Chapter 3 The Institutional Context of Multinational Management
MULTIPLE CHOICE
1. The national context of a society is made up of
a.
The national and business cultures of that society.
b.
The social institutions of that society.
c.
The national cultures and social institutions of that society.
d.
The national cultures of that society.
2. A complex of positions, roles, norms, and values organizing relatively stable patterns of human
resources to sustain viable social structures refers to which of the following?
a.
Entrepreneurship
b.
Social institutions
c.
Comparative advantage
d.
Strategy of the multinational company
3. According to the model discussed in the text, the national context does which of the following?
a.
Creates a resource pool
b.
Influences the business environment and helps create induced factor conditions
c.
Does not influence the business environment
d.
Does not help create induced factor conditions
4. An economic system where production activities are decentralized to private owners who carry out
these activities to make a profit is known as a
a.
Capitalist economy.
b.
Command economy.
c.
Socialist economy.
d.
Mixed economy.
5. Which of the following statements is NOT TRUE regarding the experiences countries go through as
they undertake market transitions from socialism to a more market based economy?
a.
Drastic measures have to be taken to turn around formerly inefficient companies.
b.
Managers’ thinking have to be changed so that they can understand management functions.
c.
Financial systems have to be left unregulated to accurately reflect market prices.
d.
More workers have to be hired as companies find that they are understaffed.
6. A society that is characterized by dominance of the manufacturing or secondary sectors is a/an
a.
Industrial society.
b.
Pre-industrial society.
c.
Post-industrial society.
d.
Market society.
7. Which of the following statements is TRUE regarding post-industrial societies?
a.
Post-industrial societies are characterized by the dominance of manufacturing sectors.
b.
Post-industrial societies tend to favor economic achievement.
c.
Post-industrial societies tend to emphasize quality of life over economic achievement.
d.
All of the above are true.
8. Which of the following are key social institutions that are the most likely to influence the business
environment of a country?
a.
Economic system
b.
Level of industrialization
c.
Religion
d.
All of the above
9. Which of the following systems encourage the pursuit of collective goals such as social equality and
solidarity?
a.
Economic system
b.
Market economy
c.
Command economy
d.
Capitalist economy
10. According to the text, which of the following statements regarding workers in formerly socialist
economies is NOT TRUE?
a.
Workers in formerly socialist economies are very trusting of each other
b.
Workers in formerly socialist economies are generally reluctant to cooperate and work
with each other
c.
Workers in formerly socialist economies tend to favor personal relationships as key to
success as opposed to their work performance
d.
All of the above are true
11. Which of the following societies tend to determine occupations based on ascription (family
background) and social status?
a.
Industrial societies
b.
Postindustrial societies
c.
Socialist societies
d.
Pre industrial societies
12. Which of the following four religions are practiced by 71% of the world’s population?
a.
Jainism, Hinduism, Islam and Christianity
b.
Hinduism, Christianity, Islam, and Sikhism
c.
Christianity, Hinduism, Islam and Buddhism
d.
Judaism, Christianity, Buddhism, and Islam
13. Which of the following religions is most practiced around the world?
a.
Christianity
b.
Buddhism
c.
Hinduism
d.
Islam
14. Which of the following religions has strict gender roles and also prohibits multinationals from paying
or receiving interest on transactions?
a.
Islam
b.
Buddhism
c.
Christianity
d.
Jainism
15. Which religion is considered to be timeless and eternal as it not based on a single founder or event?
a.
Jainism
b.
Christianity
c.
Hinduism
d.
None of the above
16. Which of the following religions is based on the idea that craving and desires produce suffering but
that it also possible to reach a stage where there is no longer any suffering?
a.
Christianity
b.
Judaism
c.
Hinduism
d.
Buddhism
17. The cultural and economic changes that occur because of how production is organized and distributed
in society refers to which concept?
a.
religion
b.
education
c.
industrialization
d.
dominant economic type
18. In industrial societies, occupational placement is based on universalistic criteria such as
a.
Age.
b.
Religion.
c.
Ascription.
d.
Achievement.
19. A multinational manager carefully considers the list of festivals that are celebrated in a country in
order to allow for holidays for his/her employees. Which social institution is most likely being
considered here?
a.
Industrialization
b.
Market transition
c.
Education
d.
Religion
20. Pre industrial societies tend to have
a.
Poor infrastructure and support.
b.
Adequate infrastructure.
c.
Favorable business conditions.
d.
Government support.
21. An increased emphasis on quality of life over achievement oriented norms is typical of
a.
Pre-industrial societies.
b.
Industrial societies.
c.
Post-industrial societies.
d.
None of the above
22. A multinational Human Resource Manager’s decision to promote an individual results in wide
discontent in the foreign subsidiary. The manager finds that although the promoted individual’s
performance is exemplary, most employees feel that the promotion should have gone to another
individual who comes from an important family. The foreign subsidiary is most likely located in a/an
a.
