Although some business areas are affected by culture, accounting and finance are
objective and thus universal.
The term international business is used to describe an organization with multicountry
affiliates, each of which formulates its own business strategy based on perceived market
differences.
An advantage of bottom-up planning is that the people responsible for attaining the
goals are formulating them.
If a firm decides to become involved in overseas manufacturing, it has two options: (1)
wholly owned subsidiary and (2) joint venture.
Backward vertical integration establishes facilities to manufacture inputs used in the
production of a firm’s final product.
If a nation is continuing to receive appreciable amounts of foreign investment, its
investment climate must be favorable.
In some cases, an international company legally can keep more profit after taxes by
allocating work and prices.
Analysis of the paying habits of customers is studied as part of the sociocultural forces
screening.
Zimbabwe’s government offers an example of government instability.
Cognitive institutions are important to the international manager because these
institutions help the manager understand the schema operating in their international
environments and are easily missed or misunderstood by the non-native, so schemas
can easily lead to misunderstandings.
Once in export markets, new exporters tend to maintain their focus on them, despite
what is happening in the home market.
According to the text, the domestic environment is all of the uncontrollable forces
originating in the home country that surround and influence the firm’s life and
development.
If a firm decides to set up its own export operation rather than do indirect exporting, the
firm must obtain overseas distribution.
The Bretton Woods Conference established the European Union currency, the euro.
A structure organized by more than one dimension at the top level is a matrix
organization.
Dynamism means that the leader must be dynamic.
Some think that renewed focus on exchange rates would be a good path forward for the
IMF, which is struggling with core issues related to its purpose.
American depository receipts are held by a bank in the stock’s home country and these
receipts then are traded on the U.S. exchange.
Switzerland, China, and Colombia are nations that present topographic challenges to
marketers because their markets are divided by mountain ranges.
Often new exporters think that they won’t have to localize their approach, that a
marketing technique or distribution system that works in one country will work in
another.
Currency exchange rate movements are well understood by economists and can be
accurately forecast, which eliminates risk for the international seller operating with
exposure outside the home currency.
A business entity with a clearly defined market, specific competitors, the ability to carry
out its business mission, and a size appropriate for control by a single manager is a
strategic operating unit.
Market indicators are economic data that correlate highly with market demand for a
product.
Trading and pooling alliances are typically different in their goals, optimal structures,
and managerial challenges.
A sales company is established to market goods or services, not to produce them.
The United States can be considered politically unstable compared to many countries.
Linder’s theory of overlapping demand explains the direction of trade for minerals and
agricultural products.
A pioneer will most likely succeed when there are low entry barriers and the firm has
sufficient size, resources, and competencies to take advantage of its pioneering position.
Exporting can extend a product’s life cycle by exporting to currently unserved markets
where the product will be at the introduction stage of the life cycle.
Creating an environment for team norms to come into play is especially useful in global
teams, because they are characterized by high levels of diversity.
Entering foreign markets may be described by two levels of involvement,
nonequity-and equity-based.
International strategy helps firms to make choices about how to deploy scarce resources
in order to achieve their international objectives.
The number of FX markets, along with floating exchange rates, varying country
inflation rates, advances in technology for the management of cash, and the growth of
the derivatives market are among the conditions that have led to the growth of
international finance centers.
The Internet has made direct exporting much easier.
Most companies can enter a market in stages. The order listed in the textbook is
establishment of a foreign sales company, exporting, local assembly, and
manufacturing.
If you are a Westerner and become victim of a miscellaneous law in a foreign country,
all you have to do is call your embassy and you’ll be released to your government.
Material culture describes how people make things, who makes what, and why.
Scenarios are designed to assist managers:
A. in becoming aware of the critical elements of the external forces.
B. in brainstorming various “what-if” situations.
C. in preparing budgets.
D. all of the above.
E. two of A, B, and C.
Examples of the kinds of uncontrollable forces listed in the text are:
A. competitive.
B. technological.
C. personnel.
D. two of the above.
E. all of A, B, and C.
The World Bank’s two major institutions are the International Development Association
and the:
A. Collateral-Based Lending Agency.
B. International Bank for Reconstruction and Development (IBRD).
C. International Microloan Bank.
D. International Bank for Development.
In the area of shipment risk, ocean vessels assume:
A. all the risk for the safety of their cargo.
B. none of the risk for the safety of their cargo, except for negligence.
C. exporters or importers will have bought adequate insurance.
D. marine environments are usually safe.
E. half of the risk for the safety of their shipment.
Why are rare earths a concern in industrialized economies?
A. Although they are relatively common, they do not occur in concentrated form often.
B. They are very rare.
C. They are used in the smelting process.
D. They are not a concern, except for political reasons.
What is the role of the home country in risk assessment?
