Although engineers are required for the maintenance of specialized machinery, only
highly-skilled people are needed to attend the machines.
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.
A compound duty is a combination of specific and variable duties.
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.
Subsidies from the United States to its sugar industry have been critical in helping to
prevent a loss of jobs from American companies that are high users of sugar.
“When in Rome, do as the Romans do” is a solid, moral guideline.
A disadvantage of hiring local managers is that they are often unfamiliar with the home
country of the IC and with its policies and practices.
Arbitration provides foreign businesses a forum other than the U.S. court system to
address disputes that involve U.S. sellers or buyers.
External environmental forces are commonly referred to as controllable.
According to the theory of comparative advantage, a nation can gain from trade if it is
not equally less efficient in producing two goods.
Subsidies that confer a benefit may well evoke countervailing duties.
Voluntary export restraints are imposed by the importing nation to avoid violating WTO
rules.
According to the text, Zara’s strategy focuses on continual renewal of its clothing lines.
The Big Mac index is an example of purchasing power parity, an international measure
of junk-food consumption.
The basic concept behind strategic planning is to help ensure that managers have a
sound understanding of the business, the strategy, the assumptions behind the strategy,
the external business environment pressures, and the company’s strengths and
weaknesses.
The proportion of merchandise exports coming from Asia increased by over 90 percent
between 1980 and 2010, with China accounting for nearly two-thirds of that increase.
A recent study reported that 77 percent of companies considered that cross-cultural
training was highly valuable and required such training for their expats or their families.
The United Nations operates with voluntary agreements, so it is essentially an informal
institution.
By and large, the UN record of facilitating business transactions has been minor.
A choice-of-law clause specifies where a dispute will be settled.
By conducting environmental scanning, a firm monitors the natural resources around
the world that may affect it.
In a currency option hedge, the firm covers its downside risk but, because the contract
is an option, can also benefit from any upside.
Duties may be used to encourage local input.
Japanese cultural values suggest that in Japan, antitrust law against cartels would be
strictly enforced.
In developing countries, third-country nationals are often preferred by the host country
over nationals of the home country.
Knowledge that an individual has but that is difficult to express clearly in words,
pictures, or formulae, and therefore difficult to transmit to others, is called explicit
knowledge.
Organizational structure deals with how an international business should be organized
in order to ensure that its worldwide business activities are integrated.
The export marketing plan is essentially the same as the domestic marketing plan.
The international Fisher effect states that the interest rate differentials for any two
currencies reflect the expected change in their exchange rates.
Often small exporters don’t consider the use of an export management company when
they should.
In a DAP (delivered at named place), the seller assumes risk when the goods leave the
seller’s factory or warehouse.
By UN regulation, contracts cannot contain choice-of-law and choice-of-forum clauses.
Policies are broad guidelines issued by upper management for the purpose of assisting
lower-level managers in handling recurring problems.
Leadership is universal; all people want to be led by a strong leader.
Multiplicity for global team leaders is evidenced by more players in the game than in a
domestic setting.
Developed by the United Nations Conference on Trade and Development, the Trade and
Development Index is a tool whose goal is to assist efforts “to systematically monitor
the trade and development performance of developing countries with a view to
facilitating national and international policies and strategies that would ensure that trade
serves as a key instrument of development.”
Value chain analysis focuses primarily on the question, “What value does the company
want to deliver to these customers?”
Expatriate children who lived in a foreign country for a period of time while in their
impressionable adolescent years often have attributes of “third-world kids.”
Moving executives around an IC system can increase confidence and mutual reliance.
Credit information is available for new exporters through all of the following except:
A. Dun & Bradstreet.
B. the FCIB (Finance, Credit, and International Business Association).
C. the exporter’s bank.
D. the SBA (Small Business Administration).
E. all of the above.
When a company faces relatively weak pressures for local responsiveness and cost
reductions, it should tend to use a:
A. global strategy.
B. multidomestic strategy.
C. transnational strategy.
D. differentiation strategy.
E. home replication strategy.
A shipper’s export declaration (SED) includes:
A. names and addresses of the shipper and consignee.
B. U.S. port of exit and foreign port of unloading.
C. export license number and bill-of-lading number.
D. description and value of the goods.
E. all of the above.
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.
The Doha Development Agenda is:
A. a WTO conference on trade.
B. an agreement on climate control and greenhouse gases.
C. a decision-making approach to development.
D. a development rules list.
Price and profit allocation decisions are usually best made:
A. at the subsidiary headquarters.
B. at the IC headquarters.
C. cooperatively by both subsidiary and IC headquarters.
D. at the subsidiary headquarters in the host country with the lowest prices.
E. none of the above.
For purchases of capital goods such as manufacturing equipment, many U.S. buying
organizations now use _______________ to analyze purchasing decisions, including
trade-in or future estimated salvage value.
