The problem of noncomparable outcomes arises because of differences in economic,
political, legal, and cultural variables.
International Management Qualifications (Scenario)
Core Computer Corporation (CCC) recently opened a customer service facility in New
Delhi, India. Managers of the Texas-based firm have been displeased with the local
manager hired to run the New Delhi facility because of a variety of problems that took
place. CCC managers believe that a representative from the headquarters should
manage the Indian facility for one year in order to train personnel and to improve the
quality of customer service. Two CCC executives have expressed a desire to work and
live in India: Craig Springer and Devon Parks. The CCC human resources department is
comparing the qualifications and characteristics of the two men in order to determine
which candidate would be the most successful in India.
Which of the following most supports hiring Craig Springer as manager for CCC’s
facility in New Delhi?
A) Craig handles work-related stress mostly by exercising and spending time with
friends.
B) Craig has served as a manager for six months in CCC’s office in Beijing.
C) Craig learned to speak fluently in Spanish and French from his past assignments in
Europe.
D) Craig is able to work independently with little direction.
________ is the world’s leading licensing firm?
A) Nickelodeon
B) The Walt Disney Company
C) Mattel
D) Major League Baseball
Feminine cultures tend to emphasize ________.
A) interdependence among people
B) accumulation of wealth
C) ambition
D) competitiveness
Which of the following refers to a collaborative venture which results in a new legal
entity?
A) non-equity-based strategic alliances
B) sole proprietorships
C) equity-based joint ventures
D) not-for-profit organizations
Which of the following has contributed to the emergence of a large Eurocurrency
market?
A) lower interest rates on Eurocurrency loans
B) regulations of home-country banking systems
C) loans repaid interest-free at face value
D) low interest rates on Eurocurrency deposits
The relocation of manufacturing and other value-chain activities to cost-effective
locations abroad is known as ________.
A) insourcing
B) cultural imperialism
C) contagion
D) offshoring
Which of the following best exemplifies corporate social responsibility?
A) a computer firm charging a high fee for recycling old computers
B) an automobile manufacturer selling low-fuel economy cars and trucks
C) a telecommunications firm charging high-rates to low-income customers
D) an automotive battery firm offering free technical training to students of a deprived
community
Which of the following tasks is the final stage of assessing the global market
opportunities of a firm?
A) screen countries to identify target markets
B) assess product suitability for foreign markets
C) estimate company sales potential
D) assess industry market potential
Corruption is defined as ________.
A) the system of procedures and processes by which corporations are managed,
directed, and controlled
B) a manner of operating a business that meets or exceeds the ethical, legal,
commercial, and public expectations of customers
C) the abuse of power to achieve illegitimate personal gain
D) the tendency to make decisions based purely on cognitive factors
Which of the following is an element of the comparative advantage principle?
A) per unit cost advantage
B) relative efficiency of production
C) absolute cost of production
D) negative balance of trade
Sid Maxwell (Scenario)
Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer.
Hudson’s signature toy, the Witty Parakeet, includes an embedded software program
that allows the bird to interact with children. Hudson is currently planning to expand its
market in Asia but Sid is concerned about reports of software piracy in the region.
Hudson uses a distinctive sign to enable its customers to easily identify its products.
This distinctive sign that the company also uses to distinguish its offerings from that of
its competitors is known as a ________.
A) patent
B) copyright
C) trademark
D) users’ license
NAFTA is an example of which of the following levels of regional integration?
A) free trade area
B) political union
C) economic union
D) common market
Representative B is most likely from ________.
A) New Zealand
B) North Korea
C) Russia
D) Canada
Which of the following would be the best way for a manager to learn about country
risks in a host country?
A) analysis of records of competitor firms
B) employees working in the host country
C) host country nationals working abroad
D) employees working in the home country
In a world ever sensitive to social and environmental issues, more and more firms are
embracing CSR and sustainability. Such firms are more likely than not to ________.
A) develop closer relations with foreign stakeholders to better understand their needs
and work jointly toward solutions
B) minimize their contribution to the local community in order to maximize profits
C) be reluctant to hire managers from around the world
D) favor region-specific CSR standards to global CSR standards for foreign operations
Which of the following approaches to ethical standards for corporate governance
reflects the view that the best action emphasizes the welfare of the entire community or
nation?
A) rights approach
B) utilitarian approach
C) common good approach
D) virtue approach
Business activities that would most likely be offshored are characterized by ________.
A) high-value-adding activities that contribute more productively to increasing
company performance
B) services related to critical, long-term research projects and product development
C) routine tasks that do not relate to the firm’s primary service or product
D) functions related to the firm’s core competencies and strategic assets
When applying the five-step framework for making ethical decisions, managers should,
at first, ________.
