Ib Test 2-- Chapter 6

Front 1

Corporate social responsibility

Back 1

operating a business in a manner that meets or exceeds the ethical, legal, commercial, and public expectations of stakeholders 9customers, shareholders, employees, and communities)

Front 2

Country risk

Back 2

exposure to potential loss or adverse affects on company operations and profitability caused by developments in a countrys political and/ or legal enviornments

Front 3

Extraterritorality

Back 3

application of home-country laws to persons or conduct outside of national borders

Front 4

Intellectual property

Back 4

ideas or works created by people or firms, such as patents, trademarks and copyrights

Front 5

intellectual property rights

Back 5

the legal claim through which the proprietary assets of firms and individuals are protected from unauthorized use by other parties

Front 6

legal systems

Back 6

a system for interpreting and enforcing laws

Front 7

political system

Back 7

a set of formal istitutions that constitue a government

Front 8

rule of law

Back 8

the existence of a legal system where rules are clear, publicly disclosed, fairly enforced, and widely respected by individuals, organizations, and the government

Front 9

transparency

Back 9

the degree to which firms regularly reveal substantial information about their financial condidtion and accounting practices

Front 10

international business is influenced by

Back 10

political and legal systems

Front 11

adverse developments in political and legal systems increase

Back 11

country risk.. these can result from events such as a change in government or the creation of new laws or regulations

Front 12

what are the three existing major political systems

Back 12

totalitarianism, socialism, and democracy

Front 13

totalitarianism

Back 13

seeks to control not only economic and political matters but the attitudes, values and beliefs of its citizens.. They are generally theocratic (religion based) or secular (non religion based)

Front 14

socialism

Back 14

capital and wealth should be vested in the state and use primarly as a means of production for use rather than for profit. It is based on a collectivst ideology in which the collective welfare of the peopleis believed to outweigh the welfare of the individual

Front 15

democracy

Back 15

characterized by two key features: private property rights and limited government
Under democracy individual persuits of people and firms are sometimes at odds with equality and justice

Front 16

Most countries today combine

Back 16

democracy and socialism

Front 17

Command economies

Back 17

aka centrally planned economy, the state is responisble for making all decisions in a command economy with espect to what goods and services the country produces, the quantity of their production, the prices at which they are sold, and the manner of their distribution. The state owns all productive wealth, land and capital, and the government allocates resources

Front 18

mixed economies

Back 18

exhibits features of both a market economy and a command economy combining state intervention and market mechanisms for achieving production and distribution

Front 19

market economies

Back 19

economic decisions are left to individuals and firms. Gov intervention is limited. They are closely asociated with capitalism, accordng to which the means of production are privately owned and operated

Front 20

Common Law

Back 20

(aka case law) is tradition, past practices, and legal precedents set ny the nations courts through interpretation of statues, legislation, and past ruling. The national legislature holds ultimate power in passing or amending laws

Front 21

Civil Law

Back 21

(aka code law)its origins go back to roman laws that have been "codified' -clearly written and accessible. Divides the legal system into three seperate codes: commercial, civil, and criminal

Front 22

Religious Law

Back 22

a legal system strongly influenced by religious beliefs, ethical codes, and moral values viewed as mandated by a supreme being

Front 23

Socialist Law

Back 23

Rights of the state are emphasized over those of the individual. Tend to view property and intellectual property rights more loosely

Front 24

Mixed systems

Back 24

refers to a variation of two or more legal systems operating together

Front 25

World trade Organization and the United Nations

Back 25

typical of international organizations that influence international business

Front 26

Special intrest groups

Back 26

serve the intrests of particular industries or country groupings, usually in pursuit of economic developent

Front 27

Confiscation

Back 27

seizure of foreign assets without compensation

Front 28

Expropriation

Back 28

seizure of corporate assets with compensation

Front 29

Special interest groups

Back 29

formed to serve the intrests of particular countries, industries, or causes and example would be the Organization for Economic Cooperation and Development whcih supports the economic developmental and business goals of advanced economies

Front 30

Competing Firms

Back 30

rival domestic firms with strong presence in the host country naturally have an interest in opposing the entry of foreign firms into the local market and may lobby their gov for protection

Front 31

Embargoes

Back 31

official bans on exports of specific products or specific modes of transport with particular countries. They are often used during wartime

Front 32

Sanctions

Back 32

type of ban on international trade, usually undertaken by a country, or a group of countries, against another judged to have jeopardized peace and security

Front 33

Boycotts

Back 33

an attempt to halt trade or business activities and are usually pursued for political reasons

Front 34

Terrorism

Back 34

the threat or actual use of force or violence to attian a political goal through fear, coercion, or intimidation

Front 35

nationalization

Back 35

denotes government takeover of not a firm but an entire industry, with or without compensation

Front 36

Marketing and distribution laws

Back 36

These laws influence the nature of international firms' promotion and advertising

Front 37

Laws regarding income repatriation

Back 37

restrict the transfer of profits back to the home country

Front 38

Enviornmental laws

Back 38

devised to combat practices that harm the natural enviornment

Front 39

International contracts

Back 39

vary around the world in both substance and enforcement. Internet and e-commerce regulations are relativel underdeveloped in most countries

Front 40

Antiboycott regulations

Back 40

prevent companies from participatiing in restrictive trade practices

Front 41

Ethical values and practices

Back 41

relate to the moral behavior of people, companies, and governments

Front 42

Corruption

Back 42

involves the use of illegal or unethical practices, such as bribery and fraud, to achieve business goals

Front 43

Succesful management

Back 43

requires developing an understanding of the political and legal contextx abroad