MGMT Week 5 Notes
MGMT Week 5 Notes MGMT 3490-004
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This 2 page Class Notes was uploaded by Johanna Glaser on Wednesday September 21, 2016. The Class Notes belongs to MGMT 3490-004 at University of Nebraska at Omaha taught by Robert Ottemann in Fall 2016. Since its upload, it has received 57 views.
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Date Created: 09/21/16
Chapter 3 The Global Environment Global Village- refers to companies conducting business worldwide without boundaries International Company- an organization based primarily in one country but transacts business in other countries Multinational Corporation (MNC)- an organization that has ownership in operations in two or more countries Managing Foreign Trade Ethnocentrism- regarding one’s own ethnic group or culture as superior to others Dumping- selling products in one country at a high profit and selling in another country at a loss with the intention of driving out competition Protectionism- trade barriers to protect domestic companies and their workers from foreign completion Trade Barriers Embargo- total ban on the importing of a product from one or more countries Quota- a limit on the number or volume of a product that can be imported or exported during a set period Subsidies- government grants, loans, and tax breaks given to domestic companies Tarif- a direct tax on imports to make them more expensive Trade Agreements There are 6 major trade agreements around the globe: o North American Free Trade Agreement (NAFTA) If we remove barriers and tarifs will increase trade Will benefit US citizens Forms of Global Business (pg 72 pic3-5) Global Sourcing- hiring others outside the organization to perform work worldwide Licensing- the process of a licensor agreeing to licensee the right to make its products or services or use its intellectual property in exchange for a royalty Franchising- an entrepreneurial venture in which a franchisor licenses a business to the franchisee for a fee and royalties o Chick-Fil-A = very profitable franchise Contract Manufacturing- contracting a foreign firm to manufacture products a company will sell as its own o Similar to global sourcing, but it tends to be on a large scale Strategic Alliance- an agreement to share resources that does not necessarily involve creating a new company Joint Venture- two or more firms sharing ownership of a new company Direct Investment- the building or buying of operating facilities in a foreign country o Also called wholly owned affiliates or subsidiaries
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