Chapter 3
INTERNATIONAL COMPETITIVENESS, PRODUCTIVITY AND QUALITY
Important Terms
1. Absolute Advantage Full advantage over competitors or the lack of competitors, so
as to enable a company or country to set prices and policies without fear of
competition.
2. Capital Money or other assets that are available for investment purposes
3. Comparative Advantage An advantage usually created when a company or country
becomes more efficient, has better technology, and has easier access to resources
than its competitors
4. Competitive Advantage An advantage in which a country or company outperforms
others in terms or productivity, quality and price of products, superior service,
better technology, higher profit.
5. Developed Nations Industrialized countries that have a high standard of living and
produces a sophisticated range of products.
6. Developing Nations Countries that are evolving from being less developed to being
more industrialized.
7. Economies Of Scale The tendency of the cost per item to go down when items are
bought or produced in large quantities.
8. Gross Domestic Product (GDP) The total value of all goods and services
produced in a country during a specific time.
9. Intellectual Capital The sum of knowledge, information, intellectual property, talent
and experience within a country or an organization.
10. International Organization for Standardization (ISO) A non-governmental
organization devoted to developing voluntary standards of quality management
and quality assurance.
11. Knowledge Economy The increased reliance of business, labour, and government
on knowledge, information, and ideas.
12. Less Developed Nations Countries with little economic wealth and an emphasis
on primary resource production.
13. Market-Driven Organizations Organizations that respond to market needs by
providing customers with high-quality, low cost goods and services.
14. Opportunity Cost Cost and potential benefit of an opportunity that is deferred or
sacrificed in order to act on another opportunity.
15. Productivity The amount of work accomplished in a unit of time using the factors of
production.
16. Rationalization The process used by an organization or company to change its
structure, product line, or production process to make it more efficient, productive,
and competitive.
17. Standard Of Living The way people live as measured by the kinds and quality of
goods and services they can afford.
18. Total Quality Management (TQM) A system for managing business with a
commitment to continuously improving products, processes, and work habits.
19. Utility Value in terms of benefit (financial, quality of life) or usefulness; service
providing electricity, water, water treatment, natural gas, or sewage disposal for a
certain community, region, or country