The WTO supports trade with discrimination as a basic right of trading nations.
Trade flows are good indicators of the magnitude of present sales.
The level of merchandise exports coming from Africa decreased between 1980 and
2010.
It is not possible for foreign investors to control a joint venture if the host country’s law
prevents foreign investors from having more than 49 percent ownership.
Companies have the potential to achieve competitive advantages through leveraging
their organizational knowledge across national boundaries.
As global financial markets become more integrated, we can expect countries’ inflation
rates to vary over a small range.
Permanent members of the UN Security Council vote on Security Council measures,
and only the secretary-general of the UN, Ban Ki-Moon, has veto power.
According to the text, the level of intracompany trade of multinationals in 1930, as a
percentage of world trade, may have exceeded the proportion at the end of the 20th
century.
The regionalized organization appears to be popular with companies that manufacture
products with a rather low technological content.
A benefit of global strategies is their ability to adjust quickly and effectively to changes
in customer needs across national or regional markets.
All managers need to have a basic knowledge of international business.
Portfolio investment is the purchase of sufficient stock in a firm to obtain significant
management control.
Internal environmental forces are commonly referred to as controllable.
Foreign direct investment may be an attempt by foreign companies to establish
competitive advantage over potential competitors in other markets, due to possession of
advantages not available to local firms. Such advantages possessed by foreign
companies over their local competitors include knowledge about local market
conditions and cost efficiencies from operating at a distance.
Porter’s diamond can be used to explain the importance of the environment and natural
resources.
Generally, the host government will understand that a third-country national is better for
the parent company than a local executive would be.
Internalization theory suggests that what an organization is good at should not be
outsourced without very careful consideration.
Social desirability bias can be seen as a cultural problem when conducting market
research.
Britain was the world’s leading manufacturing country for about 1,800 years, until it
was replaced by the United States at the end of the 1800s.
Buyers of industrial goods and luxury products usually act on the same motives the
world over, lending themselves to a standardized approach.
Because of the rapidity of changes in uncontrollable variables, many managers have
turned to contingency plans, which are multiple, plausible stories for probable futures.
By accepting a time draft, the buyer assumes the responsibility for making payment at
maturity of the draft.
Research on global change has led to well-developed theories of the process of global
change.
Because inventory is carried at each stage in the supply chain, and because inventory
ties up money, it has been argued that the ultimate goal of effective supply chain
management systems is to reduce inventory.
One should not look at sociocultural forces as subjective.
Both multinational and global companies use regionalized organizations.
Economic cooperation often begins with a common market, as in the case of the EU.
A follower will most likely succeed when there are few legal, technological, cultural, or
financial barriers to inhibit entry, as long as it has sufficient resources or competencies
to overwhelm the pioneer’s early advantage.
The effectiveness of every organization is totally controlled by the effectiveness of its
workforce.
Logistics refers to managerial functions associated with the movement of raw materials
and work in progress, but not finished goods.
Seeing what needs to be done is a management, rather than leadership, element.
Informal cognitive institutions are not important to international managers because such
managers localize their hiring, and so they can draw on local talent.
International markets served often differ widely because of great variations in the
uncontrollable environmental forces.
Generally mergers and acquisitions are considered alliances.
All EU members use the euro and thus have given up part of their national sovereignty
to the EU.
Hall’s high-and low-context framework is based upon communication styles.
Entry barriers are part of the ___________ stage of market screening.
A. economic and financial
B. political and legal
C. sociocultural
D. market entry
E. none of the above
Regardless of the functional currency, retained earnings are translated at:
A. their market value based on recent stock price.
B. the rate in effect when the earnings were posted.
C. the rate in effect the day of consolidation.
D. a reasonable rate of the company’s choice.
The market growth rate index is measured by:
A. none of B, C, D, or E.
B. average growth rate in commercial energy + real growth rate in GDP.
C. real growth rate in commercial energy + real growth rate in GDP.
D. average growth rate in commercial energy + average growth rate in GDP.
E. real growth rate in commercial energy + average growth rate in GDP.
The cash flow management of a global firm, compared to that of a domestic firm, is:
A. exactly the same: moving money is moving money.
B. less complex, because the sums are larger and the process is centralized.
C. more complex, because currencies vary, as do national-level regulations.
D. more complex, because the number of subsidiaries or branches is larger.
There are two points at which operating in a foreign currency raises issues for
accounting:
A. when debt is incurred and when foreign payrolls are run.
B. when transactions are made in foreign currencies and when foreign subsidiaries
consolidate their results back to corporate financial reports.
