Book Title
International Business: The Challenge of Global Competition 13th Edition

BUS 53841

February 28, 2019
In the United States, punitive damage rulings have no measureable effect on medicine.
Greater profits may be obtained by either increasing total revenue or decreasing the cost
of goods sold.
Seeing what needs to be done is a management, rather than leadership, element.
Arbitration provides foreign businesses a forum other than the U.S. court system to
address disputes that involve U.S. sellers or buyers.
In the antitrust area, the United States is concerned with the impact of the business deal
on the consumer, whereas the EU focus is on the competitive structure of the
marketplace, so it pays attention to rivals.
Monetary policies control the collecting and spending of money by governments.
Research on global change has led to well-developed theories of the process of global
According to the text, the self-absorption criterion is probably the biggest cause of
international business blunders.
When developing and assessing strategic alternatives, it is important to remember that
companies competing in international markets confront two opposing forces: reduction
of costs and adaptation to local markets.
Microsoft is an example of how a company can avoid multiple antitrust laws in multiple
jurisdictions, thanks to equalization agreements.
Few international companies are organized by function at the top level.
International freight, insurance, and packing can add as much as 8 to 10 percent to the
quoted price, depending on the sales term used.
The Global Reporting Initiative has made little effort in establishing a framework for
global 3BL reporting, despite its UN collaboration.
One way that the WTO defines dumping is the selling of a product abroad for less than
the average cost of production in the importing nation.
In the year 2008, twice as much FDI invested in the United States was spent in
acquiring established businesses than in setting up new ones.
The United States and Canada are small power distance countries because they expect a
level playing field, socially, at least at the ideal level.
Climate differences explain differences in human and economic development because
the less temperate climates limit mental powers.
A good example of the relationship between water supply and population concentration
A. eastern Europe
B. China
C. Australia
D. Japan
Partnerships between or among competitors, customers, or suppliers that may take one
or more of various forms, both equity and nonequity, are known as:
A. licenses.
B. joint ventures.
C. wholly owned subsidiaries.
D. strategic alliances.
E. management contracts.
Licensing provides income for:
A. fashion designers.
B. computer manufacturers.
C. magazine publishers.
D. all of the above.
The principal ingredient(s) that a franchiser exports is:
A. a brand name.
B. marketing strategy.
C. a set of proven procedures.
D. two of the above.
Which of the following is(are) true about the spouses of expatriates?
A. Many are unable to legally work in the host nation.
B. Nearly one-quarter were employed during the course of the expat assignment.
C. Many experience stages of grief, similar to the loss of a loved one, due to career
effects of the assignment.
D. Two of the above.
For purchases of capital goods such as manufacturing equipment, many U.S. buying
organizations now use _______________ to analyze purchasing decisions, including
trade-in or future estimated salvage value.
A. e-procurement
B. activity-based costing
C. total costing
D. life-cycle costing
E. none of the above
A. two of B, C, and D.
B. is a weapon used by some terrorists to extract ransom.
C. can result in counterproductive results if ransom is paid for hostages.
D. can be insured against by obtaining kidnapping, ransom, and extraction (KRE)
The FCPA includes:
A. wording consistent with the United Kingdom Bribery Act to facilitate application
B. specific explicit rules with clear definitions of terms that U.S. companies must
follow in their foreign operations.
C. all accounting processes, including the accounting of transfer payments.
D. foreign tax liabilities and other adjustments specific to business outside the home
E. uncertainties that make its application problematic.
Unconventional sources of petroleum such as oil sands and shale are often grouped
together and referred to as:
A. nonrenewable hopes.
B. new sources.
C. peak sources.
D. heavy oil.
The three major taxes governments use to generate revenue are:
A. VAT, income tax, and withholding tax.
B. sales tax, VAT, and income tax.
C. property tax, VAT, and sales tax.
D. income tax, property tax, and sales tax.
Due to the expanding importance of foreign-owned firms in local economies, host
governments have made their policies toward these companies:
A. more strict.
B. more liberal.
C. harsher.
D. more confronting.
E. two of the above.
If people consider the context and relationships when they make decisions about the
application of rules, they are likely to be:
A. universalist.
B. particularist.
C. achievement-oriented.
D. individualist.
Zimbabwe is an example of:
A. a richly endowed country that has suffered because of government instability.
B. a government that expropriated private property, that is, nationalized it, and then
redistributed it.
C. a country whose leadership stole the 2008 election.
D. all of the above.
Is the WTO's idea of "fair competition" really a code phrase for free trade?
A. Yes, the WTO is in favor of free trade and only free trade under all circumstances.
B. Not really. Trade relationships among nations can be exceedingly complex, and the
WTO supports fair competition, which may mean freer trade rather than free trade.
