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Mercantilism:	Economic philosophy based on the belief that a nation's wealth is measured by its holdings of gold and silver.
Mercantilism:	The economic philosophy of merchants and kings during the 16th and 17th centuries to regulate trade, to promote an excess of exports over imports.
Merchandise export:	Sale of a good to a resident of a foreign country.
Merchandise exports and imports:	Trade involving tangible products.
Merchandise import:	Purchase of a good from a resident of foreign country.
MERCOSUR	Pact between Argentina, Brazil, Paraguay, and Uruguay to establish a free trade area.
Mercosur Accord:	Customs union composed of Argentina, Brazil, Paraguay, and Uruguay.
Merit good:	Something whose consumption is deemed intrinsically desirable.
Meritocracy:	A social and economic system that is open to all and where the rewards are given out according to talent and hard work.
Methodological individualism:	A theory of explanation in social science that says the reason for social processes and events can be deduced from principles governing the behavior of the participating individuals.
M-form design:	Form or organization design in which products are related in some way.
Micropolitical risk:	Political risk that affects only specific firs or a specific industry operating within a country.
Minimum efficient scale	The level of output at which most plant-level scale economies are exhausted.
Ministry of International Trade and Industry (MITI):	The Japanese cabinet agency that is concerned with that nation's industrial development, and that shares with other ministries responsibility for international trade.
Mission statement:	Definition of a firm's values, purpose, and directions.
MITI	Japan's Ministry of International Trade and Industry.
Mixed economy	Certain sectors of the economy are left to private ownership and free market mechanisms. While other sectors have significant government ownership and government planning.
Mixed economy:	An economy where private and state-owned enterprises exist side by side.
MNC (multinational corporation):	An enterprise that produces goods or services in more than one country.
Monetary policy	Government policy efforts to manage the money supply in the economy in the pursuit of macro economic goals, such as low inflation, low unemployment, and high rates of economic growth.
Monetary policy:	Management of the money supply, and thus the availability of credit, to support price stability and full employment.
Monopoly	A market situation in which there is only one producer/seller of a good or service.
Monopoly:	When a firm or individual is the only seller of a given commodity.
Moral hazard:	The action of economic agents to maximize their utility to the detriment of others by hiding their actions.
Mores	Norms seen as central to a functioning of a society and to its social life.
Morrill Act of 1860	Federal education legislation that established the land-grant system of colleges and universities in which Congress gave land to states for the support of programs in agriculture and mechanical arts.
Most-favored nation (MFN):	The principle of nondiscrimination in international trade. For a nation, receiving "most favored" treatment from another means that the products it exports are subject to tariffs no greater than those imposed on imports from any other country. Under GATT Article I all contracting parties pledge most-favored nation treatment to one another. NIFN is frequently circumvented by voluntary export restraints (VERs), however, and preferences (GSP) constitute an exception to MFN. So do free trade agreements (FTAs) between to or more nations.
Most favored nation (MFN) principle:	Principle that any preferential treatment granted to one country must be extended to all countries.
Motivation:	Overall set of forces that cause people to choose certain behaviors from a set of available behaviors.
Multidomestic corporation:	Firm composed of relatively independent operating subsidiaries, each of which is focused on a specific domestic market.
Multidomestic strategy	Emphasizing the need to be responsive to the unique conditions prevailing in different national markets.
Multi-Fiber Arrangement:	An international trade compact, dating from 1973, that establishes a framework for negotiating bilateral orderly marketing agreements (OMAs) under which exporting nations undertake to limit their shipments of textile and apparel products. Under the MFA, importing nations can impose quantitative import restrictions when unable to negotiate such agreements or to counter market-disruptive import surges. The MFA succeeded the LTA (Long-Term Arrangement), which took effect in 1962 and applied only to cotton textiles. The MFA broadened controls to include products made from wool or synthetic fibers. As part of the Uruguay Round agreement, the MFA will be phased out in three stages over 10 years. After 3 years, the quotas on 17 percent (by volume) of textile imports must be removed. The quotas on an additional 18 percent of textile imports must have the quota removed within 7 years, and the remaining 65 percent must be free from quotas within 10 years.
Multifibre Agreement (MFA):	Commodity agreement among exporting and importing countries of textiles and apparel to control trade in those goods.
Multilateral Investment Guarantee Agency (MIGA):	World Bank affiliate that offers political-risk insurance to investors in developing countries.
Multilateral netting	A technique used to reduce the number of transactions between subsidiaries of the firm, thereby reducing the total transaction costs arising from foreign exchange dealings and transfer fees.
Multilateral netting:	Netting of transactions between three or more business units.