C. when the currency fluctuates and when the local inflation rate changes.
D. when the interest and inflation rates change.
Partnerships between or among competitors, customers, or suppliers that may take one
or more of various forms, both equity and nonequity, are known as:
A. licenses.
B. joint ventures.
C. wholly owned subsidiaries.
D. strategic alliances.
E. management contracts.
A typical company’s supply chain costs can represent more than ____ percent of assets.
A. 20
B. 35
C. 50
D. 60
E. 80
In the traditional strategic planning approach:
A. the CEO and the head of planning got together to devise a corporate plan, which
would then be handed to the operating people for execution.
B. interaction with important customers and suppliers was included.
C. governments and other stakeholders were direct participants.
D. tended to fall victim to collective mind-sets about the competitive environment.
E. two of the above.
A decision to move production factors from one country to another would be:
A. affected by currency and political stability.
B. made cooperatively by subsidiary managers.
C. based on tax, labor supply, and market conditions.
D. all of the above.
E. two of A, B, and C.
Government protection of economic activities is:
A. two of the following.
B. a historical function of government.
C. a recent responsibility of government.
D. a socialist characteristic.
E. stronger in democracies.
__________ are organizational forms in which product divisions are defined as though
they were independent businesses.
A. Free-form management units
B. Strategic business companies
C. Strategic business units
D. Matrix overlays
E. Virtual corporations
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.
International institutions are important to international business managers because, in
general, they:
A. limit financial responsibility of business.
B. promote development.
C. limit choices, thereby providing ways to settle disagreements and resolve conflicts.
D. encourage immigration and labor mobility.
The planning method that is becoming more popular is:
A. top down.
B. bottom up.
C. sequential.
D. a combination of top down and bottom up.
E. centralized planning.
Regarding repatriation:
A. expatriates often struggle with the higher autonomy of their work context when they
return home.
B. planning for an expat’s return should start while the employee is abroad.
C. 49 percent of expatriates report that they do not have any guaranteed position in their
IC after the end of their international assignment.
D. two of the above.
E. none of the above.
Extraterritoriality is:
A. a nation’s attempt to enforce its law beyond its borders.
B. added territory as a result of dispute settlements in wars, such as the Sakalin Islands.
C. a citizen’s claim to government assistance in a foreign environment.
D. a taxable condition most international firms attempt to avoid.
E. two of the above.
High levels of motivation in teams are likely when:
A. the rewards are substantial.
B. the team has low levels of diversity.
C. team members see one another as each member sees himself or herself.
D. the task is challenging.
E. A and B.
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.
An argument against using trade restrictions to punish an offending nation is that:
A. sanctions seldom achieve their goal of forcing change in the offending country.
B. sanctions are relatively harmful to the citizens of the offending country.
C. sanctions are not condoned by the UN.
D. sanctions decrease the cost of doing business.
E. two of the above.
In developing economies, informal institutions tend to play a greater role than in
developed economies, possibly because
A. the developing economies have more ambiguity and lack formal institutions by
definition, so informal institutions step into the breach.
B. developing economies show cultural preference for informality.
C. informal institutions emerge to give order to the unstructured, chaotic environment.
D. A and C.
Deserts and tropical forests seem opposites, but they have this trait in common:
A. they are good vacation spots, and thus an economic stimulator.
B. they have small populations on their edges.
C. they separate markets, increasing transportation costs.
D. they are hospitable to insects.
The increased internationalization of business requires __________ to have a basic
knowledge of international business.
A. all managers
B. managers of multinationals
C. managers of transnationals
D. managers of purely domestic operations
E. none of A, B, C, or D
Historically, international business:
A. is relatively new as a discipline and as a business practice.
B. existed before the time of Christ.
C. two of A, B, and D.
D. was influenced by the rise of the Ottoman Empire.
E. none of the above.
The kinds of marine insurance policies include:
A. basic named perils.
B. broad named perils.
C. partial risk.
D. all risk.
E. A, B, and D.
Marketers everywhere must:
A. know the market.
B. satisfy customers’ needs.
C. inform potential customers.
D. two of the above.
E. all of A, B, and C.
Culture plays a significant role in the discipline(s) of:
A. marketing, but not finance, because it is quantitative.
B. leadership, accounting, finance, marketing, human resources, and production.
C. marketing and human resources, but not production, finance, and accounting.
D. all foreign businesses, but not businesses of the home country.
The approach to design that promotes cross-functional participation in the design stage:
A. helps to identify many of the potential sourcing, manufacturing, and other
difficulties associated with a particular design.
