International Business 16th Edition

PART ONE BACKGROUND FOR INTERNATIONAL BUSINESS Chapter 1 GLOBALIZATION AND INTERNATIONAL BUSINESS OBJECTIVES 1-1 Relate globalization and international business (IB) to each other and explain why their study is important 1-2 Grasp the forces driving globalization and IB 1-3 Discuss the major criticisms of globalization 1-4 Assess the major reasons companies seek to create value

Questions 1.1 Professional athlete A is a star. And professional athlete B is an average player. How has the globalization of professional sports affected each of these both positively and negatively? "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These

CHAPTER TEN THE DETERMINATION OF EXCHANGE RATES OBJECTIVES 10-1 Describe the International Monetary Fund and its role in determining exchange rates 10-2 Discuss the major exchange-rate arrangements that countries use 10-3 Identify the major determinants of exchange rates 10-4 Show how managers try to forecast exchange-rate movements 10-5 Examine how exchange-rate movements influence business decisions CHAPTER OVERVIEW From a

Questions 10-1. Do you think Venezuela should drop its currency, the VEF, and adopt the U.S. dollar? Why or why not? "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among your students and therefore,

CHAPTER ELEVEN GLOBAL CAPITAL MARKETS OBJECTIVES 11-1 Describe the finance function of an MNE in a global context 11-2 Define leverage and how it affects the choice of capital structure 11-3 Explain the different ways to access debt internationally 11-4 Summarize how foreign source income is taxed 11-5 Analyze how offshore financial centers provide financing opportunities for

Questions 11-1. In the case of Allergan and Pfizer, there are two sovereign powers in play Ireland and the United States. Why was Ireland interested in letting the inversion take place, and why was the U.S. government against the inversion? Is the decision by the United States a direct affront to the sovereignty

PART FIVE GLOBAL STRATEGY, STRUCTURE, AND IMPLEMENTATION CHAPTER TWELVE THE STRATEGY OF INTERNATIONAL BUSINESS OBJECTIVES 12-1 Explain the idea of strategy in the MNE 12-2 Profile how executives make strategy 12-3 Differentiate resources, capabilities, and core competencies 12-4 Assess approaches to create value 12-5 Diagram the features and functions of the value chain 12-6 Compare global integration and

Questions 12-1. Which element of Zaras strategy do you believe best explains its success? "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among your students and therefore, no correct answer is provided." "All questions

CHAPTER THIRTEEN COUNTRY EVALUATION AND SELECTION OBJECTIVES 13-1 Elaborate on the significance of location in IB operations 13-2 Illustrate why comparing countries through scanning is important and how it connects to final location choices 13-3 Discern major opportunity and risk variables and how to prioritize and relate them when deciding whether and where to expand

Questions 13-1. Discuss the risks that an international restaurant company such as Burger King would have by operating abroad rather than just domestically. "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among your students

CHAPTER FOURTEEN EXPORT AND IMPORT OBJECTIVES 14-1 Explain the principles and practices of exporting 14-2 Articulate the motivations and methods of exporting 14-3 Understand export startup and expansion 14-4 Explain the principles and practices of importing 14-5 Articulate the motivations and methods of importing 14-6 Describe the problems and pitfalls that challenge international traders 14-7 Differentiate the resources

Questions 14-1. Analyze two challenges that SpinCent overcame in developing its export activity. Describe how it overcame them. "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among your students and therefore, no correct answer

CHAPTER FIFTEEN DIRECT INVESTMENT AND COLLABORATIVE STRATEGIES OBJECTIVES 15-1 Comprehend why export and import may not suffice for companies achievement of IB objectives 15-2 Explain why and how companies make wholly owned foreign direct investments 15-3 Ascertain why companies collaborate in international markets 15-4 Compare and contrast forms of and considerations for selecting an international collaborative arrangement 15-5

Questions 15-1. After reading the chapter, explain the advantages for Meli to own its hotels versus managing them for other organizations. "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among your students and therefore,

CHAPTER SIXTEEN THE ORGANIZATION OF INTERNATIONAL BUSINESS OBJECTIVES 16-1 Profile the evolving idea of organization in the MNE 16-2 Interpret classical organization structures 16-3 Interpret neoclassical organization structures 16-4 Differentiate the systems used to coordinate international activities 16-5 Differentiate the systems used to control international activities 16-6 Explain the purpose and characteristics of organizational culture CHAPTER OVERVIEW Structuring organizations is a