Multilateral trade negotiations (MTN):	Technically any of the postwar series of barrier-reducing negotiations under GATT auspices, the MTN commonly refers to the Tokyo Round of 1973-79.
Multinational corporation (MNC):	Incorporated firm that has extensive involvement in international business, engages in foreign direct investment and owns or controls value-adding activities in more than one country.
Multinational enterprise (MNE)	A firm that owns business operations in more than one country.
Multinational enterprise (MNE):	Business that may or may not be incorporated and has extensive involvement in international business.
Multinational organization (MNO):	Any organization -- business or not-for-profit -- extensive international involvement.
Nation: return to top	A people who consciously identify with some common cultural experience.
National Academy of Public Administration (NAPA)	Organization of distinguished practitioners and scholars in public administration dedicated to improving public management in the United States.
National Aeronautics and Space Administration (NASA)	A federal agency whose main function is to conduct research and development on the problems of flight within and outside the earth's atmosphere and to explore outer space.
National competitive advantage, theory of:	Theory stating that success in international trade is based upon the interaction of four elements: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry.
National competitiveness:	The ability of a country's companies to win in international markets.
National defense argument:	Argument in favor of governmental intervention in trade holding that a nation should be self-sufficient in critical raw materials, machinery, and technology.
National Defense Education Act	A 1958 act to strengthen national defense and to encourage and assist the expansion and improvement of higher education programs in science technology, mathematics, and modern foreign languages.
National Institutes of Health (NIH)	The principal biomedical research agency of the U.S. federal government. It's mission is to employ science in the pursuit of knowledge to improve human health conditions.
National Labor Relations Board (NLRB)	Federal agency that administers the nation's laws relating to labor relations in the private and nonprofit sectors.
National Oceanographic and Atmospheric Administration (NOAA)	A federal administration whose primary mission is to explore, map, and study the world's oceans and atmosphere.
National Performance Review (NPR)	A program established by the Clinton Administration to strengthen the delivery of public services at all levels of government. The first report of the program was published in 1993.
Nationalization:	Transfer of property from a privately owned firm to the government.
Nationalize:	For government to take over ownership and control of an industry that produces output for sale in the market.
Neo-mercantilists:	Modem supporters of mercantilism, who hold that a country should erect barriers to trade to protect its industries from foreign competition; also called protectionists.
New trade theory	The observed pattern of trade in the world economy may be due in part to the ability of firms in a given market to capture first-mover advantages.
Newly industrialized country (NIC):	A newly industrialized country, such as Taiwan or South Korea.
Newly industrializing countries (NICs):	Developing countries (for example, Hong Kong, Korea, Singapore, and Taiwan) experiencing rapid industrial development and, hence, expanding export of their industrial products.
Nirvana:	State of spiritual perfection; according to the Hindu faith, one achieves nirvana by leading progressively ascetic and purer lives as one goes through the cycle of life, death, and rebirth.
Non Governmental Organizations (NGOs)	Private, not-for-profit organizations of a charitable, public service, research, or educational nature concerned with problems of a global, national, or local scale.
Nonconvertible currency	A currency is not convertible when both residents and nonresidents are prohibited from converting their holdings of that currency into another currency.
Nonmarket failure:	See government failure.
Nonprofit sector:	The sector of a mixed economy made of private organizations in which no stockholder shares in profits or losses. Also called the independent or voluntary sector.
Nontariff barrier (NTB):	Any governmental regulation, policy, or procedure other than a tariff that has the effect of impeding international trade.
Nontariff barriers:	Government measures other than tariffs--i.e., import quotas, buy-national procurement regulations, product standards, subsidies--that impede or distort the flow of international commerce. The Tokyo Round was devoted primarily to limiting and disciplining national use of NTBs.
Nontariff barriers:	Government measures other than tariffs to inhibit international commerce.
Norms	Social rules and guidelines that prescribe appropriate behavior in particular situations.
North American Free Trade Agreement (NAFTA)	A trade agreement removing trade barriers between the United States, Canada, and Mexico.
North American Free Trade Agreement (NAFTA)	Free trade area between Canada, Mexico, and the United States.
North American Free Trade Agreement (NAFTA):	Agreement establishing free trade among the United States, Mexico, and Canada. Negotiated by President Bush and signed on 17 December 1992, NAFTA removes barriers to trade and investment and improves the protection of intellectual property rights. Prior to seeking congressional implementation of NAFTA, President Clinton negotiated side agreements on labor and environmental issues. Congress approved implementation of NAFTA in November 1993.
North Atlantic Treaty Organization (NATO)	A mutual defense alliance formed in 1949 whose purpose was to provide for the collective defense of the member states against the perceived threat of the Soviet Bloc.

