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.
Globalization increases the complexity of the external but not the internal context of the
company.
Customary international law draws on practices that have been followed often for
centuries.
Benefits of trade fairs include sales, making contacts with prospective buyers and
agents, and competitive intelligence.
An arrangement in which one or more activities that could be provided in-house are
instead provided by another company is offshoring.
The price of one currency stated in terms of another currency is the exchange rate.
The national defense argument for trade restrictions is based on the development level
of the country.
One example of nationalization of private companies is the nationalization of
French-owned firms in Europe after World War II.
Anthropologist E. T. Hall suggests that to learn another culture, you need to spend two
weeks in it with a training program.
Kotter’s model for change is an eight-step process that includes ways to make the
change stick through leadership and succession.
Many corporations do not hedge translation exposure.
Unlike the topography, the political climate of a country has relatively little influence
on its exports.
To avoid changing the product to meet local legal requirements, manufacturers
frequently design it to meet the most stringent laws, even though it is over designed for
other markets.
The UN Environment Programme laid the groundwork for the Climate Change
Convention, which led to the Kyoto Protocol.
When government-owned companies compete with private companies, the private
companies have the advantage.
International strategy involves decisions that deal with a single area, such as marketing
or production.
The first step in the market screening process is the economic/financial screening.
Nuisance tariffs require importers to go through the administrative paperwork
connected to paying tariffs, even though the payment itself might be quite small.
An international company is an organization with multicountry affiliates, each of which
formulates its own business strategy based on perceived market differences.
U.S. pavilions are located in every country around the world and provide background
information and displays on foreign companies.
In exposure netting, a risk management technique similar to multilateral netting, the
firm runs a centralized clearing account that matches and nets out FX exposure across
currencies or currency families.
The disadvantage of an organization divided into geographic regions is that each region
must have its own product and functional specialists.
Egocentric ruthlessness is a leadership trait admired in some cultures, as suggested by
Project GLOBE.
For a company interested in entering a foreign market, a report analyzing in detail all
five screening forces listed in the book is sufficient information.
In some cases, an international company legally can keep more profit after taxes by
allocating work and prices.
In 2009, the top 10 exporting and importing nations collectively accounted for over half
of all exports and imports of merchandise and services worldwide.
Global managers who want to drive change need to be able to communicate across
cultural boundaries and build trust.
Although India is a member of the WTO and has benefited greatly from increased trade
as a result of WTO agreements, China is not yet a member.
A company’s international operating environment, both currently and as it is expected to
be in the future, is the primary determinant of its organizational structure.
Worldwide uniformity or standardization in manufacturing methods hinders
headquarters’ effectiveness in keeping production specifications current.
Operating in more than five local currencies is unusual for the international firm.
The WTO has made progress on trade-related intellectual property rights (TRIPS). An
example of this progress is:
A. an agreement that property rights should not take precedence over public health.
B. an agreement that copyrights are inviolate.
C. a shared recognition that private property is a basic human right.
D. an agreement that governments should hold all pharmaceutical trade secrets.
Usually, it is reasonable to assume that foreign law:
A. will be similar to U.S. law.
B. will differ from U.S. law and must be understood.
C. won’t matter because you and your trading partner will agree to arbitrate.
D. will be biased against the foreigner.
E. will vary but that U.S. law will take precedence.
__________ 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.
A survey of CEOs of the 162 largest firms on Fortune’s list of the 500 largest American
corporations found that the CEOs strongly believed that:
A. an international orientation should be an important part of college business
education.
B. international business skills and knowledge were important for promotion to senior
executive positions but not for appointment to entry-level positions.
C. the importance of international business skills and knowledge for promotion to
senior executive positions was higher for companies anticipating an increased level of
importance of international activities in the next five years.
D. all of the above.
E. two of A, B, and C.
Who took the United States off the gold system?
A. President Eisenhower
B. President Kennedy
C. the Supreme Court
D. President Nixon
UNCTAD, an agency of the United Nations, estimates there are __________
international firms in the world.
A. 5,500
B. 12,000
C. 64,000
D. 82,000
E. over 800,000
Most developed nations have:
A. small power distance.
B. high individualism.
C. strong uncertainty avoidance.
D. all of the above.
The following conditions led to the establishment of international finance centers:
A. the end of the gold standard and the Bretton Woods Accord.
B. WTO guidelines and IMF regulations.
C. floating exchange rates and growth in the FX markets.
D. growth of sustainable business practices and social responsibility.
With privatization:
A. assets are transferred from the public sector to the private sector.
B. stock is bought back so that the company no longer has public shareholders.
C. state activities are moved into private management through contracts.
D. all of the above.
E. two of A, B, and C.
Companies wishing to export must first choose between:
A. exporting directly and using sales companies.
B. exporting indirectly and using joint ventures.
C. exporting directly and exporting indirectly.
D. exporting directly and licensing.
E. none of the above.
Accounting controls directly relate to a culture’s assumptions about:
A. the basic nature of people.
B. inventory policy.
C. efficiency.
D. leadership.
The monopolistic advantage theory states that:
A. a firm that has a monopoly has a major advantage in overseas investment.
B. FDI is made by firms in oligopolistic industries possessing technical advantages over
local companies.
