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Indicate whether the statement is true or false.
1. The estimated 2010 misery index figures suggest significantly less misery for almost every country as compared to
figures at the beginning of the century.
a. True
b. False
2. A low-context culture is a culture in which communication is used primarily to enhance personal relationships.
a. True
b. False
3. Collectivism means a preference for a tightly knit social framework in which individuals look after one another and
organizations protect their members’ interests.
a. True
b. False
4. A country’s physical facilities that support economic activities make up its infrastructure.
a. True
b. False
5. The goal of the European Union is to create a powerful single market system for Europe’s millions of consumers.
a. True
b. False
6. When Harbor Trades, a Korean-based company, makes resources including technology, managerial skills, and patent
and trademark rights available to Nano Technologies, a Russian company, thereby allowing Nano to make products
similar to Harbor’s, it is engaging in exporting.
a. True
b. False
7. According to the GLOBE Project, gender differentiation refers to the extent to which a society maximizes gender role
differences.
a. True
b. False
8. The primary emphasis of polycentric companies is on their home countries.
a. True
b. False
9. Large international firms typically are called multinational corporations.
a. True
b. False
10. An MNC is managed as an integrated worldwide business system.
a. True
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b. False
11. For the past several years, foreign companies have invested more business in India than they spent anywhere else in
the world.
a. True
b. False
12. An example of global outsourcing is seen when Gap, Inc. uses low-cost Caribbean labor to cheaply produce its
clothing, and then finishes off and sells its clothing in the United States.
a. True
b. False
13. A high humane orientation means that a society encourages toughness, assertiveness, and competitiveness.
a. True
b. False
14. Licensing means engaging in the international division of labor so that work activities can be done in countries with
the cheapest sources of labor and supplies.
a. True
b. False
15. Most American shoppers support the movement of certain jobs overseas if it benefits them in the form of lower prices.
a. True
b. False
16. Because of cheap labor, most international business firms are headquartered in the less developed countries of Asia
and South America.
a. True
b. False
17. The social value of uncertainty avoidance is evident in countries like Greece, which supports beliefs that promise
certainty and conformity among its citizenry.
a. True
b. False
18. The basic management functions of planning, organizing, leading, and controlling are the same whether a company
operates domestically or internationally.
a. True
b. False
19. Many U.S. managers fail to realize that the values and behaviors that typically govern how business is done in the
United States do not translate to the rest of the world.
a. True
b. False
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20. The least costly and least risky direct investment is called a greenfield venture.
a. True
b. False
21. Business has become a unified, global field as trade barriers fall, communication becomes faster and cheaper, and
consumer tastes converge.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
22. Jana has a high tolerance for the unstructured, the unclear, and the unpredictable. She can best be described as having:
a. high uncertainty avoidance.
b. low uncertainty avoidance.
c. a high degree of individualism.
d. a low degree of individualism.
e. a low level of power distance.
23. Your company is interested in producing and marketing a line of coffee that will penetrate the Chinese market. Your
firm is willing to supply the equipment, products, product ingredients, trademark and trade name rights, managerial
advice, and standardized operating system to entrepreneurs. Which of the following types of strategy are you going to
use?
a. Wholly owned foreign affiliate
b. A greenfield venture agreement
c. A franchise
d. An export agreement
e. Barter trade
24. Which organization originated and supports the idea of small businesses operating on a global level?
a. GLOBE
b. EU
c. NAFTA
d. ASEAN
e. GATT
25. The maquiladora industry along the Texas–Mexico border on the Mexico side uses cheap labor for assembling
products. This lowers the price for U.S. consumers and is an example of:
a. licensing.
b. joint venture.
c. outsourcing.
d. franchising.
e. a greenfield venture.
26. The management of business operations conducted in more than one country is called:
a. global management.
b. international management.
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c. outsourcing management.
d. planning management.
e. domestic management.
27. Which of the following has a goal to guide the nations of the world toward free trade and open markets?
a. GATT
b. WTO
c. GLOBE
d. EU
e. NAFTA
28. A.R.C. is a large nonprofit humanitarian aid organization that has been forced to pull out of several African markets in
recent years due to civil wars and large-scale violence. This demonstrates which of the following frequently cited
problems for international companies?
a. Political instability
b. Communist governments
c. Economic instability
d. Political risk
e. Financial risk
29. All of the following are cultural dimensions as defined by the GLOBE Project, except:
a. assertiveness.
b. gender differentiation.
c. performance orientation.
d. humane orientation.
e. masculinity.
