Some of the culture dimensions that are involved in change are tolerance of ambiguity
and power distance.
Incoterms are 11 trade terms that describe the responsibilities of the buyer and seller in
international trade.
Factoring allows the exporter to be more competitive by selling on open account rather
than by means of the more costly letter-of-credit method.
Sustainable approaches in business usually involve trade-offs such as lower profits
compensated by reduced marketing costs and improved image/reputation.
In many companies, the purchasing function has been viewed as a prime candidate for
outsourcing to other firms, a trend encouraged by rapid developments in e-procurement.
The book value, or the value of the total outstanding stock, of all foreign direct
investment worldwide was $19 trillion at the beginning of 2010.
Although arbitration procedures may be confidential, enabling a company to avoid
unwelcome publicity accompanying an open court case, arbitration is generally slower
than law courts.
One reason for using home-country citizens overseas is to prepare them for high-level
positions at headquarters.
An important consideration in design is the extent to which the international company’s
products and services will be standardized across nations or regions.
Triple-bottom-line accounting is an example of sustainability with economic, social,
and environmental accountability.
To hedge the terrorism risk, there are insurance, antiterrorist schools, and even
companies to handle negotiations.
Feminine cultures in Hofstede’s dimensions care about relationships and are not focused
on business success. It is quality of life that matters.
An advantage of Internet advertising is its ability to reach all of the possible consumer
groups.
Translation exposure occurs when the subsidiary’s results are consolidated at the
corporate level.
Procedures are broad guidelines issued by upper management for the purpose of
assisting lower-level managers in handling nonrecurring problems.
Two of the concerns that management faces in designing the organizational structure for
an international company are (1) finding the most effective way to take advantage of
geographic differences and (2) coordinating the activities of departments to enable the
firm to meet its overall objectives.
In the case of the United States, intrafirm trade accounts for 30 to 40 percent of exports
of goods.
The forces in the international environment are the same as those in the domestic
environment except that they occur in foreign nations.
The potential of licensing for generating income has been more limited in recent years
because courts have not upheld patent infringement claims as much as they used to.
The export marketing plan does not include product characteristics, promotional plans,
and details on arrangements with foreign representatives.
Sales forecasts are both a control and a planning technique.
Decisions that work to the detriment of the subsidiary may be beneficial to the
enterprise.
The term international company refers to both global and multidomestic companies.
Expanded international trade is linked with the creation of more and better jobs.
Competencies are skills or abilities required in order to adequately complete a task.
A study of the liberal arts disciplines of history, political science, foreign languages, and
geography would be a helpful background for an aspiring global leader.
Incoterms are established by the UN Commission on International Trade.
Brazil, India, and the United States are among the highest corporate tax locations.
Interface, the manufacturer of Flor, is an example of a petroleum-based business that
has developed a sustainable model.
Adam Smith explained how countries can benefit from international trade even if they
lack any absolute advantage over their trade partners.
Licensing is a form of franchising.
Although the international airline segment is competitive, British Air as it is today
could not legally take over Delta or United.
A company’s organizational structure helps to determine where formal power and
authority will be located within the organization.
Employees hired in the host country are sometimes called inpatriates.
Only in communist countries do governments own the factors of production.
To avoid translation errors, the experienced advertising manager will use:
A. plenty of illustrations with short copy.
B. local translators.
C. back translation.
D. all of the above.
E. two of A, B, and C.
3BL gives companies the chance to measure and make public the social and
environmental effects of their decisions: they should welcome this, in part because:
A. what we tend to learn about companies is what is reported in the media, and that
reporting tends to be focused on problems.
B. it’s about time companies are held accountable for their actions.
C. right now we measure company decision results only at the economic level.
D. A and C.
According to the text, changes in the way corporate planning is done:
A. include greater attention being paid to sociopolitical developments.
B. include the use of advanced computing techniques to make detailed five-year
forecasts.
C. include heavy emphasis on the use of variables that can be quantified.
D. all of the above are correct.
E. two of A, B, and C.
A traditional approach to product design that involves a sequential approach to design
has been termed:
A. product-based design.
B. concurrent engineering.
C. over the wall.
D. sequenced design.
E. participative design.
The monopolistic advantage theory suggests that firms in oligopolistic industries are
likely to _______________ foreign direct investment when they have technical and
other advantages over indigenous firms.
A. increase
B. reduce
C. ignore
D. not change
E. none of the above
“Foreign direct investment without investment” is a term sometimes applied to:
A. franchising.
B. exporting.
C. a joint venture.
D. a management contract.
E. contract manufacturing.
What is the role of the home country in risk assessment?
A. It has no role.
B. It is a significant consideration.
C. It is used initially, but then more micro issues become the focus of CRA.
D. None of the above.
E. Two of A, B, and C.
Adam Smith claimed that:
A. governments, not market forces, should determine the directions, volume, and
composition of international trade.
B. a nation could trade advantageously if it had a comparative advantage.
C. market forces, not government controls, should determine direction, volume, and the
composition of international trade.
