Cross-cultural proficiency is characterized by all of the following EXCEPT ________.
A) perceptiveness
B) flexibility and adaptability
C) valuing personal relationships
D) tolerance for ambiguity
________ tends to worsen culture shock.
A) The ability to speak more than one language
B) Proximity to family
C) Inadequate cross-cultural skills
D) High adaptability
Wonder Cat Licensing (Scenario)
Wonder Cat is a popular, new cartoon series created by the U.S-based All Cartoon
Channel (ACC). Currently, the only Wonder Cat item available for sale are shirts that
are sold exclusively through the ACC Web site. The cartoon series is a big hit in China,
and as a result ACC has been approached by a Chinese firm about a licensing
agreement. ACC executives are considering the pros and cons of such an agreement
before making any final decisions.
Which of the following statements most likely supports an ACC decision to enter into a
licensing agreement with the Chinese firm?
A) Royalties from toys and apparel would be initially minimal.
B) The Wonder Cat brand’s products could be easily counterfeited in other markets
except in the Chinese markets.
C) The Chinese government restricts complete ownership of local operations by foreign
firms.
D) China exclusively opts for high-control strategies such as FDI.
Demographic trends indicate that, in the coming two decades, ________.
A) the spending power of middle-class households will substantially decline
B) the GDP of advanced economies will decline
C) the spending power of low-income households will increase tremendously
D) the proportion of middle-class households in emerging markets will become much
bigger, acquiring enormous spending power
Which of the following explains how firms can use FDI to gain and sustain competitive
advantage?
A) monopolistic advantage theory
B) new trade theory
C) Leontief paradox
D) factor proportions theory
When sourcing relies on foreign suppliers or production bases, it is known as
________.
A) offshoring
B) protectionism
C) insourcing
D) subsidizing
Which of the following is a benefit for firms that participate in the global capital
market?
A) availability of short-term financing
B) availability of a large pool of financing sources at a lower, competitive rate
C) access to larger funds exclusively in the domestic market
D) access to unregulated and secured returns on investment
Global Operations Report (Scenario)
As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with
preparing a comprehensive report on the company’s global operations over the past
twenty years. Deva assigns three strategists to collaborate on the History portion of the
report, which details the rationale behind Pax’s decisions to expand operations in
particular areas. Rashid Ahl focuses on early expansion to China, which occurred after
China began to make its market more accessible to foreign companies. Markus Teller
focuses on Pax’s expansion to Eastern Europe, which was motivated by increased
industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan,
which happened when the company’s commercial bank expanded its service network to
Asia.
In describing the main driver behind Pax’s expansion to China, Rashid is most likely to
emphasize ________.
A) high rate of employee attrition in China
B) advances in technology
C) reduction of barriers to trade
D) integration of world financial markets
The likelihood of internalizing ________ rather than outsourcing it is considerably
high.
A) R&D
B) manufacturing of parts
C) sales and distribution
D) customer service
As a strategic asset, ________ is of the lowest importance to a firm.
A) customer service
B) R&D, design
C) manufacturing of parts
D) marketing and branding
________ refers to the tendency of a financial or monetary crisis in one country to
spread rapidly to other countries, due to the ongoing integration of national economies.
A) Contagion
B) Nationalization
C) Internationalization
D) Codetermination
Which of the following is typical of developing economies?
A) low levels of bureaucracy and red tape
B) low debt levels
C) lack of cultural history
D) poor education systems
How can international human resource managers effectively minimize culture shock for
expatriates?
A) by allowing personnel a short trip to the foreign location before the actual
assignment
B) by training personnel to understand the host country’s government, culture, and
language
C) by inviting foreign employees to the homes of future expatriates for enhancing
cultural awareness
D) by asking the expatriate to return to the headquarters
Businesses foster economic and social development in in emerging markets and
developing economies ________.
A) through the mass production of cheap, low-quality goods
B) by using strategies developed decades ago and refined in mature advanced-economy
markets
C) by developing community-oriented social programs
D) by implementing cost-effective production methods
Which of the following should be done by a company planning to internationalize when
it assesses market industry potential?
A) take action to eliminate deficiencies in the firm
B) determine the most desirable attributes in foreign business partners
C) develop a 3- to 5-year forecast of industry sales for each target market
D) determine how products or services may need to be adapted for each market
Which of the following is characteristic of emerging markets?
A) low inward foreign direct investment
B) minimum regulations
C) major focus on services and branded products
D) rapidly declining trade barriers
________ fundamental tenet is that capital and wealth should be vested in the state and
used primarily as a means of production rather than for profit.
A) Socialism’s
B) Democracy’s
C) Totalitarianism’s
D) Theocracy’s
A formal arrangement between two or more countries to reduce or eliminate tariffs is
known as a(n) ________.
A) quota arrangement
B) free trade agreement
C) memorandum of association
D) memorandum of understanding
All of the following are international labor trends EXCEPT ________.
A) increase in immigration
B) more mobile labor force
C) rapidly increasing union membership in most advanced economies
D) formation of global alliances by national labor unions
All of the following are reasons to study international business EXCEPT ________.
