The three main team leadership activities in any environment are establishing the team,
coaching team members, and setting team norms.
Supply chains are an integral part of global quality and cost management initiatives,
since a typical company’s supply chain costs can represent over 80 percent of assets.
The ultimate managers of strategic planning and strategy making are the executive
board of a corporation.
According to the text, any activity in the value chain can be outsourced except for
strategy and management.
Where litigation should occur has to do with the location of the problem and is usually
clear to both the defendant and the plaintiff.
Among the skills necessary for a global leader are cultural adaptability and an ability to
build global teams.
As a result of Bretton Woods and the dollar’s use as a proxy for gold, the United States
ran up a balance-of-payments deficit of around $56 billion, which led to the United
States going off the gold exchange standard in 1971.
The licensee generally pays a fixed sum when signing a license agreement and then
royalties of 5 to 7 percent of sales over the life of the contract.
Promotion is the paid, nonpersonal presentation of ideas, goods, or services by an
identified sponsor.
As the term is used in the text, foreign business is business whose activities are carried
out across national borders.
U.S. accounting practice is guided by the Securities and Exchange Commission (SEC)
and the International Accounting Standards Board (IASB), and it follows standards
known as generally accepted accounting principles (GAAP).
Heavy oil is oil weighted down with an extra carbon molecule, and it can be gasified
using the Fischer-Tropsch process.
Bodies of water, much like deserts and mountains, also serve as barriers to trade.
Wholesale importers are independent merchants that buy for their own account.
In a customs union, common external tariffs are added to an existing FTA, as found in
the Southern African Customs Union and Mercosur.
Some evidence suggests that pioneers gain and maintain a competitive advantage in
new markets.
The Bretton Woods meeting in 1944 established a fixed-rate exchange system among
Allied governments that was imposed on the Axis governments.
Products placed in a bonded warehouse do not pay import duties until they are
removed.
Importing and foreign direct investment are two approaches to meeting overseas
demand.
The Internet has made direct exporting much easier.
The effectiveness of every organization depends, to a great extent, on how well its
human resources are used.
In organizing their international activities, there are five dimensions along which
management can globalize or standardize these activities.
There is reverse culture shock when an expatriate returns to the home country and
company.
According to the text, differences in taste, a demand variable, can reverse the direction
of trade predicted by the theory.
In a firm without a global product policy, the preference of the operations management
people in the home office has always been to localize the product or at least the
production process in as many overseas plants as possible.
Because it is a high polluter, coal is on the decline as an energy source.
All decisions are made either at the IC headquarters or at the subsidiary level.
The dynamic capability theory states that for a firm to invest overseas, it must have
three kinds of advantages: ownership specific, internalization, and location specific.
Every coast between 20 and 30 degrees of the equator (north or south) is dry.
A basic cultural decision for the marketer is whether to position the product as foreign
or local, and which way to go seems to depend on the country, the product type, and the
distribution channel.
Often new exporters think that they won’t have to localize their approach, that a
marketing technique or distribution system that works in one country will work in
another.
The great disparity in income throughout the world promotes worldwide product
standardization.
Geographical proximity is rarely a major reason for trade.
Porter’s diamond model suggests that Switzerland should not be competitively
successful.
When engaging in international business, banks are concerned with the merchandise,
not the documents.
Finance is best left decentralized in international firms so that local efficiencies and
opportunities can be accessed.
The Global Reporting Initiative has made little effort in establishing a framework for
global 3BL reporting, despite its UN collaboration.
An examination of the 2009 Human Development Report shows that only 23 of the 182
countries for which data were available had average annual GDP per capita growth rates
that were higher than the U.S. growth rate for the period 1990-2007.
In HC cultures, time tends to be:
A. loosely conceived.
B. tightly planned.
C. monochronic.
D. polychronic.
Most companies enter a market in stages. Which of the following is not listed in the
textbook as a stage of market entry?
A. Exporting
B. Establishment of a foreign sales company
C. Establishing a website
D. Local assembly
E. Local manufacturing
In response to China’s requirement to censor Internet searches:
A. two of B, C, and D.
B. Google chose not to enter that country.
C. Google refused to engage in censorship, including a disclosure on its site that no
censorship had occurred.
