Hiring personnel who are third-country nationals can be advantageous, especially in
developing countries, because they may accept lower wages and benefits than will
employees from the home country and they may come from a culture similar to that of
the host country.
When a business pays in dollars for an import from Turkey, the dollars that leave the
United States will eventually show up as a credit on the U.S. capital account.
Transformational experiences are a recommended part of preparation for global
leadership.
Some observers have argued that American industry and the American economy as a
whole will be strengthened by offshoring activities to workers in India or other nations
that have comparative advantages in areas such as labor costs.
Coal and nuclear power are both in decline as energy sources.
The main argument against 3BL is that business is concerned with generating profit, not
with social and ecological issues, except where the law requires it to be.
An advantage of Internet advertising is its ability to reach all of the possible consumer
groups.
According to the World Health Organization, about one-quarter of all drugs sold
through “questionable” Internet pharmacies are estimated to be counterfeit.
Gift-giving across cultures is a simple kindness and need not be complicated with
attempts to understand. The act of generosity says everything in and of itself.
In a 12-country study conducted by Ernst & Young, 65 percent of U.S. companies were
found to be engaged in a strategic alliance.
The World Bank funds infrastructure projects in developed countries.
In a forward market hedge, the firm sells forward its foreign currency receivables for its
home currency, matching the time forward to the foreign currency receivable’s due date.
Moving executives around an IC system can increase confidence and mutual reliance.
The rapidly changing business environment caused by increased global competition,
customer preference for custom-made rather than mass-produced products, and faster
technological change is pressuring companies to make greater use of global product
structures.
A common cause of the added complexity of foreign environments is managers’
unfamiliarity with other cultures and is called self-reference syndrome.
Opponents of free trade point out that globalization has contributed to a decline in
environmental and health conditions.
De Gaulle pushed Nixon to close the gold window at the Treasury, and this one action
moved the IMF toward a floating exchange rate system.
Procedures are broad guidelines issued by upper management for the purpose of
assisting lower-level managers in handling nonrecurring problems.
Exporters should consider both private and public export financing.
International trade theory shows that nations will attain a higher level of living by
specializing in goods for which they possess a comparative advantage and importing
those for which they have a comparative disadvantage.
The Doha Development Agenda is an extended development plan for Doha, Qatar.
FASB 52 requires that companies record foreign currency-based transactions at the spot
rate at the time of the transaction.
When developing and assessing strategic alternatives, it is important to remember that
companies competing in international markets confront two opposing forces: reduction
of costs and adaptation to local markets.
Alliances can allow a partner to acquire a firm’s technological or other competencies,
thereby raising important competitive concerns.
U.S. pavilions are located in every country around the world and provide background
information and displays on foreign companies.
New exporters often fail to provide local language translation of service, sales, and
warrantee information.
Changing the method of going abroad from exporting to overseas production is often
necessary to protect foreign markets.
Companies need to consider two types of measures when assessing strategic
performance: (1) measures of the company’s success in obtaining and applying required
resources, such as financial, technological, and human resources, and (2) measures of
the effectiveness of the company’s personnel, within and across the firm’s international
network of operations, in performing their assigned jobs.
The use of third-country nationals has become particularly prevalent in the LDCs
because they provide substantial cost savings over the use of home-country nationals.
The practice of country risk assessment is an exercise in xenophobic and ethnocentric
thinking.
The value-added tax (VAT) can be rebated to exporters, according to WTO rules.
Import duties can be set to encourage:
A. increased imports based on sales volumes.
B. local input.
C. price-fixing.
D. imports from other suppliers.
E. all of the above.
The EU applies its competition policy:
A. extraterritorially.
B. only within the EU.
C. within the EU and applicant states.
D. within the EU and other European nations.
E. none of the above.
Qualifications for a good manager of an overseas operation should include:
A. all of B, C, and D.
B. being bicultural and bilingual.
C. knowing business practices in the home and host countries.
D. having more and different skills than domestic managers.
E. two of B, C, and D.
To fully understand why, how, and where they intend to do business, now and over
time, managers must have:
A. a clear understanding of the company’s mission.
B. a vision for how they intend to achieve the company’s mission.
C. an understanding of how the company plans to compete with other companies.
D. all of the above.
E. two of A, B, and C.
As we use frameworks to help us understand culture, it’s important to remember that
frameworks:
A. describe other cultures with precision.
B. can’t be used to describe our own cultures.
C. are comparative, with our own culture being the reference point.
D. all of the above.
According to the text, competencies:
A. are skills or abilities required in order to achieve competitive advantage.
B. refer to the ability of a company to have higher rates of profits than its competitors.
C. create value for customers and for which customers are willing to pay.
D. two of the above.
E. none of A, B, and C.
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, the reasons international firms enter foreign markets are linked
to:
A. the desire to increase profits and sales.
B. the desire to invest excess capital from domestic markets.
C. the desire to protect profits and sales from being eroded by competitors.
D. all of the above.
E. two of A, B and C.
Historically, firms making a foreign direct investment have generally preferred:
A. direct exporting.
B. joint ventures.
C. strategic alliances.
D. wholly owned subsidiaries.
E. contract manufacturing.
Market screening eliminates:
A. undesirable products.
B. markets that are judged to be less attractive.
C. environmental forces.
D. competition.
E. two of the above.
Firms that have substantial operations in more than one country are called:
A. global companies.
B. multidomestic firms.
C. affiliated companies.
D. all of the above.
E. two of A, B, and C.
This government commercialized the German Fischer-Tropsch process in order to
obtain oil from coal through a catalyzed chemical reaction:
A. Israel.
B. the Sudan.
C. South Africa.
D. Germany.
Barriers to trade:
A. are a political issue but affect the cost of imports only marginally.
B. cost consumers billions of dollars per year.
C. save jobs in unprotected industries at $231,289 per job per year.
D. none of the above.
E. two of A, B, and C.
The experience of suppliers to the youth market indicates that this is an international
market segment:
A. like the retiree market.
B. unlike any other market.
C. like the market for consumer goods.
D. like the market for luxury goods.
E. none of the above.
Regarding the structure of international companies:
A. managers have to consider the nature of their company’s international operating
environment, both currently and how it is expected to change in the future.
