1. Business has become a unified, global field as trade barriers fall, communication becomes faster and cheaper, and
consumer tastes converge.
a.
True
b.
False
True
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2. Large international firms typically are called multinational corporations.
a.
True
b.
False
True
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3. The term top of the pyramid refers to the more than four billion people who earn the least, as defined by per capita
income.
a.
True
b.
False
False
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4. Fifteen member states of the EU have adopted the rupee, as a single European currency.
a.
True
b.
False
False
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5. Culture shock refers to a person’s ability to use reasoning and observation skills to interpret unfamiliar gestures and
situations and devise appropriate behavioral responses.
a.
True
b.
False
False
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6. There are three components to cultural intelligence: cognitive, emotional, and physical.
a.
True
b.
False
True
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7. A tendency to regard their own culture as superior and to downgrade other cultures reflects an attitude called
geocentric.
a.
True
b.
False
False
MGMT.DAFT.12.04-07 – 04–07
8. An example of global outsourcing is seen when Gap, Inc uses low-cost Caribbean labor to cheaply produce its clothing,
and then finishes off and sells its clothing in the United States.
a.
True
b.
False
True
110
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A
9. With exporting, the corporation transfers its products for sale and its production facilities in foreign countries.
a.
True
b.
False
False
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10. Seeking cheaper sources of materials or labor offshore is called offshoring.
a.
True
b.
False
True
110
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11. The least costly and least risky direct investment is called a greenfield venture.
a.
True
b.
False
False
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12. Direct investing means that the company is involved in managing the productive assets, which distinguishes it from
other entry strategies that permit less managerial control.
a.
True
b.
False
True
110
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13. Licensing means engaging in the international division of labor so that work activities can be done in countries with
the cheapest sources of labor and supplies.
a.
True
b.
False
False
111
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14. When a company builds a subsidiary from scratch in a foreign country it is called a greenfield venture.
a.
True
b.
False
True
112
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15. One advantage to acquiring a wholly owned foreign affiliate is that the company that acquires it would then have
complete control.
a.
True
b.
False
True
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16. A form of direct investment is franchising.
a.
True
b.
False
False
112
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17. The goal of the European Union is to create a powerful single market system for Europe’s millions of consumers.
a.
True
b.
False
True
112
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18. The sub-divisions of the international environment are the economic, the sociocultural, and the legal-political
environments.
a.
True
b.
False
True
MGMT.DAFT.12.04-06 – 04–06
19. The basic management functions of planning, organizing, leading, and controlling are the same whether a company
operates domestically or internationally.
a.
True
b.
False
True
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20. Because of cheap labor, most international business firms are headquartered in the less developed countries of Asia
and South America.
a.
True
b.
False
False
114
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21. A multinational corporation typically receives more than 25 percent of its total sales revenues from operations inside
the parent’s home country.
a.
True
b.
False
False
114
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22. An MNC is managed as an integrated worldwide business system.
a.
True
b.
False
True
114
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23. The primary emphasis of polycentric companies is on their home countries.
a.
True
b.
False
False
114
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24. Geocentric companies are truly world-oriented and favor no specific country.
a.
True
b.
False
True
114
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25. A country’s physical facilities that support economic activities make up its infrastructure.
a.
True
b.
False
True
116
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26. The estimated 2010 misery index figures suggest significantly less misery for almost every country as compared to
figures at the beginning of the century.
a.
True
b.
False
False
116
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27. Market risk is defined as the risk of loss of assets, earning power, or managerial control due to politically based events
or actions by host governments.
a.
True
b.
False
False
117
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28. The countries experiencing political stability face the greatest threat of violence.
a.
True
b.
False
False
117
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29. Unfortunately, many U.S. managers fail to realize that the values and behaviors that typically govern how business is
done in the United States do not translate to the rest of the world.
a.
True
b.
False
True
118
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30. Countries that value high power distances normally have cities that are geographically separated and so have the need
to transport electrical energy over large distances.
a.
True
b.
False
False
118
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31. The social value of uncertainty avoidance is evident in countries like Japan which support beliefs that provide stability
and conformity among its citizenry.
a.
True
b.
False
True
118
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32. Collectivism means a preference for a tightly knit social framework in which individuals look after one another and
organizations protect their members’ interests.
a.
True
b.
False
True
119
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33. According to the GLOBE Project, a society with a high performance orientation places high emphasis on performance
and rewards people for performance improvements and excellence.
a.
True
b.
False
True
120
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34. According to the GLOBE Project, gender differentiation refers to the extent to which a society maximizes gender role
differences.
a.
True
b.
False
True
120
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35. Cultural intelligence refers to a person’s ability to use reasoning and observation skills to interpret unfamiliar gestures
and situations and devise appropriate behavioral responses.
a.
True
b.
False
120
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36. Social values greatly influence organizational functioning and management styles.
a.
True
b.
False
True
121
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37. According to the GLOBE Value Dimensions, Japan and Russia both have very high performance orientation.
a.
True
b.
False
False
121
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38. When an organization has a humanistic attitude, it values employees as an end in themselves.
a.
True
b.
False
True
121
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39. A high performance orientation means that a society encourages toughness, assertiveness, and competitiveness.
a.