Questions 16-1. Identify three advantages of working for Gore. Do you find them appealing? "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among your students and therefore, no correct answer is provided." "All questions

PART SIX MANAGING INTERNATIONAL OPERATIONS CHAPTER SEVENTEEN MARKETING GLOBALLY OBJECTIVES 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting 17-2 Discuss the pros and cons of adaptation versus global standardization of products 17-3 Describe pricing complexities when selling in foreign markets 17-4 Recognize the advantages and problems of using uniform promotional marketing

Questions 17-1 The chapter explains five international marketing orientations. Which one applies most to Tommy Hilfiger? Explain why. The strategic marketing orientation indicates a firm is committed to continually serving foreign target markets and to making incremental product adaptations to satisfy local customers. Similar marketing principles apply in domestic and foreign markets;

CHAPTER EIGHTEEN GLOBAL OPERATIONS AND SUPPLY-CHAIN MANAGEMENT OBJECTIVES 18-1 Define what is meant by global supply-chain management 18-2 Describe the different facets of global operations strategies 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management 18-4 Explain how information technology is used in global operations and supply-chain management 18-5 Summarize how quality management

Questions 18-1. Although Apples inbound logistics began with Apple controlling the assembly of its computers, it shifted to having suppliers acquire raw materials with contract manufacturers handling most of the production and assembly of final products. Why did they do this, and what are the major challenges Apple faces? "All questions marked

CHAPTER NINETEEN INTERNATIONAL ACCOUNTING AND FINANCE ISSUES OBJECTIVES 19-1 Explain the crossroads of accounting and finance 19-2 Identify the major factors affecting the development of accounting objectives, standards, and practices 19-3 Describe international accounting standards and the process of global convergence 19-4 Demonstrate how companies account for foreign-currency transactions 19-5 Determine how companies can translate foreign-currency financial statements 19-6

Questions 19-1. What is the unique market niche for GPS, and what does it have to offer compared to larger banks and other financial institutions? "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among

PART TWO COMPARATIVE ENVIRONMENTAL FRAMEWORKS CHAPTER 2 THE CULTURAL ENVIRONMENTS FACING BUSINESS OBJECTIVES 2-1 Explain why culture, especially national culture, is important in IB, but tricky to assess 2-2 Grasp the major causes of national cultural formation and change 2-3 Discuss major behavioral factors influencing countries business practices 2-4 Recognize the complexities of cross-cultural communications 2-5

Questions 2.1 Assume you are a manager in a multinational company that needs to send a team of three to five people to Saudi Arabia for about two weeks to investigate the feasibility of selling your products there. What advice would you give them to help assure that cultural problems do not

CHAPTER TWENTY INTERNATIONAL HUMAN RESOURCE MANAGEMENT OBJECTIVES 20-1 Profile international human resource management 20-2 Distinguish the perspective of the expatriate 20-3 Differentiate the staffing frameworks used by MNEs 20-4 Describe expatriate selection 20-5 Appraise expatriate preparation 20-6 Summarize expatriate compensation 20-7 Profile expatriate repatriation 20-8 Describe expatriate failure CHAPTER OVERVIEW Firms the world over agree on the importance of qualified personnel to achieve

Questions 20-1. Identify three compelling reasons to pursue an expatriate assignment. "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among your students and therefore, no correct answer is provided." "All questions marked with this

Chapter 3 THE POLITICAL AND LEGAL ENVIRONMENTS FACING BUSINESS OBJECTIVES 3-1 Explain how politics and laws influence business 3-2 Appraise the principles and practices of the political environment 3-3 Discuss the contemporary state of political freedom 3-4 Interpret political risk 3-5 Appraise the principles and practices of the legal environment 3-6 Describe key legal issues facing international

Questions 3.1 Recommend a perspective an MNE could use to make sense of the political situation in China "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among your students and therefore, no correct answer

Chapter 4 THE ECONOMIC ENVIRONMENTS FACING BUSINESSES OBJECTIVES 4-1 Explain the value of economic analysis 4-2 Differentiate the types of economic environments 4-3 Explain the idea of economic freedom 4-4 Differentiate the types of economic systems 4-5 Interpret indicators of economic development, performance, and potential 4-6 Profile elements of economic analysis CHAPTER OVERVIEW When companies source, manufacture, and/or market products