C. Yes, the WTO stands for trade liberalization, which requires transparency, economic
reform, and no protectionism, regardless of the member nation's economic situation.
D. Yes. The WTO supports free trade and the term fair competition is used to obtain
buy-in from nations opposed to trade liberalization.
According to the text, decisions on the standardization of design are affected by:
A. competitive factors.
B. cultural factors.
C. regulatory factors.
D. all of the above.
The main difference between a free trade area (FTA) and a customs union is that in a
customs union, there is:
A. no need for passport controls.
B. a shared border patrol.
C. shared currency.
D. a common external tariff.
In planning, there has recently been a decided move among many firms:
A. to use advanced statistical techniques to help produce voluminous and detailed
strategic plans.
B. toward a less structured format and a shorter plan.
C. to concentrate on factors that can be easily quantified.
D. to make detailed forecasts and project them out at least five years.
E. two of the above.
Incoterms include:
A. FAS and DAF.
B. CFR and COD.
D. SAE and EBI.
E. DOA and EDP
Petroleum, a relatively cheap nonrenewable energy source, is:
A. in abundant supply but is not environmentally clean.
B. being increasingly depleted and is expected to run out in another 50 years, but in the
meantime, improved retrieval techniques are being developed.
C. clean, cheap, and available, but most of the reserves are located in countries whose
leadership is critical of the industrialized world.
D. expected to run out in another 10 years and needs to be replaced with renewable
energy sources quickly.
The sooner the team achieves high levels of trust, the sooner the team can:
A. relax and wait for deadlines.
B. rank its members by skills.
C. set up its norms.
D. move to a constructive focus on the task.
E. allocate power.
According to the text, the reasons international firms enter foreign markets are linked
A. the desire to increase profits and sales.
B. the desire to invest excess capital from domestic markets.
C. the desire to protect profits and sales from being eroded by competitors.
D. all of the above.
The following arrangement can provide a firm with foreign products:
A. domestic subsidiary.
B. wholly owned subsidiary.
C. foreign sales office.
D. two of the above.
Material culture includes:
A. what people in the culture make, such as tools, art, and everything material.
B. tapestries but not their frames and the wool or other fabric before it is woven.
C. only manufactures of which the culture is proud.
D. only pottery, glassware and eating utensils.
In establishing the team, the leader wants to:
A. set boundaries for the team.
B. encourage strong member identification with the team and team norms.
C. direct activities so the team can meet its goals.
D. encourage team members to know one another.
E. A and B.
The segment approach to investigating markets requires that markets should be which
of the following?
A. Large
B. Protected
C. Capturable
D. All of the above
E. A and C
Foreign environmental forces often operate differently than domestic environmental
forces because:
A. they are uncontrollable.
B. force values are different.
C. changes are difficult to assess.
D. two of the above.
In U.S. industry, the proportion of purchased materials in the overall cost of goods sold
has been rising for several decades, to a level of ________ percent today.
A. 40
B. 45 to 60
C. 55 to 79
D. 65 to 74
E. over 80
The Fisher effect states that the real interest rate:
A. is the nominal rate plus the recorded inflation rate.
B. is the only measure to use in calculating PPP.
C. is the nominal rate minus the expected inflation rate.
D. is the difference between the nominal rate and the inflation rate.
ASEAN began as a defensive alliance of 10 Asian nations concerned about:
A. trade barriers in the West.
B. translation issues for their export products.
C. the spread of communism in their region.
D. Japan's influence in the region.
Assessment instruments can be used to:
A. determine job performance for global assignments.
B. measure cross-cultural adaptability and global leadership competencies.
C. train managers in global leadership.
D. train managers to assess global arena performance.
Leading global change is:
A. just like leading domestic change.
B. like leading domestic change, but exponentially more complex due to globalization.
C. similar in every location on the globe.
D. a well-understood process with models and theories underpinning it.
E. C and D.
Subsidies are problematic because they:
A. are administered as a form of political patronage.
B. aid export businesses or protect domestic businesses from imports.
C. encourage nationalization.
D. violate UN agreements.
E. two of the above.
The regionalized organization:
A. has the advantage that it avoids duplication of product and functional specialists.
B. seems to be popular with companies that have diverse products, each with different
product requirements, competitive environments, and political risks.
C. often encounters problems with global product planning.
D. two of the above.
In a forward market hedge for transaction exposure, the firm sells forward:
A. foreign currency receivables for the home currency, matched to the due date of the
B. domestic currency receivables for the foreign currency, matched to the due date of
the receivable.
C. its anticipated sales in the foreign currency.
D. its projected earnings in the foreign currency, which will be repatriated.