Businesspeople measure material culture to determine whether a market can support
production activities.
Critics of globalization argue that it eliminates jobs in developing nations.
The most important disadvantage of a strategic alliance is that it can create a future
local or even global competitor.
Export-processing zones are special areas in which companies engage in tariff-free
importing and exporting.
With the help of microfinance, low-income entrepreneurs can borrow money at
competitive rates without having to put anything up as collateral.
The process of recruitment involves screening and hiring the best-qualified applicants
with the greatest performance potential.
The eclectic theory states that firms undertake foreign direct investment only when the
features of a particular location make the location appealing for investment.
Scenario: Excelsior’s Limited
Excelsior’s Limited, a manufacturer of health and beauty aids, is expanding its presence
in several countries around the world. Excelsior’s president is surprised at some of the
responses the company is receiving from other countries.
A compound tariff on an imported product is calculated partly as a percentage of its
stated price and partly as a specific fee for each unit.
The scope of a corporation’s operations refers to the size of its operations.
The process of assessing a company’s ability to produce enough output to satisfy market
demand is called process planning.
Capacity planning applies only to manufacturing companies.
Countertrade is not an option for smaller companies because of the cash outlays
involved.
Scenario: Cleanshot USA in Russia
When Cleanshot USA, a photography products company, decided to enter the
international arena, it chose Russia as its main market. Although Russia has been in
transition for years, Cleanshot managers believe their company has tremendous
opportunities there.
Expropriation is the term used to describe a host-country government seizing the assets
of a foreign corporation and providing no compensation in return.
The power of the General Agreement on Tariffs and Trade (GATT) to settle trade
disputes is what sets it apart from the World Trade Organization (WTO).
Which of the following would companies do in markets that require long payback
periods?
A) divest operations
B) implement retrenchment strategies
C) emphasize on decruitment
D) reinvest profits
Which of the following statements is true of tariffs?
A) They are the major source of government revenue in developed nations.
B) They increase products’ appeal to buyers.
C) They lower the effective prices of imports.
D) They protect domestic producers.
Globalization is characterized by ________.
A) the demise of democracy within a nation
B) national boundaries becoming less relevant
C) the fortification of trade barriers
D) rigid foreign relations policies
As a promotional strategy, manufacturers of products that are commonly sold through
department and grocery stores often use ________.
A) a push strategy
B) a pull strategy
C) retrenchment strategy
D) stability strategy
________ is a major component of a promotion mix.
A) Distribution
B) Market segmentation
C) Pricing
D) Public relations
Which of the following is true of government interventions in a country’s trade
practices?
A) A major economic motive behind government intervention in trade is the protection
of jobs.
B) A major political motive behind government intervention in trade is the protection of
infant industries.
C) Government interventions help companies take advantage of economies of scale and
be the first movers in their industries.
D) Governments intervene to protect only imports, as the protection of exports is
handled by private agencies.
Which stage of the market-screening process is John involved in, while examining
government regulations and bureaucracy in a market?
A) assessment of the national business environment
B) selection of the market
C) identification of the basic appeal for markets
D) measurement of market potential
Scenario: Frankfurter Friday
Betty Cleveland is the vice president of Frankfurter Friday, a highly successful hot dog
joint in Oceania. Her company decides to expand to Asia and identifies China as the
ideal market. Before she leaves for China, she studies their culture extensively and
discovers that the number four is considered extremely unlucky, that not everybody is
fluent in China’s official language-Mandarin-and that punctuality is a highly valued trait
in the country.
One of Betty’s employees, Dan, oversees the hot dog joint’s decor. He designs all menu
cards in shades of red and gold because those are considered lucky colors in China. He
also uses his knowledge of Feng Shui when designing the building’s interior. The
cultural component Dan is involved in is ________.
A) ethics
B) stratification
C) imperialism
D) aesthetics
In the interbank market, the process of aggregating the currencies that one bank owes
another and then carrying out that transaction is called ________.
A) swapping
B) dumping
C) hedging
D) clearing
A(n) ________ advantage is the advantage of conducting a particular economic activity
in a specific area because of the characteristics of that area.
A) internalization
B) ownership
C) comparative
D) location
Scenario: Not-So-Free Freeland
Freeland is a semi-closed economy whose government believes in protecting national
identity and building a self-sustained economy. The government’s priority is to protect
local jobs and provide opportunities to Freeland’s emerging industries to flourish
without the threat of external competition. Which of the following motives illustrates
Freeland’s efforts to protect local jobs?
A) political motive
B) economic motive
C) cultural motive
D) social motive
Describe the four key approaches to corporate strategy, providing an example of each.
Describe the main political motives behind government intervention in trade.
Describe the most important features of the international monetary system created by
the Bretton Woods Agreement.
What is countertrade? Explain the concept of buyback as a type of countertrade, and
discuss buyback as a joint venture configuration.
Differentiate between worldwide and dual pricing. Which one of these is more difficult
to achieve and why?
One argument in the debate surrounding globalization is about the inequality between
nations. Discuss the major points of the inequality between nations argument and
describe how falling barriers to trade and investment might help reduce the inequality
between nations.
Describe the Foreign Corrupt Practices Act, and explain how it relates to corporate
social responsibility.