Questions 4-1 Transformations such as the Comeback happen quite rarely. Their infrequency, however, only amplifies their revolutionary impact on our lives. Identify from the case how your life has changed, or will likely change, given the comeback of emerging economies. For a point of comparison, think about what you have learned

CHAPTER FIVE GLOBALIZATION AND SOCIETY OBJECTIVES 5-1 Describe the trade-offs among different stakeholders in MNE activities 5-2 Evaluate the major economic effects of MNEs on home and host countries 5-3 Explain the broad foundations of ethical behavior 5-4 Identify the cultural foundations of ethical behavior 5-5 Illustrate how ethical behavior is affected by different legal attitudes 5-6 Show

Questions 11.1 What are the major challenges GE faces in adopting a green strategy while keeping all of its stakeholders happy? "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among your students and therefore, no

PART THREE THEORIES AND INSTITUTIONS: TRADE AND INVESTMENT CHAPTER SIX INTERNATIONAL TRADE AND FACTOR-MOBILITY THEORY OBJECTIVES 6-1 Understand why policymakers rely on international trade and factor mobility theories to help achieve economic objectives 6-2 Illustrate the historical and current rationale for interventionist and free trade theories 6-3 Describe theories that explain national trade patterns 6-4

QUESTIONS 6.1 Using the framework in Table 6.1, explain which of the theories relate to Taiwans trade policy during each of the eras described in the case. "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to

CHAPTER SEVEN GOVERNMENTAL INFLUENCE ON TRADE OBJECTIVES 7-1 Recognize the conflicting outcomes of trade protectionism 7-2 Assess governments economic rationales and outcome uncertainties with international trade intervention 7-3 Assess governments noneconomic rationales and outcome uncertainties with international trade intervention 7-4 Describe the major instruments of trade control 7-5 Classify how companies deal with governmental trade influences CHAPTER OVERVIEW This

QUESTIONS 7-1. List the advantages and disadvantages for the U.S. protection of its catfish industry. "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion among your students and therefore, no correct answer is provided."

CHAPTER EIGHT CROSS-NATIONAL COOPERATION AND AGREEMENTS OBJECTIVES 8-1 Define the three major types of international economic integration 8-2 Explain what the World Trade Organization is and how it is working to reduce trade barriers on a global basis 8-3 Summarize the major benefits of regional economic integration 8-4 Compare and contrast different regional trading groups 8-5 Describe the

QUESTIONS 8-1. Why did the Europeans try to protect their auto industry from Japanese imports, and do you think this was fair to European consumers? "All questions marked with this blue star in the textbook are also found as discussion board questions in the MyLab. These are meant to prompt discussion

PART FOUR WORLD FINANCIAL ENVIRONMENT CHAPTER NINE GLOBAL FOREIGN-EXCHANGE MARKETS OBJECTIVES 9-1 Define what foreign exchange is and who the major players are in the foreign-exchange market 9-2 Summarize the major characteristics of the foreign-exchange market 9-3 Compare and contrast spot, forward, options, and futures markets 9-4 Explain some of the major aspects of the foreign-exchange

Questions 9-1. The United Emirates, of which Dubai is a member, is one of the Gulf Cooperation Council members. How does it compare with the other GCC countries in terms of total population and the nonimmigrant population as a percentage of total population? How important do you think migration and therefore

According to the text, what is the most common concern that expatriates have before they move overseas? A) reestablishing a social life B) missing friends and family C) learning a foreign language D) adapting to the culture ALearning Outcome: Identify and discuss the components of the global human resource management process ALearning Outcome: Identify and

The marketing approach a company takes internationally should be compatible with its overall aims and strategies. TRUE TRUE TRUE The lack of cultural guidebooks and research specifically for international managers poses a significant problem for global firms. FALSELearning Outcome: Explain how differences in culture affect the international business environment FALSELearning Outcome: Explain

Totalitarianism is a political ideology that typically involves constant indoctrination of the population by agents of the government to eliminate dissent. TRUE TRUE TRUE The collapse of communism in the late 1980s and early 1990s led to a more widespread adoption of the principles of capitalism. TRUE TRUE TRUE One advantage of centralized

