Management, 3e (Hitt)
Chapter 3 International Management and Globalization
1) Increasing globalization has dramatically changed the competitive landscape for everyone in
recent years.
2) The two major aspects of a country’s environment are its heritage and culture.
3) A country’s institutional environment consists of its rules, policies, and enforcement
processes.
4) The institutional environment of a country has little effect on the individuals and organizations
that operate within it.
5) The Sarbanes-Oxley Act was enacted by the United States to enforce tariffs and quotas on
goods imported from China.
6) If a country’s laws related to intellectual property rights are weak, then firms with valuable
technologies will be reluctant to bring them into that country.
7) Societal culture can dramatically influence how people observe and interpret the business
world around them.
8) Power distance is the extent to which people accept power and authority differences among
people.
9) Citizens in nations high in uncertainty avoidance prefer to have fewer rules and tend to be
more comfortable in ambiguous situations.
10) Individualism can be defined as the extent to which a person’s identity is a function of the
groups to which he or she belongs.
11) People from countries with high collective orientations tend to exhibit emotional dependence
on the organizations and institutions to which they belong.
12) As firms gain more experience operating in international markets, they prefer to enter
markets that have institutional environments and cultures similar to their own.
13) The most common way of entering international markets is via strategic alliances.
14) By forming a strategic alliance, two firms agree to share resources to accomplish a mutually
desirable goal.
15) In a globally focused organization, strategic decisions are made in the branch offices.
16) An organization using a region-country focus is highly decentralized.
17) A transnational organization tries to be simultaneously centralized and decentralized.
18) In low-context cultures, the situation itself may or may not affect what is considered to be
appropriate behavior.
19) Managers rarely have to manage multicultural teams within one organization in one location.
20) In virtual teams, members frequently depend on electronically
mediated communications.
21) A global mind-set can allow a manager to influence individuals, groups, and organizations
from diverse sociocultural and institutional environments.
22) ________ refers to the flow of goods and services, capital, and knowledge across country
borders.
A) Marketing
B) Globalization
C) Repatriation
D) Entrepreneurialism
23) According to Thomas Friedman, the third stage of globalization involves ________.
A) internationalization of countries
B) countries moving into international markets
C) individuals collaborating or competing on a global basis
D) increasing influence of national governments on local economies
24) A country’s ________ consists of its rules, policies, and enforcement processes.
A) cultural milieu
B) economic dimension
C) institutional environment
D) socioeconomic landscape
25) Of the following, ________ is a dimension of a country’s distinct institutional environment.
A) human behavior
B) societal values
C) economic development
D) power distance
26) Which one of the following economies tends to have a more effective capital market than the
rest?
A) emerging
B) developing
C) developed
D) expansive
27) Which of the following is true about the economic development of an institutional
environment?
A) Economies that are not highly developed but are growing rapidly are classified as developing
economies.
B) Developing economies tend to have more effective capital markets than developed
economies.
C) Developed economy countries have rapidly growing economies.
D) Developed economies tend to be larger than less-developed or emerging economies.
28) When the laws of a country related to enforcement of ________ are weak, firms with
valuable technologies are reluctant to bring them into the country.
A) currency exchange rates
B) intellectual property rights
C) infrastructure dimensions
D) environmental protection
29) Which of the following is a dimension of the country’s physical infrastructure?
A) welfare of the citizens
B) production of raw materials
C) number of airports
D) political stability
30) Rooney, Inc. is a company that manufactures sugar. It is based in South Africa. The company
follows the just-in-time approach in which it does not believe in stocking raw materials and
maintaining an inventory, but instead relies on a strong supply chain to deliver materials in time.
As a part of recent business development plans, the company decided to begin importing raw
materials from Borneo. Which of the following, if true, would force the company to question its
reliability on the JIT approach?
A) Regulations in Borneo have become stricter.
B) Borneo has recently been classified as an emerging economy.
C) Borneo has yet not relaxed its markets to direct foreign investments.
D) The physical infrastructure in Borneo is weak.
31) Cluster 1 countries largely consist of developing and transition economies that ________.
A) are low on monetary policies
B) have strong physical infrastructures
C) have balanced regulatory controls and political rights
D) are high in regulatory control and low in political rights
32) Cluster 4 countries have the most developed institutional infrastructure, with ________.
A) balanced regulatory control and political rights
B) high regulatory control and low political rights
C) low monetary policy and investment restrictions
D) low regulatory control and low political rights
33) ________ is a learned set of assumptions, values, and beliefs that have been accepted by
members of a group and that affect human behavior.
A) Culture
B) History
C) Nationality
D) Ethnicity
34) According to Hofstede, ________ is the extent to which people accept power and authority
differences among people.
A) gender focus
B) individualism
C) power distance
D) uncertainty avoidance
35) Which of the following is similar to the given scenario?
A) In a steel mill in Japan, all tasks take place only after careful planning. The managers proceed
to make changes step by step. They believe this reduces risks to a minimum.
