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BUS 110
First Exam Chapter 3
115
Business
Undergraduate 3
09/14/2013
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Term
International Business
 Definition
All business activities that involve exchanges across national boundaries
Term
Absolute Advantage
 Definition
The ability to produce a specific product more efficiently than any other nation
Term
Comparative Advantage
 Definition
The ability to produce a specifc product more efficiently than any other product
Term
Exporting
 Definition
Selling and shipping raw materials or products to other nations
Term
Importing
 Definition
Purchasing new materials or products in other nations and bringing them into ones own country
Term
Balance of Trade
 Definition
The total value of a nation's exports minus the total value of its imports over some period of time
Term
Trade Deficit
 Definition
A negative balance of trade
Term
Balance of Payments
 Definition
The total flow of money into a country minus the total flow of money out of that country over some period of time
Term
Import Duty (Tariff)
 Definition
A tax levied on a particular foreign product entering a country
Term
Dumping
 Definition
Exportation of large quantities of a product at a price lower than that of the same product in the home market
Term
Nontariff Barrier
 Definition
A nontax measure imposed by a government to favor domestic over foreign suppliers
Term
Import Quota
 Definition
A limit on the amount of a particular good that may be imported into a country during a given period of time
Term
Embargo
 Definition
A complete halt to trading with a particular nation or in a particular product
Term
Foreign-exchange control
 Definition
A restriction on the amount of a particular foreign currency that can be purchased or sold
Term
Currency Devaluation
 Definition
The reduction of the value of a nation's currency relative to the currencies of other countries
Term
General Agreement on Tariffs and Trade (GATT)
 Definition
An international organization of 153 nations dedicated to reducing or eliminating tariffs and other barriers of world trade
Term
World Trade Organization (WTO)
 Definition
Powerful successor to GATT that incorporates trade in goods, services, and ideas
Term
Economic Community
 Definition
An organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies
Term
Licensing
 Definition
A contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation
Term
Letter of Credit
 Definition
Issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary
Term
Bill of Lading
 Definition
Document issued by a transport carrier to an exporter to prove that merchandise has been shipped
Term
Draft
 Definition
Issued by the exporter's bank, ordering the importer's bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer's bank
Term
Strategic Alliance
 Definition
A partnership formed to create competitive advantage on a worldwide basis
Term
Trading Company
 Definition
Provides a link between buyers and sellers in different countries
Term
Countertrade
 Definition
An international barter transaction
Term
Multinational Enterprise
 Definition
A firm that operates on a worldwide scale without ties to any specific nation or region
Term
Export-Import Bank of the United States
 Definition
An independence agency of the U.S. government whose function is to assist in financing the exports of American firms
Term
Multilateral Development Bank (MDB)
 Definition
An internationally supported bank that provides loans to developing countries to help them grow
Term
International Monetary Fund (IMF)
 Definition
An international bank with 186 member nations that makes short-term loans to developing countries experiencing balance-of-payment deficits
Term
Explain the economic basis for international business
 Definition
  • International business encompasses all business activities that involve exchanges across national boundaries
  • Each country produces the goods and services that it can produce more efficently than other goods and services
  • A nation's balance of trade is the difference between the value of its exports and the value of its imports 
Term
The restrictions nations place on international trade, the objecives of these restrictions, and their results
 Definition
  • Tariff and nontariff barriers (other resrictions) to limit trade
  • Restrictions are justified as being needes to protect a nation's economy, industries, citizens, or security 
  • Can result in loss of jobs, higher prices, fewer choices in marketplace, and the misallocation of resources
Term
The extent of international business and the world economic outlook for trade
 Definition
  • World trade is increasing
  • Trade between the U.S. and other nations in increasing in dollar value but decreasing in terms of our share of the world market 
Term
Discuss the international trade agreements and international economic organizations working to foster trade
 Definition
  • The General Agreement of Tariffs (GATT) was formed to dismantle trade barriers and provide an environmentin which international business can grow
  • The World Trade Orginization (WTO) carries on this mission today
  • As well as the NAFTA, CAFTA, and The European Union 
Term
The methods by which a firm can organize for and enter into international markets
 Definition
