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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
2. Large international firms typically are called multinational corporations.
a.
True
b.
False
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
4. Fifteen member states of the EU have adopted the rupee, as a single European currency.
a.
True
b.
False
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
6. There are three components to cultural intelligence: cognitive, emotional, and physical.
a.
True
b.
False
7. A tendency to regard their own culture as superior and to downgrade other cultures reflects an attitude called
geocentric.
a.
True
b.
False
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
9. With exporting, the corporation transfers its products for sale and its production facilities in foreign countries.
a.
True
b.
False
10. Seeking cheaper sources of materials or labor offshore is called offshoring.
a.
True
b.
False
11. The least costly and least risky direct investment is called a greenfield venture.
a.
True
b.
False
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
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
14. When a company builds a subsidiary from scratch in a foreign country it is called a greenfield venture.
a.
True
b.
False
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
16. A form of direct investment is franchising.
a.
True
b.
False
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
18. The sub-divisions of the international environment are the economic, the sociocultural, and the legal-political
environments.
a.
True
b.
False
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
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
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
22. An MNC is managed as an integrated worldwide business system.
a.
True
b.
False
23. The primary emphasis of polycentric companies is on their home countries.
a.
True
b.
False
24. Geocentric companies are truly world-oriented and favor no specific country.
a.
True
b.
False
25. A country's physical facilities that support economic activities make up its infrastructure.
a.
True
b.
False
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
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
28. The countries experiencing political stability face the greatest threat of violence.
a.
True
b.
False
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
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
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
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
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
34. According to the GLOBE Project, gender differentiation refers to the extent to which a society maximizes gender role
differences.
a.
True
b.
False
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
36. Social values greatly influence organizational functioning and management styles.
a.
True
b.
False
37. According to the GLOBE Value Dimensions, Japan and Russia both have very high performance orientation.
a.
True
b.
False
38. When an organization has a humanistic attitude, it values employees as an end in themselves.
a.
True
b.
False
39. A high performance orientation means that a society encourages toughness, assertiveness, and competitiveness.
a.
True
b.
False
40. A low-context culture is a culture in which communication is used to enhance personal relationships.
a.
True
b.
False
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
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
43. Ethnocentrism refers to a natural tendency of people to regard their own culture as inferior to other cultures.
a.
True
b.
False
44. German, Swiss, and North American cultures are among the high-context cultures.
a.
True
b.
False
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
46. Today's companies compete in a _____.
a.
growingly domestic
b.
low-context culture
c.
high-context culture
d.
Greenfield economy
e.
borderless world
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
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.
Bottom of the pyramid strategy
b.
Skimming the barrel strategy
c.
Cream of the crop strategy
d.
Top of the peak strategy
e.
Base price strategy
49. Companies that think _____ have a competitive edge.
a.
globally
b.
regionally
c.
nationally
d.
strategically
e.
"customers first"
50. _____ places an emphasis on a worldwide perspective.
a.
Polycentric companies
b.
Geocentric companies
c.
Ethnocentric companies
d.
Regiocentric companies
e.
Domestic companies
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
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.
53. Most firms begin with which strategy to enter foreign markets?
a.
Exporting
b.
Greenfield venture
c.
Joint venture
d.
Acquisition
e.
Direct investment
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
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
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.
57. All of the following are components of cultural intelligence, except _____.
a.
physical
b.
cognitive
c.
emotional
d.
analytical
e.
all of these
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
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
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
61. ____ is the most widespread approach to international involvement in China and India.
a.
Importing
b.
Exporting
c.
Manufacturing
d.
Outsourcing
e.
Greenfield venture
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
63. Which of the following is a form of franchising?
a.
Direct investing
b.
Licensing
c.
Exporting
d.
Countertrade
e.
Barter trade
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