A. e-procurement
B. activity-based costing
C. total costing
D. life-cycle costing
E. none of the above
Environmental sustainability is both local and global because:
A. environmental conditions do not recognize national borders.
B. governments are not prepared to address environmental issues beyond the UN.
C. business has become global, so sustainability must follow the trend.
D. all of the above.
Control activities:
A. are the efforts to develop strategic plans for an organization.
B. are needed more by domestic companies than international companies.
C. should be linked to evaluation and reward systems.
D. none of the above.
E. two of A, B, and C.
Collection documents are:
A. for debt carried in cash receivables.
B. needed to load and unload transported goods.
C. presented to the buyer for payment.
D. certificates of origin, invoices, and inspection certificates.
E. C and D.
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.
Quality control in foreign affiliates from the home office is less difficult when:
A. the quality inspectors are trained in the home office.
B. separate standards are used in each plant.
C. production equipment is similar.
D. the quality reports are sent to the home office at the same time.
E. two of the above.
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.
Much of the confusion in the ongoing discussion about whether a global firm can have
global products results from the discussants not clarifying whether they are referring to
the:
A. total product, physical product, or brand name.
B. final product, physical product, or brand name.
C. total product, final product, or brand name.
D. physical product, final product, or brand name.
E. none of the above.
Of all the promotional mix elements, __________ is the one with the greatest
similarities worldwide.
A. public relations
B. personal selling
C. advertising
D. sales promotion
E. none of the above
International strategy:
A. needs to be consistent among the various functions, products, and regional units of
the company.
B. needs to be consistent with the demands of the international competitive
environment.
C. is concerned with the way firms make fundamental choices about developing and
deploying scarce resources internationally.
D. has a goal of achieving and maintaining competitive advantage.
E. all of the above.
Size of the urban population and electricity consumption are part of the __________
index.
A. market size
B. market growth rate
C. e-commerce readiness
D. market factor
E. none of the above
All forms of communication between a firm and its publics are:
A. advertising.
B. promotion.
C. limited by government regulations.
D. an accepted part of doing business in emerging markets.
E. two of the above.
(p.111)-Unlike quotas, voluntary export restraints (VERs) are imposed by the:
A. importing country’s government.
B. exporting country’s government.
C. either the importing or exporting country’s government; what matters is that they are
voluntary.
D. the importing company.
E. none of the above.
A specific example of a sustainable business is Patagonia, as evidenced in its:
A. Footprint Chronicles program that addresses the trade-offs global sourcing creates
and evaluates the impact of sourcing decisions.
B. ecosystem model of sustainability that relies on the synergies between financial,
environmental, and social elements.
C. product lines and credit policies.
D. A and B.
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.
The present floating exchange rate system is not a totally free float because:
A. there is an exchange fee of 1.5 to 1.75 percent.
B. some governments refuse to allow foreign traders to trade their currency.
C. some central banks from time to time intervene in the market to buy or sell large
amounts of currency to affect the supply and demand of a particular currency.
D. A and B.
Swiss exports are concentrated, high-density products that minimize the need for
importing bulky materials because:
A. mountain ranges increase transport costs into and out of Switzerland and limit local
resources.
B. the Swiss love of chocolate and watches influenced the export patterns.
C. high-density exports encounter lower tariffs.
D. B and C.
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.
Sam Palmisano, CEO of IBM, has described a new way of doing business that goes to
equity of distribution by observing that:
A. profit sharing will need to increase.
B. stakeholder theory provides a way forward, combining local and global.
C. IBM would end its colonial company model and move on to an integrated model
with high levels of trust among stakeholders.
D. A and B.
The three characteristics of evolving sustainable business practices are:
A. local, global, and improving quality of life.
B. environmental sustainability, quality-of-life sustainability, and triple-bottom-line
accounting.
C. limits, interdependence, and equity.
D. none of the above.
Reasons for sourcing globally include:
A. a lower price.
B. products not available locally.
C. a firm’s worldwide operation and quality.
D. all of the above.
Assumptions that underlie a country’s legal, political, and economic systems:
A. do not influence accounting because it is a quantified discipline, objective and
factual.
B. influence accounting, both its practice and the commonly shared understanding of its
purpose.
C. influence accountants but not the science of accounting.
D. do not influence accounting because value is measured in currency, an objective and
comparable measure.
Virtual communication:
A. is more efficient than face-to-face communication.
B. allows a focus on tasks and less on social needs.
C. lacks the richness of face-to-face communication.
D. supports higher levels of trust than face-to-face communication.
E. allows for integrated global team development.
Training and development of potential candidates for expatriate assignments:
A. are unnecessary with host-country nationals.
B. are unnecessary with home-country nationals.
C. depend on whether the candidate is a home-, host-, or third-country national.
D. wastes company resources because management is an art form, not a skill.
E. none of the above.
Balance-of-payments data:
A. reveal a country’s assets.
B. suggest areas of concern in monetary and fiscal policy.
C. reveal demand for a country’s currency.
D. show how the country’s currency arrangement (fixed, pegged, floating) is valued.