  • A firm can enter international market in several ways
  • May export its products through its own sales organization abroad
  • May sell exports to an export-import merchant
  • May enter into a joint venture with a foreign firm
  • May develop into a multinational enterprise 
Term
Various sources of export assisstance
 Definition
  • U.S. Export Assistance Centers
  • International Trade Administration
  • U.S. and Foreign Commercial Services
  • Export Legal Assistance Network
  • National Trade Data Bank
  • other gov't and international agencies 
Term
Institutions that help firms and nations finance international business
 Definition
  • Ex-Im Bank and International Monetary Fund
  • Both have been established to provide financing and ultimately to increase world trade for American and International firms 
Term
Management
 Definition
The process of coordinating people and other resources to achieve the goals of an organization
Term
The four main resources of management
 Definition
  1. Material Resources
  2. Human Resources
  3. Financial Resources
  4. Informational Resources

combined, they create organizational goals 
Term
Material Resources
 Definition
Tangible, physical resources an organization uses
Term
Human Resources
 Definition
people
Term
Financial Resources
 Definition
The funds an organization uses to meet its obligations to ivestors and creditors
Term
Informational Resources
 Definition
External environmantal conditions--economy, consumer markets, technology, politics, and cultural forces
Term
The four basic management functions:
 Definition
  1. planning
  2. organizing
  3. leading and motivating
  4. controlling
Term
Planning
 Definition
Establishing organizational goals and deciding how to accomplish them
Term
Mission
 Definition
A statement of the basic purpose that makes an organization different from others
Term
Strategic Planning Process
 Definition
The establishment of an organization's major goals and objectivesand the allocation of resources to achieve them
Term
Goal
 Definition
An end result that an orginazation is expected to achieve over a one-to ten-year period
Term
Objective
 Definition
A specific statement detailing what an organization intends to accomplish over a shorter period of time
Term
SWOT analysis
 Definition
The identification and evaluation of a firm's strengths, weaknesses, opportunities, and threats
Term
Core Competencies
 Definition
Approaches and processes that a company performs well that may give it an advantage over its competitors
Term
Plan
 Definition
An outline of the actions by which an organization intends to accomplishits goals and objectives
Term
Strategic Plan
 Definition
An organizations broadest plan, developed as a guide for major policy settings and decision making
Term
Tactical Plan
 Definition
A smaller scale plan developed to implement a strategy
Term
Operational Plan
 Definition
A type of plan designed to implement tactical plans
Term
Contingency Plan
 Definition
A plan that outlines alternative courses of action that may be taken if an organization's other plans are disrupted or become ineffective
Term
Organizing
 Definition
The grouping of resources and activities to accomplish some end result in an efficent and effective manner
Term
Leading
 Definition
The process of influencing people to work toward a common goal
Term
Motivating
 Definition
The process of providing reasons for people to work in the best interests of an organization
Term
Directing
 Definition
The combined processes of leading and motivating
Term
Controlling
 Definition
The process of evaluating and regulating ongoing activities to ensure that goals are achieved
Term
The 3 steps of the control function
 Definition
  1. setting standards
  2. measuring actual performance
  3. taking corrective action  
Term
The 3 levels of management
 Definition
  1. Top management
  2. middle "
  3. first-line " 
Term
Top Manager
 Definition
An upper-level executive who guides and controls the overall fortunes of an organization
Term
Middle Manager
 Definition
A manager who implements the strategy and major policies developed by top management
Term
First-Line Manager
 Definition
A manager who coordinates and supervises the activities of operating employees
Term
Five Areas of Management Specialization
 Definition
  • Financial Managers
  • Operations "
  • Marketing "
  • Human Resources "
  • Administrative " 
Term
Financial Managers
 Definition
A manager who is primarily responsible for an organization's financial resources
Term
Operations Manager
 Definition
A manager who manages the systems that convert resources into goods and services
Term
Marketing Manager
 Definition
A manager who is responsible for facilitating the exchange of products between an organization and its customers or clients
Term
Human Resources Manager
 Definition
A person charged with managing an organization's human resources programs
Term
Aministrative Manager
 Definition
A manager who is not associated with ant specific funtional area but who provides overall administrative guidance and leadership
Term
5 key skills of a successful manager
 Definition
  1. Conceptual Skills
  2. Analytic "
  3. Interpersonal "
  4. Technical "
  5. Communication " 
Term
Conceptual Skills
 Definition
The ability to think in abstract terms
Term
Analytic Skills
 Definition
