Just-in-time manufacturing drastically reduces the costs associated with large
inventories in the production process.
Lobbying is the policy of hiring people to represent a company’s views on political
matters.
The particular process to be used to create products is typically determined by a firm’s
business-level strategy.
Scenario: Better Mousetrap Inc.
Better Mousetrap Inc. is a manufacturing company that sells pest control products.
Recently the company launched an innovative mousetrap with a unique design that has
been selling well in the U.S. market. Senior Vice President Marc Wallace, even
recommended expanding sales overseas in order to increase company revenues.
When a country’s currency is weak relative to other nations, domestic products are more
expensive than imports.
The process of staffing a company and ensuring employees are as productive as
possible is called human resource management.
The first phase of human resource planning is estimating the company’s future HR
needs.
Scenario: Susan Goes Global with Grape Fizz
Susan is the CEO of Grape Fizz, a global drinks-manufacturing company. She wishes to
set up production facilities in other countries and has been advised to assess the
political system of each country before she does so.
When a country’s religious leaders are also its political leaders, its political system is
called a theocracy.
Exchange rate risk is the risk of adverse changes in exchange rates.
The value customers obtain from a product is heavily influenced by the image of the
country in which the product is manufactured.
Civil law can be more adversarial than common law because civil law relies more on
the need to interpret laws according to tradition, precedent, and usage.
The theory of absolute advantage measures a nation’s wealth by the standard of living
of its people.
A negative aspect of a low-cost leadership strategy is low customer loyalty.
________ will enable a company to reduce the degree to which it is vertically
integrated and the overall amount of specialized skills and knowledge that it would
have to possess.
A) Outsourcing
B) Skimming
C) Lean production
D) Centralized production
The ________ is an agency created to provide financing for national economic
development efforts.
A) Global Financial Markets Association
B) World Trade Organization
C) Financial Stability Board
D) World Bank
Buyback is defined as ________.
A) the export of industrial equipment in return for products produced by that equipment
B) an agreement that a company will offset a hard-currency sale to a nation by making a
hard-currency purchase of an unspecified product from that nation in the future
C) the sale of goods or services to a country by a company that promises to make a
future purchase of a specific product from that country
D) the exchange of goods or services for a certain amount of money
________ is a decentralized exchange encompassing a global computer network of
foreign exchange traders and other market participants.
A) Securities exchanges
B) Eurocurrency market
C) Interbank market
D) Over-the-counter market
Which of the following occurs in a country’s balance of payments when a country
exports more goods and services and receives more income from abroad than it imports
and pays abroad?
A) current account deficit
B) capital account surplus
C) current account surplus
D) capital account deficit
The GDP per capita of a country is lower than that of France. If the GDP per capita of
the country is adjusted for PPP, the country’s revised GDP is higher than that of France.
Which of the following is most likely true about the country?
A) The cost of living in the country is higher than that of France.
B) The cost of living in the country is lower than that of France.
C) The cost of living in the country is approximately equal to that of France.
D) The cost of living in the country has increased over the past decade.
No proposed legislation becomes EU law unless the ________ votes it into law.
A) Council of the European Union
B) European Parliament
C) Court of Auditors
D) European Commission
Scenario: Global Manufacturing Inc. (GMI)
Global Manufacturing Inc., a fast-growing U.S. company, plans for a production system
in which two components of its product will be manufactured in locations where the
cost of production is lowest. The components will then be taken to maquiladoras for
final assembly. GMI plans to purchase an existing company in Brazil to produce
component A and build a subsidiary in Thailand to produce component B.
GMI’s subsidiary for component B in Thailand is best described as a(n) ________.
A) greenfield investment
B) portfolio investment
C) acquisition
D) merger
Which of the following was created to regulate fixed exchange rates and enforce the
rules of the International monetary system?
A) International Monetary Fund
B) World Trade Organization
C) European Union
D) World Bank
The world’s largest banks exchange currencies at spot and forward rates in the
________.
A) International Finance Corporation
B) Eurocurrency market
C) interbank market
D) World Bank
Today’s international monetary system is considered to be a ________ system.
A) fixed exchange
B) free float
C) managed float
D) linked exchange rate
Which of the following methods would Gro-Tru be implementing if it exchanges its
products directly for other goods or services without the use of money?
A) barter
B) offset
C) switch trading
D) buyback
The major drawback of polycentric staffing is the potential to ________.
A) lose control of host-country operations
B) experience a high incidence of expatriate failure
C) create barriers for the host-country office
D) create legal problems for the home-country office
Under ________ law, the justice system decides cases by interpreting the law on the
basis of tradition, precedent, and usage.
A) civil
B) international
C) common
D) theocratic
The customary means by which a company fills up vacancies in its offices is called
________.
A) a staffing policy
B) an employment policy
C) onboarding
D) outsourcing
________ refers to the concentration of production facilities in one location.
A) Lean production
B) Continuous production
C) Centralized production
D) Horizontal integration
An individual from a country with a high degree of political risk would most likely be
from ________.
A) Canada
B) Singapore
C) Iraq
D) Japan
Scenario: TeleToys Inc.
TeleToys Inc., a U.S.-based company, recently opened eighteen new toy stores in
Brazil, acquired a women’s clothing company in Canada, and closed its men’s clothing
line in Australia. The company has a structure that organizes its global operations into
geographic regions.
Which of the following strategies should TeleToys follow if it wants buyers to perceive
its products as unique?
A) retrenchment strategy
B) global strategy
C) differentiation strategy
D) low-cost leadership strategy
According to mercantilism, the accumulation of national wealth depended on the
________.
A) increase in a nation’s trade surplus
B) increase in a nation’s trade deficit
C) expansion of a nation’s total value of trade
D) expansion of a nation’s total volume of trade
The purpose of ________ is to force companies from other nations to use local
resources in their production processes, particularly labor.
A) administrative delays
B) currency controls
C) local content requirements
D) voluntary export restraints
What two factors propel growth in foreign direct investment?
Discuss how companies identify the basic appeal for products when screening a
potential market, and explain how international organizations provide the essential
information to researchers.
What are voluntary export restraints and how are they used?
Explain the concept of capital structure as it applies to a company with international
operations.
Write a short note on the World Trade Organization and its influence on the
environment.
What is currency speculation? Why do some governments protect their markets from
currency speculation?
Explain why companies consider exporting. Describe the four-step model of developing
a successful export strategy.
Discuss the major points of differences between centralization and decentralization, and
explain the differences between an international area structure and a global product
structure.