Industrial society.
b.
Pre-industrial society.
c.
Capitalist society.
d.
Post-industrial society.
23. In which of the following societies would people most likely prefer non-monetary incentives?
a.
Industrial society
b.
Pre-industrial society
c.
Post-industrial society
d.
None of the above
24. High rankings on the materialist index of some countries (e.g., Hungary, India, Brazil) suggest that
individuals in these countries are
a.
Favor non material incentives.
b.
Achievement oriented.
c.
Motivated by non-monetary rewards.
d.
Hinduism.
25. When industrialization is inwardly oriented, local industries are promoted to satisfy the
a.
Need to export.
b.
Local population.
c.
Requirements of multinational companies.
d.
Domestic market and preserve foreign exchange.
26. When industrialization is outward oriented, foreign exchange is
a.
Encouraged and exporting is promoted.
b.
Discouraged and exporting is not favored.
c.
Not welcomed.
d.
Used to fund governments in power.
27. The famous German Sociologist, Max Weber, argued that the Protestant work ethic
a.
Led to the emergence of capitalism in Western Europe.
b.
Led to the decline of capitalism in Western Europe.
c.
Led to an acute distaste for the accumulation of wealth.
d.
Led to the rise of socialism in Eastern Europe.
28. One important issue relevant to multinationals, is the extent to which educational systems encourage
students to
a.
Be innovative and creative.
b.
To expect a more ethical atmosphere.
c.
Passively accept what is taught.
d.
None of the above
29. When multinationals pay low wages or use child labor, they often receive
a.
Support and praise.
b.
Imprisonment.
c.
Negative publicity.
d.
Social responsibility.
30. According to the text, all of the following statements regarding education and educational systems
around the world are TRUE except
a.
Universal education enrolment is a goal of most countries.
b.
Educational levels give an indication of the skill and productivity in any society.
c.
The focus of educational systems around the world are fairly similar in terms of whether
these systems emphasize academic or vocational aspects.
d.
All of the above statements are true.
31. The educational attainment scores
a.
Are fairly similar for most countries.
b.
Give an idea of the abundance of engineers for research and development purposes.
c.
Reflect the mean years of schooling of people in any society.
d.
All of the above are true of educational attainment scores.
32. Which of the following is not an implication of educational systems as they apply to multinationals?
a.
Educational level gives an indication of the skill and productivity of workers in any
society.
b.
Educational systems have implications for how labor force issues are approached and
policies implemented.
c.
Educational levels can be gauged to give an idea of what multinationals can expect.
d.
All of the above are true
33. In societies with high social inequality, resources are controlled by
a.
A majority of people.
b.
Very few people.
c.
The Government.
d.
Religious institutions.
34. When a society expects that while men should work outside, and women ideally stay at home, this
exhibits which of the following features?
a.
Need for domestic products
b.
Open societies
c.
Growing levels of industrialization and economic development
d.
Strict division of society by gender
35. Postindustrial societies are typically characterized by the dominance of
a.
Service and manufacturing sectors.
b.
Service sectors.
c.
Manufacturing sectors.
d.
Agricultural sectors.
36. The degree to which people have privileged access to resources and positions within societies is
a.
An indication of social inequality.
b.
The same around the world.
c.
Has no implications for multinationals.
d.
All of the above
37. Which of the following statements about the GINI index is FALSE?
a.
The GINI index represents the extent of inequality in people’s income within a society
b.
Ranges from 0 to 100
c.
Is scaled so that 0 represents no inequality while 100 represents perfect inequality
d.
Is scaled so that 100 represents no inequality while 0 represents perfect inequality
38. The movement from a socialist economy to a free market economy is also known as which of the
following?
a.
Market transition
b.
Dominant economic type
c.
Rapid industrialization
d.
Government regulation
39. The index of economic freedom may be used by multinationals to understand the nature of
a.
market transitions
b.
national culture
c.
national context
d.
governmental intervention
40. Which of the following has important implications for multinationals?
a.
Religion
b.
Education and economic systems
c.
Industrialization and inequality
d.
All of the above
ESSAY
1. Define social institutions. How do social institutions affect individuals and organizations?
2. Define national context. Explain how national context influences organizations.
3. What are the three major types of economic systems? What are the effects of economic systems on
how organizations are structured in societies?
4. What are some implications of the market transitions that many formerly communist societies are
experiencing? What are some major challenges facing multinationals as they try to motivate workers
in these transition economies?
5. Compare and contrast pre-industrial, industrial and post-industrial societies. Discuss the implications
for multinationals of any one of these three types of economies.
6. What are some major philosophies of each of the world’s major religions? Pick two religions and
discuss how they affect the business environment.
7. How does the educational system influence the business environment in any country?
8. What is social inequality? What implications does social inequality have for multinationals?