Internatioanl Business

Key Terms

Chapter 1

*globalization : the broadening set of interdependent relationship among people from different parts of a world that happens to be divided into nations. It also refers to the integration of world economies through the reduction of barrier to the movement of trade, capital, technology, and people.

* born-global company : a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple-countries.

* clustering : many new companies locate in areas where there are many competitors and suppliers which helps them to become quickly aware of foreign opportunities and to gain easier access to the resources needed to move internationally.

* collaborative arrangement : joint ventures, licensing agreements, management contracts, minority ownership, and long-term contractual arrangements.

* strategic alliance : is used to mean the same as collaborative arrangement, but it's often reserved to refer either to an agreement that's of critical importance to one or more partners or to an agreement that does not involve joint ownership.

* merchandise import : tangible products - goods - brought into a country

* merchandise export : tangible products - goods - are sent out of a country

* service export : the company or individual that provides the service and receives payment makes a service exports

* service import : the company or individual that receives and pays for it makes a service import

* turnkey operation : on the international level, for example, companies may pay fees for engineering services rendered, which are often construction projects performed under contract and transferred to owners when they're operational / a product or service concept that is complete, installed and ready to use upon delivery or installation. The product or service is then leased or sold to an individual to run as his/ her own venture.

* management contract : arrangements in which one company provides personnel to perform general or specialized management functions for another.

* licensing agreement : when one company allows another to use its assets, such as trademarks, patents, copyrights, or expertise, under contracts known as licensing agreement. They receive earnings called royalties.

* royalty : Payments