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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 […]

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? 1-2 As you read the chapter, identify and show […]

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 […]

Questions 10-1. Do you think Venezuela should drop its currency, the VEF, and adopt the U.S. dollar? Why or why not? 10-2. If Venezuela does not replace the VEF with the dollar, what do you think will happen to the […]

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 […]

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 […]

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 […]

Questions 12-1. Which element of Zara’s strategy do you believe best explains its success? 12-2. Assess the difficulty a competitor, such as Gap, faces trying to re-create the resources, capabilities, and core competencies that define Zara. “All questions marked with […]

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 […]

Questions 13-1. Discuss the risks that an international restaurant company such as Burger King would have by operating abroad rather than just domestically. 13-2. How has Burger King’s headquarters location influenced its international expansion? Has this location strengthened or weakened […]

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 […]

Questions 14-1. Analyze two challenges that SpinCent overcame in developing its export activity. Describe how it overcame them. 14-2. Based on its Asian experiences, map a sequence to guide SpinCent’s export expansion to sub-Saharan Africa. “All questions marked with this […]

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 […]

Questions 15-1. After reading the chapter, explain the advantages for Meliá to own its hotels versus managing them for other organizations. 15-2. After reading the chapter, discuss the advantages and risks for Meliá in its non-equity joint venture with Jin […]

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 […]

Questions 16-1. Identify three advantages of working for Gore. Do you find them appealing? 16-2. What mix of knowledge, skills, and abilities would make you a high-performing Associate at Gore? “All questions marked with this blue star in the textbook […]

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 […]

Questions 17-1 The chapter explains five international marketing orientations. Which one applies most to Tommy Hilfiger? Explain why. 17-2 The chapter explains five elements in the marketing mix (product, pricing, promotion, branding, and distribution). In which of these have Tommy […]

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 […]

Questions 18-1. Although Apple’s 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 […]

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 […]

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? 19-2. What do you think are the major obstacles to success for GPS in Europe? […]

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 […]

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 […]

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 […]

Questions 20-1. Identify three compelling reasons to pursue an expatriate assignment. 20-2. Explain why you would seek or, alternatively, avoid an expatriate assignment. “All questions marked with this blue star in the textbook are also found as discussion board questions […]

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 […]

Questions 3.1 Recommend a perspective an MNE could use to make sense of the political situation in China 3.2 How would you advise an MNE to manage the intricacies of China’s legal environment? “All questions marked with this blue star […]

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 […]

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. […]

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 […]

Questions 11.1 What are the major challenges GE faces in adopting a green strategy while keeping all of its stakeholders happy? 11.2 From the standpoint of environmental impact, do you think it is more important for GE to reduce its […]

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 […]

QUESTIONS 6.1 Using the framework in Table 6.1, explain which of the theories relate to Taiwan’s trade policy during each of the eras described in the case. 6-2. Map 6.1 shows that 61.4 percent of Taiwan’s exports go to only […]

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 […]

QUESTIONS 7-1. List the advantages and disadvantages for the U.S. protection of its catfish industry. 7-2. As you read through the chapter, list the protective measures (instruments) the United States has not used to protect its catfish industry. Briefly explain […]

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 […]

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? 8-2. What has Toyota done to be more successful in Europe, and why do you […]

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 […]

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 […]

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 Which of the […]

The marketing approach a company takes internationally should be compatible with its overall aims and strategies. The lack of cultural guidebooks and research specifically for international managers poses a significant problem for global firms. FALSE Learning Outcome: Explain how differences […]

Totalitarianism is a political ideology that typically involves constant indoctrination of the population by agents of the government to eliminate dissent. The collapse of communism in the late 1980s and early 1990s led to a more widespread adoption of the […]

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 […]

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 A U.S. firm is […]

The major trade groups in South America are CAN and Mercosur. 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 Producers are affected […]

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 […]

Export controls are highly effective for digital products, such as computers, TVs, and cameras. Most world trade takes place between raw material exporters and manufacturing exporters. FALSE An arbitrageur is an exporter that seeks to conduct countertrade in emerging markets. […]

Licensing companies commonly negotiate a “front-end” payment from licensees to cover ________ transfer costs. A) employee B) brand name C) technology D) copyright A ________ is a special outlook, skill, capability, or technology that runs through the firm’s operations, weaving […]

The theory of absolute advantage holds that there are advantages to trade because different countries can produce different goods more efficiently than others. When entering foreign countries, many franchisors encounter difficulty in transferring the domestic success factors of product and […]

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 […]

NAFTA is a good example of ________. A) trade divestment B) trade diversion C) the theory of trade disruption D) the theory of trade implementation The view that globalization is inevitable is most likely based on the belief that ________. […]

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. In collaborative arrangements, when one partner cedes control to another partner, it […]

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 […]

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 […]

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. A growing number of MNEs 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 […]

An advantage of collaborative agreements is the ability to spread faster geographically. A currency sells at a forward premium when the forward rate is greater than the spot rate. TRUE Learning Outcome: Describe the functions of the foreign-exchange market A […]

EDI is software that can link information flows from different parts of a business and from different geographic areas. Collaborative agreements allow companies to specialize more in those activities that best fit their competencies. TRUE Learning Outcome: Summarize the main […]

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% Which of the following accurately identifies a difference between […]

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 […]

Which type of exchange rate arrangement is based on supply and demand? A) soft peg B) hard peg C) crawling D) floating Research has shown that past exchange rates are an accurate predictor of future exchange rates ________. A) only […]

Committing resources to one country usually means forgoing or delaying projects in others. Innovation is the ability of the production process to make different kinds of products and to adjust the volume of output. FALSE Learning Outcome: Describe how global […]

An effective code of conduct reports results to external stakeholders. 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 […]

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 Which of the […]

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 […]

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 Which of the following would LEAST likely be […]

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. The government considers itself a better judge of resource allocation than businesses […]

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 […]

Logistics is also known as materials management. Strategies to reduce operational costs are linked to efficiency. TRUE Learning Outcome: Describe how global production and logistics decisions are made According to the unity-of-command principle, workers and organizations benefit the most from […]

In the long run, MNEs must adequately meet the needs of all stakeholders in order to prosper and survive. The factor proportions theory holds that countries should concentrate production on those products that use their most abundant production factors. TRUE […]

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 […]

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 […]

British MNEs are more likely to use the forecast exchange rate to set the budget. On average, workers displaced by imports earn higher wages in the new jobs they accept. FALSE Learning Outcome: Discuss arguments for and against government intervention […]

The process of shifting production to a foreign country is known as outsourcing. Very few commodity agreements are successful in bringing together supplier and consumer countries to stabilize commodity prices. TRUE Learning Outcome: Discuss arguments for and against regional economic […]