True
b.
False
False
121
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40. A low-context culture is a culture in which communication is used to enhance personal relationships.
a.
True
b.
False
False
123
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41. A high-context interaction requires more time because a relationship has to be developed, and trust and friendship
must be established.
a.
True
b.
False
True
123
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42. Ethnocentrism refers to a natural tendency of people to regard their own culture as superior and to downgrade or
dismiss other cultural values.
a.
True
b.
False
True
123
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43. Ethnocentrism refers to a natural tendency of people to regard their own culture as inferior to other cultures.
a.
True
b.
False
False
123
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44. German, Swiss, and North American cultures are among the high-context cultures.
a.
True
b.
False
False
124
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45. The extent to which trade and investments, information, social and cultural ideas, and political cooperation flow
between countries is called _____.
a.
standardization
b.
industrialization
c.
globalization
d.
internationalism
e.
linguistic pluralism
c
104
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
46. Today’s companies compete in a _____.
a.
growingly domestic
b.
low-context culture
c.
high-context culture
d.
Greenfield economy
e.
borderless world
e
104
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
47. _____ is a concept that proposes that corporations can alleviate poverty and other social ills by selling to the world’s
poorest people.
a.
Cream of the crop
b.
Skimming the barrel
c.
Bottom of the pyramid
d.
Top of the peak
e.
Base hierarchy
c
104
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
48. The Digitec company has recently decided to design and manufacture a laptop that retails for under $50, in an effort to
make information technology available to people in places like rural Africa and rural India. This is known as what type of
strategy?
a.
b.
c.
d.
e.
a
104
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
A
49. Companies that think _____ have a competitive edge.
a.
globally
b.
regionally
c.
nationally
d.
strategically
e.
“customers first”
a
104
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
50. _____ places an emphasis on a worldwide perspective.
a.
Polycentric companies
b.
Geocentric companies
c.
Ethnocentric companies
d.
Regiocentric companies
e.
Domestic companies
107
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
51. Which of the following refers to engaging in the international division of labor so as to obtain the cheapest sources of
labor and supplies regardless of country?
a.
Franchising
b.
Licensing
c.
Market entry strategy
d.
Outsourcing
e.
Activity
110
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
52. The Maquiladora industry along the Texas-Mexico border on the Mexico side uses cheap labor for assembling
products. This lowers the price for U.S. consumers and is an example of:
a.
licensing.
b.
joint venture.
c.
outsourcing.
d.
franchising.
e.
none of these.
c
110
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
A
53. Most firms begin with which strategy to enter foreign markets?
a.
Exporting
b.
Greenfield venture
c.
Joint venture
d.
Acquisition
e.
Direct investment
a
110
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
54. Which of the following is an entry strategy in which the organization maintains its production facilities within its
home country and transfers its products for sale in foreign markets?
a.
Franchising
b.
Licensing
c.
Exporting
d.
Greenfield venture
e.
Joint venture
c
110
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
55. What is exporting?
a.
Countertrade
b.
The barter of products for products, often used in developing nations
c.
Items produced in the home country for sale in foreign markets
d.
All of these
e.
None of these
110
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
56. Go RVing, a U.S. company, built a subsidiary from scratch in England. This is an example of:
a.
franchising.
b.
greenfield venture.
c.
joint venture.
d.
exporting.
e.
licensing.
110
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
A
57. All of the following are components of cultural intelligence, except _____.
a.
physical
b.
cognitive
c.
emotional
d.
analytical
e.
all of these
110
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
58. The Nissan plant in Mississippi is an example of a _____.
a.
greenfield venture
b.
joint venture
c.
direct investment
d.
foreign affiliate
e.
direct acquisition
a
110
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
59. Exporting, licensing, and direct investing are called _____ strategies because they represent alternative ways to sell
products and services in foreign markets.
a.
globalized
b.
expansion
c.
retrenchment
d.
market entry
e.
concentrated business
110
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
60. As a first step into international business, which two countries are most companies going to today?
a.
Russia and Japan
b.
Sweden and Germany
c.
China and India
d.
Brazil and Philippines
e.
Indonesia and Brazil
c
111
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
61. ____ is the most widespread approach to international involvement in China and India.
a.
Importing
b.
Exporting
c.
Manufacturing
d.
Outsourcing
e.
Greenfield venture
111
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
62. Heineken begins by exporting its product into new markets, and then ____ to a local brewer to establish its position in
the market.
a.
countertrades
b.
licenses
c.
exports
d.
franchises
e.
markets
111-112
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
A
63. Which of the following is a form of franchising?
a.
Direct investing
b.
Licensing
c.
Exporting
d.
Countertrade
e.
Barter trade
111-112
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United States – BUSPROG: Analytic
United States – LA – DISC: Environmental Influence
Bloom’s: Knowledge
64. CRL, a European plastics manufacturer, is considering forming an alliance with a U.S. military goods manufacturer to
develop a new type of polymer that can be used for international industrial and military applications. Such a partnership
represents what type of direct investment?
a.
Franchising
b.
Joint Venture
c.
Wholly owned affiliate
d.
Greenfield venture
e.
Outsourcing
112