1) The refusal of Japan, the EU, and the US to reduce farm subsidies was one of the
reasons for the collapse of the Doha Round.
2) According to the VRIO framework, valuable, rare, and hard-to-imitate resources and
capabilities will lead to a competitive parity.
3) Non-equity modes do not require the establishment of independent organizations
overseas.
4) European Economic Community is the official title of European economic
integration since 1993.
5) Both exporting and importing are taken into account when calculating balance of
trade.
6) Islamic law is the only surviving example of a theocratic legal system that is
formally practiced by some existing governments.
7) A boss regularly taking his employees out for casual lunches would indicate a low
power distance within the firm.
8) Economic agglomeration is an example of an OLI advantage.
9) Purchasing power parity (PPP) is a conversion that determines the equivalent amount
of goods and services different currencies can purchase.
10) Hedging protects firms from spot market unpredictability.
11) Intrafirm trade enables MNEs to better coordinate cross-border activities.
12) A SWOT analysis deals with a firms external S (strengths) and W (weakness), and
internal O (opportunities) and T (threats).
13) Individualists make more distinction between in-group and out-group members than
collectivists.
14) A dragon multinational is a name given to MNEs from emerging markets.
15) An institutional framework is made up of formal and informal institutions
governing individual and firm behavior.
16) The theory of national competitive advantage of industries assumes that
comparative advantage always resides in the lead innovation nation.
17) The foreign exchange market has no central physical location and is the largest and
most active market in the world.
18) Basic economic theory suggests that the price of a commodity is most
fundamentally determined by its supply and demand.
19) Which of the following is true of the common law system?
a. It is the oldest legal system in the world
b. It has spread to all English-speaking countries and their (former) colonies
c. It bases its legal judgment primarily on the dominant religion of the country
d. It does not allow interpretations of the law by judges
20) ____ is the ability to recognize the value of new information, assimilate it, and
apply it.
a. Social capital
b. Micro-macro link
c. Absorptive capacity
d. Global mandate
21) Companies with market-seeking strategic goals search for _____.
a. abundance of strong market demand and customers willing to pay
b. economies of scale and abundance of low cost factors
c. abundance of innovative individuals, firms, and universities
d. particular foreign locations where the required resources are found
22) Knowledge outflow, one of the knowledge management elements, faces the
common problem of _____.
a. inappropriate channels
b. absorptive capacity
c. How does it help me? syndrome
d. Not invented here syndrome
23) Which of the following four Ps in the marketing mix includes the online
marketplace?
a. Place
b. Promotion
c. Pointcasting
d. Positioning
24) _____ refers to all the communications that marketers insert into the marketplace.
a. Purchasing specification
b. Product orientation
c. Promotion
d. Prospecting
25) The _____ structure is appropriate for a localization strategy.
a. international division
b. global product division
c. geographic area
d. global matrix
26) In terms of the supply chain, alignment is best defined as _____.
a. the combining of interests of various players involved in the supply chain
b. the ability to change supply chain configurations in response to long-term changes in
the environment and technology
c. the ability to quickly react to unexpected shifts in supply and demand
d. the way to identify consumers who differ from others in purchasing behavior
27) _____ refers to the ability to extract favorable outcome from negotiations due to
one partys strengths.
a. Expropriation
b. Bargaining power
c. Compromising power
d. Accommodating power
28) The key role of institutions is to _____ in business transactions.
a. reduce uncertainty
b. increase normative limits
c. increase opportunism
d. reduce resource costs
29) _____ refers to the deal struck by MNEs and host governments, which change their
requirements after the initial FDI entry.
a. Obsolescing bargain
b. Integrative bargain
c. Automated bargain
d. Ongoing bargain
30) In an agency relationship, a person who delegates authority is called a(n) _____.
a. principal
b. agent
c. manager
d. employee
31) In the context of NTBs, _____ are bureaucratic rules that make it harder to import
foreign goods.
a. VERs
b. administrative policies
c. local content requirements
d. deregulation policies
32) Entrepreneurs selling an equity stake or the entire firm to foreign entrants are using
a(n) ____ strategy to internationalize.
a. export
b. franchising
c. licensing
d. harvest and exit
33) A _____ is the price of one currency, such as the dollar, in terms of another, such as
the euro.
a. stock exchange index
b. securities market rate
c. commodities exchange rate
d. foreign exchange rate
34) If a firm engages in final assembly in its home operations, then which of the
following operations of the firm in a foreign country would be considered a
downstream vertical FDI?
a. Research and development
b. Components procurement
c. Marketing
d. Final assembly
35) Which of the following may be a hindrance to successful knowledge management?
a. Bonuses to measurable knowledge outflows and inflows
b. Investment in codifying tacit knowledge
c. Facilitation of informal social capital
d. Use of single-subsidiary-based incentives
36) _____ refers to the extent to which members in a culture tolerate ambiguous
situations.
