The International Finance Corporation (IFC) acts as an investment banker, arranging
private risk ventures in developing countries.
The GLED model is used to develop management skills.
Managers may consider entering a market in which strong competition already exists if
they believe entering a competitor’s home market will distract the competitor’s attention
from the new entrant’s own home market.
Lack of top management commitment to export is often a problem with new exporters.
Indirect procurement includes such items as maintenance, repair, raw materials and
components, office equipment, and other services and supplies.
It is possible to hide profits with transfer prices.
Consolidation is the process in which a company’s various results are aggregated into
one report.
Due to developments such as a rapid rise in the level of uncertainty in many areas of
international business, many firms have moved toward more structured strategic
planning formats and longer planning documents.
Allied and Axis governments met in Bretton Woods in the final days of World War II.
International pricing involves setting prices of goods for export to both unrelated and
related firms.
Foreign business refers to the operations of a company outside its home or domestic
market.
Export pricing and sales agreements for foreign representatives are part of the
marketing mix.
A disadvantage for companies that insist on less risky transactions, such as a letter of
credit, is that they may be losing business to competitors that sell on open accounts.
As Kofi Annan, former secretary-general of the UN, observed, the UN exists to help us
master the challenges of our common, global destiny, which we can do only if we face
them together.
Generally, the deeper the immediate market penetration desired, the greater the product
modification must be.
Scenarios are forecasts that extrapolate from past data to make predictions.
In a DAP (delivered at named place), the buyer is responsible for paying for all
transportation costs from the seller’s location, including customs clearing, to the buyer’s
location.
The central idea of mercantilism is that there should be an export surplus so a nation
can accumulate precious metals.
Although the EU can influence the practices of businesses located in non-EU-member
countries, Microsoft has been able to maintain business in the EU much as it conducts
business in the United States.
If a company feels that it probably will send parent-country nationals abroad, it will
frequently encourage them to study the language and culture of the country to which
they are going.
Exporting is a way for firms to improve the efficiency of manufacturing equipment.
As humans, it is easier to think of ourselves as market segments that extend across
borders than as discrete country segments.
Being from another country qualifies expatriates for international status.
Alliances can allow a partner to acquire a firm’s technological or other competencies,
thereby raising important competitive concerns.
Coal and nuclear power are both in decline as energy sources.
Incoterms were created by the New York Chamber of Commerce and are revised every
year.
American depository receipts are held by a bank in the stock’s home country and these
receipts then are traded on the U.S. exchange.
According to the definitions in the text, a multidomestic firm is an organization that
attempts to standardize operations worldwide in all functional areas.
Material culture describes how people make things, who makes what, and why.
One benefit of exporting is that it can enable a company to serve markets where the
company has no or limited production facilities.
Market screening can assist firms that sell exclusively in the domestic market.
A sales company is part of indirect exporting.
Microsoft is an example of how a company can avoid multiple antitrust laws in multiple
jurisdictions, thanks to equalization agreements.
A geocentric staffing policy:
A. enables the practices used at headquarters to be transferred worldwide.
B. tends to be used with a global strategic orientation.
C. selects the best person for each job, without considering national origin.
D. two of the above.
E. all of A, B, and C.
Marketers everywhere need to be able to:
A. price the products or services so they are acceptable.
B. produce products that satisfy customers’ needs.
C. inform potential customers.
D. two of the above.
E. all of A, B, and C.
The continuum from insensitive to sensitive to foreign environment begins with
__________ and ends with __________.
A. basic consumer staples; high-style and faddish consumer products
B. industrial products; high-style and faddish consumer products
C. high-style and faddish consumer products; industrial products
D. basic consumer staples; industrial products
E. high-style and faddish consumer products; basic consumer staples
Patagonia recognizes that doing business following the traditional approach, focusing
on quarterly earnings, is not complete because this does not focus on:
A. the negative impact of the business.
B. the cost of environmental sustainability.
C. consumer needs for green merchandise.
D. triple-bottom-line (3BL) accounting.
In 1717, Sir Isaac Newton took Britain from the silver standard (pounds sterling) to:
A. floating exchange rates.
B. fixed exchange rates, using silver.
C. the gold standard, with fixed rates.
D. pegged rates.
The specific-diffuse dimension looks at:
A. work behaviors.
B. organizational loyalty.
C. attitudes toward public and private life.
D. attitudes toward paternalism.
The impact of the EU on the WTO could be said to be negative, since:
A. a country could belong to only one of these organizations.
B. the favored trade relationships among EU members are not extended to nonmember
countries, so the EU undercuts the WTO.
C. the euro threatens other hard currencies supported by the WTO, such as the dollar
and the yen.
D. the WTO does not collect dues from EU member-nations.
To set corporate objectives, management must first:
A. select a viable market segment.
B. quantify them.
C. define the firm’s mission.
D. research the market.
E. none of the above.
The international marketing manager’s task is more complex than that of the domestic
marketing manager because:
A. marketing strategies must be developed by assessing potential markets and analyzing
alternate marketing mixes.
B. it is usually not possible to have a single, standardized worldwide strategy for the
overall marketing mix.
C. the uncontrollable environmental forces vary widely among markets.
D. two of the above.
E. all of A, B, and C.
The extent to which members of a society expect and accept that power is to be
distributed unequally is termed by Hofstede as:
A. uncertainty avoidance.
B. feminist.
C. power distance.
D. nondemocratic.
This type of institution operates through laws and regulations, with coercion as the
regulative mechanism.