B) In an accounting firm in Australia, the manager encourages individual thought process. He
puts a high value on personal achievement.
C) Employees of an HR consultancy firm in Pakistan make sure everyone is at the table during
lunch hour. This practice also helps them discuss alternatives and reach decisions collectively.
D) Players of the Manchester United soccer team revere their manager Sir Alex Ferguson and
trust him completely with respect to team tactics and selection.
36) In EduTech, a software company, the views and suggestions of managers are considered
unquestionable and employees never go against what has been suggested by the managers. Sole
authority rests in the hands of the managers. What is this an example of?
A) uncertainty avoidance
B) power distance
C) individualism
D) gender focus
37) When Maria arrived from Mexico to study in the U.S., she noticed a difference between the
students in Mexico and the students in the U.S. The American students felt comfortable asking
questions, they were eager to share a thought or an opinion, and in some instances they even
contradicted the teacher. Maria comes from a country that has ________.
A) individualism
B) gender focus
C) high power distance
D) uncertainty avoidance
38) Brian, a senior manager in a logistics firm, has a democratic style of leadership. Brian is very
approachable, and employees in his department are free to consult with him at any time. The
culture in Brian’s department is one of ________.
A) low power distance
B) gender focus
C) uncertainty avoidance
D) economic development
39) Which of the following is a dimension of national culture?
A) political stability
B) uncertainty avoidance
C) regulations
D) economic development
40) ________ is when cultures differ in the extent to which they need clarity or can tolerate
ambiguity.
A) Collectivism
B) Individualism
C) Power distance
D) Uncertainty avoidance
41) Business meetings in Japan follow elaborate procedure, often take a long time as seemingly
little details are scrutinized, and end with all parties signing detailed protocols to leave no room
for misunderstandings. This is because Japan ranks high when it comes to ________.
A) personal freedom
B) uncertainty avoidance
C) individualism
D) gender focus
42) Swedish companies usually have a flat and team-oriented structure with few management
levels. The result is a simple and direct decision-making process. In Swedish companies, the
concept of personal responsibility is paramount. This is because Swedish companies have
________.
A) low power distance
B) high uncertainty avoidance
C) gender focus
D) collectivism
43) ________ is the extent to which people’s identities are self-oriented and people are expected
to take care of themselves and their immediate families.
A) Individualism
B) Power distance
C) Collectivism
D) Uncertainty avoidance
44) As a teacher in a primary school in Scottsdale, Arizona, Ruth likes to make decisions that are
independent of the school organization. She is dedicated to inculcating the habit of making
choices in her students and places a high reward on personal achievement. This is an example of
________.
A) uncertainty avoidance
B) power distance
C) collectivism
D) individualism
45) People who live in countries that score high on individual orientations tend to ________.
A) value collective decisions
B) emphasize group membership
C) emphasize and reward individual achievement
D) exhibit emotional dependence on organizations
46) ________ is the extent to which a person’s identity is a function of the group(s) to which he
or she belongs and the extent to which group members are expected to look after each other.
A) Individualism
B) Collectivism
C) Power distance
D) Uncertainty avoidance
47) In a steel mill in Japan, all tasks take place only after careful planning. The employees rely
on the rules, laws, and regulations set by the authorities. They proceed to make changes step by
step. The managers of the mill believe this reduces risks to a minimum. This is an example of
________.
A) collectivism
B) individualism
C) uncertainty avoidance
D) group membership
48) Which of the following is a characteristic of collectivism?
A) high emotional independence
B) value for individual decisions
C) emphasis on individual achievement
D) group membership
49) Ruth belongs to a community where members have a strong feeling of involvement in each
other’s lives, as well as a strong feeling of loyalty and responsibility to their community. This
community is an example of?
A) avoidance
B) power distance
C) collectivism
D) gender focus
50) Countries emphasizing masculine traits value ________.
A) activities that encourage forgiveness
B) activities that lead to success
C) activities that show caring for others
D) activities that enhance quality of life
51) Countries emphasizing feminine traits value ________.
A) activities that lead to success
B) activities that lead to money
C) activities that lead to possessions
D) activities that enhance quality of life
52) Which of the following is true for the dimensions of national culture?
A) Power distance is a measure of the extent to which a group has power and status differences.
B) Citizens in nations high in uncertainty avoidance prefer to have fewer rules.
C) Countries emphasizing masculine traits value activities that lead to success, money, and
possessions.
D) Individualism is the extent to which a person’s identity is a function of the group(s) to which
the person belongs.
53) ________ involves manufacturing products in a firm’s home country and shipping them to a
foreign market.
A) Importing
B) Exporting
C) Outsourcing
D) Strategic marketing
54) For smaller firms and for firms entering into foreign markets, ________ is the most common
way to enter an international market.
A) licensing arrangements
B) exporting goods
C) creating strategic alliances
D) cross-border acquisition