Hotel chains are large providers of international management services through
collaborative operations. All of the following are reasons for this EXCEPT which one?
A) Some governments have restricted foreign ownership in hotels.
B) Local hotel owners may be very knowledgeable about real estate, but know little
about hotel operations.
C) Local companies can forgo making a capital investment.
D) Hotel chains can offer global brand recognition.
Which of the following governmental actions is LEAST likely to increase national
debt?
A) macroeconomic stimulus plans
B) unemployment benefits
C) corporate bailouts
D) T-bond sales
Before the strong emphasis on zero defects, U.S. companies operated under the premise
of ________, which allowed a level of poor quality with the assumption that service
warranties and repair facilities would deal with product defects.
A) Six Sigma
B) acceptable quality level
C) just-in-time inventory management (JIT)
D) ISO 9000
A negotiable certificate issued by a U.S. bank to represent the underlying shares of a
foreign corporation’s stock is called a(n) ________.
A) Euroequity
B) American Depositary Receipt
C) Global Depositary Receipt
D) European Depositary Receipt
A manager has the task of collecting and analyzing data that will help the firm decide
where to locate its international operations. Which of the following BEST describes
how the manager should handle this task?
A) conduct extensive research, regardless of the expense, in order to avoid costly
mistakes
B) compare the costs of data collection with the probable payoff it will generate for the
firm
C) continue data gathering until all data have been collected, regardless of how long
this takes
D) focus all data collection on governmental resources because they have the highest
reliability
All of the following are types of products that are usually exceptions to what is
predicted by the product life cycle theory EXCEPT ________.
A) trendy clothing
B) luxury items
C) differentiated products
D) consumer durables
In this example, assume that both trade and production factors are internationally
mobile. Using domestic labor, the labor cost per silicon chip is $.10 in Japan and $.20 in
the United States. Using domestic capital, the capital cost per chip is $.10 in Japan and
$.05 in the United States. Chip transportation in either direction is $.10. Japanese labor
is willing to work in the United States for $.15 per chip including the workers’ transport
cost. U.S. capital will go to Japan at a cost of $.08 per chip including transaction costs.
Which silicon chips will the United States buy?
A) those made in Japan with Japanese labor and capital
B) those made in the United States with U.S. labor and capital
C) those made in Japan with Japanese labor and U.S. capital
D) those made in the United States with Japanese labor and U.S. capital
What is the primary problem associated with Anglo American PLC’s ART program?
A) unknown side effects to drugs and treatment
B) rising costs of medications and procedures
C) poor treatment adherence by employees
D) lack of sufficient insurance coverage
Which of the following is generally the most costly information source for companies?
A) marketing research and consulting companies
B) reports from international agencies
C) reports from government agencies
D) published reports by accounting firms
IBM puts investments, people, and work anywhere in the world based on the best mix
of costs, skills, and environment and uses sophisticated strategies and technologies to
support and coordinate activities. IBM most likely uses a ________ structure.
A) classical
B) product
C) neoclassical
D) locational
An MNE in which new knowledge and capabilities are developed in both domestic and
foreign locations, both independently and jointly, and then diffused throughout the
worldwide organization, is following a ________ strategy.
A) transnational
B) localization
C) global
D) matrix
A Chief Financial Officer (CFO) in an international company would most likely be
responsible for all of the following activities EXCEPT ________.
A) managing short-term capital needs
B) making financial decisions
C) making investment decisions
D) managing employee repatriation
Assume Company A receives a proposal from Company B to be a joint venture partner
abroad. Company A is most likely to make its decision based on ________.
A) an opportunity-risk matrix
B) a go/no-go basis
C) a global matrix comparison
D) an oligopolistic reaction
MNEs are attracted to regional trading groups because of their large market sizes and
production locations, and because they ________.