B. managers have to consider the nature of their competitors’ international strategies,
both currently and how they are expected to change in the future.
C. gains from increased specialization of labor may at times be nullified by the
increased cost of coordination.
D. all of the above.
E. two of A, B, and C.
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.
Opportunities for corporations to tap into varying international markets exist because:
A. markets, although interconnected, are not fully integrated.
B. some regional markets favor certain business sectors (Mexico, cement; U.S., fast
food; EU, cheese).
C. national markets favor domestic companies.
D. B and C.
Unconscious reference to one’s own cultural values when judging behavioral actions of
others in a new and different environment is called:
A. self-reference culture.
B. self-reference values.
C. self-reference criterion.
D. self-reference customs.
E. self-reference environment.
Social loafing is:
A. unusual in virtual teams.
B. a danger in virtual teams.
C. discouraged through a mixture of individual and team-based rewards.
D. more common in face-to-face teams than global virtual teams.
E. B and C.
A nontariff barrier is illustrated by:
A. the French requirement in 1982 that all Japanese VCRs be inspected in Poitieres, far
from the port and lacking speedy highway connection to the port.
B. the widespread Japanese belief that American rice can cause cancer.
C. the European attitude toward genetically modified crops.
D. all of the above.
E. two of A, B, and C.
China’s vast and mountainous terrain leads to:
A. many languages and dialects.
B. political unity, as in Switzerland.
C. economic disparities.
D. population disparities.
Topography, including mountains, deserts, plains, and bodies of water, greatly
influences:
A. political relationships.
B. the physical distribution of products and services.
C. the local approach to education and health services.
D. local attitudes toward industrially developed economies.
The Anglo-American inclination toward optimism is explained by a desire to:
A. promote good feelings within the firm.
B. show impressive earnings that will attract investors.
C. promote capitalism.
D. contribute to political stability.
________ alliances are driven by similarity and integration.
A. Strategic
B. Trading
C. Pooling
D. Equity-based
E. None of the above
Average growth rate in commercial energy use and real growth rate in GDP compose
the __________ index.
A. market size
B. market growth rate
C. e-commerce readiness
D. market factor
E. none of the above
In establishing the team, the leader wants to:
A. set boundaries for the team.
B. encourage strong member identification with the team and team norms.
C. direct activities so the team can meet its goals.
D. encourage team members to know one another.
E. A and B.
As an energy source, nuclear power:
A. is growing significantly, especially in developing countries.
B. has been growing as the price of oil climbs and cleaner energy sources
(nonpolluting) are sought.
C. has been exploited by France, which has one of the lowest greenhouse gas emissions
in the industrialized world.
D. all of the above.
The United States and the EU:
A. both apply antitrust law extraterritorially.
B. both oppose the Japanese Anti-Monopoly Law.
C. share a commitment to the per se concept in law.
D. two of the above.
E. all of A, B, and C.
According to the text, about ____ percent of medium and large-sized companies have
employees working abroad.
A. 23
B. 47
C. 55
D. 76
E. 80
The major argument against 3BL is that:
A. companies don’t want the public to know what they are doing.
B. social and environmental impacts cannot be measured as well as can economic
results.
C. measurement won’t get us closer to the desired state.
D. A and B.
In the current rate method, assets and liabilities are translated:
A. at their historical rates.
B. at an average of the historical and current rates.
C. on the date the balance sheet is produced.
D. however the company chooses, as long as it is consistent in all its foreign operations.
Discuss the concerns conducting business in a foreign currency raises from an
accounting perspective.
What are the reasons for sourcing globally, and what options are available to a firm that
wishes to engage in global sourcing?
What are the four primary dimensions that need to be considered when designing the
structure of an international company, and why are they important?
This chapter discusses building a corporate global mindset. What can you do to build an
individual global mindset?
How might U.S. law affect international managers?
Explain Trompenaars’ achievement-ascription dimension, and comment on its
usefulness in an international business setting.
One danger of using the frameworks in this chapter is that if they are applied
prescriptively, they may well lead to a sophisticated form of stereotyping. Explain this
danger and suggest ways to avoid it.
Discuss the problems associated with global sourcing.
With global leadership, global teams, and global change, the global context adds
substantial complexity to the activity. Comment on this additional complexity.
Discuss how culture might impact accounting.
What challenges often confront the spouses of expatriates, and what options are
available for managing these challenges?
The owners of private companies sometimes complain that government-owned
companies have unfair advantages. Discuss some of these complaints.
Define and discuss country risk assessment, using examples to illustrate your points.
What advice would you give to a friend who wants to develop global leadership skills
and is an English major?
Why do international managers need to know anything about a nation’s topographic
features?
Why is the closer integration of functions important for new product development?
What is international strategy and why is it important?
Discuss the use of market indicators.
Why might international marketing managers wish to standardize the marketing mix?