Northwest Territory	Land governed by surveying practices of the Land Ordinance of 1785 covering the current states of Ohio, Indiana, Illinois, Michigan, Wisconsin, and parts of Minnesota.
NV:	In the Netherlands, abbreviation used to refer to a publicly held, limited-liability firm.
Occupation Safety and Health Administration (OSHA) return to top	Federal body that develops regulations and standards relating to occupational health and safety issues.
OECD (0rganization for Economic Cooperation and Development):	An international organization (established in 196 1) to promote economic growth and development. The 25 members are mostly economically advanced, capitalist nations.
Office of Management and Budget (OMB)	An office in the executive branch of the federal government that is designed to help the president prepare the fiscal budget and manage the government.
Official reserves account:	BOP account that records changes in official reserves owned by a central bank.
Official settlements balance:	BOP balance that measures changes in a country's official reserves.
Offset obligations:	Agreement between an MNC and a host government in which the MNC agrees to provide some economic benefit to the host government in return for purchase of a good or service by the host government.
Offset purchases:	Form of countertrade in which a portion of the exported good is produced in the importing country.
Old Age Survivors Disability Insurance (OASDI)	Federal program created by the Social Security Act of 1935 that taxes both workers and employers to pay benefits to retired and disabled people, their dependents, widows, widowers, and children of deceased workers.
Oligopoly	An industry composed of a limited number of large firms.
Omnibus Trade and Competitiveness Act of 1988:	The 1988 Trade Act was the first comprehensive trade legislation initiated by the Congress since before the Smoot-Hawley Act of 1930. Its important features included the strengthening of unilateral trade retaliation instruments, particularly Section 301, provision of fast-track negotiating authority for the Uruguay Round of GATT negotiations, and enhancement of the authority of the US Trade Representative.
Open account:	Type of payment in which the seller ships goods to the buyer prior to payment; seller relies on the promise of the buyer that payment will be forthcoming.
Operations control:	Level of control that focuses on operating processes and systems within both the organization and its subsidiaries and operating units.
Operations management	Set of activities used by an organization to transform different kinds of resource inputs into final goods and services.
Opportunity cost	The highest valued alternative given up to pursue an activity.
Opportunity cost:	Value of what is given up in order to get the good or service in question.
Opportunity cost:	The alternative cost if a choice had been made differently.
Orderly marketing agreement (OMA):	A formal agreement in which an exporting nation undertakes to limit its sales of specified "sensitive" products to specific levels, so as not to disrupt, threaten, or impair competitive industries or workers in an importing country or countries.
Organization change:	Any significant modification or alteration in a firm's strategy, organization design, technology, and/or employees.
Organization design:	Overall pattern of structural components and configurations used to manage the total organization; also called organization structure.
Organization for Economic Cooperation and Development (OECD):	Organization whose 25 members are among the world's richest countries and consist of Canada, Mexico, the United states, Japan, Australia, New Zealand, and 19 Western European Countries.
Organization of Petroleum Exporting Countries (OPEC)	Oil producing countries that are net exporters of crude oil and petroleum-based products.
Organization of Petroleum Exporting Country (OPEC):	Commodity cartel created to control production and prices of crude oil.
Organization structure:	See organization design.
Organizational control:	Level of control that focuses on the design of the organization itself.
Output controls	Achieving control by setting goals for subordinates, expressing these goals in terms of objective criteria, and then judging performance by a subordinate's ability to meet these goals.
Overall cost leadership strategy:	Business-level strategy that emphasizes low costs.
Overall productivity:	Productivity measure determined by dividing total outputs by total inputs; also called total factor productivity.
Overseas Private Investment Corporation (OPIC):	U.S. government agency that promotes U.S. international business activities by providing political risk insurance.
Ownership advantage theory:	Theory stating that foreign direct investment occurs because of ownership of valuable assets that confer monopolistic advantages in foreign markets.
Ownership advantages:	Resources owned by a firm that grant it a competitive advantage over its industry rivals.
PAC (political action committee): return to top	An organization formed under U.S. law to funnel funds to selected candidates or to promote favored causes.
Palestine Liberation Organization (PLO)	A representative organization of the Palestinian people.
Paper gold:	See special drawing rights.
Par value:	Official price of a currency in terms of gold.
Parent-country nationals (PCNs):	Employees who are citizens of an international business's home country and are transferred to one of its foreign operations.
Parliamentary democracy:	A form of government in which the legislature is the supreme governing body and from which the executive is drawn.
Passive goal behavior:	Behavior based on the cultural belief that social relationships, quality of life, and concern for others are the basis of motivation and reflect the goals that a person should pursue.