30. Which of the following refers to engaging in the international division of labor so as to obtain the cheapest sources of
labor and supplies regardless of country?
a. Franchising
b. Licensing
c. Market entry strategy
d. Outsourcing
e. Activity
31. How many nations signed on for negotiation when GATT was created in 1947?
a. 15
b. 23
c. 28
d. 40
e. 57
32. Digitec Company has recently decided to design and manufacture a laptop that retails for under $50, in an effort to
make information technology available to people in places like rural Africa and rural India. This is known as which of the
following types of strategy?
a. Bottom of the pyramid strategy
b. Skimming the barrel strategy
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c. Cream of the crop strategy
d. Top of the peak strategy
e. Base price strategy
33. Which of the following countries possesses a high degree of assertiveness?
a. Spain
b. Sweden
c. Japan
d. Iceland
e. Switzerland
34. Which of the following countries possesses a high performance orientation?
a. Israel
b. Sweden
c. Taiwan
d. Russia
e. Venezuela
35. The extent to which trade and investments, information, social and cultural ideas, and political cooperation flow
between countries is called:
a. standardization.
b. industrialization.
c. globalization.
d. internationalism.
e. linguistic pluralism.
36. The legal-political environment includes:
a. infrastructure.
b. tariffs and taxes.
c. religion.
d. exchange rates.
e. demographic profile.
37. Kim, a Japanese expatriate working in Denmark, tends to use communication primarily to build personal social
relationships. She feels that relationships and trust are more important than business. Kim is surprised that her business
associates in Denmark do not share the same views. Based on this information, Kim most likely grew up in which of the
following types of culture?
a. Human-oriented
b. Passive
c. Assertive
d. Low-context
e. High-context
38. As a first step into international business, which two countries are most companies going to today?
a. Russia and Japan
b. Sweden and Germany
c. China and India
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d. Brazil and Philippines
e. Indonesia and Brazil
39. Go RVing, a U.S. company, built a subsidiary from scratch in England. This is an example of:
a. franchising.
b. a greenfield venture.
c. a joint venture.
d. exporting.
e. licensing.
40. Your grocery store in India is having trouble getting the local farmers to supply you with the proper produce. This is a
problem with India’s:
a. product market.
b. resource market.
c. infrastructure.
d. economy.
e. power distance.
41. Austria’s cultural preference is for achievement, heroism, assertiveness, work centrality, and material success. This
would be considered:
a. power distance.
b. individualism.
c. masculinity.
d. ethnocentrism.
e. collectivism.
42. A foreign terrorist kidnaps your firm’s marketing vice president while the vice president is in the host country. This is
a harsh example of:
a. economic development.
b. infrastructure.
c. political risk.
d. international law.
e. social risk.
43. Language, values, religion, and education all describe which of the following dimensions in the international
environment?
a. Economic
b. Legal
c. Political
d. Sociocultural
e. Technological
44. A company’s risk of loss of assets, earning power, or managerial control due to politically based events or actions by
host governments is referred to as:
a. MFN.
b. political risk.
c. tariffs.
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d. political instability.
e. terrorism.
45. __________ place an emphasis on a worldwide perspective.
a. Polycentric companies
b. Geocentric companies
c. Ethnocentric companies
d. Regiocentric companies
e. Domestic companies
Enter the appropriate word(s) to complete the statement.
46. The __________ is the single European currency that has replaced several national currencies.
47. MNCs that are oriented toward the markets of individual foreign host countries are considered __________.
48. __________ means engaging in the international division of labor so that work activities can be done in countries with
the cheapest sources of labor and supplies.
49. A country that places emphasis on fairness and values kindness would be described by the GLOBE Project as high in
__________.
50. __________ stands for preference for achievement, heroism, assertiveness, work centrality (with resultant high stress),
and material success.
51. __________ is the criterion traditionally used to classify countries as developed or developing.
52. A multinational corporation typically receives at least __________ percent of its total sales revenues from outside the
parent’s home country.
53. An alliance begun in 1957 to improve economic and social conditions among its members, it has evolved into the 28–
nation __________.
54. __________ (objects, taboos, holidays) is a sociocultural factor in the international environment.
55. The economy of __________, already the seventh largest in the world, is projected to move into fourth place by 2050.
56. In a(n) __________, people use communication primarily to exchange facts and information.
57. Riots, revolutions, civil disorders, and frequent changes in government that affect the operations of an international
company show __________ in a country.
58. The __________ dimension of the global mind-set means knowing about the global environment and global business,
mentally understanding how cultures differ, and having the ability to interpret complex global changes.
59. List five of the countries that make up the European Union (EU).
60. List three examples of a country’s infrastructure.
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61. Briefly describe the social characteristic of ethnocentrism and explain how this can have an impact on the success of
an international manager.
62. Identify and briefly explain at least two key factors in economic, sociocultural, and political-legal environments that
affect an organization.
63. Briefly explain the difference between high power distance and low power distance.
64. Explain NAFTA.
65. Direct investing means that the company is involved in managing the productive assets in a foreign country. There are
three options for direct investing. Name and compare these three options.
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Answer Key
1. False
2. False
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26. b
27. b
28. a
29. e
30. d
31. b
32. a
33. a
34. c
35. c
36. b
37. e
38. c
39. b
40. b
41. c
42. c
43. d
44. b
45. b
46. euro
47. polycentric companies
48. Global outsourcing
49. humane orientation
50. Masculinity
51. Per capita income
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