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When a multinational organization elects to establish subsidiaries in different countries and allow each subsidiary to function as if it was a local firm, this is referred to as a multidomestic strategy. Each subsidiary acts as if it were a domestic firm in order to be able to respond more effectively to local conditions. In the final analysis each firm is still a member of the parent organization, but also has roots in the country in which it was formed. [ABSTRACT FROM AUTHOR]

Although human rights policies are normally associated with governmental functions, the plight of humankind has become of great concern in the international business world. Feelings about a country's treatment of its citizens, especially those who speak out against the government or seek changes or freedoms which other citizens may have, are often transferred to the businesses located in the country. For example, when South Africa had a poor record regarding human rights, foreign companies doing business in South Africa were criticized, boycotted, and some were even terrorized. Now that the system has changed, former investors are coming back to South Africa. [ABSTRACT FROM AUTHOR]

The success of a financial institution or other organization with high capital needs is closely tied to its ability to secure funds and the price paid for those funds. Banks and other large lenders and borrowers of capital are judged by debt-rating services as to their creditworthiness. A low debt rating results in funds being difficult to obtain, or obtained only at a high cost. An organization with a good debt rating will normally find funds readily available at favorable rates. [ABSTRACT FROM AUTHOR]

A service involves the provision of human thought in order to achieve a more effective or efficient use of resources. Service industries include consulting activities of all kinds, legal assistance, most medical care, as well as other areas where the human intellect can be used to accomplish tasks not related to producing a product. In many countries service industries are a major part of the economy. In fact some countries rely upon providing services as their major source of income. [ABSTRACT FROM AUTHOR]

One of the most important tasks associated with managing an international firm is the selection of employees to represent the firm overseas. EXPATRIATE selection is the process used to select employees who will have the best chances of success. Although many companies stress the importance of technical competence, many other factors should also enter into the selection equation. Improperly selected or improperly trained employees can do irreparable harm to an organization's overseas operations and image in a surprisingly short period of time. [ABSTRACT FROM AUTHOR]

A US government agency charged with responsibility for overseeing the offering and exchange of securities within the United States. The agency investigates claims of wrongdoing or other securities related problems. The SEC monitors the issuance of securities, especially in the area of full disclosure to prospective buyers. The SEC was established in 1934 and is governed by five presidentially appointed commissioners. [ABSTRACT FROM AUTHOR]

One country may agree to lower trade restrictions (duties, QUOTAS, etc.) in return for a second nation making similar reductions. When agreements are made to reduce BARRIERS in specific trade areas (sectors such as heavy equipment or automobiles) the exchange of concessions is known as sectoral reciprocity. Often, sectoral reciprocity is the stage from which broader and more widespread trade agreements may flow. [ABSTRACT FROM AUTHOR]

When a country takes actions which endanger the peace and security of other nations, those nations may impose economic or other sanctions on the offending country. The United Nations, acting as a body, may vote for sanctions against a nation when it is felt that outrageous actions of the nation went strongly against the norms the UN sets for its members. Sanctions could also be imposed by a single nation or group of nations against another country for aggression (or support of aggression) aimed at a third nation or one of those imposing the sanction. [ABSTRACT FROM AUTHOR]

Tax considerations play a large role in international trade. One of the methods used by multinational firms to reduce the impact of taxes is to establish an OFFSHORE organization which acts as the receiver of imports for the parent corporation. The agent company is established in a country with favorable corporate tax rates and regulations. Goods purchased on behalf of the parent company are sold to the offshore company which then reinvoices the goods to increase their price to the parent company. [ABSTRACT FROM AUTHOR]

Periodically, a nation will have difficulty with a trading partner with respect to the trading partner DUMPING goods onto the nation's market or engaging in what the first nation feels are UNFAIR TRADE practices. The first nation may elect to impose unilateral duties or other restrictions on the goods of the trading partner. These restrictions are referred to as sanctions. Sanctions are temporary measures and are used until the offending nation changes its ways or until more formal sanctions can be imposed by the United Nations. [ABSTRACT FROM AUTHOR]

