IB Final

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IB Final
2012-04-19 21:13:27
SSMBA International Business Vocabulary Final

Vocabulary for the SSMBA International Business class final exam in the spring of 2012
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  1. Strategy
    a planned set of actions that managers employ to make the best use of the firm’s resources and core competencies to gain competitive advantage.
  2. Visionary leadership
    a quality of senior management that provides superior strategic guidance for managing efficiency, flexibility, and learning.
  3. Organizational culture
    the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt.
  4. Organizational Process
    managerial routines, behaviors, and mechanisms that allow the firm to function as intended.
  5. Global Team
    an internationally distributed group of employees charged with a specific problem-solving or best-practice mandate that affects the entire organization.
  6. Multi-domestic Industry
    and industry in which competition takes place on a country-by-country basis.
  7. Global Industry
    an industry in which competition is on a regional or worldwide scale.
  8. Global Integration
    coordination of the firm’s value-chain activities across countries to achieve worldwide efficiency, synergy, and cross-fertilization in order to take maximum advantage of similarities between countries.
  9. Local Responsiveness
    management of the firm’s value-chain activities on a country-by-country basis to address diverse opportunities and risks.
  10. Home replication strategy
    an approach in which the firm views international business as separate from, and secondary to, its domestic business.
  11. Multi-domestic strategy
    an approach to firm internationalization in which headquarters delegates considerable autonomy to each country manager, allowing him or her to operate independently and pursue local responsiveness.
  12. Transnational Strategy
    a coordinated approach to internationalization in which the firm strives to be relatively responsive to local needs while retaining sufficient central control of operations to ensure efficiency and learning.
  13. Organizational structure
    reporting relationships inside the firm that specify the links between people, functions, and processes.
  14. Export department
    a unit within the firm charged with managing the firm’s export operations. 
  15. International division structure
    an organization design in which all international activities are centralized within one division in the firm, separate from domestic units.
  16. Geographic area structure
    an organizational design in which management and control are decentralized to the level of individual geographic regions.
  17. Product Structure
    an arrangement in which management of international operations is organized by major product line.
  18. Functional Structure
    an arrangement in which management of the firm’s international operations is organized by functional activity, such as production and marketing.
  19. Global Matrix structure
    an arrangement that blends the geographic area, product, and functional structures to leverage the benefits of a purely global strategy while keeping the firm responsive to local needs.
  20. Global market opportunity
    Favorable combination of circumstances, locations, and timing that offers prospects for exporting, investing, sourcing, or partnering in foreign markets.  
  21. Industry market potential
    an estimate of the likely sales for all firms in a particular industry over a specific period.
  22. Licensing
    arrangement in which the owner of intellectual property grants a firm the right to use that property for a specified period of time in exchange for royalties or other compensation. 
  23. Franchising
    arrangement in which the firm allows another the right to use an entire business system in exchange for fees, royalties, or other forms of compensation.
  24. International collaborative venture
    cross-border business alliance whereby partnering firms pool their resources and share costs and risks to undertake a  new business venture; also referred to as an “international partnership” or an “international strategic alliance”.
  25. Company sales potential
    an estimate of the share of annual industry sales that a firm expects to generate in a particular target market.
  26. Importing / Global Sourcing
    the procurement of products or services from independent suppliers or company-owned subsidiaries located abroad for consumption in the home country or a third country.
  27. Exporting
    the strategy of producing products or services in one country (often the producer’s home country), and selling and distributing them to customers located in other countries.
  28. Countertrade
    an international business transaction where all or partial payments are made in kind, rather than cash.
  29. Indirect exporting
    exporting that is accomplished by contracting with intermediaries located in the firm’s home market.
  30. Direct exporting
    exporting that is accomplished by contracting with intermediaries located in the foreign market.
  31. Company-owned subsidiary
    a representative office of the local firm that handles marketing, physical distribution, promotion, and customer service activities in the foreign market.
  32. Documentation
    official forms and other paperwork required in export transactions for shipping and customs procedures.