D. Google provided users of its Chinese site with a hot link to its uncensored U.S. site,
to circumvent censorship.
E. none of the above.
The balance part of the BOP is explained by:
A. the accounts being double-entry, so they are always balanced.
B. imbalances showing immediately.
C. actions governments take to achieve the balance.
D. none of the above.
According to the text, which of the following dimensions provide(s) the basis for
organizational subdivisions at the secondary, tertiary, and still lower levels?
A. Two of B, C, and D
B. National subsidiary
C. Domestic or international
D. Function
E. All of B, C, and D
All UN member-countries belong to the UN’s:
A. Peace Jurga.
B. General Assembly.
C. Internal Court of Justice.
D. Committee on Intelligence.
When Lady Gaga took her act to India, she adapted her product, ______, to the local
environment by _______.
A. song performances; changing rhythm tracks to fit Indian preferences.
B. song performance; having an Indian singer redub her songs in Hindi.
C. clothing; adapting the clothing line to the thinner Indian figure.
D. all of the above.
E. two of A, B, and C.
The concept of strict liability, as found in the U.S. legal system, applies:
A. to harm done by the designer/manufacturer without the need to prove negligence.
B. to harm done within narrow limits, considering the design of the product.
C. to children harmed by products in both the United States and the EU.
D. strictly to harm caused by the designer/manufacturer, so no penalties outside of
damages can be awarded.
E. none of the above.
The presence of tattoos suggests social outcasts universally, based on:
A. their use in Japan by the Yakuza.
B. a primitive human desire to change and thus control the body.
C. a universal aesthetic.
D. nothing, because this statement is not accurate.
The experience of suppliers to the youth market indicates that this is an international
market segment:
A. like the retiree market.
B. unlike any other market.
C. like the market for consumer goods.
D. like the market for luxury goods.
E. none of the above.
According to a 12-country study conducted by Ernst & Young, _____ percent of U.S.
companies are engaged in some form of strategic alliance.
A. 25
B. 50
C. 65
D. 75
E. 90
Environment as used in the textbook is the forces surrounding and influencing the life
and development of the firm and is classified as:
A. controllable or uncontrollable.
B. domestic or foreign.
C. internal or external.
D. all of the above.
E. A and C.
Discussion of bribery and transparency has generally not come into despite the Foreign
Corrupt Practices Act (FCPA), the OECD convention, and the UN initiative.
In order to really understand another culture:
A. living in it is important, but you don’t need to know the spoken language.
B. both the spoken and unspoken languages are important to understand.
C. the unspoken language is enough because it allows you access to the culture.
D. A and C.
Some of the variables that determine which decision is made where include:
A. product and equipment.
B. competence of subsidiary.
C. state-of-the-art communication networks.
D. two of the above.
E. all of A, B, and C.
The level of merchandise exports in 2010, worldwide, was:
A. $3.7 trillion.
B. $8.5 trillion.
C. $15.2 trillion.
D. $18.9 trillion.
E. $23.4 trillion.
International business can be a powerful political force, in part because:
A. a recent Supreme Court ruling in the United States allows corporate contributions to
political races.
B. many top management team members are willing to accept roles with national
security agencies.
C. about half the world’s 100 largest economic units are firms.
D. business is all about achieving political goals.
E. two of the above.
The lowest corporate tax rates are found in:
A. the United States, Brazil, India, and France.
B. Brazil, China, Australia, and Japan.
C. Peru, Australia, Italy, and Luxembourg.
D. Switzerland, Ireland, Singapore, and Russia.
Social loafing is:
A. unusual in virtual teams.
B. a danger in virtual teams.
C. discouraged through a mixture of individual and team-based rewards.
D. more common in face-to-face teams than global virtual teams.
E. B and C.
The regionalized organization seems to be popular with companies that:
A. operate in many diverse foreign regions.
B. favor licensing as a form of market entry.
C. manufacture products with a low technological content requiring strong marketing
ability.
