Policies are broad guidelines issued by upper management for the purpose of assisting
lower-level managers in handling recurring problems.
Expatriate assignments have been reported to lead to faster promotions.
In the year 2008, twice as much FDI invested in the United States was spent in
acquiring established businesses than in setting up new ones.
Country risk assessment is a measure of the threat of nationalization.
According to the text, the product is the central focus of the marketing mix.
Multiplicity and interdependence are among the four dimensions of complexity
identified by scholars.
The term international company refers to both global and multidomestic companies.
Currency devaluation helps a nation avoid losing markets and regain competitiveness in
world markets.
Trade restrictions violate the spirit of the WTO.
General surveys are not done with a specific firm in mind.
According to the text, environmental elements over which management does have some
control—including competitive, labor, and financial forces—are called internal forces.
International freight, insurance, and packing can add as much as 8 to 10 percent to the
quoted price, depending on the sales term used.
For the conservative international firm, there is no reason to move money other than the
repatriation of profits.
The spot rate is the rate for exchange within two days in the currency market.
As exemplified by companies such as Campbell’s, international firms seldom have to
change name, labels, or colors due to cultural differences.
Outsourcing decisions, except for the decision to use global sources of supply, are
extensions of the make-or-buy decisions of earlier eras.
On an open account, payment can be made once the exports have been sold.
With a multidomestic strategy, the cost and complexity of coordinating a range of
different strategies and product offerings across national and regional markets can be
substantial.
Facebook is a social institution based on free association.
The combination of an openness to and awareness of diversity across cultures and
markets with a propensity and ability to synthesize across this diversity has been termed
a transnational mindset.
Most virtual teams meet at their launch and during crisis.
Public international law refers to legal relations between governments and publicly
held companies.
Many corporations do not hedge translation exposure.
Sales companies will import in their own name from the parent and will invoice in the
currency of the parent company.
The more familiar, or the more similar, conditions in the host country are perceived to
be, the more likely headquarters is to rely on subsidiary management.
The stakeholder model for environmentally sustainable business has failed because we
don’t have an accounting system to measure the present costs of environmental
irresponsibility.
The marketing mix is a set of strategy decisions made in the areas of product,
production, promotion, and pricing in order to satisfy the needs and desires of
customers in a target market.
Internal environmental forces are commonly referred to as controllable.
Companies controlled by other companies through ownership of enough voting stock to
elect majorities on the board of directors are called subsidiaries or affiliates.
Employees hired in the host country are sometimes called inpatriates.
Emerging industry-based B2B exchanges can help optimize the supply chain across an
entire network of organizations, not merely within a single company.
Generally, the host government will understand that a third-country national is better for
the parent company than a local executive would be.
The UN Convention on the International Sale of Goods (CISG) has established legal
rules and outlined the rights and obligations of the buyer and seller.
CIF and CFR terms are more convenient for foreign buyers because they merely have
to add the import duties, landing charges, and freight from the port of arrival to their
warehouses to establish their cost.
Although international firms maintain manufacturing facilities in countries at various
levels of development, manufacturing systems should not vary significantly within the
same company.
A variable levy confers benefit on the domestic producer, as with the EU variable levy
on grain.
The source of international law is frequently the United Nations.
These countries prefer debt to equity by large margins:
A. France, Italy, and Japan.
B. United Kingdom, Italy, and United States.
C. United States, Canada, and United Kingdom.
D. Japan, United States, and United Kingdom.
Which of the following are identified in the text as being drivers of globalization?
A. Technological
B. Social
C. Two of A, B, and D
D. Economic
E. All of A, B, and D
__________ was the world’s leading manufacturing country for about 1,800 years, until
it was replaced by Britain in about 1840.
A. The United States
B. Germany
C. India
D. France
E. none of the above.
Regarding foreign direct investment and trade:
A. historically, foreign trade has followed foreign direct investment.
B. foreign trade is typically more costly and more risky than making a direct investment
into foreign markets.
C. typically, a firm would hire sales representatives to live in overseas markets as a first
step in developing international trade.
D. fewer government barriers to trade, increased competition from globalizing firms,
and new production and communications technology are causing many international
firms to disperse the activities of their production systems to locations close to available
resources.
E. all of the above.
Frederick Gluck, management consultant, says that for firms to develop the flexibility
to compete, managements must make the following change(s) in their planning
methods:
A. top management must dedicate more time to deciding how things ought to be done.
B. the nature of planning must change from being an exercise in forecasting to being an
exercise in creativity.
C. planning processes and tools that assume a future much like the past must be
replaced.
D. strategic planning must be restored to strategic planning departments.
E. two of the above.
How many countries in the EU use the euro as their currency?
A. 17
B. 23
C. 15
D. 7
The largest portion of the world’s proven oil reserves is located in:
A. low-risk areas.
B. high-risk areas.
C. climate-challenging areas.
D. developed nations’ oil fields.
Managers of international companies that are attempting to develop a competitive
advantage face a formidable challenge because:
A. all of B, C, and D.
B. resources are always scarce.
C. there are many alternative ways to use the company’s scarce resources.
D. managers are forced to make choices regarding what to do and what not to do.
E. two of B, C, and D.
Which of the following is(are) true about the spouses of expatriates?
A. Many are unable to legally work in the host nation.
B. Nearly one-quarter were employed during the course of the expat assignment.
C. Many experience stages of grief, similar to the loss of a loved one, due to career
effects of the assignment.