C. a firm that has a monopoly domestically will have no competition making overseas
investments.
D. the firm making the overseas investment first has a monopolistic advantage.
E. none of the above.
When the law of one price is applied to interest rates, it suggests that:
A. interest rates do not differ much across national borders.
B. inflation is not affected by interest rates.
C. inflation and interest rates do not follow the law of one price.
D. varying interest rates take into account anticipated differences in inflation rates.
A survey of CEOs of the 162 largest firms on Fortune’s list of the 500 largest American
corporations found that the internationally oriented courses that were viewed as being
the most important for early career positions included topics related to:
A. an introduction to international business.
B. international strategy and competitiveness.
C. international legal and political issues.
D. all of the above.
E. two of A, B, and C.
The three main approaches to exchange rate forecasting are:
A. the efficient market approach, the fundamental approach, and the technical approach.
B. the efficient market approach, the random walk hypothesis, and the pragmatic
approach.
C. the random walk hypothesis, the pragmatic approach, and the fundamental approach.
D. none of the above.
A pioneering firm stands the best chance for long-term success in market-share
leadership and profitability when:
A. there are few cultural barriers to entry.
B. the firm has sufficient size, resources, and competencies.
C. there is high potential for imitation.
D. all of the above.
E. two of A, B, and C.
International institutions offer graduating international business majors:
A. interesting career development and internship opportunities.
B. funded study-abroad programs.
C. language training in major languages used in trade.
D. export-import process training.
___________ is(are) economic data that correlate highly with market demand for a
product.
A. Market factors
B. Trend analysis
C. Cluster analysis
D. Market indicators
E. None of the above
The Fisher effect states that the real interest rate:
A. is the nominal rate plus the recorded inflation rate.
B. is the only measure to use in calculating PPP.
C. is the nominal rate minus the expected inflation rate.
D. is the difference between the nominal rate and the inflation rate.
The disadvantages of indirect exporting include:
A. firms gain little experience from the transaction.
B. commissions have to be paid to agents.
C. firms are dependent on the agents.
D. all of the above.
E. two of A, B, and C.
Executive compensation packages sometimes include payments called perks that are
extras and are:
A. usually illegal.
B. always legal.
C. uncommon.
D. symbols of rank in the company hierarchy.
E. none of the above.
According to Warren Bennis:
A. the leader inspires, while the manager controls.
B. the leader orders, while the managers requests.
C. the leader is charismatic, while the manager is a functionary bureaucrat.
D. the leader is acclaimed, while the manager is appointed.
E. the leader initiates, while the manager waits for directives.
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
According to the text, which of the following is true regarding “corporate
anthropology”?
A. It involves ethnographic research techniques.
B. It involves extensive use of surveys.
C. It involves extensive use of focus groups.
D. All of the above.
E. A and C.
Interface, the producer of Flor carpeting, has a solid record in sustainable business
practice and:
A. makes impressive contributions to sustainable development in developing
economies.
B. is committed to triple-bottom-line accounting.
C. spins its products from petroleum.
D. sources its raw materials from recycled plastic bottles.
_____________ is used by management during the planning process to eliminate the
less desirable markets.
A. Market screening
B. Environmental scanning
C. Country screening
D. Segment screening
E. None of the above
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.
An advantage of using home-country citizens abroad is:
A. they have expertise in the host-country culture.
B. they expand their experience, enhancing their potential for promotion at home.
C. they have lower-cost salaries and benefits than HCNs or TCNs.
D. two of the above.
E. all of A, B, and C.
Acceptable leadership traits across cultures, according to Project GLOBE, include:
A. directive, not afraid of criticizing others, and direct.
B. planning, able to stick to schedule, and able to stay within budget.
C. effective bargainer, dependable, win-win problem solver, and plans ahead.
D. high context, high power distance, and high tolerance for ambiguity.
E. low power distance, female, and low tolerance for ambiguity.
A broad statement that defines the organization’s purpose and scope is known as a:
A. strategic plan.
B. mission statement.
C. vision statement.
D. values statement.
E. none of the above.
World interest rates tend to vary across a small range because:
A. the IMF has been successful at promoting responsibility in the monetary sector.
B. world financial markets are integrated, so we see the law of one price at work.
C. bankers have low market appeal, given the financial crisis.
D. the BIS has coordinated monetary policy.
Why might international marketing managers wish to standardize the marketing mix?
What is dumping, and why is it found to be problematic?
Discuss the global strategic planning process.
Although air freight rates are usually higher than ocean freight rates, air freight may be
less costly for a firm.