D. manufacture products incorporating high technology in industrialized regions.
E. two of the above.
Customs procedures in many countries often:
A. are transparent and fair.
B. discriminate against imports and favor exports.
C. are online and impersonal.
D. two of the above.
E. all of A, B, and C.
Understanding the religious beliefs of foreign markets is:
A. not really necessary because religion is one and the Truth is universal.
B. useful, because religions affect attitudes and beliefs across cultures.
C. not necessary because religion is not a part of culture; it is beyond culture.
D. useful because there is always the possibility of conversion.
A polycentric staffing policy is appropriate when:
A. there are low levels of pressure for cost reduction and high levels for localization.
B. information technology is of increasing importance.
C. all of A, B, and D.
D. international companies are entering India, where there are more women in
management.
E. two of A, B, and D.
The Trompenaars dimension that describes a society whose rules regulate behaviors for
all members and are applied evenly is:
A. particularist.
B. universalist.
C. feminist.
D. specific.
International firms employ contract manufacturing:
A. as a means of entering a foreign market without investing in plant facilities.
B. to subcontract assembly work or the production of parts to independent companies
overseas.
C. A and B.
D. as a means of direct foreign investment.
_______ refers to the transportation of any domestic good or service to a destination
outside a country or region.
A. Importing
B. Foreign direct investment
C. Exporting
D. International business
E. None of the above
Legal uncertainties have affected international business, and:
A. they have prevented IB growth.
B. they have not, though, slowed down the growth of IB; instead, they have made it
more complex.
C. prices and insurance costs have risen.
D. fewer large businesses want to be involved across national borders due to the
uncertainties of the legal environment.
E. none of the above.
The UN is important to international business for many reasons, including that it:
A. develops standards and norms in technical areas.
B. monitors trade patterns.
C. arranges trade missions to developing nations.
D. arranges international funding for business education.
The theory of resource endowment:
A. explains why France exports cosmetics, wine, commercial aircraft, and clothing.
B. states that a nation will trade goods that can be produced with the production factor
that is most abundant.
C. explains why an automobile can be made either by hand or by a capital-intensive
process.
D. explains why transportation costs may be ignored when calculating the costs of
imports.
E. none of the above.
Tactical plans:
A. are operational plans.
B. are broad, operational plans on which strategic plans are based.
C. are specific and short-term compared to strategic plans.
D. all of the above.
E. two of A, B, and C.
Financial dumping is:
A. sending excess financial resources to other nations.
B. a government’s decision to subsidize low interest rates for purchases of its exports.
C. allowing a bank to have a low level of capital to total assets.
D. all of the above.
E. two of A, B, and C.
The International Energy Agency 2010 report observes that an energy revolution
underway may well lead to:
A. a 27 percent drop in oil usage.
B. North America becoming the center of alternative energy research.
C. Africa and the Middle East increasingly relying on fossil fuels.
D. Europe relying increasingly on nuclear.
What are the four primary dimensions that need to be considered when designing the
structure of an international company, and why are they important?
How might U.S. law affect international managers?
Discuss the requirements of viable markets under the segment approach.
What two aspects of the culture frameworks would you share with a colleague leaving
on her first foreign assignment, and why?
Discuss the terrorist threat of kidnapping and how it impacts international business.
What are the reasons for sourcing globally, and what options are available to a firm that
wishes to engage in global sourcing?
Why do nations care about having outlets to the ocean? Are landlocked nations at a
disadvantage?
Explain the purpose of a mission statement, a vision statement, values statements, and
objectives.
What is international strategy and why is it important?
Why is the closer integration of functions important for new product development?
What are the benefits of standardization of global operations?
Discuss barriers to trade, using examples to illustrate your points.
Describe approaches to international dispute settlement.
There are two basic approaches to international dispute settlement, litigation and
arbitration. Litigation can be complex when international parties are involved. Which
court has jurisdiction? Which law applies?
The owners of private companies sometimes complain that government-owned
companies have unfair advantages.
Explain what a “global mindset” includes and why this may be important for
international companies and their managers.
What challenges often confront the spouses of expatriates, and what options are
available for managing these challenges?
How does the notion of sustainable business compare to Milton Friedman’s assertion
that the focus of business should be only on the bottom line?
Why is the design of products and services important to global supply chain
management, and what are the main design alternatives that are available?