  33. Incoterms
    universally accepted terms of sale that specify how the buyer and the seller share the cast of freight and insurance in an international transaction and at which point the buyer takes the title to the goods.
  34. Letter of credit
    contrast between the banks of a buyer and a seller that ensures payment from the buyer to the seller upon receipt of an export shipment.
  35. Multilateral development banks (MDBs)
    international financial institutions owned by multiple governments within world regions or other groups.
  36. Barter
    a type of countertrade in which goods are directly exchanged without the transfer of any money.
  37. Compensation deals
    a type of countertrade in which payment is both goods and cash.
  38. Counterpurchase
    a type of countertrade with two distinct contracts. In the first, the seller agrees to a set price for goods and receives cash from the buyer. This first deal is contingent on a second wherein the seller agrees to purchase the goods from the buyer for the same amount as in the first contract or a set percentage of same.
  39. Buy-back agreement
    a type of countertrade in which the seller agrees to supply technology or equipment to construct a facility and receives payment in te form of goods produced by the facility.
  40. Foreign Direct Investment (FDI)
    an internationalization strategy in which the firm establishes a physical presence abroad though acquisition of productive assets such as capital, technology, labor, land, plant, and equipment.
  41. International collaborative venture
    cross-border business alliance whereby partnering firms pool their resources and share costs and risks to undertake a new business venture; also referred to as an “international partnership” or an “international strategic alliance”.
  42. Joint venture
    a form of collaboration between two or more firms to create a new, jointly owned enterprise.
  43. International Portfolio Investment
    passive ownership of foreign securities such as stocks and bonds for the purpose of generating financial returns.
  44. Greenfield investment
    direct investment to build a new manufacturing, marketing, or administrative facility, as opposed to acquiring existing facilities.
  45. Acquisition
    direct investment to purchase an existing company or facility.
  46. Merger
    a special type of acquisition in which two firms join to form a new, larger firm.
  47. Equity participation
    acquisition of partial ownership in an existing firm.
  48. Wholly owned direct investment
    a foreign direct investment in which the investor fully owns the foreign assets.
  49. Equity joint venture
    a type of partnership in which a separate firm is created through the investment or pooling of assets by two or more parent firms that gain joint ownership of the new legal entity.
  50. Vertical integration
    an arrangement whereby the firm owns, or seeks to own, multiple stages of a value-chain for producing, selling, and delivering a product or service.
  51. Horizontal integration
    an arrangement whereby the firm owns, or seeks to own, the activities performed in a single stage of its value-chain.
  52. Project-based, nonequity venture
    a collaboration in which the partners create a project with a relatively narrow scope and a well-defined timetable, without creating a new legal entity.
  53. Consortium
    a project based, nonequity venture initiated by multiple partners to fulfill a large-scale project.
  54. Cross-licensing agreement
    a type of project-based, nonequity venture where partners agree to access licensed technology developed by the other on preferential terms.
  55. Global marketing strategy
    a plan of action for foreign markets that guides the firm in deciding how to position itself and its offerings, which customer segments to target, and the degree to which it should standardize or adapt its marketing program elements.
  56. Global marketing segment
    a group of customers who share common characteristics across many national markets.
  57. Adaptation
    firm’s efforts to modify one or more elements of its international marketing program to accommodate specific customer requirements in a particular market.
  58. Standardization
    firm’s efforts to make its marketing program elements uniform, with a view to targeting entire regions, or even the global marketplace, with the same product or service.
  59. Global brand
    a brand whose positioning, advertising strategy, look, and personality are standardized worldwide.
  60. Gray market activity
    legal importation of genuine products into a country by intermediaries other than the authorized distributors (also known as parallel imports).
  61. International price escalation
    the problem of end-user prices reaching exorbitant levels in the export market, caused by multilayered distribution channels, intermediary margins, tariffs, and other international customer costs.
  62. Transfer pricing
    the practice of pricing intermediate or finished products exchanged among the subsidiaries and affiliates of the same corporate family located in different countries.
