International Business: The Challenge of Global Competition 13th Edition

of others. Could the same attributes be explained by the hypothesis that transparent cultures are less trusting and need the transparency to satisfy their cultural distrust? What do you think? This is an opinion question that encourages students to think through the way culture impacts all aspects of international activity. The

international accounting standards’ convergence process and its importance to international firms. LO18-4 Outline the arguments for and against 3BL LO18-5 Explain the capital structure choices open to international firms and their significance. LO18-6 Describe why ICs move funds. LO18-7 Explain the utility of an international finance center LO18-8 Describe multilateral netting and its benefits LO18-9 Categorize

integrate operations worldwide, whereas a multidomestic is an organization with multi-country affiliates, each of which formulates its own business strategy based on perceived market differences. An international company refers to both global and multinational companies. 2. Business is business, and every firm has to find ways to produce and market its

that international business has a long and important history in the world’s development. LO1-4 Appreciate the dramatic internationalization of markets. LO1-5 Understand the five kinds of drivers, all based on change, that are leading firms to internationalize their operations. LO1-6 Recognize the key arguments for and against the globalization of business. LO1-7 Explain the

are grouped and their reporting relationships established. It also provides information conduits for the data needed for decision-making. What are the main strengths and weaknesses of the use of an international division as part of a company’s organizational structure? Under what circumstances might such a structure be an appropriate choice for

Discuss the various organizational forms available for structuring international companies. LO10-4 Explain why decisions are made where they are among parent and subsidiary units of an international company. LO10-5 Discuss how an international company can maintain control of a joint venture or of a company in which the IC owns less than

openness to and awareness of diversity across cultures and markets with a propensity and ability to synthesize across this diversity.” It has been argued that global mindset has two key components: (1) intellectual intelligence, which includes business acumen, and (2) global emotional intelligence, which includes self-awareness, cross-cultural understanding, cultural adjustment, and

competencies required for effective global leadership. LO11-4 Discuss approaches for selecting and developing effective global leaders. LO11-5 Explain what skills a manager needs in order to effectively lead global teams. LO11-6 Identify some of the challenges of leading global change. NOTE: International business statistics, data, and facts about countries, regions, governments, and companies can change

screening. Sources are found in the Global path Ahead, Chapters 12 and 14. 2. What is the basis for the order of screenings presented in the text? The suggested order is based on the idea of performing the least difficult screening first. Successive screenings, which become more difficult, will deal with fewer countries 3.

similar markets. LO4 Discuss the value to businesspeople of trade missions and trade fairs. LO5 Discuss some of the problems market researchers encounter in foreign markets. LO6 Discuss some of the options for conducting survey-based research. LO7 Explain the difference between country screening and segment screening. NOTE: International business statistics, data, and facts about countries, regions,

If the company wanted to instead be a fast follower, what would be different in terms of the conditions that would increase the likelihood of the company’s successful entry? A market pioneer firm stands the best chance for long-term success in market-share leadership and profitability when: (1) the new market is

Identify why firms export and the options available for indirect and direct exporting. LO 13-4 Explain the potential benefits and disadvantages of joint ventures and how a company might exercise control over a joint venture, even as a minority shareholder. NOTE: International business statistics, data, and facts about countries, regions, governments, and companies

responsibility for loss or damage pass to the buyer? Use Incoterms in your response. The possible responses to the question are summarized in Fig. 14.1. The seller may or may not pay transportation costs. For example, Ex Works leaves all transportation costs to the buyer. </para></item> <item id="id_0073530166_001_015401">2. <para id="id_0073530166_001_015402" page-num=""><orderedlist id="id_0073530166_001_015403" numeration="lc-alpha"><item

export financing LO14-4 describe the activities of a foreign freight forwarder LO14-5 outline the export documents required LO14-6 identify import sources NOTE: International business statistics, data, and facts about countries, regions, governments, and companies can change rapidly and dramatically. We recommend that you update this information as needed. As an adopter of this text, McGraw-Hill Irwin

anything.” Although he was speaking about the luxury goods market, do his comments about averages apply to other segments of the market as well? Why or why not? As mentioned earlier in the text, averages are only one indication of a market’s potential size, and purchases ar3 made by a specific

is often impossible to standardize the marketing mix worldwide LO15-4 discuss the importance of distinguishing among the total product, the physical product, and the brand name LO15-5 explain why consumer products generally require greater modification for international sales than do industrial products or services LO15-6 discuss the product strategies that can be formed

