting a new retail business needs to be careful when selecting merchandise in their stores |
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| To guarantee uniqueness, an owner should visit a trade show to see whats fresh and new |
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| Canadian consumers also shop locally |
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| Canadian also like to look for local brands for buy from Canadian retailers. |
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