Currency exchange rate movements are well understood by economists and can be
accurately forecast, which eliminates risk for the international seller operating with
exposure outside the home currency.
The matrix overlay organizational form attempts to eliminate some of the problems of
the matrix organization.
The International Court of Justice (ICJ) handles all cases brought forward by any
person or organization.
The first step in finding a foreign market for a product is to determine whether a market
exists for a firm’s products.
Fair competition is a strong rationale for trade barriers.
(p.93)-There are few cultural misunderstandings in the discipline of marketing.
The initial choice of organizational structure after discarding the international division
is usually a hybrid based on product and market factors.
To protect an infant industry, trade restrictions might be effective.
One possible current currency arrangement is a fixed peg, whereby the exchange rate of
a currency is allowed to move (within a narrow band) with another currency. One
example is the pegging of the Canadian dollar to the U.S. dollar.
The existence of two or more partners, which typically have differences in strategies,
operating practices, and organizational cultures, is a factor that tends to promote
successful management and performance of strategic alliances.
Nuclear power is a leading contributor to the French energy grid.
Sustainable business practices have three characteristics: limits, interdependence, and
equity.
Most companies can enter a market in stages. The order listed in the textbook is
establishment of a foreign sales company, exporting, local assembly, and
manufacturing.
International business differs from domestic business in that a firm operating across
borders must deal with the forces of two kinds of environments—domestic and foreign.
The use of TCNs has become particularly prevalent in the developing countries.
One type of strategic alliance between competitors is an R&D partnership.
Teams with strong heartbeats may meet less regularly than at their launch and during
crisis.
Global firms that organize by function at the top level have functional managers that
report directly to the area heads.
Computer-integrated manufacturing reduces the economic batch quantity to one and
facilitates the potential for mass customizaton.
Standards are documented agreements containing general guidelines, rules, or
definitions of the characteristics of a product, process, or service.
Estimation by analogy is an example of a market factor.
Subsidiary detriment occurs when a small loss for a subsidiary results in a greater gain
for the total IC.
FASB 52 requires that companies record foreign currency-based transactions at the spot
rate at the time of the transaction.
Drastic modifications in the physical product may be necessary because of two
problems prevalent in the developing countries: a tendency to overload equipment and
to slight maintenance.
A virtual corporation is also called a network organization.
In cultures with hierarchical values, such as Japan and Brazil, a single leader with
decision-making power is often the case.
There are five major kinds of globalization drivers, all based on changes that are
leading international firms to the globalization of their operations.
A middle-ground advertising strategy in which the home office and the foreign
subsidiaries agree on marketing objectives is called the computerized-management
approach.
Both developed nations and developing nations tend to trade more with developed
nations.
Responding to any demand rather than executing a planned growth strategy is not a
mistake new exporters tend to make.
Many smaller and developing nations want to reduce patent protection from the current
15 to 20 years down to 5 years or even 30 months.
Chief financial officers avoid tapping into international markets because they bring too
many unpredictable variables.
A historical function of capitalist—but not communist—governments has been the
protection of the economic activities within their geographic area of control.
The e-commerce potential index developed in the text includes three indexes: market
size, market growth rate, and e-commerce readiness.
Production coordination poses difficult problems in many regionalized organizations,
which has led many companies to assign many specialized product managers who have
line authority.
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.
Public relations includes the various methods of communicating with the firm’s publics,
including the governments where it operates, in order to secure a favorable impression.
Global trademark protection follows the Office of Harmonization in the Internal Market
approach.
Economic exposure occurs at the operations level and results from:
A. poor decision making in foreign markets.
B. higher tax rates in foreign operations.
C. risks incurred during foreign transactions.
D. exchange rate changes on projected cash flows.
Which of the following is correct about scenario analyses?
A. The objective of the process is to forecast the future.
B. The process extrapolates from past data to build scenarios for guiding decision
making.
C. Managers develop best-case, worst-case, and most likely scenarios to guide decision
making.
D. All of the above are correct.
E. None of A, B, or C is correct.
Benefits of joint ventures may include:
A. the ability to respond to strong nationalistic sentiment in the host nation.
B. access to expertise that the company lacks.
C. differing strategies and cultures of the partners.
D. two of the above.
E. all of A, B, and C.
Patent trolls are:
A. a record of all patents, recorded by the UN.
B. the numerical controls issued on patents, standardized by the Paris Convention.
C. the organizing system for patent review that is kept internationally by the OECD.
D. modern highway robbers who exploit loopholes in IP protection.
E. the framework used for filing and referencing patents.
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.
The segment approach to investigating markets requires that markets should be which
of the following?
A. Large
B. Protected
C. Capturable
D. All of the above
E. A and C
If a student wants to become a global leader, she or he might:
A. study abroad and live with host families.
B. build language and cultural fluency.
C. take international internships.
D. travel as much as possible.
E. all of the above.
According to the text, data on imports may not completely measure market potential
because:
A. these data are not available for most countries and products.
B. foreign competitors will not report export data accurately.
C. transportation costs impact prices.
D. all of the above.
E. two of A, B, and C.
Global team leaders want to set specific team norms because:
A. leaving the norming process to team members will allow the predominant culture to
dominate.
