Research on global change has led to well-developed theories of the process of global
change.
Being from another country qualifies expatriates for international status.
The Global Reporting Initiative has made little effort in establishing a framework for
global 3BL reporting, despite its UN collaboration.
A middle-ground advertising strategy in which the home office and the foreign
subsidiaries agree on marketing objectives is called the computerized-management
approach.
The effectiveness of every organization is totally controlled by the effectiveness of its
workforce.
Objectives must be quantified in order to be useful.
Tax law is exempt from extraterritoriality.
The first step in the market screening process is the economic/financial screening.
One example of nationalization of private companies is the nationalization of
French-owned firms in Europe after World War II.
Out of all the pricing methods mentioned, the preferred one for sellers is
Ex-Works/factory door.
A complete financial analysis is part of the financial and economic forces screening
process.
Hybrid organizations are often the result of a regionally organized company having
introduced a new and different product from what the regionally organized form is
accustomed to handling.
The initial choice of organizational structure after discarding the international division
is usually a hybrid based on product and market factors.
Team establishment involves weakly linked member identification to ensure creativity.
Decisions that work to the detriment of the subsidiary may be beneficial to the
enterprise.
Responding to any demand rather than executing a planned growth strategy is not a
mistake new exporters tend to make.
Often small exporters don’t consider the use of an export management company when
they should.
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.
In larger, older organizations more decisions are made at the subsidiaries.
One should not look at sociocultural forces as subjective.
(p. 18)-Globalization has produced uneven results across nations and people.
Anthropologist E. T. Hall suggests that to learn another culture, you need to spend two
weeks in it with a training program.
The utility of risk analyses of social, political, and economic factors increases rapidly
over longer time spans.
The family is the basic unit of institutions based on free association.
Benefits of trade fairs include sales, making contacts with prospective buyers and
agents, and competitive intelligence.
Contingency-fee cases are limited to the United States.
A fundamental drawback of indirect exporting is that companies must pay a
commission to all of the companies that handle their exports.
Approximately 15 percent of expatriates leave their firms during the course of their
overseas assignment, and an additional 28 percent leave their companies within a year
of their return from abroad.
Exporting refers to the transportation of any good or service to a destination inside a
country or region.
Advertisers have followed glocalization to reduce costs, enabling them to develop a
common strategy for large regions.
When a country imports more than it exports, the currency might be expected to
weaken.
Buyers of consumer goods always act on the same motives the world over.
By conducting environmental scanning, a firm monitors the natural resources around
the world that may affect it.
The only reason firms are nationalized is to spread a socialist-communist ideology.
According to the text, every successful company uses controls to put its plans into
effect, evaluate, correct, and reward.
By UN regulation, contracts cannot contain choice-of-law and choice-of-forum clauses.
Foreign national pricing is the use of the home-country price in foreign markets.
The controlling mechanism for a gold-based exchange system and a floating-rate
system are the same.
Examples of informal, normative institutions would include local town/city
governments and the U.S. government.
Porter’s diamond can be used to explain the importance of the environment and natural
resources.
Regarding foreign investment:
A. it can be divided into three components: international trade, portfolio investment,
and direct investment.
B. portfolio investment involves investors who participate in the management of the
firm in addition to receiving a return on their money.
C. deals that result in the foreign investor’s obtaining at least 10 percent of the
shareholdings are classified as portfolio investments.
