Chapter 02 – The Role of Globalization in HR Policy and Practice
Chapter 2 The Role of Globalization in HR Policy and Practice
True/False Questions
[QUESTION]
1. Third parties that specialize in facilitating importing and exporting are called intermediaries.
2. Licensing is one means of entering a foreign market.
3. A licensee leases the right to use intellectual property of another firm.
4. Management contract is a special form of licensing.
5. Some firms prefer to enter international markets through actual ownership of business.
6. Technological innovations, lower costs associated with skilled labor, and direct access to
growing markets are all putting pressure on companies to decrease global expansion.
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© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
7. A major disadvantage to joint ventures is the potential for conflict between the partners.
8. While multinational corporations sell their brand of product in multiple global locations, they
typically use raw materials sourced from a local source.
9. Strategic alliances permit organizations to share risk and expenses, and also enable each
partner to tap into and benefit from the strengths of the other.
10. Factors associated with a company’s task environment influence a company’s decision to
invest in the international market.
11. It is difficult to operate in a decentralized fashion in a multilocal industry because of the high
need for coordination.
12. In global industries, business policies and practices can be as centralized or as decentralized,
as management prefers.
13. The degree of cultural differences is one of the factors that affect the level of difficulty
involved in operating HR on an international basis.
Chapter 02 – The Role of Globalization in HR Policy and Practice
[QUESTION]
14. People from highly individualistic societies attach more importance to freedom and
challenges in jobs.
15. HR within a global company is complex because of the different cultures, politics and laws
that exist between locations.
16. Individuals from societies with high levels of uncertainty avoidance tend to have a strong
task orientation, prefer flexible work hours, and feel a strong loyalty to their employer.
17. Large corporations such as Walmart, are generally successful when they decide to embark on
ventures within foreign markets, and because of their size, do not need to be concerned about the
complexities associated with international HR issues within smaller companies.
18. Individuals from societies with a short-term orientation expect quick results, personal
steadiness and stability, and place less emphasis on status.
19. An organization’s degree of foreign investment in relation to its domestic investment does
not play a role in increasing the complexity of managing HR internationally.
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© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
20. The UNCTAD index is based on a composite of two ratios: foreign assets to total assets and
foreign sales to total sales.
21. The level of decentralization and empowerment within a culture can be understood by a
reference to the ______ within that culture.
A) Individualism
B) Power distance
C) Dichotomy
D) Short-term orientation
E) Collectivism
22. The successful placement of employees within international assignments is important to the
success of a transnational organization. Studies have shown that difficulty adjusting to a
different ______ is the number one reason for the failure of international assignments.
A) level of collectivism
B) level of compensation
C) set of laws
D) currency
E) culture
23. An agreement that allows an independent organization or individual to run a business using
the name of an established business for a fee is known as.
A) franchising
B) exporting
C) licensing
D) contract manufacturing
E) management contract
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© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
24. The organization gives up a major amount of control over processes when using contract
manufacturers. A concern with this approach is:
A) variation in advertising content
B) lack of ability to relieve excess capacity
C) irresponsible use of brand names and trademarks
D) product quality concerns
E) the difficulty of finding reliable distributors
25. When an organization directly owns part of or an entire business in a foreign market, it is
called __________.
A) franchising
B) exporting
C) licensing
D) contract manufacturing
E) foreign direct investment
26. A(n) __________ allows an organization to make direct investment very gradually while
sharing its risk with a knowledgeable, experienced other party while maintaining independence.
A) Joint venture
B) Alliance/partnership
C) Management contract
D) Contract manufacturing
E) Foreign direct investment
27. A(n) __________ involves the purchase of an up-and-running business that has established
suppliers and customers.
A) Start-up operation Acquisition
B) Alliance
C) Strategic alliance
D) Sole ownership
E) Acquisition
Chapter 02 – The Role of Globalization in HR Policy and Practice
[QUESTION]
28. In __________ industries, a firm’s competitive position in one country is significantly
affected by its position in other countries.
A) Local
B) Decentralized
C) Centralized
D) Global
E) Multilocal
29. __________ refers to the extent to which members of a society accept delayed gratification
of their material, social, or emotional needs.
A) Individualism
B) Power distance
C) Dichotomy
D) Long-term versus short-term orientation
E) Uncertainty avoidance
30. The UNCTAD index is based on a composite of ratios including:
A) Foreign assets, sales, and debt.
B) Domestic sales, employment and profit.
C) Foreign assets, employment, and profit.
D) Foreign assets, sales, and employment.
E) Domestic assets, employment and sales.
31. A(n) __________ leases the right to use its intellectual property to another firm.
A) Licensor
B) Licensee
C) Franchisee
D) Contractor
E) Expatriate