no longer operate in a vacuum and are forced to compete with businesses from around the globe. For this reason management should be constantly searching for methods to improve quality and lower the overall cost of production. Also businesses have begun to use the outsourcing of non-core activities in an

global sourcing arrangements. LO 16-4 Understand the increasing role of electronic purchasing for global sourcing. LO 16-5 Appreciate the importance of the added costs of global sourcing. LO 16-6 Explain the potential of global standardization of production processes and procedures, and identify impediments to standardization efforts. NOTE: International business statistics, data, and facts about countries,

anything.” Although he was speaking about the luxury goods market, do his comments about averages apply to other segments of the market as well? Why or why not? As mentioned earlier in the text, averages are only one indication of a market’s potential size, and purchases ar3 made by a specific

the relationship between competitive strategies (international, multidomestic, global, and transnational) and international human resource management approaches (ethnocentric, polycentric, regiocentric, and global). LO 17-3 Compare home-country, host-country, and third-country nationals as international company executives. LO 17-4 Explain what an expatriate is, and identify some of the challenges and opportunities of an expat position. LO

major trends? How might this information be of value to a manager? The volume of international trade in merchandise and services exceeded $4 trillion in 1990. Fourteen years later, international trade had more than doubled to $11 trillion! Trade in services has also increased. The significance of world trade cannot be

and trends in such trade. LO2-3 Outline the theories that attempt to explain why certain goods are traded internationally. LO2-4 Explain the size, growth, and direction of foreign direct investment LO2-5 Explain several theories of foreign direct investment. NOTE: International business statistics, data, and facts about countries, regions, governments, and companies can change rapidly and

managers? Cognitive institutions use shared ideas to define reality by means of conceptual frameworks or schema. Examples in the text included the supplier relationship contrast between the U.S. and Japan and in guanxi. Cognitive institutions are tremendously important to the international manager because they establish the rules of the game at

institutional theory. LO3-3 Outline the United Nations as an institution and its relevance to international business. LO3-4 Describe the purposes of the two global monetary institutions, the IMF and the World Bank. LO3-5 Discuss the purpose of the World Trade Organization and its impact on international business. LO3-6 Discuss the resources of the

has spent his career in the Middle East is sent on temporary assignment to Germany for a year to integrate a process developed in one of the Middle East production facilities. Germany is LC and the Arab officer is used to HC communication patterns. Any of the issues in Fig. 4.1

Trompenaars’ dimensions. LO4-6 Discuss the sociocultural aspects of culture as a phenomenon. NOTE: International business statistics, data, and facts about countries, regions, governments, and companies can change rapidly and dramatically. We recommend that you update this information regularly to present your students with timely data reflecting current global events. As an adopter of this

might being landlocked contribute to slower development? Remember that Switzerland is landlocked as you think through this question. </para></item>The lack of a seacoast is probably a contributing factor to lack of development. The distance from a seaport increases the cost of transporting exports and imports to the landlocked country. Most of

international business. LO5-2 Apply Porter's diamond model to a discussion of geographical features. LO5-3 Summarize the importance to business of inland waterways and outlets to the sea. LO5-4 Outline the nonrenewable and renewable energy options available and their broad business implications. LO5-5 Describe the issues related to nonfuel minerals that concern international business LO5-6 Describe

their hands on firms for a number of reasons. Some of these reasons are (1) to extract more money from the firms, if the government suspects that the firms are concealing profits; (2) profitability—the government believes it can run the firms more efficiently and make more money; (3) ideology; (4)

countermeasures that companies and their employees might take. LO 6-3 Evaluate the importance to business of government stability and policy continuity. LO 6-4 Explain country risk assessment by international business. LO 6-5 Discuss types of trade restrictions and the arguments for imposing them. NOTE: International business statistics, data, and facts about countries, regions, governments,

assurance that their civil and property rights will be protected. It is desirable that a country bases its functions on the rule of law instead of ruled by political dictatorship or by a powerful elite. The rule of law makes it easier to encourage foreign investment. How does international law differ

need and methods to protect intellectual property LO 7-4 Explain the risk of product liability legal actions LO 7-5 Discuss some of the U.S. laws that affect international business operations NOTE: International business statistics, data, and facts about countries, regions, governments, and companies can change rapidly and dramatically. We recommend that you update this

is widely trusted. On the other hand, gold is unwieldy, especially with large trade flows, it has holding costs and security costs, and it does not generate interest. 2. Was the Bretton Woods system bound to fail if it were successful? This question goes to the Triffin Paradox. <para id="id_0073530166_001_005969" page-num="">The Bretton