  63. Global Account Management (GAM)
    serving a key global customer in a consistent and standardized manner, regardless of where in the world it operates.
  64. Equity financing
    the issuance of shares of stock to raise capital from investors and the use of retained earnings to reinvest in the firm.
  65. Debt financing
    the borrowing of money from banks or other financial intermediaries, or the sale of corporate bonds to individuals or institutions, to raise capital.
  66. Global money market
    the collective financial markets where firms and governments raise short-term financing.
  67. Global capital market
    the collective financial markets where firms and governments raise intermediate and long-term financing.
  68. Global equity market
    the worldwide market of funds for equity financing – stock exchanges around the world where investors and firms meet to buy and sell shares of stock.
  69. Eurodollars
    US dollars held in the banks outside the United States, including foreign branches of US banks.
  70. Eurocurrency
    any currency deposited in a bank outside its country of origin.
  71. Bond
    a debt instrument that enables the issuer (borrower) to raise capital by promising to repay the principal along with interest on a specified date (maturity).
  72. Global bond market
    the international marketplace in which bonds are bought and sold, primarily through bond brokers.
  73. Foreign bond
    a bond sold outside the issuer’s country and denominated in the currency of the country where issued.
  74. Eurobond
    a bond sold outside the issuer’s home country but denominated in its own country.
  75. Incorporate financing
    funds from sources inside the firm (both headquarters and subsidiaries) such as equity, loans, and trade credits.
  76. Fronting loan
    a loan between the parent and its subsidiary, channeled through a large bank or other financial intermediary.
  77. Tax haven
    a country hospitable to business and inward investment because of its low corporate income taxes.
  78. Multilateral netting
    strategic reduction of cash transfers within the MNE family through the elimination of offsetting cash flows. 
  79. Transaction exposure
    the currency risk firms face when outstanding accounts receivable or payable are denominated in foreign currencies.
  80. Translation exposure
    the currency risk that results when a firm translates financial statements denominated in a foreign currency into the functional currency of the parent firm, as a part of consolidating international financial results.
  81. Consolidation
    the process of combining and integrating the financial results of foreign subsidiaries into the financial statements of the parent firm.
  82. Economic exposure
    the currency risk that results from exchange rate fluctuations affecting the pricing of products, the cost of inputs, and the value of foreign investments.
  83. Spot rate
    the exchange rate applied when the current exchange rate is used for immediate receipt of a currency.
  84. Forward rate
    the exchange rate applicable to the collection or delivery of a foreign currency at some future date.
  85. Direct quote
    the number of units of domestic currency needed to acquire one unit of foreign currency; also known as the normal quote.
  86. Indirect quote
    the number of units of foreign currency obtained for one unit of domestic currency.
  87. Hedgers
    currency traders who seek to minimize their risk of exchange rate fluctuations, often by entering into forward contracts or similar financial instruments. 
  88. Speculators
    currency traders who seek profits by investing in currencies with the expectation their value will change in the future. 
  89. Arbitragers
    currency traders who buy and sell the same currency in two or more foreign-exchange markets to profit from differences in the currency’s exchange rate.
  90. Hedging
    using financial instruments and other measures to reduce or eliminate exposure to currency risk by locking in guaranteed foreign exchange positions.
  91. Forward contract
    a contract to exchange two currencies at a specified exchange rate on a set future date.
  92. Futures contract
    an agreement to buy or sell a currency in exchange for another at a specified price on a specified date.
  93. Currency option
    a contract that gives the purchaser the right to, but not the obligation, to buy a certain amount of foreign currency at a set exchange rate within a specified amount of time.
  94. Currency swap
    an agreement to exchange one currency for another, according to a specified schedule.
  95. Transparency
    the degree to which companies regularly reveal substantial information about their financial condition and accounting practices.
  96. Current rate method
    translation of foreign currency balance sheet and income statements at the current exchange rate- the spot exchange rate in effect on the day or for the period when the statements are prepared.
  97. Temporal method
    translation of foreign currency balance sheet and income statements at an exchange rate that varies with the underlying method of valuation.