a. Uncertainty avoidance
b. Lingua franca
c. Ethnocentrism
d. Long-term orientation
37) For which of the following types of economies would the factors of production
depend on the relative distribution of market forces versus command forces?
a. Mixed economy
b. Pure market economy
c. Strict laissez faire economy
d. Command economy
38) A(n) _____ emphasizes the norms and practices of the parent company relying on
parent-country nationals.
a. polycentric approach
b. geocentric approach
c. regiocentric approach
d. ethnocentric approach
39) _____ firms often engage in voluntary activities that go beyond what is required by
regulations.
a. Accommodative
b. Proactive
c. Reactive
d. Defensive
40) ____ focuses on flexibility that can overcome short-term fluctuation in the supply
chain.
a. Aggregation
b. Agility
c. Alignment
d. Adaptability
41) _____ strategy centers on leveraging home-grown competencies abroad.
a. Contender
b. Extender
c. Defender
d. Dodger
42) In HRM, _____ refers to the determination of salary and benefits.
a. negotiation
b. benchmarking
c. cost-per-hire
d. compensation
43) The main supportive pillars of the informal institutions are _____.
a. normative and cognitive
b. regulatory and normative
c. regulatory, normative, and cognitive
d. cognitive and regulatory
44) The difficulty of identifying the causal determinants of successful firm performance
is called _____.
a. causal determination
b. causal indifference
c. causal agency
d. causal ambiguity
45) Efficiency-seeking firms go to countries that have _____.
a. an abundance of natural resources and related transport and communication
infrastructure
b. a strong demand for their products and services
c. world-class innovations (innovative individuals, firms, and universities)
d. economies of scale and abundance of low-cost factors
46) Corporations in the United States and the United Kingdom rely mostly on _____.
a. voice-based, internal mechanism
b. bank-oriented, network-based systems
c. bank-oriented, high-tension systems
d. exit-based, external mechanism
47) _____ refers to HRM activities associated with hiring employees and filling
positions.
a. Rostering
b. Sourcing
c. Staffing
d. Benchmarking
48) Which of the following is the funding source for the International Monetary Fund?
a. Member-country quota
b. Foreign direct investment
c. Subsidiary investing
d. Currency trading
49) Which of the following value chain activities does an original equipment
manufacturer perform?
a. Research and development
b. Product branding
c. Final assembly
d. Marketing
50) In a non-equity-based alliance, which of the following should be high for possible
upgrading to equity-based relationships?
a. Degree of tacitness
b. Importance of direct organizational monitoring and control
c. Potential as real option
d. Influence of formal institutions
51) Greenfield operations are similar to acquisitions in that they are both examples of
_____.
a. partially owned subsidiaries
b. wholly owned subsidiaries
c. non-equity mode of entry into foreign markets
d. equity mode of entry into foreign markets limited to a contractual agreement
52) Firms prefer FDI to licensing because FDI_____.
a. increases the chances of opportunism when dealing with a host nation entity
b. requires complete dissemination of technological know-how to host nation entity
c. protects the firm from economic agglomeration
d. provides the firm with direct ownership to its foreign assets
53) Members of a group or collective consider each other as _____.
a. in-group members
b. out-group members
c. individualistic members
d. cross-cultural members
54) _____ refers to the positive or negative perception of firms and products from a
certain country.
a. Ethnocentrism
b. VRIO effect
c. Market orientation
d. Country-of-origin effect
55) The basic laws in supply and demand suggest that in general, the larger the pool of
capital providers:
a. the lower the cost of capital
b. the higher the rate of return
c. the more likely a firm will default on loan obligations
d. the higher the ROI for investors
56) Which of the following is a key element to achieving alignment in the supply
chain?
a. Power
b. Standardization
c. Localization
d. Productivity
57) A key insight of the institution-based view of CSR is that individuals and
organizations make rational choices given the right kind of incentives.
58) How does the VRIO framework affect acquisitions?
59) Cross-border mergers are more common than acquisitions.
60) MNEs intend to eventually replace even top-level expatriates with TCNs, in part to
save cost.
61) The CSR approach draws upon Adam Smith’s idea that the pursuit of economic
self-interest within legal and ethical bounds leads to efficient markets.
62) Firms dealing with global agnostics can leverage global brands and their relatively
more standardized products and services.
63) The Anglo-American and the continental European-Japanese systems are the two
primary corporate governance families in the world.
64) Equity, learning and experience, relational capabilities, and nationality are four
factors that may influence alliance performance.
65) The home replication strategy duplicates home country-based competencies in
foreign countries.
66) Subsidiary initiatives are new opportunities pursued by a subsidiary based on
headquarters demands.