D. Two of the above.
E. All of A, B, and C.
The existence of the rule of law in a foreign market suggests that:
A. lawyers will be necessary in any substantive business transaction.
B. personal relationships will be less effective than in a country governed outside the
rule-of-law system.
C. none of A, B, D, or E.
D. legal rulings will be the basis of any dispute resolution.
E. foreign investors can assume that their interests will be protected.
Natural resources are:
A. anything that is alive in the natural world.
B. anything provided by nature on which people depend.
C. any raw material that becomes a component in a manufactured good.
D. anything that is used for food or fuel.
Regarding annual inflows of FDI:
A. industrialized nations primarily invest in one another.
B. an average of nearly 70 percent of annual FDI investments has been going into
developed countries in recent years.
C. developed countries obtained a 70 percent increase in the level of FDI between 2000
and 2009.
D. all of the above.
E. two of A, B, and C.
A statistical technique that divides objects into groups so that the objects within each
group are similar is called:
A. trend analysis.
B. group classification analysis.
C. cluster analysis.
D. factor analysis.
E. none of the above.
Employee compensation payments added to base salaries because of higher expenses
encountered when living abroad are considered:
A. bonuses.
B. allowances.
C. perks.
D. tax exempt.
E. two of the above.
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
According to the text, decisions on the standardization of design are affected by:
A. competitive factors.
B. cultural factors.
C. regulatory factors.
D. all of the above.
E. two of A, B, and C.
Generally, as marketers go down the economic and social strata in each country, they
will tend to find:
A. similarities among countries with respect to social and cultural values.
B. dissimilarities among countries with respect to social and cultural values.
C. no significant differences with respect to social and cultural values.
D. greater government support for each succeeding lower stratum.
E. none of the above
In the United States and EU, attitudes toward competition:
A. are quite similar.
B. are based on differing assumptions, with the United States following a per se concept
and the EU concerned about the existence of harm.
C. differ because the EU is anticompetitive; its Commission on Competition ensures
competition isn’t too severe.
D. differ on the role of market dominance, with the United States supporting it and the
EU wanting to avoid it.
E. are both focused on prevention of price fixing.
Foreign trade zones are also called:
A. free trade zones.
B. transit zones.
C. free perimeters.
D. export processing zones.
E. all of the above.
To create a competitive advantage that is sustainable over time, the international
company should try to develop competencies that:
A. create value for customers and for which they are willing to pay.
B. are easy to imitate or substitute for.
C. are expensive to develop and maintain.
D. all of the above.
E. two of A, B, and C.
The horizontal corporation:
A. often draws teams from different departments to solve a problem or deliver a
product.
B. has been characterized as “antiorganization.”
C. puts greater decision-making responsibility in the hands of middle managers.
D. all of the above.
E. two of A, B, and C.
In a forward market hedge for transaction exposure, the firm sells forward:
A. foreign currency receivables for the home currency, matched to the due date of the
receivables.
B. domestic currency receivables for the foreign currency, matched to the due date of
the receivable.
C. its anticipated sales in the foreign currency.
D. its projected earnings in the foreign currency, which will be repatriated.
A traditional approach to product design that involves a sequential approach to design
has been termed:
A. product-based design.
B. concurrent engineering.
C. over the wall.
D. sequenced design.
E. participative design.
Purchasing power parity is a way to compare:
A. the purchasing power of several currencies.
B. tastes in several different cultures.
C. the impact of financial aid in several economies.
D. meals in the quick-service restaurant sector—via the Big Mac index.
The theory of resource endowment:
A. explains why France exports cosmetics, wine, commercial aircraft, and clothing.
B. states that a nation will trade goods that can be produced with the production factor
that is most abundant.
C. explains why an automobile can be made either by hand or by a capital-intensive
process.
D. explains why transportation costs may be ignored when calculating the costs of
imports.
E. none of the above.
An advantage of hiring personnel who are citizens of neither the home country nor the
host country may be that they:
A. may accept lower wages and benefits.
B. may come from a culture similar to that of the host country.
C. all of A, B, and D.
D. have international experience.
E. two of A, B, and D.
The consequence for management in a world out of control is a six-element recipe
developed at Massachusetts Institute of Technology for devising a system of distributed
control, which includes:
A. prepare a clear and integrated plan of action.
B. don’t change the simple things.
C. master complex tasks first.
D. all of the above.
E. two of A, B and C.
A culture’s sense of beauty and taste is:
A. universal, as described in Homer’s The Odyssey.
B. an aesthetic concern of no interest to the international manager.
C. an aesthetic concern that may interest the trailing spouse and is good to know a little
about.
D. expressed in the culture’s art and music and important for international managers to
know about.
Official prices ensure that:
A. imported goods will be sold at minimum prices, to avoid dumping.
B. a black market will be healthy and available for imported goods.
C. low-priced invoices to avoid tariffs will not be successful.
D. two of the above.
E. none of A, B, and C.
The principal ingredient(s) that a franchiser exports is:
A. a brand name.
B. marketing strategy.
C. a set of proven procedures.
D. two of the above.
E. all of A, B, and C.
The main source(s) of international law is(are):
A. the UN International Court of Justice.
B. the U.S. Supreme Court and the EU Court of Justice.
C. bilateral and multilateral treaties, along with customary law.
D. nonexistent.
E. the WIPO.
In the case of the United States, intrafirm trade accounts for ___ ___ percent of imports
of goods.
A. 15 to 30
B. 45 to 60
C. 35 to 45
D. 30 to 40
E. over 60