International businessLesson 1 of 2 in the course Competing in the Global Marketplace

Political, Cultural, and Economic Conditions in Global Markets

5 flashcards · 5 quiz questions · 5 match pairs · 5 fill-in sentences · English

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Summary

International businesses operate within political systems and cultures that may differ greatly from their own. Understanding these differences helps companies anticipate threats, build trust, and adapt products and business practices to local markets.

A country's political structure and policies can create barriers or uncertainty for foreign producers. Tariffs, exchange controls, and other government actions may affect a company's ability to sell goods or move money. Political attitudes toward foreign ownership can also shape whether a company is welcomed.

All flashcards

Purchasing power
Consumers’ ability to buy goods and services, influenced in part by their income.
Infrastructure
The institutions and public facilities that support an economy’s development and business activity.
Gross national income (GNI)
A measure combining domestic production with net income received from other countries.
Final good
A good ultimately consumed rather than used to produce another good.
Intermediate good
A good used as an input to produce another good.

Quiz questions

  1. In international business, what does nationalism describe?Answer: National consciousness that favors a country's own culture and interests over those of other countries.
  2. How do expropriation and confiscation differ?Answer: Expropriation includes compensation for former owners; confiscation does not.
  3. Why might a company adapt a promotion for a particular country?Answer: Local values and social practices can shape customer preferences and responses.
  4. Why should local language and cultural experts review a translated advertisement?Answer: A translation can have an unintended or offensive meaning in the local market.
  5. Which approach to business cards is recommended in many Asian countries?Answer: Present and receive cards with both hands, treating them respectfully.

Based on Introduction to Business 2e by Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.

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