arrangements LO8-4 Discuss the purpose of the Bank for International Settlements LO8-5 Explain the impact of fluctuating currency values LO8-6 Discuss how foreign exchange is quoted LO8-7 Describe the factors that influence exchange rate movement LO8-8 Outline the approaches to exchange rate forecasting LO8-9 Discuss the influence of currency exchange controls on international business. LO8-10 Summarize the

make fundamental choices about developing and deploying scarce resources internationally. The goal of international strategy is to achieve competitive advantage, and that is why it is important. <item id="id_0073530166_001_003491">2. <para id="id_0073530166_001_003492" page-num="">What is the difference between strategic planning conducted in domestic companies and that conducted in international companies?</para></item> Strategic planning at the

statements, vision statements, values statements, objectives, quantified goals, and strategies. LO 9-4 Explain home replication, multidomestic, global, and transnational strategies and when to use them. LO 9-5 Describe the methods of and new directions in strategic planning. NOTE: International business statistics, data, and facts about countries, regions, governments, and companies can change rapidly and

Young, 65 percent of non-U.S. companies and 75 percent of U.S. companies were found to be engaged in a strategic alliance. [/c] Hall's high-and low-context framework is based upon communication styles. [c] TRUE Context is a critical aspect of communication style. [/c] The dynamic capability theory states that for a firm to invest overseas, it must have

flexibility has enabled the company to eliminate inventory. [c] FALSE Zara's strategy of speed and flexibility has enabled the company to shorten the fashion cycle almost to the point where it no longer exists and to better manage inventory, but the company has not eliminated inventory. [/c] The development of expanded regional trade agreements, such

obtain product liability insurance. [/c] Greater profits may be obtained by either increasing total revenue or decreasing the cost of goods sold. [c] TRUE As stated directly in the text. [/c] Seeing what needs to be done is a management, rather than leadership, element. [c] FALSE Seeing what needs to be done is an element of leadership, according to Jim

at various levels of development, it is understandable that manufacturing systems will also vary significantly, even within the same company. [/c] There are four main types of FX risk: transaction, translation, economic, and arbitrage exposure. [c] FALSE The first three risks above are the main FX risk types. [/c] Multilateral netting is an approach to debt management

reverse culture shock when an expatriate returns to the home country and company. [c] TRUE As stated directly in the text. [/c] Porter's diamond can be used to explain the importance of the environment and natural resources. [c] TRUE Porter's diamond illustrates the variables affecting competitive advantage, and one of them is factor conditions (including geography and natural

market research data through focus groups and surveys. [c] FALSE Corporate anthropology refers to the process of obtaining market research data through extensive "on-the-ground" research, watching consumers actually use products rather than relying on focus groups and surveys. [/c] According to the text, any activity in the value chain can be outsourced except for strategy

international law includes laws governing the transactions of individuals and companies crossing international borders. [/c] According to the text, the dimensions along which management can globalize (standardize) their company's international activities include: A. markets. B. competitive strategy. C. political exposure. D. all of the above. [c] E. E. two of A, B, and C. Both A and B are correct,

them, despite what is happening in the home market. [c] FALSE As stated directly in the text. [/c] Product standards ostensibly set to protect a nation's citizens can be effective in protecting local industry from foreign competitors. [c] TRUE As stated directly in the text. [/c] A nation's relative ability to design, produce, distribute, or service products within an international

to move money other than the repatriation of profits. [c] FALSE Firms will need to move money for many reasons in addition to repatriation of profits; among the reasons are dividends, royalties and fees from the subsidiary to the parent, loans from the parent to the subsidiary, and transfers as a result of

that local efficiencies and opportunities can be accessed. [c] FALSE The trend is to centralize the finance function and set it up as a profit center. [/c] The reasons international firms enter foreign markets are all linked to either (1) the desire to increase profits or (2) the desire to increase sales. [c] FALSE The reasons international firms

communism. China is not a member, although there is a trade-related affiliation between ASEAN and China called ASEAN+3, China, Japan, and South Korea. Refer To: Figure 3.6, Map of ASEAN members [/c] Globally, the overall level and rate of growth of merchandise exports exceed those of commercial services. [c] FALSE The level of merchandise exports, at