A. It has no role.
B. It is a significant consideration.
C. It is used initially, but then more micro issues become the focus of CRA.
D. None of the above.
E. Two of A, B, and C.
A middle ground between an ad campaign that is standardized worldwide and an
entirely local ad campaign is called a:
A. hybrid advertising campaign.
B. programmed-management approach.
C. computerized-management approach.
D. shared-management approach.
E. none of the above.
According to the text, the firm’s ultimate manager of strategic planning is the:
A. vice president for planning.
B. chief operating officer.
C. firm’s chief executive officer.
D. director of the strategic planning department.
E. none of the above.
Benefits of joint ventures may include:
A. the ability to respond to strong nationalistic sentiment in the host nation.
B. access to expertise that the company lacks.
C. differing strategies and cultures of the partners.
D. two of the above.
E. all of A, B, and C.
Development of global leadership skills is:
A. a linear and exacting process.
B. well established and can be followed by anyone wanting to become a global leader.
C. a process that is not individualized.
D. A and C.
E. a nonlinear process that involves a set of diverse experiences.
A polycentric staffing policy is appropriate when:
A. there are low levels of pressure for cost reduction and high levels for localization.
B. information technology is of increasing importance.
C. all of A, B, and D.
D. international companies are entering India, where there are more women in
management.
E. two of A, B, and D.
What is appealing about the gold standard is:
A. everyone loves gold.
B. its simplicity.
C. its transportability.
D. its carrying costs.
Facebook is:
A. an organization based on kinship.
B. an organization based on free association.
C. a tool that international marketers best avoid, given the complexities of culture.
D. a passing fad that will absorb many marketing budgets but won’t produce much in
the way of results.
The primary dimensions that need to be considered when designing the structure of an
international company are:
A. product and technical expertise, geographic expertise, and functional expertise.
B. product and technical expertise, customer expertise, and functional expertise.
C. geographic expertise, functional expertise, and customer expertise.
D. all of the above
E. two of A, B, and C.
Compared to equity financing, debt financing is thought to be:
A. less expensive, because interest on the debt is usually tax deductible.
B. more expensive, because interest rates are beyond the control of the company.
C. more expensive, because debt markets are professionally run and mostly
institutional.
D. less expensive, because the debt is usually aggregated.
One attribute of the U.S. tariff schedule is:
A. that it is printed in both Arabic and Hebrew.
B. how specific it is.
C. that its categories are quite general and easy to apply.
D. that its harmonized version can be accessed via cell phone and iPad.
Foreign subsidiaries must obey the local laws. If they don’t, according to the text they
are subject to:
A. legal action by the host country.
B. two of A, C, and D.
C. seizure by the host government.
D. cancellation by the parent company of its right to do business in the host country.
E. all of A, C and D.
Zimbabwe is an example of:
A. a richly endowed country that has suffered because of government instability.
B. a government that expropriated private property, that is, nationalized it, and then
redistributed it.
C. a country whose leadership stole the 2008 election.
D. all of the above.
E. two of A, B, and C.
According to the text, which of the following is true?
A. Zara’s competitive advantage comes from its stylish fashion design.
B. Zara’s supply chain management processes have allowed the company to eliminate
inventory.
C. Two of A, B, and D.
D. Zara removes its product lines, including ones that have been selling well, every two
weeks or so.
E. All of A, B, and D.
The Gold Key Service provided through many American embassies offers companies
the following:
A. orientation briefings.
B. market research.
C. introductions to potential partners.
D. assistance in developing a marketing strategy for the particular country.
E. all of the above.
The GLED model of global leadership development:
A. involves antecedents and a process to build higher levels of expertise.
B. applies to managers already belonging to the company.
C. involves extensive foreign training and language acquisition.
D. is used by the State Department.
E. C and D.
Patent trolling is the process of:
A. looking for loopholes in patent protection and exploiting them.
B. recording and registering patents in foreign countries to protect the firm’s IP.
C. searching out patents that have expired and negotiating their replacements.
D. legal research that uncovers obscure, deceased patent holders and liberates their
inventions.
E. none of the above.
Reasons for international firms to enter into foreign markets are linked to which of the
following desires?
A. Increased sales and reduced costs
B. Protecting sales and profits from being eroded by competitors
C. Creation of new markets.
D. All of the above.
E. Two of A, B, and C.
According to the text, a brand name has been pirated:
A. when a firm’s brand name has been registered by another firm, which is employing it
for its own product’s name.
B. when it is registered by someone who hopes to profit by selling the name back to the
originating firm.
C. if it is being used by sailors who are criminals.
D. two of the above.
E. all of A, B, and C.
Economic integration often progresses:
A. in stages, from free trade area to customs union to common market.
B. in stages, totally dependent on the members’ national economic strength.
C. as a result of cultural beliefs and economic strength.
D. in unpredictable ways due to unintended consequences.
Manufacturing rationalization is:
A. the allocation of scarce resources.
B. the division of production among several subsidiaries so that each produces only a
limited number of components for all subsidiaries.
C. the concentration of production at one site to get economies of scale.
D. the production by a subsidiary for its own national market.
Climate influences:
A. intelligence and energy levels, per the North-South divide.
B. what people can do, physically and economically.
C. levels of emotional well-being.
D. adjustment and motivation.
The worldwide stock of outward FDI is estimated to have increased _______ between
1990 and 2010.
A. 3-fold
B. 5-fold
C. 9-fold
D. 12-fold
E. 17-fold
A contractual arrangement in which one firm grants access to its patents, trade secrets,
or technology to another for a fee is:
A. an exporter.
B. a sales company.
C. a management contract.
D. a joint venture.
E. none of the above.
Hall suggests that communication tends to be implicit and indirect in:
A. the United States.
B. high context (HC).
C. low context (LC).
D. Australia.