Showing concern for EXPATRIATE employees is very important for a business. One of the areas of concern for most employees is that family and friends be notified when they safely reach their destination. An employer can go a long way in showing real concern for employees by notifying selected persons of the expatriate's safe arrival at the ASSIGNMENT destination. This is a simple task, but one that can create goodwill and loyalty between employer and employee. [ABSTRACT FROM AUTHOR]

Royalties are commonly paid by international enterprises for the use of a company's trademark, patented processes, or other proprietary information. In order to use another company's proprietary information or processes, a LICENSING arrangement is usually entered into between organizations. The agreement specifies either a percentage of sales or a fee to be paid by the organization using another's property. This payment is a royalty. [ABSTRACT FROM AUTHOR]

Over the years, international trade has increased substantially. This increase has been accompanied by problems arising in virtually all areas of the trade transaction. Problems are usually associated with protectionist actions of one or more countries (see BARRIERS). The Round of Trade Negotiations are a series of meetings between country representatives to develop new means to encourage free and open trade throughout the world. [ABSTRACT FROM AUTHOR]

This type of LETTER OF CREDIT is used for an exporter with whom the ISSUING BANK has had favorable past experience. The exporter also deals with customers of the issuing bank on a continuous basis over a period of time. Instead of issuing a new letter of credit each time the exporter sells to a given importer, the issuing bank arranges to offer a revolving letter of credit. This document allows the exporter to use the same letter for each transaction with the amount of payment on the letter being recredited after the completion of each transaction. [ABSTRACT FROM AUTHOR]

A revolving credit facility is a line of credit which is automatically reinstated as loans are paid off. The reinstated amount equals the amount of repayment. Revolving lines of credit have a maximum amount which may be outstanding at any one time. [ABSTRACT FROM AUTHOR]

A revocable LETTER OF CREDIT may be withdrawn by the ISSUING BANK without prior notice or explanation. Unlike the IRREVOCABLE LETTER OF CREDIT, this type does not require the permission of the other parties to the transaction. As such, this letter exposes the seller of goods to more risk. Sellers seeking to reduce their risk should always demand an irrevocable letter of credit. [ABSTRACT FROM AUTHOR]

When an employee returns to the home country after an extended ASSIGNMENT, he or she (or family members) may be subjected to what many refer to as reverse culture shock. Reverse culture shock occurs because things have changed in the home country. Friends and neighbors have moved, new schools are attended, fellow employees have gone into management or departed the company, the clothing fads are different, music has changed, and numerous other things have changed that the EXPATRIATE might have felt would be the same. CULTURE SHOCK may also be the result of a different standard of living than was achieved in the host country. [ABSTRACT FROM AUTHOR]

Customs officials in many countries routinely adjust the values of imports from those stated on the import documents. Revaluation or the adjustment of values results in higher import duties being charged. The theory behind revaluation is that exporters routinely undervalue goods in order to decrease duty charges. Revaluation may also refer to a situation in which the central monetary authority of a country changes the value of its currency. [ABSTRACT FROM AUTHOR]

When a country's monetary system is subjected to numerous devaluations its currency becomes worthless in the eyes of its citizens and the remainder of the world. Repeated devaluations may make the currency essentially unusable for trade or other commerce. When this occurs a country may introduce another currency to take the place of the old. This is thought to give the appearance of more stability and bring about a feeling that the government is actually succeeding in decreasing its monetary problems. [ABSTRACT FROM AUTHOR]

Retaliation is normally a unilateral action of one country against another. In response to an unfair trade practice, a country may impose substantial duties on a second country's imports. Retaliation is common when DUMPING of goods takes place. Retaliatory measures are usually rescinded after the countries come to an agreement regarding proper trade conduct. [ABSTRACT FROM AUTHOR]

A restricted exchange market is heavily controlled by the government. The government allows the free market (demand and supply) to contribute to the overall valuation of its currency, but the major factor affecting the market is the government's willingness to buy or sell currency. A market could also be restricted by linking the value of a currency to that of another country's. Any restrictions by the second country would also restrict the first country's currency. [ABSTRACT FROM AUTHOR]

The workweek is not the same in all countries or for all levels of employees. One variation on the workweek is one which includes a rest day. In some countries employees are paid for a full seven days per workweek, but one or two of the days are considered paid rest days. Although the total wages paid take into consideration the productivity of the workers during their actual work time, an EXPATRIATE manager's failure to recognize this pay practice could result in embarrassment and potential labor problems. [ABSTRACT FROM AUTHOR]