What is the primary difficulty associated with dismantling developed countries' agricultural subsidies? A) Rural areas in the United States, the European Union, and Japan are disproportionately represented in their governments. B) Developing countries put pressure on developed countries to maintain the subsidies so that they receive food products at a lower price. C)

It is most accurate to say that within most nations' borders, people largely share such essential attributes as ________ and ________. A) work attitudes; occupations B) lifestyles; education level C) education level; ethnicity D) values; language D D D A U.S. firm is acquiring an existing company in Germany rather than starting up a new

The major trade groups in South America are CAN and Mercosur. TRUE TRUE TRUE The Malcolm Baldrige National Quality Award is an example of a general standard that is presented annually to companies that demonstrate quality strategies and achievements. TRUE TRUE TRUE Producers are affected by exchange rate changes because goods manufactured

Hotel chains are large providers of international management services through collaborative operations. All of the following are reasons for this EXCEPT which one? A) Some governments have restricted foreign ownership in hotels. B) Local hotel owners may be very knowledgeable about real estate, but know little about hotel operations. C) Local companies can

Export controls are highly effective for digital products, such as computers, TVs, and cameras. FALSELearning Outcome: Discuss arguments for and against government intervention in international business FALSELearning Outcome: Discuss arguments for and against government intervention in international business FALSE Learning Outcome: Discuss arguments for and against government intervention in international business Most

Licensing companies commonly negotiate a "front-end" payment from licensees to cover ________ transfer costs. A) employee B) brand name C) technology D) copyright CLearning Outcome: Explain the implications of foreign direct investment for both host and home country CLearning Outcome: Explain the implications of foreign direct investment for both host and home country C Learning Outcome:

The theory of absolute advantage holds that there are advantages to trade because different countries can produce different goods more efficiently than others. TRUELearning Outcome: Compare and contrast theories of international trade TRUELearning Outcome: Compare and contrast theories of international trade TRUE Learning Outcome: Compare and contrast theories of international trade When

Which of the following statements is most likely true about the postconventional level of moral development? A) Individuals learn what is moral but not why such behavior is moral. B) Individuals behave morally because they fear negative repercussions. C) Individuals learn how to conform to society's values through observation. D) Individuals behave morally because

NAFTA is a good example of ________. A) trade divestment B) trade diversion C) the theory of trade disruption D) the theory of trade implementation B B B The view that globalization is inevitable is most likely based on the belief that ________. A) international organizations will replace nation-states B) protesters against globalization will be persuaded to

Studies of repatriated employees regularly report that most knew what their company position would be when they returned home but were uncertain about their likely new workplace practices. FALSELearning Outcome: Identify and discuss the components of the global human resource management process FALSELearning Outcome: Identify and discuss the components of the

If a U.S.-based MNE translates its German subsidiary's financial statements from euros into dollars using the current-rate method, how would it recognize translation gains and losses? A) Gains and losses would be taken to the income statement. B) Gains and losses would be recognized on the balance sheet in owners' equity. C) Gains

Expatriate failure, defined in broad terms, refers to the ________. A) manager's premature return home due to poor job performance B) manager's miscues, which give competitors a market advantage C) unintentional dilution of the company's core competency D) poor expatriate selection procedures of the MNE DLearning Outcome: Identify and discuss the components of the global

When a company does business in another country whose official language is the same as the company's home country, employees can assume that although some spellings are different, words will mean the same thing. FALSELearning Outcome: Explain how differences in culture affect the international business environment FALSELearning Outcome: Explain how differences in

The long-term financing dimension of cash management ________. A) deals with the selection, issuance, and management of long-term debt and equity B) is unaffected by currency changes because everyone borrows in U.S. dollars C) focuses on the analysis of investment opportunities D) is independent of the capital structure of an MNE ALearning Outcome: Discuss the

An advantage of collaborative agreements is the ability to spread faster geographically. TRUELearning Outcome: Summarize the main entry strategies and modes that businesses use to enter into foreign markets TRUELearning Outcome: Summarize the main entry strategies and modes that businesses use to enter into foreign markets TRUE Learning Outcome: Summarize the main

EDI is software that can link information flows from different parts of a business and from different geographic areas. FALSE FALSE FALSE Collaborative agreements allow companies to specialize more in those activities that best fit their competencies. TRUELearning Outcome: Summarize the main entry strategies and modes that businesses use to enter into

