Countries in which strong competition already exists are eliminated from consideration
by most managers.
The more familiar, or the more similar, conditions in the host country are perceived to
be, the more likely headquarters is to rely on subsidiary management.
Physical forces inhibit efforts at international product standardization.
According to the text, the self-absorption criterion is probably the biggest cause of
international business blunders.
According to the text, environmental elements over which management does have some
control—including competitive, labor, and financial forces—are called internal forces.
Currency devaluation helps a nation avoid losing markets and regain competitiveness in
world markets.
Trend analysis assumes that past conditions will remain constant.
The GLED model suggests that there are some individual characteristics that are
antecedent to the development process.
The organization of an overseas sales force, the sales presentation, and training methods
are generally very similar to those employed in the home country.
Companies need to consider two types of measures when assessing strategic
performance: (1) measures of the company’s success in obtaining and applying required
resources, such as financial, technological, and human resources, and (2) measures of
the effectiveness of the company’s personnel, within and across the firm’s international
network of operations, in performing their assigned jobs.
Expectations of team leadership style are the same in all cultures.
Luxury items such as perfume can often be sold without adaptation in many different
foreign markets.
Scenario analysis can help managers to break away from their existing view of the
world and envision alternatives that might lie outside their traditional frame of
reference.
Market indicators are economic data that correlate highly with market demand for a
product.
One of the significant differences between formal and informal institutions is how they
gain compliance.
The decision of whether to finance by debt or equity may be influenced by the practices
of the local environment, that is, culture.
Market screening is a modified version of environmental scanning in which the firm
studies the stock market to eliminate the less desirable markets.
Companies with a regional strategic approach can use a polycentric staffing policy,
employing a variety of HCNs and TCNs.
Climate, topography, and natural resources refer to environmental scanning.
According to the text, Zara’s strategy of speed and flexibility has enabled the company
to eliminate inventory.
Country and region are units of analysis for market screening.
The current rate translation method translates current assets at the rate in effect when
they were acquired.
In designing an international organization, it is essential that the structures and systems
being implemented are consistent not merely with each other but also with the strategy
the company and its competitors are using.
Culture includes everything objective, and religion contains values and is thus not a part
of culture.
Creating an environment for team norms to come into play is especially useful in global
teams, because they are characterized by high levels of diversity.
A global company is an organization that attempts to standardize and integrate
operations worldwide in most or all functional areas.
Intermediate technology will create more jobs and require less capital than will
capital-intensive processes.
The primary reason for international trade is a lack of natural resources in the
developed nations.
Because of the importance of the workforce to the effectiveness of organizational
operations, a company’s approach to international human resource management should
drive its competitive strategy.
Managerial positions in overseas operations require more and different skills than do
purely domestic executive jobs.
Sources of successful managers for IC activities include the home country, the host
country, and a third country.
The influence of organizational culture on change efforts is stronger than the influence
of national culture.
The U.S. body that establishes accounting standards, the FASB, is:
A. a branch of the U.S. government.
B. elected by seat holders on the NYSE.
C. appointed by the chair of the U.S. House of Representatives Banking Committee.
D. a private organization.
What is a controlled foreign corporation?
A. A foreign company with one major stockholder in a foreign country
B. A subsidiary with the parent company having at least 50 percent ownership and
control
C. An FDI in which foreign owners own the corporation fully
D. A centralized structure for foreign ownership
Unconscious reference to one’s own cultural values when judging behavioral actions of
others in a new and different environment is called:
A. self-reference culture.
B. self-reference values.
C. self-reference criterion.
D. self-reference customs.
E. self-reference environment.
Intellectual property:
A. excludes intangibles, which is why it is a difficult area.
B. includes thoughts and ideas, but not tangible products.
C. includes anything that is a result of a creative process that does not have material
qualities.
D. includes anything that is the result of things created using someone’s intellect.
E. excludes things found in nature, such as natural colors, scents, and sounds.
Physical barriers that have led to the development of separate languages in the same
country are known as:
A. political and cultural patterns.
B. topographical barriers.
C. linguistic tariffs.
D. differentiating borders.
The consequence for management in a world out of control is a six-element recipe
developed at Massachusetts Institute of Technology for devising a system of distributed
control, which includes:
A. prepare a clear and integrated plan of action.
B. don’t change the simple things.
C. master complex tasks first.
D. all of the above.
E. two of A, B and C.
The Gold Key Service provided through many American embassies offers companies
the following:
A. orientation briefings.
B. market research.
C. introductions to potential partners.
D. assistance in developing a marketing strategy for the particular country.
E. all of the above.
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.
Regarding the annual outflows of foreign direct investment:
A. the overall volume that came from developing nations in 2009 was nearly five times
the level from those nations in 1990.
B. the proportion that came from the United States and Europe was nearly 50 percent in
2009.
C. much of the recent increase has been associated with mergers, acquisitions, and other
international investments made by companies in industries facing increased competition
and global consolidation.