A) are good sources for raw materials
B) implement trade restrictions
C) offer both internal and external tariffs
D) have very little competition
Shelly, a manager at a global firm, is studying the foreign currency intervention
practices of Indonesia. Shelly is most likely examining ________ factors.
A) institutional setting
B) fundamental analysis
C) confidence
D) circumstantial
According to the accounting concept of mutual recognition, ________.
A) companies are required to reconcile financial statements to local GAAP
B) a country would accept financial statements of foreign companies prepared
according to the GAAP of the foreign country if a company wanted to list its shares on
that country’s stock exchange
C) companies would have to mutually agree to use GAAP issued by the IASB
D) companies would have to recast their financial statements in terms of local GAAP
Which of the following assumptions was made in the original theories of absolute and
comparative advantage?
A) Specialized labor seeks efficiency.
B) Labor resources are fully employed.
C) Countries pursue objectives other than economic efficiency.
D) Production networks enable countries to concentrate on particular functions.
The ________ starts with the same accounting framework used to calculate GDP but
then adjusts for values assigned to environmental quality, population health, livelihood
security, equity, free time, and educational attainment.
A) Gross National Index
B) Net National Product
C) Genuine Progress Indicator
D) Human Development Index
Which of the following is NOT a method of capital budgeting in a global context?
A) payback period
B) net present value
C) internal rate of return
D) non-discount method
A major benefit of the international division structure is ________.
A) outsourcing distribution and shipping tasks
B) responding quickly to foreign events
C) diversifying most product groups
D) hiring low-cost, local workers
Which of the following was part of the stability and growth pact that was required for
countries to be part of the European Monetary Union?
A) The annual government budget must be no greater than 3% of GDP.
B) The annual inflation rate must remain within 1.5% of the three best-performing EU
countries.
C) The annual government budget deficit could be no greater than 60% of GDP.
D) The annual inflation rate must remain within 5.5% of the four best-performing EU
countries.
The ________ of a firm is the share of its total output that is exported.
A) freight forward
B) incremental export
C) export intensity
D) intermodal export
Dixon Manufacturing, a British MNE, believes that its business practices are superior,
so it does not make any policy changes in foreign markets. Dixon Manufacturing most
likely takes a(n) ________ approach to staffing.
A) ethnocentric
B) polycentric
C) geocentric
D) monocentric
Carrefour has been more successful than Walmart in Europe, whereas Walmart has been
more successful than Carrefour in the United States. What is the most likely reason for
these results?
A) first-mover advantages
B) nationalistic preferences of consumers
C) lack of knowing how to adapt products
D) increased exporting fees and transportation costs
The European Union is an example of ________ integration.
A) regional
B) relative
C) global
D) bilateral
________ is the framework that managers apply to determine the competitive moves
and business approaches that run the company.
A) Competition
B) Growth
C) Strategy
D) Vision
In a market economy, the patterns of resource allocation are most directly influenced by
________.
A) government administrators who monitor the equilibrium of supply and demand
B) industry coalitions that strive to improve the efficiency of production and service
C) consumer group alliances that negotiate with firms to improve product quality
D) consumers who “vote” by their personal decision to buy or not buy products
Which of the following statements is most likely true regarding relationships between
MNEs and stakeholders?
A) An MNE typically serves all stakeholder groups equally at any given time.
B) No individual stakeholder group is powerful enough to cause the demise of an MNE.
C) All stakeholders of an MNE have the same short-term and long-term goals and
interests.
D) The inability to adequately meet the long-term needs of all stakeholders increases
the probability of an MNE failing.
A ________ structure is the ideal way to organize work when global integration is more
important than local responsiveness and the industry structure encourages cost
leadership.
A) decentralized
B) matrix
C) divisional
D) functional
Garrison Industries, a global firm, provides financial information in its annual reports in
more than one currency. Garrison Industries is most likely ________.
A) trying to provide information to users from different countries
B) providing footnotes to clarify its accounting practices
C) implementing global reporting requirements
D) altering its losses to show gains