A) international business contributes to economic prosperity
B) international trade is a critical engine for job creation
C) international trade and investment have experienced unprecedented decline
D) international business provides an opportunity to support sustainability and
corporate citizenship
________ is at odds with free trade, the unrestricted flow of products, services, and
capital across national borders.
A) Lower-cost import
B) Trade openness
C) FDI
D) Factors of production
Maxdime Inc. is an international automobile manufacturer that has decided to work on
low-cost fuel efficient motorbikes. Foray Inc., a domestic automobile company based in
China, is willing to partner temporarily with the R&D team of Maxdime to design and
launch motorbikes specially for the Chinese market. This is an example of ________.
A) product differentiation
B) non-equity-based strategic alliance
C) sole proprietorship
D) entrepreneurial orientation
Each of the following represents a factor of production EXCEPT ________.
A) manufacturing infrastructure
B) technology
C) government regulations
D) managerial talent
GramTech Solutions is a software development firm based in the United States. The
firm’s CEO, David Ghaster, wants to open an outlet in India. Being a visionary leader,
he would ________.
A) require employees to discover a strategic vision for the firm
B) require managers to acquire an openness to, and awareness of, culture in India
C) commit minimum resources for international ventures because of the currency risk
involved
D) cut down on employees’ cross-cultural training to save capital to open a firm in India
The Organisation for Economic Co-operation and Development (OECD) is classified as
a(n) ________.
A) international organization
B) regional trade organization
C) special interest group
D) competing firm
A ________ strategy is characterized by substantial control over country operations by
headquarters in order to increase efficiency and integration.
A) multilocal
B) home replication
C) multidomestic
D) global
Acme Software (Scenario)
Acme Software is a U.S.-based maker of software products for the health care industry.
Recently Acme has been investigating whether it would be beneficial to internationalize
some of its value-chain activities. Acme hires a consulting group to help determine
which, if any, value-chain activities could be conducted abroad to promote business
growth. The consulting group identifies two health care software development
companies in India that could provide programming services at a lower cost than
Acme’s current expenditures for programming. In addition, the consultants conduct
international market research which shows that German health care companies have a
strong demand for the type of software that Acme offers.
Which of the following would be most important for the consulting group to consider
when deciding whether to recommend that Acme internationalize its sales efforts to
Germany?
A) Will Acme save money on advertising by targeting small rather than large
companies?
B) How intense is the competition from German companies offering similar products?
C) What type of training is received by programmers in software firms abroad?
D) Is employee empowerment culturally favored in Germany?
Regional economic integration blocs ________.
A) reduce trade and investment barriers
B) reduce private investments
C) adopt a hostile stance toward the private sector
D) hinder the cross-border flow of factors of production
Which of the following is true about networks?
A) Networks are neither formal organizations with clearly defined hierarchical
structures nor impersonal, decentralized markets.
B) In networks, buyers and sellers share no linkages and rarely interact with each other.
C) In a network, continued interaction among partners leads to competition and rivalry
that bring down productivity.
D) Networks represent the economically beneficial short-term relationships the firm
undertakes with other business entities.
________ is the total value of products and services produced in a country over the
course of a year.
A) GDP
B) CAD
C) FDI
D) PPP
Global Operations Report (Scenario)
As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with
preparing a comprehensive report on the company’s global operations over the past
twenty years. Deva assigns three strategists to collaborate on the History portion of the
report, which details the rationale behind Pax’s decisions to expand operations in
particular areas. Rashid Ahl focuses on early expansion to China, which occurred after
China began to make its market more accessible to foreign companies. Markus Teller
focuses on Pax’s expansion to Eastern Europe, which was motivated by increased
industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan,
which happened when the company’s commercial bank expanded its service network to
Asia.
Firms expand abroad mainly as a reaction to market globalization.
Audio Component Outsourcing (Scenario)
Echo Corp., a company based in Boston, manufactures high-quality audio components,
such as speakers, amplifiers, and receivers for home entertainment systems. Echo has
been losing market share in recent years due to the competitive pricing of other audio
component manufacturers that engage in global sourcing. Echo managers are
attempting to convince Nathan Douglas, the firm’s founder and CEO, that global
sourcing would enable the firm to be more competitive without sacrificing quality.
Which of the following, if true, most supports the argument in favor of global sourcing?
A) There is no scarcity of qualified personnel in and around Boston.
B) Studies show that by reconfiguring their value-chain systems or reengineering their
business processes, companies can substantially improve their production efficiency
and resource utilization.
C) Camden Audio, Echo’s most formidable rival, follows a strategy of product
diversification.
D) The rate of employee turnover at Echo has stabilized over the last decade.
In which of the following countries would alcoholic drinks be prohibited?
A) Saudi Arabia
B) Mexico
C) Spain
D) Italy
A ________ is the firm’s integrated network of sourcing, production, and distribution,
organized on a worldwide scale and located in countries where competitive advantage
can be maximized.
A) demand chain
B) buying center
C) global supply chain
D) decision making unit
Companies that proactively build a global organizational culture will ________.
A) promote independent headquarters and subsidiaries to avoid miscommunication
B) subscribe to ethical standards developed in the home market to avert
misunderstanding
C) maintain a global perspective in all major initiatives
D) adopt multiple corporate languages for business communications