The ability to identify problems correctly, generate resonable alternatives, and select the "best" alternatives to solve problems
Term
Interpersonal Skills
 Definition
The ability to deal effectively with other people
Term
Technical Skills
 Definition
Specific skills needed to accomplish a specialized activity
Term
Communication Skills
 Definition
The ability to speak, listen, and write effectively
Term
Leadership
 Definition
The ability to influence others
Term
The 3 styles of leadership
 Definition
  1. Autocratic Leadership
  2. Participative "
  3. Entrepreneurial " 
Term
Autocratic Leadership
 Definition
Task-oriented leadership style in which workers are told what to do and how to accomplish it; workers have no say in the decision-making process
Term
Participative Leadership
 Definition
Leadership style in which all members of a team are involved in identifyinh essential goals and developing strategies to reach those goals
Term
Entrepreneurial Leadership
 Definition
Personality-based leadership style in which the manager seeks to inspire worjers with a vision of what can be accomplished to benefit all stakeholders
Term
The 4 steps in the managerial decison making process
 Definition
  1. Identifying the problem or opportunity
  2. Generating alternatives
  3. Selecting an alternative
  4. Implementing and evaluating the solution  
Term
Decision Making
 Definition
The act of choosing one alternative from a set of alternatives
Term
Problem
 Definition
The discrepancy between an actual condition and a desired condition
Term
Total Quality Management (TQM)
 Definition
The coordination of efforts directed at improving customer satisfaction, increasing emplyess participation, stregthening supplier partnerships, and facilitating an orginzational atmosphere of continuous quality improvement
Term
Benchmarking
 Definition
A process used to evaluate the products, processes, or management practices of another organization that is superior in someway in order to improve quality
Term
Organization
 Definition
A group of two or more people working together to achieve a common set of goals
Term
Organization Chart
 Definition
A diagram that represents the positions and relationships within an organization
Term
Chain of Command
 Definition
The line of authority that extends from the highest to the lowest levels of an organization
Term
Job Specialization
 Definition
The seperation of all organizational activities into distinct tasks and the assignment of different tasks to different people
Term
Job Rotation
 Definition
The systematic shifting of employees from one job to another
Term
Departmentalization
 Definition
The process of grouping jobs into manageable units
Term
Departmentalization by Function
 Definition
Grouping jobs that relate to the same orginizational activity
Term
Departmentalization by Product
 Definition
Grouping activities related to a particular product or service
Term
Departmentalization by Location
 Definition
Grouping activities according to the defined geographicarea in which they are are performed
Term
Departmentalizational by Customer
 Definition
Grouping activities according to the needs of various customer populations
Term
Delagation
 Definition
Assigning part of a manager's work and power to other workers
Term
The steps in the delegation process
 Definition

manager

  1. assign responsility
  2. grant authority
  3. assign accountability 

worker
Term
Responsibility
 Definition
The duty to do a job or perform a task
Term
Authority
 Definition
The power, within an organization, to accomplish an assigned job or task
Term
Accountability
 Definition
The obligation of a worker to accomplish an assigned job or task
Term
Decentralized Organization
 Definition
An organization in which management consciously attempts to spread authority widely in the lower levels of the organizaion
Term
Centrealized orginazation
 Definition
An organization that systematically works to concentrate authority at the upper levels of the organization
Term
Span of Management (or span of control)
 Definition
The number of workers who report directly to one manager
Term
Organizational Height
 Definition
The number of layers, or levels, of management in a firm
Term
The 4 Forms of Organizational Structure
 Definition
  1. Line Structure
  2. Line-and-Staff Structure
  3. Matrix Structure
  4. Network Structure 
Term
Network Structure
 Definition
An organizational structure in which administration is a primary function, and most other functions are contracted out to other firms
Term
Corporate Culture
 Definition
The inner rites, rituals, heros, and values of a firm
Term
Ad Hoc Commitee
 Definition
A commitee created for a specific short-term purpose
Term
Standing Commitee
 Definition
A relatively permanent commitee charged with performing some recurring task
Term
Task Force
 Definition
A commitee established to investigate a major problem or pending decision
Term
informal organization
 Definition
the pattern of behavior and interaction that stems from personal rather than official relationships
Term
Informal Group
 Definition
A group created by the members themselves to accomplish goals that may or may not be relevant to an organization
Term
Gapevine
 Definition
The informal communications network within an organization
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