There is a growing tendency for firms to use strategic planners to devise the corporate
plan, which is then handed to operations people for execution.
An example of an informal, cognitive institution would be the celebration of
Halloween.
When people are kidnapped for ransom, the right response is to pay the ransom, get the
hostages released, and then retaliate.
The theory of absolute advantage suggests that under free, unregulated trade, each
nation should specialize in producing those goods it can produce most efficiently.
Advertising is generally more effective than the other promotional mix elements.
Public international law refers to legal relations between governments and publicly
held companies.
Analysis of the paying habits of customers is studied as part of the sociocultural forces
screening.
Country risk assessment is an evaluation that assesses a country’s political situation and
policies to determine how much risk exists of a change in that country’s government.
The United States and Canada are small power distance countries because they expect a
level playing field, socially, at least at the ideal level.
The EU uses the CE mark to certify health and safety.
The ISO (International Organization for Standardization) is the only international
standardizing organization.
Direct exporting is simpler than indirect exporting because it requires neither special
expertise nor large cash outlays.
The random walk hypothesis suggests that the best predictor of tomorrow’s currency
prices are today’s prices.
Cultures that tolerate high levels of ambiguity, such as Japan and Germany, are likely to
be more change-friendly.
There is a trend toward treating third-country nationals the same as home-country
expatriates in terms of their compensation plans.
A fundamental drawback of indirect exporting is that companies must pay a
commission to all of the companies that handle their exports.
Bonuses are payments made to compensate expatriates for the extra costs they must
incur to live as well abroad as they did in the home country.
Firms that include imported parts in their finished products must pay duty on the
imports, but this duty is returned when the product is exported (customs drawback).
Management should take the attitude that the stability of government policy is more
important than is the particular form of government of a country.
Few international companies are organized by function at the top level.
The United Kingdom Bribery Act includes penalties for corporate failure to prevent
bribery, but only if the act of bribery occurred in the United Kingdom.
Supporters of globalization generally argue that it is the best strategy for advancing the
world’s economic development.
International trade includes exports, imports, and foreign direct investment.
People from cultures with high power distance will feel most comfortable with top
managers’ making decisions and issuing directives.
In a joint venture, a management contract is often used as a control mechanism by
firms, even if they hold only a minority position in the venture.
The horizontal organization has been characterized as antiorganization because its
designers try to remove the constraints imposed by the conventional organizational
structure.
Change is understood differently in different cultures, which suggests that leading
global change is a challenging process.
Advantages of the virtual corporation concept include that it allows a company to build
competence from the ground up and to increase management’s control over the
corporation’s activities.
External forces in the international business environment are commonly called
uncontrollable forces.
Approximately 70 percent of the exports from developed countries go to developed
countries.
Global standardization of trade-related law is progressing slowly.
The purpose of all accounting is to provide internal and external decision makers with
the financial data they need to make their decisions.
Switzerland exports cheese and chocolate because one of its factor endowments is lots
of rich agricultural land.
Strategic alliances are:
A. partnerships between competitors, customers, or suppliers that may take various
forms.
B. another name for a growth triangle.
C. arbitration.
D. none of the above.
E. two of A, B, and C.
The Foreign Corrupt Practices Act is U.S. legislation that:
A. outlines bribery practices that are allowed abroad but not in the United States.
B. prohibits bribery by American companies abroad.
C. allows bribery in foreign dealings when culturally sanctioned.
D. outlines and prohibits foreign bribery practices by foreign nationals in foreign
nations.
E. clearly states the basis for illegal bribery.
Geographical proximity contributes to:
A. knowledge of the country by its neighbors.
B. lower freight costs.
C. the likelihood of trade relationships.
D. all of the above.
The first principle of the WTO’s five basic principles is trade without:
A. negotiation.
B. economic reform.
C. discrimination.
D. competition.
According to the text, licensing agreements usually stipulate that a royalty of
__________ be paid to the licensor.
A. 2 to 5 percent of profits
B. 2 to 5 percent of sales
C. 5 to 7 percent of profits
D. 5 to 7 percent of sales
E. none of the above
Home leave is:
A. a standard allowance.
B. a bonus standard for every employee.
C. a periodic trip back to the home country made by employees and their families.
D. an encouragement for the employee to travel outside the home country.
E. two of the above.
Petroleum, a relatively cheap nonrenewable energy source, is:
A. in abundant supply but is not environmentally clean.
B. being increasingly depleted and is expected to run out in another 50 years, but in the
meantime, improved retrieval techniques are being developed.
C. clean, cheap, and available, but most of the reserves are located in countries whose
leadership is critical of the industrialized world.
D. expected to run out in another 10 years and needs to be replaced with renewable
energy sources quickly.
The U.S. current account deficit can be explained by:
A. citizens of other nations wanting to hold dollars because the dollar is a stable
currency.
B. foreigners wanting to invest in the United States.
C. U.S. citizens importing more than they are exporting.
D. B and C.
Densely populated areas coincide with:
A. rivers, lakes, and seacoasts.
B. inland waterways.
C. rich mineral reserves and rare earth deposits.
D. low levels of environmental awareness.
Generally, __________ products require greater modification to meet local market
requirements worldwide.
A. low-priced
B. maintenance
C. consumer
D. industrial
E. none of the above
The balance-of-payments account is divided into the following three major
subaccounts:
A. trade, capital, and debt.
B. cash flow, assets, and reserves.
C. services, cash flow, and debt.
D. current, capital, and reserves.
An example of environmental dumping can be found in the:
A. maquiladora plants of Mexico, located near the U.S. border and operating at lower
environmental standards than would be required in the United States.
