Management Definitions

Global Environment
Domestic business – A business that acquires all of its resources and sells all of its products or services within a single country.
International business – A business that is based primarily in a single country but acquires some meaningful share of its resources or revenues from other countries.
Multinational business – A business that has a worldwide marketplace from which it buys raw materials, borrows money, and manufactures its products and to which it subsequently sells its products.
Global business – A business that transcends national boundaries and is not committed to a single home country.
Exporting – Making a product in the firm’s domestic marketplace and selling it in another country.
Importing – Bringing a good, service or capital into the home country from abroad.
Licensing – An arrangement whereby one company allows another company to use its brand name, trademark, technology, patent, copyright or other assets in exchange for a royalty based on sales.
Strategic alliance – A cooperative arrangement between two or more firms for mutual gain.
Joint venture – A special type of strategic alliance in which the partners share in the ownership of an operation on an equity basis.
Direct investment – When a firm headquartered in one country builds or purchases operating facilities or subsidiaries in a foreign country.
Maquiladoras – Light assembly plants built in northern Mexico close to the U.S. border that are given special tax breaks by the Mexican government.
Market economy – An economy based on the private ownership of business that allows market factors such as supply and demand to determine business strategy.
Market systems – Clusters of countries that engage in high levels of trade with one another.
NAFTA – An agreement made by the United States, Canada and Mexico to promote trade with one another.
EU – An agreement between several European countries to promote trade with one another.
Pacific Asia – An agreement between several countries in East and South-East Asia to promote trade.
GATT – A trade agreement intended to promote international trade by reducing trade barriers and making it easier for all nations to compete in international markets.
WTO – An organization which currently includes 140 member nations and 32 observer countries that requires members to open their markets to international trade and follow WTO rules.
Infrastructure – The schools, hospitals, power plants, railroads, highways, ports, communication systems, airfields and commercial distribution systems of a country.
Nationalized – Industries taken over by the government.
Tariff – A tax collected on goods shipped across national boundaries.
Quota – A limit on the number or value of goods that can be traded.
Export restraint agreements – Accords reached by governments in which countries voluntarily limit the volume or value of goods they export to or import from one another.
Economic community – A set of countries that agree to markedly reduce or eliminate trade barriers among member nations.
Social orientation – A person’s beliefs about the relative importance of the individual versus groups to which that person belongs.
Power orientation – The beliefs that people in a culture hold about the appropriateness of power and authority differences in hierarchies such as business organizations.
Uncertainty orientation – The feelings individuals have regarding uncertain and ambiguous situations.
Goal orientation – The manner in which people are motivated to work toward different kind of goals.
Time orientation – The extent to which members of a culture adopt a long-term versus a short-term outlook on work, life and other elements of society.