D. two of A, B, and C.
E. none of A, B, and C.
Environmental sustainability is both local and global because:
A. environmental conditions do not recognize national borders.
B. governments are not prepared to address environmental issues beyond the UN.
C. business has become global, so sustainability must follow the trend.
D. all of the above.
Offshore financial centers are appealing to the international firm because they:
A. outsource all of the administrative details.
B. are in Switzerland, the Cayman Islands, the Bahamas.
C. offer reduced regulations and lower taxes than in the home country.
D. have lower labor costs.
Knowledge that an individual has but that is difficult to express clearly in words,
pictures, or formulae, and therefore difficult to transmit to others, is known as:
A. explicit.
B. none of A, C, D, or E.
C. tacit.
D. intangible.
E. valuable.
Hawalas make currency exchange and:
A. avoid the international currency exchange markets.
B. offer their clients nearly untraceable transactions.
C. transfer funds through the established banking system.
D. A and B.
Two basic ways to understand the role of leadership are as providing direction for a
collection of individuals and as:
A. limiting the freedom of individual group members.
B. integrating a group.
C. linking top management with workers.
D. organizing workers for production.
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.
Which of the following was stated in the text as being a concern with licensing?
A. It requires the licensor to invest scarce funds in the licensee’s company.
B. It can create a competitor.
C. License terms are often not upheld by the courts.
D. All of the above.
E. Two of A, B, and C.
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.
Trading companies are privately owned firms that develop international trade and serve
as intermediaries between foreign buyers and domestic sellers, and vice versa.
The product is:
A. the central focus of the marketing mix.
B. more than a physical object.
C. the result of economies of scale.
D. A and B.
E. all of A, B, and C.
The need to change the color of packages when selling a product in a new market is
generally a result of the influence of:
A. distributive forces.
B. competitive forces.
C. political conflicts.
D. cultural differences.
E. economic forces.
(p. 226)-Which of the following are reasons that many firms engage in exporting?
A. Exports can allow the firm to serve markets where it has no or limited production
facilities.
B. Exports can offset cyclical sales in the firm’s domestic market.
C. Exports can test foreign markets and foreign competition inexpensively.
D. All of the above.
E. Two of A, B, 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.
Foreign reserves are used to:
A. help foreigners who need additional funds.
B. provide military support to foreign operations, for example, the French legion and
UN peacekeepers.
C. cover foreign debt, import purchases, and other demands for foreign currency that
banks might encounter.
D. support foreign operations that are branches but not subsidiaries.
Historically, international business:
A. is relatively new as a discipline and as a business practice.
B. existed before the time of Christ.
C. two of A, B, and D.
D. was influenced by the rise of the Ottoman Empire.
E. none of the above.
In the temporal method, fixed assets such as real estate are translated at:
A. their market value.
B. their historic cost.
C. their assessed value.
D. an average of the period’s rates.
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.
According to the theory of comparative advantage:
A. a nation should produce those goods which it is more efficient at producing than are
other nations.
B. a nation can gain from trade if it is equally inefficient in producing two goods.
C. a nation must have an absolute advantage in at least one good to gain from trade.
D. all of the above.
E. none of A, B, or C.
Sir Isaac Newton put England on the gold standard when he:
A. declared, as master of the English mint, that he would sell gold for 1 pound, 1
shilling, 1 pence, under the law of one price.
B. set a market price for gold, the British pound and the U.S. dollar.
C. established a fixed equivalency between gold and the British currency.
D. brought the matter to Queen Anne, who declared Britain would follow the gold
standard.
The inflation rate determines:
A. the capital structure of the firm.
B. the growth rate of sales.
C. the real cost of borrowing in capital markets.
D. the equilibrium point.
According to the text, the failure rate for expatriate assignments, including failing to
achieve performance targets for an international assignment or prematurely returning
from the assignment, ranges from _______ percent.
A. 6 to 10
B. 15 to 25
C. 25 to 45
D. 30 to 55
E. 41 to 65
Most developed nations have:
A. small power distance.
B. high individualism.
C. strong uncertainty avoidance.
D. all of the above.
An argument against the protection of an infant industry is that:
A. in the long run the industry will have a competitive advantage.
B. firms need protection from imports until the required investment capital is obtained.
C. protection of emerging industries occurs only in developing nations.
D. there can be high costs from subsidizing infant industries.
E. Two of the above.
The regionalized organization seems to be popular with companies that:
A. operate in many diverse foreign regions.
B. favor licensing as a form of market entry.
C. manufacture products with a low technological content requiring strong marketing
ability.