B. global teams work best with norms of accountability and independence.
C. without norms or with dysfunctional norms, global teams are likely to under
perform.
D. norms that support consideration and cooperation lead to good team functioning.
E. only when norms are set can the global team leader go on to the next step in the team
process.
E. T. Hall suggests that to learn another culture, you have to undergo extensive training
or spend:
A. a lifetime in the other culture.
B. considerable time with people of the other culture, but perhaps outside that culture.
C. time studying the language of the other culture.
D. considerable amounts of time and money taking guided tours in the other culture.
With increasing inflation, borrowing becomes:
A. more attractive because repayment can be made with cheaper money.
B. less attractive because repayment is made with dearer money.
C. impossible because money has lost its value.
D. a mute issue because of liquidity issues.
Nonfuel minerals:
A. include chrome, manganese, platinum, and arsenic, all necessary for modern living.
B. are mostly sourced through imports in the United States.
C. frequently originate in China.
D. all of the above.
Policies:
A. prescribe how certain activities will be carried out.
B. are broad guidelines used to assist lower-level managers to handle recurring
problems.
C. ensure that all budgets will be prepared using the same format.
D. all of the above.
E. two of A, B, and C.
Cultural problems and technical difficulties cause problems:
A. when preparing for field trips.
B. in the collection of secondary data.
C. in the collection of primary data.
D. during the economic/financial screening.
E. none of the above.
The capability of one nation to produce more of a good with the same amount of input
than another country is:
A. a comparative advantage
B. an absolute advantage
C. a mercantilist advantage
D. none of the above
E. two of A, B, and C
Team leadership has these main activities:
A. directing and evaluating.
B. directing and organizing.
C. establishing, coaching, and assessing.
D. establishing, coaching, and setting norms.
E. A and C.
To create a competitive advantage that is sustainable over time, the international
company should try to develop competencies that:
A. create value for customers and for which they are willing to pay.
B. are easy to imitate or substitute for.
C. are expensive to develop and maintain.
D. all of the above.
E. two of A, B, and C.
Because of their close linkage, sociologists often combine the terms:
A. social and cultural.
B. social and kinship.
C. kinship and monogamy.
D. culture and monogamy.
Management has no direct control over the external environment of the firm but can
exert influence by:
A. heavy promotion of new products to change cultural attitudes.
B. only competing in the domestic market.
C. lobbying.
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.
Scenarios are designed to assist managers:
A. in becoming aware of the critical elements of the external forces.
B. in brainstorming various “what-if” situations.
C. in preparing budgets.
D. all of the above.
E. two of A, B, and C.
Proximity is a factor in explaining:
A. a nation’s political system.
B. the number of a nation’s political and trade relationships.
C. language patterns.
D. demand conditions.
If Ecuador has an absolute advantage in coffee and Argentina in wheat, then, according
to trade theory:
A. Ecuador should focus production on coffee and trade for wheat.
B. Ecuador would do well to produce its own coffee rather than import it from Bolivia.
C. Argentina should focus on producing wheat and trade for coffee.
D. all of the above.
E. two of A, B, and C.
Cote d’Ivoire uses child labor, often imported and kidnapped, in the cultivation and
harvesting of:
A. marijuana.
B. palm oil.
C. cocoa bean.
D. poppy.
E. none of the above.
The inflation rate determines:
A. the capital structure of the firm.
B. the growth rate of sales.
C. the real cost of borrowing in capital markets.
D. the equilibrium point.
Monetary and fiscal policies:
A. have nothing to do with exchange rate movement.
B. influence interest rates and taxation, and so may influence exchange rates.
C. have no predictable influence on inflation.
D. have no influence on trade patterns.
A reason that outsourcing has become an increasingly common option for companies is:
A. the cost of communications is plummeting.
B. more automation of a company’s operational activities.
C. more companies are competing for outsourcing business.
D. two of the above.
E. all of A, B, and C.
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.
According to a survey by Bain & Company, the management tool with the highest level
of satisfaction among global executives is:
A. value chain analysis.
B. industry and competitor analysis.
C. strategic planning.
D. environmental analysis.
E. none of the above.
Which of the following is the most risky for an importer?
A. Open account
B. Irrevocable letter of credit
C. Bank collection time draft
D. Cash in Advance
E. None of the above
The OECD is called the “rich man’s club” because its members:
A. are rich and male.
B. are 34 of the world’s wealthiest nations.
C. are concerned with increasing their own wealth rather than promoting development.
D. promote wealth at the cost of health and safety.
To facilitate Kraft’s goal of enhancing growth prospects within developing-country
markets, the company:
A. moved an increasing proportion of decisions to the company’s Illinois headquarters.
B. gave full profit-and-loss accountability to the business units.
C. expanded core product categories into large developing countries.
D. all of the above.
E. two of A, B, and C.