Companies decide to export to increase their sales and profits or to protect them from
being eroded.
Trompenaars’ dimension of individualism vs. communitarianism differs greatly from
Hofstede’s individualism-collectivism dimension.
Discovery refers to the process of finding out facts that indicate a law has been violated,
and it leads to the filing of a legal case, or litigation.
There is a growing tendency for firms to use strategic planners to devise the corporate
plan, which is then handed to operations people for execution.
Value chain analysis is an assessment conducted on the chain of interlinked activities of
an organization or set of interconnected organizations, intended to determine where and
to what extent value is added to the final product or service.
There are three main classes of social institutions, based on the conditions of their
formation: family, kinship, and free association.
When managers are assigned and move abroad with their families, the most difficult
adjustments are frequently for the children.
Although the international airline segment is competitive, British Air as it is today
could not legally take over Delta or United.
The EU uses the CE mark to certify health and safety.
According to the text, shorter and less predictable product life cycles have placed
reduced emphasis on supply chains and their performance.
Scenarios are a particularly useful approach for international companies that face high
levels of change and uncertainty, because they allow management to anticipate and
prepare for opportunities and threats by predicting and controlling for these
developments.
Saudi Arabia and Canada have the largest proven oil reserves.
Although arbitration procedures may be confidential, enabling a company to avoid
unwelcome publicity accompanying an open court case, arbitration is generally slower
than law courts.
The EU does not apply its competition policy beyond the EU.
Sometimes there are almost no differences between marketing domestically and
marketing internationally. At other times these differences are great.
Multilateral netting is an approach to debt management in which subsidiaries aggregate
their debt service.
Factoring allows the exporter to be more competitive by selling on open account rather
than by means of the more costly letter-of-credit method.
A multidomestic strategy tends to be used when a company simultaneously confronts
pressures for cost effectiveness and local adaptation.
Product standards ostensibly set to protect a nation’s citizens can be effective in
protecting local industry from foreign competitors.
Hofstede’s individualism-collectivism dimension measures the degree to which people
tend to be integrated into groups.
A management contract is used only by manufacturing companies to earn income by
providing expertise for a fee.
Arbitration is less popular than legal proceedings, largely because arbitration is more
expensive.
Seeing what needs to be done is a management, rather than leadership, element.
Countries put limitations on the convertibility of their currencies when they are
concerned that their foreign reserves could be depleted.
Generally, it is easier for international firms to standardize the concepts of total quality
management and synchronous manufacturing in their foreign plants than it is to
standardize the actual production facilities.
Under a polycentric staffing orientation, ICs primarily hire HCNs for subsidiaries and
PCNs for headquarters’ positions, and movement from the local subsidiaries to
headquarters’ positions is common.
The theory of absolute advantage suggests that under free, unregulated trade, each
nation should specialize in producing those goods it can produce most efficiently.
Scenarios are forecasts that extrapolate from past data to make predictions.
Mapping is figuring out a geographical outline for all team members.
Hofstede’s framework is based on social science theory.
The UN General Assembly is the main staff organization responsible for the UN
administration.
To create a sustainable competitive advantage, an international company should try to
develop competencies that are valuable, rare, difficult to imitate, and readily
substitutable.
Biomass is a category of renewable energy fuels based on their heavy weight.
Incoterms were created by the New York Chamber of Commerce and are revised every
year.
Wholesale importers are independent merchants that buy for their own account.
Among the skills necessary for a global leader are cultural adaptability and an ability to
build global teams.
Unanticipated shifts in exchange rates present risk to the international firm.
Arbitration provides foreign businesses a forum other than the U.S. court system to
address disputes that involve U.S. sellers or buyers.
Failure rates for expatriate assignments have been reported to range from 25 to 45
percent.
The total product:
A. all of B, C, and D.
B. is what the customer buys.
C. includes the physical product and brand name.
D. includes the package.
E. two of B, C, and D.
Leading global change is:
A. just like leading domestic change.
B. like leading domestic change, but exponentially more complex due to globalization.
C. similar in every location on the globe.
D. a well-understood process with models and theories underpinning it.
E. C and D.
In examining the volume of international trade:
A. the proportion of manufacturing value added generated by South and East Asia has
quadrupled since 1980.
B. the proportion of manufacturing value added generated by Latin America has
doubled since 1980.
C. the proportion of world exports and imports accounted for by the 10 largest
exporting and importing nations exceeded 70 percent in 2010.