Most international enterprises do not have actual production taking place in each of the countries. They also normally do not have their own employees in each country because the costs would be prohibitive for all but the largest of organizations. It is very common under these circumstances to use the services of an intermediary to sell a company's goods in overseas markets. Intermediaries who act on behalf of an organization to sell its products in a given country are referred to as resident selling agents. [ABSTRACT FROM AUTHOR]

Most organizations conducting international trade do not use their own employees to either buy or sell goods in various countries. The differences between business practices, language, and cultural problems usually make employee arrangements difficult at best. Instead of using employees, organizations may turn to intermediaries in each country to secure goods needed by the organization in its home country (or other country of production). Intermediaries who purchase goods for a foreign company (to be shipped to that foreign company) are referred to as resident buying agents. [ABSTRACT FROM AUTHOR]

This principle, based on a law of systems theory developed in cybernetics by W. R. Ashby, states that the regulator of a system must have as much or more variety as the system it regulates. Applied to management, this concept suggests that organizations have to be as complex as their environments (Osland, 2004). In international management, where the firm faces an exceedingly complex environment, designing heterogeneity and complexity within the firm helps it to perceive opportunities and solutions that a more homogeneous mindset would overlook. Yet, often, managers almost instinctively try to do the opposite when faced with a complex environment: they simplify by reducing internal variety to achieve consensus (Morgan, 1997). [ABSTRACT FROM AUTHOR]

A visitor to a website who has visited the site previously. Repeat visitors are usually identified by a cookie placed on their machine when they visited the site before. They may also be identified if they registered previously on the site and must identify themselves at the start of each visit in order to access content on the site. Repeat visitors are often tracked in the LOG FILE. [ABSTRACT FROM AUTHOR]

Organizations commonly enter into international commerce with the expectation of transferring profits from the foreign market to their home country. Problems arise when foreign countries implement controls over transfer of profits or dividends outside their borders. The foreign country desires to keep investment returns within the country in order to foster further economic growth and stability. Repatriation controls, however, normally have the effect of reducing investor interest in that country. [ABSTRACT FROM AUTHOR]

This means moving an employee from a foreign country back to the home country. An EXPATRIATE is said to be repatriated when he or she is brought home after a foreign ASSIGNMENT. Great care must be taken when bringing expatriates back to the home country. Many employees suffer REVERSE CULTURE SHOCK due to being out of the country for an extended period of time. [ABSTRACT FROM AUTHOR]

INTERNATIONAL HUMAN RESOURCES MANAGEMENT involves preparing expatriates for transfer to overseas locations. The relocation and orientation process is carried out to insure that the EXPATRIATE suffers as little inconvenience as possible. One of the reasons for expatriate failure is improper preparation for the new assignment. Expatriates must be trained in the language, culture, values, forms of communication, and other nuances of the country of assignment. [ABSTRACT FROM AUTHOR]

Cultural relativism is a descriptive claim that ethical practices differ among cultures; that, as a matter of fact, what is considered right in one culture may be considered wrong in another. Thus truth or falsity of cultural relativism can be determined by examining the world. The work of anthropologists and sociologists is most relevant in determining the truth or falsity of cultural relativism, and there is widespread consensus among social scientists that cultural relativism is true. Moral relativism is the claim that what is really right or wrong is what the culture says is right or wrong. [ABSTRACT FROM AUTHOR]

Regulatory cost advantage occurs when the cost of complying with regulations governing an organization's actions is extremely high in the home country, whereas those regulations do not exist (or if in existence, the cost of compliance is far less) in a host country. Three current examples of regulatory cost advantage exist in the environmental pollution area, the legal liability arena, and health and safety work regulations. Do companies locate in countries because laws are less stringent than in the company's home country? There is some evidence to indicate that companies have moved because of what they consider an oppressive legal system in the United States (high cost of litigation; uncertainty; high liability insurance costs); because of strict pollution liability regulations and responsibility; because of requirements to provide social types of insurance and pension plans; because of reduced safety and loss control requirements; as well as for other reasons. [ABSTRACT FROM AUTHOR]