D. manufacture products incorporating high technology in industrialized regions.
E. two of the above.
Honda’s “You meet the nicest people on a Honda” campaign appealed to Americans
who used their motorcycles as pleasure vehicles, but in Brazil Honda stressed the use of
the same motorcycles as basic transportation. This is an example of which promotional
strategy?
A. Same product-same message
B. Product adaptation-same message
C. Product adaptation-message adaptation
D. Different product for the same use-different message
E. None of the above
According to the text, companies are now accepting:
A. two of B, C, and D.
B. the need for frequent reorganization.
C. the need for reducing the size of middle management.
D. the use of pagers and mobile phones for faster communication.
E. all of B, C, and D.
Government stability is a characteristic of a government that:
A. makes sudden radical policy changes.
B. readily shifts alliances to maintain power.
C. maintains predictability in fiscal, monetary and political policies.
D. two of the above.
E. all of A, B, and C.
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.
When a new plant can be built that is a duplicate of others already functioning:
A. labor trainers experienced in the operation of the machinery can be sent to the new
locations without undergoing any training.
B. costs will be the same as in existing locations.
C. vendors will be requested to furnish equipment that they have supplied previously.
D. all of the above.
E. two of A, B, and C.
The roles of the global leader include:
A. negotiator and change agent.
B. supervisor and administrator.
C. superintendent and monitor
D. marketer and salesperson for change.
E. B and D.
The major function of the World Bank is to serve as a:
A. nonprofit banking cooperative for its members to meet development needs.
B. central bank for the world’s central bankers.
C. nonprofit cooperative to finance the educational needs of its members.
D. investor of funds in global businesses in order to create value for its shareholders.
The reasons a government may nationalize a firm include:
A. to extract more money from the firm.
B. to increase the firm’s profitability.
C. to preserve jobs.
D. all of the above.
E. two of A, B, and C.
The foundation of a global mindset is:
A. knowledge of and experience in other cultures.
B. knowledge of foreign languages and cultures.
C. intellectual intelligence and global emotional intelligence.
D. global skills.
E. A, B, and D.
What is international law?
The five principles of the WTO (trade without discrimination, freer trade, predictability,
fair competition, and encouraging development and economic reform), if followed,
would provide developing nations a boost in their development. Agree or disagree.
Discuss the advantages and disadvantages of employing third-country managers.
Why is it often impossible to standardize the marketing mix worldwide?
Why do nations care about having outlets to the ocean? Are landlocked nations at a
disadvantage?
Explain the principles on which The Economist‘s Big Mac index is built, and comment
on its use to international managers.
What is dumping, and why is it found to be problematic?
Discuss the global strategic planning process.
Discuss the keystone of international trade, the theory of comparative advantage.
Discuss the programmed-management approach to advertising strategy.
Why have more companies, at home and abroad, begun to obtain licenses instead of
making illegal copies?
“There is no difference between management and leadership.” Agree or disagree with
this assertion, explaining your reasoning.
Identify the seven dimensions along which management can globalize in organizing
their international activities.
Given what you have read about institutional theory, comment on the quote from
William Inge, former dean of St. Paul’s, London: “Every institution not only carries
with it the seeds of its own dissolution, but prepares the way for its most hated rival.”
What are the types of information that an international company needs to have reported
to it by its units around the world, and why is each type important for the IC and its
control efforts?
Discuss the observation made recently by an undergraduate philosophy major that “the
major international institutions are concerned with keeping the rich countries rich, at the
expense of the poorer ones.”
What is contract manufacturing, and what are the ways in which international firms
employ contract manufacturing?
Discuss the terrorist threat of kidnapping and how it impacts international business.
Explain the ethnocentric, polycentric, regiocentric, and geocentric approaches toward
international human resource management, including when and how each is best used.