Passive income:	See Subpart F income.
Payback period:	Number of years it takes a project to repay a firm's initial investment in that project.
Peak association:	An all-embracing organization that represents the interests of a large number of firms in different economic sectors.
Pegged:	Tied to, as in "The gold standard created a fixed exchange-rate system because each country pegged the value of its currency to gold."
Per capita income	The mean income for every man, woman, and child in a particular group.
Per capita income:	Average income per person in a country.
Performance ambiguity	Occurs when the causes of good or bad performance are not clearly identifiable.
Performance appraisal:	Process of assessing how effectively a person is performing his or her job.
Performance ratio:	Control technique based on a numerical index of performance that the firm wants to maintain.
Performance standard	Pollution standard in which the polluter must meet a specific level of performance in pollution abatement, but the method used to achieve that performance is left up to the polluter.
Personal controls	Achieving control by personal contact with subordinates.
Personal selling:	Making sales on the basis of personal contracts.
Planning Process control:	Form of organizational control that focuses on the actual mechanics and processes a firm uses to develop strategic plans.
Plaza Accord:	Agreement made in 1985 among central bankers to allow the U.S. dollar to fall in value.
Plaza Agreement:	An agreement in September 1985 among the "Group of Five" advanced industrial nations (France, Germany, Japan, the United Kingdom, and the United States) to encourage depreciation of the US dollar.
PLC:	Abbreviation used in the United Kingdom to indicate a publicly held, limited liability company.
Pluralism:	A type of political representation where power is distributed through many private organizations that can limit one another's action.
Poison pill:	A shareholder rights plan aimed at discouraging hostile takeovers.
Policy-making system:	A small and stable group that effectively controls decisions in a narrow policy area.
Political economy	The study of how political factors influence the functioning of an economic system.
Political economy:	The study of the interaction of political, economic, and other factors in society.
Political rights:	Rights to join in the management of government and to influence public policy.
Political risk	The likelihood that political forces will cause drastic changes in a country's business environment that adversely affect the profit and other goals of a particular business enterprise.
Political risk assessment:	Systematic analysis of the political risks that firm faces when operating in a foreign country.
Political risk:	Change in the political environment that may adversely affect the value of a firm.
Political union:	Complete political as well as economic integration of two or more countries.
Pollution:	Industrial byproducts that are discharged into the physical environment and that have social cost.
Pollution permit:	A right to pollute that can be bought, sold, traded, or saved.
Pollution tax:	A tax that is theoretically equal to the external cost of pollution, so that prices reflect the full cost to the environment of making things.
Polycentric approach:	Management approach in which a firm customizes its operations for each foreign market it serves.
Polycentric staffing	A staffing policy in an MNE in which host-country nationals are recruited to manage subsidiaries in their own country, while parent-country nationals occupy key positions at corporate headquarters.
Polycentric staffing model:	Approach primarily using HCNs to staff upper-level foreign positions.
Popular agenda	The policy issues that are considered important by the general public at any particular time.
Pork barrel	A term used to refer to expenditure authorizations that are included in a government's budget to benefit a particular constituency or special interest group.
Pork barrel Policy:	Extra funding added to bills for local projects to please a legislator's constituents.
Portfolio investments:	Passive holdings of stock, bonds, or other financial assets that do not entail active management or control of the securities' issuer by the investor.
Positive sum game	A situation in which all countries can benefit even if some benefit more than others.
Post-industrial economy	An economy where the primary focus in on the production of services, rather than goods. Characteristics of a post-industrial economy include the pre-eminence of a professional and technical class, the centrality of theoretical knowledge as the source of innovation and policy making, and the emphasis on the creation of intellectual technology.
Postindustrial society:	Societies whose people predominantly work in services and where manufacturing provides a minority of jobs and national income.
Power orientation:	Cultural beliefs about the appropriateness of power an authority in hierarchies such as business organizations.
Power respect:	Cultural belief that the use of power and authority is acceptable simply on the basis of position in a hierarchy.
Predatory pricing	Selling below purchase price or cost of production except in the case of seasonal or perishable goods. The objective of predatory pricing is to drive competitors out of business.
Predatory pricing	Reducing prices below fair market value as a competitive weapon to drive weaker competitors out of the market ("fair" being cost plus some reasonable profit margin).
Price discrimination	The practice of charging different prices for the same product in different markets.
Price elasticity of demand	A measure of how responsive demand for a product is to changes in price.
Principal-agent problem:	A situation where the interests of a principal (e.g., a shareholder) and an agent (e.g., a professional manager) differ, and the principal cannot fully control what the agent does.

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