B. may involve customers in the design process.
C. has been called concurrent engineering.
D. all of the above.
E. two of A, B, and C.
Climate is probably the most important element of the physical forces, as it sets the
limits on:
A. annual rainfall, and thus water supply.
B. population growth patterns.
C. what people can do physically and economically.
D. expected FDI.
Regarding economic and social development:
A. international trade has an important role in influencing nations’ economic and social
performance, with this role being even more fundamental in the case of developed
countries.
B. expansion of trade guarantees improvement for a country and its people.
C. the Trade and Development Index attempts to provide a quantitative indication of a
nation’s social and economic development.
D. the 30 highest-ranked nations in the initial Trade and Development Index were all
developed countries.
E. for the Trade and Development Index, the best regional performance among
developing countries was that of the countries of the East Asia and Pacific region.
A hybrid organization may result from:
A. the firm’s acquiring a company with distinct products and distribution channels.
B. management’s attempt to mesh product and regional expertise.
C. management’s problems with a matrix organization.
D. a firm’s use of SBUs.
E. none of the above.
The UN’s International Court of Justice (ICJ) is also known as:
A. the Court of Europe.
B. the Court of International Law and Regulations (CILR).
C. the International Court of Peace.
D. the World Court.
The three nations that exported the largest amount of goods to the United States in 2010
were:
A. Japan, Canada, and China.
B. China, Mexico, and the UK.
C. Japan, China, and Saudi Arabia.
D. Canada, Japan, and Mexico.
E. Canada, Mexico, and China.
When formulating product strategies, international marketing managers must remember
that they are selling:
A. a new product.
B. an expensive product to poor people.
C. a total product.
D. hope.
E. two of the above.
Antitrust laws differ among countries, and complying with them is often difficult for the
firm, so:
A. international firms have had to increase their legal staff to ensure compliance.
B. the U.S. government is pushing for a world organization to clear antitrust issues.
C. firms have moved toward fewer mergers and more regionalized organizations.
D. firms expect to be in antitrust litigation and act accordingly.
E. two of the above.
Organizational design:
A. is a process that deals with how an international business should be organized in
order to ensure that its business activities are integrated globally.
B. must consider the size of an organization and the complexity of its business
operations.
C. must be able to evolve over time in order to enable the organization to respond to
change.
D. all of the above
E. two of A, B, and C.
Economic integration agreements are nice for the insiders, such as the United States,
Mexico, and Canada with NAFTA, but they stand in the way of WTO progress because
they violate basic guidelines of the WTO.
What are the types of information that an international company needs to have reported
to it by its units around the world, and why is each type important for the IC and its
control efforts?
Why do international managers need to know anything about a nation’s topographic
features?
Identify the appealing factors of online advertising in the international sphere, as
discussed in the text.
Your firm operates in Seattle and is signing a contract to supply advisory services to a
design firm in Beijing. Your payment is 50 percent on contract signing and 50 percent
on completion, which is two years out. Would you want your payment in dollars or
yuan/renminbi for today’s portion? What about the portion on completion? Why?
Under what circumstances is a follower likely to succeed when entering into
international markets?
What are the disadvantages of joint ventures?
Discuss the programmed-management approach to advertising strategy.
What are the primary opportunities and challenges associated with expatriate positions?
Answers may vary, but should include elements such as the following: Companies will
continue to staff many key positions with expatriates, employees who are relocated to
the host country from the home country or a third country, with the assignment lasting
for an extended period of time (two to four years is a common length of time for an
expatriate assignment). Why use expatriates rather than just hire local employees?
Discuss the risks associated with transaction exposure and how to hedge them.
Explain the logic of mercantilism and why it is generally viewed as a deficient theory.
Compare and contrast home replication, global, multidomestic, and transnational
strategies.
Please provide an overview of the major issues a compensation package for expatriates
should address.
Why is it often impossible to standardize the marketing mix worldwide?
Discuss some cultural problems and technical difficulties in collecting primary data
abroad.
What are currency exchange controls, why are they used, and how might they influence
the international manager located in an exchange-controlled environment?
Is triple-bottom-line accounting a reasonable approach to encourage businesses to take
responsibility for the impact of their actions on social and environmental systems, or
does it place an unrealistic burden on businesses to measure what may not be
measurable?
How do U.S. nonexporting firms often explain their avoidance of foreign markets?
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.