A website visitor's input of personal or business information into a form provided on the website. Registration allows the website owner to better understand viewers and customers, increases the likelihood of users returning to the site, and usually gains permission to send marketing messages to the visitor (see OPT-IN; PERMISSION-BASED MARKETING). In return, the website owner may provide the registrant with access to restricted information (e.g., a research report), a website customized for the user, a free service (e.g., free email), a discount on products or services, entry in a sweepstakes, or some other inducement to register. Users generally expect, and websites generally provide, a PRIVACY statement describing how the information will be used. [ABSTRACT FROM AUTHOR]

Sometimes called geographic structure, this term refers to a way of structuring an international business by separating responsibility areas into geographic divisions. This method of structuring an organization is commonly used when the organization feels that it is important to recognize cultural differences and local methods of doing business. By organizing on a geographic basis managers may be selected who are familiar with the region, speak the language, and are comfortable with any cultural differences. [ABSTRACT FROM AUTHOR]

This involves the move by groups of countries to establish agreements to reduce trade BARRIERS between the group members as well as to promote cooperation in establishing trade policies between the group and the rest of the world. Trading blocs are either the result of economic integration or the vehicle chosen to assist in achieving economic integration. Examples of successful regional economic integration include the EUROPEAN COMMUNITY, which has become one of the most formidable trading associations in the world, and the United States, Canada, and Mexico, who through NAFTA have strengthened economic ties. Regional economic integration allows countries to bring real strength of numbers to the international trade negotiating table, while at the same time encouraging internal development of each of the member countries. [ABSTRACT FROM AUTHOR]

Development banks are established by governments to foster economic growth in a particular country, region, or worldwide. There are five regional development banks: the AFRICAN DEVELOPMENT BANK; the ASIAN DEVELOPMENT BANK; the CARIBBEAN DEVELOPMENT BANK; the INTER-AMERICAN DEVELOPMENT BANK; the International Bank for Reconstruction and Development (IBRD or World Bank). These banks are also referred to as multilateral development banks (MDBs). The purposes of development banks are to foster the economic development of member countries and to assist in implementing the development programs of the United Nations. [ABSTRACT FROM AUTHOR]

An organization that chooses its management personnel from within a selected region of the world practices regiocentrism. The theory behind this selection process is that nationals of the region in which operations actually take place are better able to deal with language and cultural problems than are managers from outside the region. [ABSTRACT FROM AUTHOR]

A regiocentric approach to hiring selects management personnel from within a region of the world which most closely resembles that of the host country. The company has expanded its search beyond the borders of the host country, but has stopped short of seeking management personnel from its operations throughout the world. The theory behind this selection process is that nationals of the region in which operations actually take place are better able to deal with language and cultural problems than are managers from outside the region. The logic behind this hiring approach is probably sound, but it ignores the potential growth a manager goes through when forced to deal with different situations than those in which he or she is comfortable. [ABSTRACT FROM AUTHOR]

In order to protect itself from predatory pricing practices or DUMPING, the European Community (EC) has established minimum prices which must be charged for certain imported commodities. Agricultural commodities are the target of most reference prices. When the price of an import falls below its reference price, a surcharge is imposed on that item. Reference prices are part of the EC's attempt to protect local producers from foreign competition. [ABSTRACT FROM AUTHOR]

A re-entry VISA is issued to a foreign person who has been permitted to work in a country. If that person desires to leave the country for a short period of time a re-entry visa may be issued to expedite the person's readmittance to the host country. Re-entry visas are commonly issued to business people who must return to their home country periodically, but will be back to the host country in a short while to continue their work. Business persons will also have to have a work permit in most countries if they remain resident more than a minimum amount of time. [ABSTRACT FROM AUTHOR]

Often, an exporter does not have the funds to produce products to fill current orders. A LETTER OF CREDIT may have already been issued by the importer in anticipation of goods being exported. If allowed by the terms of the letter of credit, the exporter may draw upon the letter to obtain funds to produce goods. Once the goods are delivered the exporter may then submit the proper documentation to obtain the balance of the letter of credit. [ABSTRACT FROM AUTHOR]