Small and medium-size enterprises, such as SpinCent as seen in the opening case for chapter 14, account for ________ of all U.S. exporters. A) 38% B) 54% C) 79% D) 98% DLearning Outcome: Discuss the roles of exporting, importing, and countertrade in international business DLearning Outcome: Discuss the roles of exporting, importing, and countertrade in

If a foreign subsidiary is located in a low tax country, the parent company would probably use a ________. A) high transfer price on inventory shipped from the parent to the subsidiary B) high transfer price on goods sold by the subsidiary to the parent C) low transfer price on inventory shipped from

Which type of exchange rate arrangement is based on supply and demand? A) soft peg B) hard peg C) crawling D) floating DLearning Outcome: Summarize the roles of the international monetary system and global capital market DLearning Outcome: Summarize the roles of the international monetary system and global capital market D Learning Outcome: Summarize the roles

Committing resources to one country usually means forgoing or delaying projects in others. TRUELearning Outcome: Describe how global production and logistics decisions are made TRUELearning Outcome: Describe how global production and logistics decisions are made TRUE Learning Outcome: Describe how global production and logistics decisions are made Innovation is the ability of

An effective code of conduct reports results to external stakeholders. TRUE TRUE TRUE An internal code of conduct is a set of guidelines, recommendations, and rules issued by entities within society but outside the firm with the intent of affecting the behavior of international business entities in order to enhance corporate

The ________ sets the expatriate's salary in terms of the salary of a comparable job in the city where the MNE has its headquarters. A) host-based method B) home-based method C) headquarters-based method D) culturally based method CLearning Outcome: Identify and discuss the components of the global human resource management process CLearning Outcome: Identify and

All of the following forces are leading to convergence of accounting standards around the world EXCEPT ________. A) global integration of capital markets B) need of MNE's to raise capital outside of their home markets C) pressure from investors for more uniform standards D) regional and political harmonization C C C MedCo uses an IT

Which of the following ideas calls for assessing a country's performance based on factors such as life expectancy, leisure time, and income equality? A) microeconomics B) happynomics C) macroeconomics D) green economics B B B Which of the following would LEAST likely be caused by a high inflation rate? A) rules against increasing export prices B) inability

A common law system is based on tradition, judge-made precedent, and usage in which the courts assign a preeminent position to existing case law to guide dispute resolution. TRUE TRUE TRUE The government considers itself a better judge of resource allocation than businesses or citizens in a market economy. FALSELearning Outcome: Discuss

Market economies are primarily characterized by ________. A) formal cooperation among government, companies, and workers to achieve stable growth B) heavy government spending and high taxation to pay for a range of social services C) minimal governmental participation D) restricted consumer powers CLearning Outcome: Discuss arguments for and against government intervention in international business CLearning

Logistics is also known as materials management. TRUE TRUE TRUE Strategies to reduce operational costs are linked to efficiency. TRUELearning Outcome: Describe how global production and logistics decisions are made TRUELearning Outcome: Describe how global production and logistics decisions are made TRUE Learning Outcome: Describe how global production and logistics decisions are made

In the long run, MNEs must adequately meet the needs of all stakeholders in order to prosper and survive. TRUE TRUE TRUE The factor proportions theory holds that countries should concentrate production on those products that use their most abundant production factors. TRUELearning Outcome: Compare and contrast theories of international trade TRUELearning

An advantage of the geocentric outlook to staffing is ________. A) encouraging workers to appreciate the unique virtues of a particular country B) giving people a flexible perspective for fitting operations to different countries C) removing most behavioral barriers to fully adapting to the chosen local market D) tapping learning opportunities around the world

When examining economic and demographic variables to compare countries' sales potential for your product, which the following should you NOT consider? A) Countries may depend heavily on the import of raw materials. B) Consumers in some countries may more conveniently substitute certain products than consumers in some other countries. C) Consumers in developing

British MNEs are more likely to use the forecast exchange rate to set the budget. TRUELearning Outcome: Describe the role of accounting standards in international business TRUELearning Outcome: Describe the role of accounting standards in international business TRUE Learning Outcome: Describe the role of accounting standards in international business On average, workers

The process of shifting production to a foreign country is known as outsourcing. FALSELearning Outcome: Discuss trends in and the debate over globalization FALSELearning Outcome: Discuss trends in and the debate over globalization FALSE Learning Outcome: Discuss trends in and the debate over globalization Very few commodity agreements are successful in bringing