A) evaluate alternatives
B) examine the facts
C) recognize the ethical problem
D) implement a decision
Extra Clean Strategy (Scenario)
Extra Clean Soap Company has been manufacturing soap products, such as
dishwashing liquid, bath soap, and shampoo, for over 20 years from its facility and
headquarters in Dublin, Ireland. A recent opportunity allowed Extra Clean to purchase
soap companies in Taiwan and India. Extra Clean is now servicing both foreign and
domestic markets with its products and manufacturing in all three locations. Recent
reports from managers in the foreign facilities indicate that Extra Clean sales in Taiwan
and India are low due to a lack of local responsiveness. Extra Clean managers from
Ireland, India, and Taiwan are having a teleconference in an attempt to devise a strategy
to improve the profitability of Extra Clean.
Which of the following most likely supports Extra Clean implementing a multidomestic
strategy instead of a global strategy?
A) The Taiwan manufacturing facility requires an update in equipment.
B) Extra Clean managers lack internationalization experience.
C) Recent studies have shown that consumer trends in Taiwan, India, and Ireland are
converging.
D) Foreign rivals of Extra Clean compete at a global level.
Under the ________, Canada, Mexico, and the United States have eliminated nearly all
tariffs on product imports from each other.
A) APEC
B) FTAAP
C) GATT
D) NAFTA
Which of the following emerging market economies has the largest middle-class
population?
A) India
B) Russia
C) Brazil
D) China
Under which of the following circumstances would an MNE most likely hire a
parent-country national?
A) when the MNE wants to maintain strong control over its foreign operations
B) when the MNE wants to benefit substantially from specialized knowledge available
in the host country
C) when the MNE wants to transfer specific knowledge or corporate culture from third
countries to host-country operations
D) when the host country environment is complex
ABC Appliance (Scenario)
The ABC Appliance Corporation is a Florida-based manufacturer of refrigerators,
dishwashers, and other large household appliances. ABC takes advantage of NAFTA,
and as a result, the firm has loyal customers across North America. ABC managers
would like to expand into the Asian market, but are unsure of the best way to do so.
ABC managers are meeting to discuss various possibilities for entering the Asian
market.
Which of the following should most likely be considered in making the decision to
expand ABC operations into the Asian market?
A) How will domestic competitors of ABC react to an international expansion?
B) What technological and managerial know-how can ABC gain from an Asian
expansion?
C) How many managers will need to relocate to Asia to oversee the Asian project?
D) How will ABC utilize the Internet to achieve success in the Asian market?
The size and growth rate of a country’s middle class is termed as ________.
A) market consumption capacity
B) market intensity
C) market receptivity
D) market size
________ are transfer payments or tax concessions made directly to foreign firms to
entice them to invest in the country.
A) Investment incentives
B) Antidumping duties
C) Countervailing duties
D) Quotas
The Bretton Woods Agreement most likely influenced the current trend towards
international free trade when member countries agreed to ________.
A) no longer impose trading tariffs within economic blocs
B) provide low interest loans to poor countries
C) not impose restrictions on currency trading
D) implement a multilateral trade and investment system
Which of the following is characteristic of an effective legal system?
A) a stable and rigid framework of rules and norms across nations
B) systematically enforced laws and regulations
C) political involvement in business transactions
D) universal emphasis on religious law over common and civil law
Which of the following is the final task in international financial management?
A) managing currency risk
B) managing the diversity of international accounting and tax practices
C) raising funds for the firm
D) managing working capital and cash flow
The estimate of the share of annual industry sales the firm expects to generate in a
particular target market is known as ________.
A) industry market potential
B) company sales potential
C) break-even analysis
D) SWOT analysis
Which of the following most likely occurs as a result of expatriate failure?
A) culture shock
B) diminished careers
C) acculturation
D) knowledge sharing
________ theory suggests that firms using FDI as an internationalization strategy must
own or control certain resources and capabilities not easily available to competitors.
A) Factor proportions
B) Monopolistic advantage
C) Internalization
D) Absolute advantage
________ refer to post-industrial countries characterized by high per-capita income,
highly competitive industries, and well-developed commercial infrastructure.
A) Underground economies
B) Emerging markets
C) Advanced economies
D) Transition economies
Which of the following is the most likely underlying reason for the demise of the
Bretton Woods system?
A) U.S. trade deficits
B) creation of the EU
C) gold depreciation
D) WTO restrictions
Which of the following countries has the highest per-capita GDP using PPP exchange
rates in US$?
A) Brazil
B) China
C) Turkey
D) South Korea
Which of the following would exert pressure on a U.S.-based clothing company,
ZSource Ltd., to become locally responsive?
A) to seek cost reduction through scale economies
B) to conduct global sourcing of raw materials, components, energy, and labor
C) to monitor and respond to global competitors
D) to meet host government requirements and regulations