Successful international trade sometimes means that countries enter into agreements to reduce BARRIERS to each other's goods and services. Agreements can be as broad as virtually open and free trade to "I'll open my borders for your product, if you will open yours for mine." When an agreement concerning mutual concessions is made it is referred to as reciprocity. There are a number of types of reciprocity, of which some are listed below: [No list] 1 Identical reciprocity. Each country allows organizations to do business across borders but foreign organizations are subject to the same internal regulations as are domestic organizations. Foreign organizations also cannot undertake any activities not allowed in their own country. [ABSTRACT FROM AUTHOR]

Rationalization involves seeking efficiency by restructuring an organization. Also known as re-engineering a firm or DOWNSIZING, restructuring seeks to reduce the costs of operation through streamlining processes, reducing unnecessary staff, closing unprofitable operations, concentrating on profitable operations, and generally seeking out the most efficient ways to increase the long-run viability and profitability of a firm. Rationalization became a very important part of international business activities in the 1990s. [ABSTRACT FROM AUTHOR]

Ramadan is one of the most important religious observances for Muslims. Ramadan is the holy month of fasting. It is the ninth month of the Muslim year. During this time Muslims refrain from food, drink, and sexual activity from sunrise to sunset. [ABSTRACT FROM AUTHOR]

A quotation is a statement by a seller as to the expected price (and terms of sale) of goods or services at a specific time. Because the quotation is not associated with an actual order, it is not binding. A quotation may become a binding price if the buyer seeks to enter into a formal purchase agreement. Failure to enter into an agreement in a timely manner usually makes the quotation useless. [ABSTRACT FROM AUTHOR]

One of the most common ways of establishing a barrier to free trade is to establish a quota for specific goods. A quota establishes a quantitative limit on the amounts of goods that can be imported. Quotas may be expressed in terms of weight (so many tons of grain), value (no more than $1,000,000 in value of a good), units (no more than 1,000 trucks of a certain type), or more recently in terms of a percentage of final value (no more than 50 percent of the final value of a good may come from outside the country). Quotas are often used as retaliatory measures for what a country perceives as unfair trade practices of another nation. [ABSTRACT FROM AUTHOR]

A number of countries regulate the importation of animals and plants as a way of reducing the potentially harmful spread of disease. Animals commonly subject to quarantine are monkeys, birds, cats, and dogs. Quarantine requirements usually include a health certificate and possible actual quarantine for a specified number of days until the animal may be released to its owners. Exporters and importers (and owners moving to another country) of plants and animals must carefully check quarantine requirements or face the possibility of not being able to obtain permission to move some plants and/or animals across international borders. [ABSTRACT FROM AUTHOR]

One of the ways to constrain the free flow of goods into a country is to institute regulations restricting the numbers or units of goods which can be imported in any given period of time. Generally, such regulations are referred to as quotas. For example, a limit of 10,000 of a certain type of automobile is a quantitative restriction. [ABSTRACT FROM AUTHOR]

The term "quality of working life" (QWL) refers to people's reactions to work, particularly personal outcomes related to job satisfaction, mental health, and safety. Attention to QWL issues started initially in Scandinavia and Europe in the 1960s and spread to North America in the 1970s. The major impetus was the growing concern among industrialized nations for the health, safety, and satisfaction of workers. In Norway and Sweden, QWL has become a national movement fostered by cultural and political forces advocating employee rights to meaningful work and participation in work decisions. [ABSTRACT FROM AUTHOR]

The quadrilateral trade ministers represent a group of four economically powerful countries or regions which have the ability to dramatically affect international commercial activities. The group is commonly referred to as the Quad. The Quad is comprised of the Canadian Minister of International Trade, the European Community's Commissioner for External Relations, Japan's Minister of International Trade and Industry, and the United States Trade Representative. The Quad was originally referred to as the Group of Seven until the EUROPEAN COMMUNITY (which included four members of the group of seven: France, Germany, Italy, and the United Kingdom) elected to be represented by a single member. [ABSTRACT FROM AUTHOR]

Trade taking place between four regions or countries. Bilateral trade is trade taking place between two regions or countries. Multilateral trade is trade between unspecified numbers of regions or countries. [ABSTRACT FROM AUTHOR]