B. nuclear waste shipments to developing nations.
C. garbage shipments from New Jersey to developing nations.
D. all of the above.
E. two of A, B, and C.
Generally, management prefers global product standardization because:
A. there can be longer production runs, which lowers costs.
B. a standardized corporate visual identity can help project a consistent image.
C. the creative work needed for promotion doesn’t need to be done for each market.
D. two of the above.
E. all of A, B, and C.
Transfer pricing may serve as a vehicle for:
A. moving blocked goods from one country to another.
B. moving profits and blocked royalties from high-tax to low-tax subsidiaries.
C. manager motivation.
D. A, B, and C.
Sir Isaac Newton put England on the gold standard when he:
A. declared, as master of the English mint, that he would sell gold for 1 pound, 1
shilling, 1 pence, under the law of one price.
B. set a market price for gold, the British pound and the U.S. dollar.
C. established a fixed equivalency between gold and the British currency.
D. brought the matter to Queen Anne, who declared Britain would follow the gold
standard.
Companies in the United States, Canada, and the United Kingdom tend to:
A. rely on equity more than do companies in most other countries.
B. depend on debt more than do companies in other countries.
C. divide their equity and debt almost evenly.
D. rely on retained earnings more than do companies in most other countries.
Stakeholder theory pushes managers to be clear about how they want to do business, so
it encourages:
A. recognition of and transparency with values and underlying principles.
B. discussion of profit center margins.
C. strategy development from the top down.
D. B and C.
According to the text, including such items as maintenance, repair, operating supplies,
office equipment, and other services and supplies, indirect procurement can account for
as much as what percent of the total purchasing expenditures in companies?
A. 15 percent
B. 30 percent
C. 50 percent
D. 70 percent
E. 80 percent
LASH and RO-RO are:
A. innovative material-handling methods.
B. kinds of containerization.
C. Panamax ships.
D. barges used in materials handling.
E. Japanese import requirements.
When considering where to export, advantages to managers of focusing on a nation that
is already a sizable purchaser of goods coming from the home country include:
A. the political climate in the importing nation is relatively stable.
B. there are abundant natural resources in the importing nation.
C. satisfactory transportation facilities have already been established.
D. all of the above.
E. two of A, B, and C.
According to the text, approximately ______ of expatriate failures are family-related.
A. 25 percent
B. 40 percent
C. half
D. nearly 75 percent
E. 90 percent
Project GLOBE found that:
A. all cultures think of leadership in the same way.
B. leadership is individualistic to each culture, with little overlap.
C. leadership is nonexistent in some developing countries.
D. leadership tends to be stable in developed economies and unstable in developing
economies.
E. some leadership traits are shared among all cultures
Heavy oil is:
A. a group of unconventional oil sources such as oil sands, shale, coal, and natural gas,
all of which via processing can yield oil.
B. a rich oil found in deposits in Saudi Arabia and Kuwait whose molecular weight is
heavier than normal oil.
C. oil extracted from biomass that is reprocessed.
Heavy oil is oil that is obtained from unconventional sources and usually through
additional processing involving heating and pressure treatments. It does not flow easily
and cannot be obtained from wells, as can conventional oil.
Financial forces such as inflation and taxation are considered uncontrollable because:
A. there is nothing a manager can do to adjust to them, so the recommended approach is
to ignore them.
B. they are external forces beyond the influence of the firm, around which a manager
can manage.
C. they are external to the firm and their influence is to be avoided.
D. they are unpredictable.
In the United States, the Smoot-Hawley Tariff Act:
A. outlawed tariffs for U.S. imports.
B. led to the Wall Street crash of 1929.
C. established some of the highest tariffs the United States has known.
D. two of the above.
E. all of A, B, and C.
Bodies of water that provide inexpensive access to interior markets are known as:
A. inland waterways
B. seaway outlets.
C. river systems.
D. inland oceans.
The CE mark in the EU:
A. shows that an export license has been issued.
B. indicates the electric current, DC or AC.
C. shows that the product conforms to health and safety standards.
D. A and C.
International business differs from domestic business in that a firm operating across
borders must deal with:
A. all of C, D, and E.
B. two of C, D, and E.
C. the foreign environment.
D. the international environment.
E. the domestic environment.
ASEAN began as a:
A. free trade pact.
B. cooperative marketing alliance among Southeast Asian nations.
C. security and military alliance among Southeast Asian nations.
D. response to the EU.
The balance-of-payments account is a record of:
A. the total tangible trade flows of a country over a five-year period.
B. a country’s transactions with the rest of the world.
C. a country’s total debt service payments during a one-year period.
D. the outstanding balance of a country’s debt payments for the fiscal year.
In larger, older organizations:
A. more decisions are delegated to the subsidiary headquarters.
B. decisions are delegated to empowered, decentralized subsidiary managers.
C. more decisions are made at headquarters of the parent company.
D. all of the above.
E. two of A, B, and C.
The United Nations is probably the best known among:
A. for-profit organizations.
B. social service organizations.
C. international organizations.
D. military organizations.
As stated in the text, an international business is:
A. a business whose activities involve crossing national borders.
B. the operations of a company outside its home or domestic market.
C. an organization with multicountry affiliates that each formulate their own business
strategy.
D. an organization that attempts to standardize operations worldwide.
E. all of the above.
A polycentric staffing policy:
A. involves human resource policies that are created at the local level for the specific
context in which the local operations operate.
B. results in the company hiring local managers who are familiar with the home country
of the IC and with its corporate culture, policies, and practices.
C. may confront the problem of having the best people pirated away by local firms or
other IC subsidiaries.
D. two of the above.
E. all of A, B, and C.