A. formal
B. informal
C. normative
D. cognitive
The level of service exports worldwide increased more than _______ between 1980 and
2010.
A. 4-fold
B. 6-fold
C. 10-fold
D. 12-fold
E. 17-fold
Mercantilists believed that:
A. merchants should import goods to raise the level of living.
B. governments should lower import duties.
C. a nation should have an export surplus in order to accumulate precious metals.
D. a nation should produce goods for which there is a comparative advantage.
E. two of the above.
The total product:
A. all of B, C, and D.
B. is what the customer buys.
C. includes the physical product and brand name.
D. includes the package.
E. two of B, C, and D.
A statistical technique that divides objects into groups so that the objects within each
group are similar is called:
A. trend analysis.
B. group classification analysis.
C. cluster analysis.
D. factor analysis.
E. none of the above.
At the end of World War II, the UN called for the conference that set up the World Bank
and the IMF. This conference was:
A. convened in San Francisco.
B. held at Yalta.
C. held at Grasleben, Germany.
D. held at Bretton Woods, New Hampshire.
The Panama Canal:
A. has to be enlarged for larger ship sizes.
B. increases shipping costs from New York to Los Angeles.
C. can handle Panamax-size ships.
D. makes shipping competitive with air freight.
E. reduces travel time between the U.S. West Coast and Europe by 21 days.
Because of the context in which the global team leader is acting, he or she:
A. confronts the added complexities created by globalization.
B. needs to speak foreign languages and understand foreign cultures.
C. needs to be able to cope with jet lag and cultural adjustment.
D. is sheltered from most domestic political activity.
E. needs to be aware of the possibility of terrorism, including electronic hacking.
Included in the differences between a traditional team and a global team is the
difference between:
A. one economic condition and many dissimilar economic conditions.
B. virtual and actual relationships.
C. hierarchy and flat structures.
D. individual and group goals.
E. assertive and aggressive goal setting.
Foreign business denotes:
A. a business whose activities involve crossing national borders.
B. the domestic operations within a foreign country.
C. an organization with multicountry affiliates.
D. an organization that attempts to standardize operations worldwide.
E. all of the above.
The interdependence that confronts global leaders results from:
A. needing to depend on others to implement change plans.
B. increased levels of linkage, both within and outside the company.
C. global logistics conditions.
D. outsourcing of manufacturing.
E. offshoring of personnel.
In the case of the United States, intrafirm trade accounts for ___ ___ percent of imports
of goods.
A. 15 to 30
B. 45 to 60
C. 35 to 45
D. 30 to 40
E. over 60
Which of the following is incorrect about scenario analyses?
A. The objective of the process is to force executives to question their assumptions
about the environment.
B. The process attempts to incorporate the uncertainty and potential changes that might
impact strategic and operational performance.
C. Managers develop scenarios and use them for discussion.
D. All of the above are incorrect.
E. None of A, B, or C is incorrect.
________ alliances are driven by similarity and integration.
A. Strategic
B. Trading
C. Pooling
D. Equity-based
E. None of the above
When an IC hires and trains local, host-country people, the IC often:
A. pays them too much and creates inflation.
B. overtrains them to IC culture-based standards.
C. may lose them to local firms or other ICs once they are trained.
D. encourages their transfer, causing brain drain.
E. two of the above.
The final step in the screening process will generally include:
A. a field trip.
B. the use of secondary data.
C. a cost-benefit analysis.
D. a visit to a trade fair.
E. all of the above.
International status is the status of:
A. every expatriate employee.
B. third-country nationals.
C. employees of international organizations.
D. the IC employee who is receiving all applicable allowances and bonuses plus perks.
E. two of the above.
Microloans are usually:
A. loans made in small, developing economies.
B. loans made to small, entrepreneurial businesses.
C. small loans made to small businesses, usually in developing countries.
D. pharmaceutical-backed loans.
One of the major differences between GAAP and the IFRS is that:
A. IFRS relies more on norms than does GAAP, which relies on expedience for
compliance.
B. IFRS is more lax than is GAAP.
C. IFRS relies on principles, whereas GAAP is rules-based.
D. A and C.
Market forces that set the relative prices of currencies are:
A. not influenced by government policies.
B. not influenced by world events.
C. influenced by many forces including forces external to business, such as world
events.
D. A and B.
Most significantly for the international manager, the balance of payments reveals:
A. demand for a firm’s products.
B. a firm’s financial position.
C. a country’s export patterns.
D. demand for a country’s currency and potential changes in its economic environment.
According to the text, approximately ______ of expatriates leave their firms during the
course of their overseas assignment.
A. 10 percent
B. 25 percent
C. 31 percent
D. nearly 40 percent
E. none of the above
According to the text, among the appealing factors of online advertising in the
international sphere is the following:
A. the Internet provides access to a broad, low-income market.
B. Internet communications are unregulated.
C. for some groups, the Internet may be among the best media choices.
D. all of A, B, and C.
E. two of A, B, and C.
Decisions to standardize product and equipment with which to make it and to tailor it to
fit each national market are most likely to be made by:
A. IC headquarters.
B. subsidiary headquarters.
C. LDC government officials.
D. none of the above.
E. two of A, B, and C.
What is the purpose of multilateral netting?
A. To increase market penetration
B. To increase levels of standardization
C. To decrease inflation risk
D. To reduce transaction costs and increase efficient use of funds