D. nearly half went to China and its territories from 2007 to 2009.
E. all of the above.
In the new strategic planning process:
A. top management is assigning strategic planning to teams of line and staff managers
from the same business.
B. interaction with important customers and suppliers should be included.
C. governments and other stakeholdersshould be direct participants.
D. all of the above.
E. two of A, B, and C.
According to the text, the type of information a firm will need to judge country risks:
A. none of B, C, and D.
B. varies according to the nature of its business.
C. varies according to its size.
D. varies according to the length of time required to yield a satisfactory return.
E. two of B, C, and D.
The results of liberalized trade so far have been:
A. beneficial for developing economies.
B. harmful for developing economies.
C. unconnected to developed economies.
D. uneven for developing and developed economies.
An itemized projection of revenues and expenses for a future time period is a:
A. sales forecast.
B. budget.
C. marketing plan.
D. strategic plan.
E. none of the above.
Problems with the matrix structure include that:
A. two or more managers must agree on decisions, which can lead to slow decision
making.
B. special divisions often must be established to serve heterogeneous customer
segments.
C. global branding and production coordination are hindered.
D. all of the above.
E. two of A, B, and C.
Management would prefer global standardization of the marketing mix:
A. because each market demands it.
B. for cost savings.
C. to meet local conditions.
D. two of the above.
E. all of A, B, and C.
The marketed energy use has been dominated since 1980 by:
A. renewable energy sources.
B. nuclear energy and coal.
C. nonrenewable energy sources.
D. solar and wind power.
Backward vertical integration refers to:
A. the purchase of competitive firms.
B. the installation of production facilities to produce inputs for the production of final
products.
C. the placing of minorities in charge of production processes.
D. the installation of production facilities to consume the outputs of the production
system.
According to the text, market screening is a valuable method to:
A. assess the nearly 200 countries to pinpoint the most attractive prospects.
B. help domestic firms expand within their home markets.
C. help multinational companies avoid missing potential new markets.
D. all of the above.
E. A and C.
The United States allocates quotas to 40 countries for specific tonnages of:
A. sugar.
B. roast beef.
C. malt beer.
D. soybeans
E. two of the above.
ADRs are a way for non-U.S. firms to:
A. participate in U.S. debt markets.
B. lock in dollar exchange rates.
C. leverage in a foreign currency.
D. participate in local U.S. equity markets without incurring the need for a broker or
foreign exchange.
In their measurement and disclosure for accounting systems, less developed countries
tend toward:
A. transparency and conservatism.
B. transparency and optimism.
C. secrecy and optimism.
D. secrecy and conservatism.
According to the text, the types of information an IC needs to have reported by
subsidiaries include:
A. financial.
B. organizational structure and systems.
C. political.
D. all of the above.
E. two of A, B, and C.
More than half of the exports from developing nations go to developed nations, and:
A. this proportion has been declining over the past 35 years.
B. approximately 70 percent of exports from developed economies also go to other
industrialized nations.
C. the proportion of world trade accounted for by members of regional trade
agreements has grown to nearly 50 percent.
D. all of the above.
E. two of A, B, and C.
Incoterms are developed and maintained by:
A. the U.S. Chamber of Commerce.
B. the International Chamber of Commerce.
C. the WTO.
D. the UN.
E. a committee of major global companies.
Arbitrage functions to:
A. provide French markets access to other EU markets.
B. exploit price differences between markets, so as to profit with no risk.
C. create wealth through interest rate swaps.
D. create increased trading in commodity markets.
The successful domestic leader:
A. can easily adapt to the global arena because the leadership challenges there are the
same as those in the domestic arena.
B. faces daunting new skills in transferring to the global leadership arena, skills having
to do with understanding a fast-moving environment and cultural differences.
C. can be retrained to lead globally through an international global leadership program.
D. will need to learn foreign languages and nonverbal communication patterns to be a
global leader.
E. C and D.
Among trading blocs, the EU has the largest GDP per capita.
Enforcing contracts that cross international borders is:
A. simply a matter of applying the local law to the contract.
B. quite complicated and governed in most nations by the CISG.
C. the responsibility of Interpol.
D. secondary to who has possession of the goods, regardless of title.
E. nearly impossible, so negotiation is important.
Firms have developed international finance centers in order to:
A. centralize the financial management function and thereby reduce costs and increase
both profits and efficiencies.
B. meet WTO guidelines.
C. compete with international banks.
D. facilitate interfirm and intrafirm transfer pricing.
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.
Theory based on ____________________ states that international and interregional
differences in production costs occur because of differences in the supply of production
factors.
A. comparative advantage
B. absolute advantage
C. mercantilist advantage
D. resource endowments
E. none of the above
In an affective culture (Trompenaars), emotions are seen as:
A. responses to be freely displayed.
B. private and, therefore, not displayed.
C. a weakness and, therefore, hidden.
D. appropriate to share with family members only.