Chapter 2 Vocab - Global Business

Fundamental and comprehensive changes introduced to the formal and informal rules of the game that affect firms as players.

A leading perspective in global business that suggests that the success and failure of firms are enabled and constrained by institutions.

Formal and informal rules of the game.

Formal and informal institutions that govern individual and firm behavior.

Institution represented by laws, regulations, and rules.

The coercive power of governments.

Institution represented by cultures, ethics, and norms.

The mechanism through which norms influence individual and firm behavior.

Values, beliefs, and actions of relevant players that influence the focal individuals and firms.

The internalized (or taken-for-granted) values and beliefs that guide individual and firm behavior.

The cost associated with economic transactions or, more broadly, the costs of doing business.

The act of seeking self-interest with guile.

A subset of emerging economies, particularly those moving form central planning to market competition (such as China, Poland, Russia, and Vietnam).

The necessity of making rational decisions in the absence of complete information.

The rules of the game on how a country is governed politically.

A political system in which citizens elect representatives to govern the country on their behalf.

A political system in which one person or party exercises absolute political control over the population.

Risk associated with political changes that may negatively impact domestic and foreign firms.

The rules of the game on how a country's laws are enacted and enforced.

A legal tradition that uses a comprehensive statues and codes as a primary means to form legal judgments.

A legal tradition that is shaped by precedents and traditions from previous judicial decisions.

A legal system based on religious teachings.

The legal right to use an economic property (resource) and to derive income and benefits from it.

Intangible property that is the result of intellectual activity.

Right associated with the ownership of intellectual property.

Exclusive legal rights of inventors of new products or processes to derive income form such inventions.

Exclusive legal rights of authors and publishers to publish and disseminate their work.

Exclusive legal rights of firms to use specific names, brands, and designs to differentiate their products from others.

Unauthorized use of intellectual property.

Rules of the game on how a country is governed economically.

An economy that is characterized by the "invisible hand" of market forces.

An economy that is characterized by government ownership and control of factors of production.

An economy that has elements of both a market economy and a command economy.

A firm owned and controlled by the state (government).

Recklessness when people and organizations (including firms and governments) do not have to face the full consequences of their actions.

A political system in which political plurality is undermined and concentrated government power is imposed

International political relations

Purposive action aimed at creating, maintaining, and disrupting institutions

A strategy that centers on leveraging political and social relationships

A capitalist, market-based system with substantial state ownership