D. customers’ tastes are affected by income levels.
E. two of the above.
According to the text, political drivers of globalization include:
A. preferential trading agreements.
B. reduction of barriers to trade and foreign investment.
C. nationalization of much of the industry in formerly communist nations.
D. all of the above.
E. two of A, B, and C.
Government stability is understood to refer to a government’s:
A. policies—their ability to endure over time.
B. ability to keep itself in power.
C. two of A, B, and D.
D. ability to adjust to sudden changes by making radical policy changes.
E. all of A, B, and D.
In 2008, foreign firms investing in the United States spent about ____________ on
establishing new firms as they did on acquiring going firms.
A. twice as much
B. 25 percent as much
C. nine times as much
D. one-thirteenth as much
E. the same amount
Exposure netting is a transaction exposure hedging technique that is similar to:
A. leading and lagging.
B. a forward market contract.
C. multilateral netting.
D. a spot currency contract.
Two good places to begin country-level research are the websites of the:
A. CIA and UN.
B. UN and WTO.
C. BIAC and CIA.
D. specific country’s government and OECD.
__________ permits a firm to set up an export program with a minimum of cash outlay
and little special expertise.
A. A joint venture
B. Direct exporting
C. Franchising
D. Indirect exporting
E. Licensing
Foreign direct investment (FDI) includes all of the following except:
A. wholly owned subsidiary.
B. joint venture.
C. management contract.
D. strategic alliance.
E. none of the above. (All four are included within foreign direct investment.)
Counterarguments to the “protect domestic jobs from cheap foreign labor” argument
include:
A. the labor rate is not all of the labor cost or the production cost.
B. productivity per worker is what matters.
C. cheap foreign labor is a natural occurrence.
D. two of the above.
E. all of A, B, and C.
It is sensible for an IC to direct or allocate as much profit as reasonably possible to
subsidiaries in countries with:
A. two of B, C, and D.
B. the least currency controls.
C. lower taxes.
D. the highest rate of inflation.
E. all of B, C and D.
According to the text, a brand name has been pirated:
A. when a firm’s brand name has been registered by another firm, which is employing it
for its own product’s name.
B. when it is registered by someone who hopes to profit by selling the name back to the
originating firm.
C. if it is being used by sailors who are criminals.
D. two of the above.
E. all of A, B, and C.
Which of the following is true about trend analysis?
A. None of the following.
B. It is appropriate for use with the introduction of new products.
C. It is based on the assumption that past conditions are not an accurate predictor of the
future.
D. It accounts for the impact of entry by competitors.
E. B, C, and D
The oldest orderly marketing arrangement, which was disbanded through the WTO, is
the:
A. Multi-Fiber Agreement (MFA).
B. Jamaica Agreement.
C. Textile Co-operation Treaty (CTC).
D. Japanese truck export quota.
E. Paris Convention.
Dissimilar cultural patterns generally necessitate changes in food and other:
A. industrial products.
B. consumer goods.
C. luxury products.
D. basic consumer staples.
E. all of the above.
The Council of European Union, the primary policy-setting institution of the EU, is
composed of:
A. the member-states’ prime ministers or presidents.
B. the member-states’ ministers who represent the specific area being discussed.
C. elected members from across Europe, elected by country.
D. appointed representatives from each member-state.
Punitive damages in product liability cases can be awarded in:
A. Japan.
B. Japan and the EU.
C. the UK.
D. the United States
E. all of the above.
Home-country nationals may be used in host-country management because:
A. all of B, C, and D.
B. host-country nationals are unavailable.
C. home-country nationals are being groomed for IC headquarters.
D. IC headquarters wants one of its nationals in the host country.
E. two of B, C, and D.
According to the text, a management contract is useful for:
A. joint ventures.
B. earning money by providing know-how.
C. two of A, B, and D.
D. wholly owned subsidiaries.
E. all of A, B, and D.
The route to global leadership:
A. is well established on the MBA foundation.
B. has many options, depending on context.
C. involves recognizing the traits early because global leaders have skills they were
born with.
D. is dependent on early career success in accounting or auditing and knowledge of
foreign languages.
E. A and D.
Average growth rate in commercial energy use and real growth rate in GDP compose
the __________ index.
A. market size
B. market growth rate
C. e-commerce readiness
D. market factor
E. none of the above
The OECD has encouraged members to:
A. develop trade relationships within the OECD only.
B. eliminate bribery in all commercial transactions.
C. standardize electrical wave signals.
D. extend their tax regulations beyond their borders.
Quotas are a quantitative barrier that sets:
A. limits, established by the importer.
B. goals, established by the exporter.
C. precise quantities of imports or exports, based on price.
D. expectations on domestic and foreign sales.
E. two of the above.
When a firm offers its stock in a foreign market, it is:
A. encountering foreign currency exposure.
B. trying to limit its investor pool.
C. violating domestic law in the EU or United States.
D. cross-listing.
In some countries people are relatively loosely connected and tend to focus on
themselves and their immediate family. Hofstede would describe these countries as:
A. myopic.
B. xenophobic.
C. self-referential.
D. individualistic.