Rhine waterway's importance is increasing. It is the world's most important inland waterway system. Refer To: Figure 5.10, map of the Rhine-Danube Canal [/c] The Doha Development Agenda is: A. a WTO conference on trade. B. an agreement on climate control and greenhouse gases. C. a decision-making approach to development. D. a development rules list. [c] A. The Doha Agenda

divisions have been defined as though they were distinct, independent businesses. [/c] On an open account, the buyer assumes all of the payment risk. [c] FALSE As stated directly in the text. [/c] Currency exchange rate movements are well understood by economists and can be accurately forecast, which eliminates risk for the international seller operating with exposure

the home currency. [c] FALSE Swaps are agreements to exchange currencies at specified rates and times, and they can be for longer periods than those offered in the forward market. [/c] Internal environmental forces are commonly referred to as controllable. [c] TRUE As stated directly in the text. [/c] Scenario planning helps to emphasize that the business environment is predictable

is, following the rules is expedient. Refer To: Figure 3.1, Institutions: Characteristics [/c] Companies with a transnational strategic orientation follow a global staffing policy, selecting the best person for each job without considering national origin and generally having a consistent HRM strategy across all subsidiaries. [c] FALSE Companies with a transnational strategic orientation follow a geocentric

include social, environmental, financial services, cultural, and tax dumping. [/c] Geographical proximity is rarely a major reason for trade. [c] FALSE To the contrary, geographical proximity often explains trade relationships. [/c] Virtual team leadership is similar to co-located team leadership. [c] FALSE Virtual team leadership has the additional challenge of relationships mediated by technology. [/c] Allowances are paid by firms in recognition

of production at one site to get economies of scale. D. the production by a subsidiary for its own national market. [c] B. As stated directly in the text. [/c] What is a controlled foreign corporation? A. A foreign company with one major stockholder in a foreign country B. A subsidiary with the parent company having at least

rates. For example, if the nominal interest rate in the United States is 5 percent and in the EU is 3 percent, we would expect the dollar to decrease against the euro by 2 percent over the year. [/c] Environmentally sustainable businesses need to consider the economic and ecological systems in which

businesses, but the government brings the complaint. [/c] The spot rate is the rate for exchange within two days in the currency market. [c] TRUE The spot rate is the rate today for exchange within two days. [/c] Country risk assessment is a measure of the threat of nationalization. [c] FALSE The threat of losing an investment or not being

through work, so its social status tends to be based on ascription. [c] FALSE Ascription is status based on who you are, not what you've done. Ascription could consider family lineage, age, or other attributes. Status via work is achievement-oriented. [/c] In organizing their international activities, there are five dimensions along which management can globalize

manager something that the spoken language does not. [c] FALSE Nonverbal communication, if understood, can help a non-native grasp subtleties of the new culture. [/c] Biomass is a category of renewable energy fuels based on their heavy weight. [c] FALSE Biomass is a category of fuels based on photosynthesis, using the sun's energy to create chemical energy via

return on the funds invested. [/c] For controls to be effective, all operating units of an IC must provide headquarters with timely, accurate, and complete reports, including those dealing with financial, technological, market opportunity, and political and economic information. [c] TRUE As stated directly in the text. [/c] A global strategy tends to be used when a

are WTO members and have benefited greatly from increased trade facilitated by the WTO. [/c] In the method favored by the majority of American ICs, the salary part of an expatriate employee's compensation package will generally be governed by the employee's level in the organization and will not be higher because of

two are ambiguity and dynamism. [/c] FASB 52 requires that companies record foreign currency-based transactions at the spot rate at the time of the transaction. [c] TRUE Gains or losses related to fluctuations in currency values go in the income statement. [/c] Assessing global leadership skills is a well-understood, basic process. [c] FALSE There are instruments available for assessment, but

and staff managers from different business, geographic, and functional areas. [/c] The United Kingdom Bribery Act includes penalties for corporate failure to prevent bribery, but only if the act of bribery occurred in the United Kingdom. [c] FALSE The United Kingdom Bribery Act includes penalties for corporate failure to prevent bribery. The person engaging in

or production. [c] FALSE International strategy deals with all the various functions and activities of a company and the interactions among them, not merely a single area such as marketing or production. [/c] A form of organization characterized by lateral decision processes, horizontal networks, and a strong corporatewide business philosophy is a horizontal corporation. [c] TRUE As stated

would be strictly enforced. [c] FALSE The zaibatsu, Japanese conglomerate, is hampered by antitrust legislation, which was originally imposed after World War II by the United States. [/c] CIF and CFR terms are more convenient for foreign buyers because they merely have to add the import duties, landing charges, and freight from the port of