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authentic leaders
Leaders who are passionate about the company, live out corporate values daily in their behavior in the workplace, and form long-term relationships with employees and other stakeholders
self-reference criterion
In business, the idea that “we” differ from “them” and an unconscious reference to one’s own cultural values, experiences, and knowledge
laissez-faire
Adam Smith’s idea of the “invisible hand,” which is critical to capitalism because it assumes the market, through its own inherent mechanisms, keeps commerce in equilibrium
bimodal wealth distribution
Occurs when the middle class shrinks, resulting in highly concentrated wealth among the rich and increased numbers of poor people with few resources
International Monetary Fund
An international body that regulates monetary relationships between national economies
global business
A practice that brings together people from countries with different cultures, values, laws, and ethical standards
cultural relativism
The concept that morality varies from one culture to another and that “right” and “wrong” are defined differently
John Maynard Keynes
Argued that the state could stimulate economic growth and improve stability in the private sector through, for example, controlling interest rates, taxation, and public projects during the 1930s
rational economics
Based on the assumption that people are predictable and will maximize the utility of their choices relative to their needs and wants
United Nations Global Compact
A set of 10 principles that promote human rights, sustainability, and the eradication of corruption
national culture
A much broader concept than organizational culture and includes everything in our surroundings made by people—both tangible items, such as artifacts, and intangible entities, such as concepts and values
global common values
Certain values broadly accepted worldwide
Milton Friedman
Rejected the Keynesian conclusion that markets sometimes need intervention to function efficiently and believed deregulation could reach equilibrium without government intervention
behavioral economics
Assumes humans act irrationally because of genetics, emotions, learned behavior, and heuristics, or rules of thumb
World Trade Organization
Administers its own trade agreements, facilitates trade negotiations, settles trade disputes, and monitors the trade policies of member nations
individualism/collective dimension
Refers to how self-oriented members of a culture are in their behavior
risk compartmentalization
When profit centers within corporations are unaware of the overall consequences of their actions on the firm as a whole
Socialism
Refers to economic theories advocating the creation of a society when wealth and power are shared and distributed evenly based on the amount of work expended in production
multinational corporations
Public companies that operate on a global scale without significant ties to any one nation or region
dumping
The practice of charging high prices for products in domestic markets while selling the same products in foreign markets at low prices, often at below cost
power distance dimension
Refers to the power inequality between superiors and subordinates
Adam Smith
A professor of logic and moral philosophy during the late eighteenth century who developed critical economic ideas still considered important today
social democracy
Allows private ownership of property and also features a large government equipped to offer such services as education and health care to its citizens
Business for Social Responsibility
A globally based resource system that endorses following responsible business practices abroad
vertical system
A channel member (manufacturer, wholesaler, distributor, or retailer) has control of the entire business system, via ownership or contract, or through its purchasing ability