D. all of the above.
E. two of A, B, and C.
Activities that are involved in producing a company’s products and services and how
these activities are linked together are often referred to as:
A. value chains.
B. supply chains.
C. organization design.
D. operations management.
E. none of the above.
The main purpose of the OECD is to:
A. provide economic research and a discussion forum.
B. function as a developed-nation cartel.
C. limit growth in developing economies.
D. support trading patterns within the group of developed nations.
The level of merchandise exports in 2010, worldwide, was:
A. $3.7 trillion.
B. $8.5 trillion.
C. $15.2 trillion.
D. $18.9 trillion.
E. $23.4 trillion.
As stated in the text, an international business is:
A. a business whose activities involve crossing national borders.
B. the operations of a company outside its home or domestic market.
C. an organization with multicountry affiliates that each formulate their own business
strategy.
D. an organization that attempts to standardize operations worldwide.
E. all of the above.
__________ 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
Documented agreements containing technical specifications or other precise criteria that
will be used consistently as guidelines, rules, or definitions of the characteristics of a
product, process, or service are referred to as:
A. standards.
B. processes.
C. logistics.
D. value chains.
E. none of the above.
The North-South divide uses climatic differences to explain:
A. population differences.
B. trade patterns.
C. differences in human development.
D. cultural differences.
Hiring and promoting employees on the basis of the specific local context in which the
subsidiary operates refers to:
A. an ethnocentric orientation.
B. a polycentric orientation.
C. a regiocentric orientation.
D. a geocentric orientation.
E. none of the above.
The UN is important to international business for many reasons, including that it:
A. develops standards and norms in technical areas.
B. monitors trade patterns.
C. arranges trade missions to developing nations.
D. arranges international funding for business education.
A turnkey project includes all of the following except:
A. plan design.
B. technology supply.
C. supply of raw material.
D. personnel training.
E. none of the above. (All four are included.)
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.
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
Subsidies are problematic because they:
A. are administered as a form of political patronage.
B. aid export businesses or protect domestic businesses from imports.
C. encourage nationalization.
D. violate UN agreements.
E. two of the above.
Research found that suppliers cut invoice and ordering errors by an average of ___
percent when using an e-marketplace.
A. 10
B. 24
C. 37
D. 56
E. 69
Trade obstacles are considered to be legal forces because:
A. they often are based on legislation.
B. their compliance is costly to the firm and the consumer.
C. they are imposed by a formal institution and noncompliance can carry punishment.
D. two of the above.
E. all of A, B, and C.
Global standardization of operations:
A. eliminates the task of maintenance and production control.
B. allows home office personnel to more effectively keep production specifications
current.
C. enables reasonably accurate forecasts of time required to erect plants.
D. all of the above.
E. two of A, B, and C.
The purpose of the International Financial Corporation (IFC) is to invest in companies
and financial institutions in developing countries in order to build:
A. infrastructure.
B. trade routes.
C. domestic logistics.
D. domestic capital markets.
Organizational structure:
A. refers to the way that an organization formally arranges its various domestic and
international units and activities and the relationships among these organizational
components.
B. helps to determine where formal power and authority will be located within the
organization.
C. is primarily created and evolved by senior management.
D. all of the above.
E. two of A, B, 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.
Home-country nationals may be used in host-country management because:
A. all of B, C, and D.
B. host-country nationals are unavailable.
C. home-country nationals are being groomed for IC headquarters.
D. IC headquarters wants one of its nationals in the host country.
E. two of B, C, and D.
When designing production facilities, designers generally find that:
A. automated machinery is severely limited in flexibility regarding product variety and
sizes.
B. general-purpose machines require skills that are built into a special-purpose machine.
C. they have to choose between low-output specialized machinery and higher-output,
general-purpose machines.
D. all of the above
E. two of A, B, and C
The rapid expansion of world exports since 1980 demonstrates that:
A. businesspeople must be prepared to meet increased competition.
B. domestic business cannot compete with cheap imports.
C. the opportunity to increase sales by exporting is a viable growth strategy.
D. all of the above.
E. two of A, B and C
Swap contracts are agreements to exchange:
A. currencies at specified rates at specified times in the future.
B. equity shares in the future at today’s rates.
C. supplier information to ensure competitive pricing.
D. B and C.
According to the text:
A. design is an important factor in the structure of a company’s global supply chain.
B. design determines the extent to which a company’s strategy will be standardized
across nations.
C. common approaches to design are concurrent engineering and “over the top.”
D. all of the above.
E. two of A, B, and C.
Laws governing transactions of individuals and companies that cross international
borders are:
A. none of B, C, D, or E.
B. private international law.
C. product liability law.
D. public international law.
E. customary law.
Informal institutions are composed of sets of:
A. mandatory agreements, a bit like the mind’s software.
B. orthodox accords whose goal is to establish rigor.
C. agreements that are for the most part written and taken for granted.
D. voluntary agreements.
Investigations of large multinationals in manufacturing and service sectors reveal that:
A. a majority of them use a global strategy.
B. a majority of these firms generate an average of about 65 percent of their worldwide
revenues within their home region.
C. most of these firms have achieved broad and deep penetration of international
markets as a whole.
D. none 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. Agree or disagree.
