Which of the following best explains why India was once characterized by high country
risk?
A) taxes and financial incentives benefited Indian businesses over foreign firms
B) Indian business leaders distrusted most European corporations
C) political leaders enacted laws that targeted foreign firms for harassment
D) Indian leaders feared the modern influences of American firms
Which of the following grants protections to the creators of art, music, books, software,
movies, and TV shows?
A) patent
B) trademark
C) copyright
D) domain registration
Freehold Investment Corp. (Scenario)
Dan Freehold and his business partner, Bethany Quinn, are successful investors
engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand
their foreign investing operations. They hold a meeting for individuals interested in
participating in certain overseas ventures.
Bethany presents another opportunity that involves the purchase of a manufacturing
plant in South Korea. She explains that this type of strategy will involve ________
ownership on the part of the firm.
A) indirect
B) passive
C) short-term
D) active
A ________ is a facility for trading securities and other financial instruments, including
shares issued by companies, trust funds, pension funds, and corporate and government
bonds.
A) stock exchange
B) business strategic unit
C) grey market
D) shell corporation
An individual who believes in ethical normativism is most likely to view ethical
behavioral standards as ________.
A) universal
B) constantly changing
C) dependent on societal norms
D) superior to religious beliefs
Governments impose defensive barriers to ________.
A) generate tax revenues
B) increase employment
C) pursue strategic policy objectives
D) promote national security
Which of the following statements is true of technological advances?
A) It provides a means for globalization to happen.
B) It discourages internationalization.
C) It inhibits the growth of new products and services.
D) It helps consolidate traditional values among consumers worldwide.
Nontariff trade barriers have increased in popularity partly because they ________.
A) generate profits for foreign firms
B) are easier to conceal from the WTO
C) restrict trade by imposing direct tax
D) have been fairly successful in eliminating smuggling along international borders
________ are low-income countries characterized by limited industrialization and
stagnant economies.
A) Developing economies
B) Emerging markets
C) Developed economies
D) Transition economies
In order to estimate industry market potential, managers most likely require ________.
A) market size and growth rates specific to the industry
B) manufacturing specifications and production output
C) anticipated improvements within public infrastructure
D) expected long-term IT needs and e-commerce trends
Which of the following best explains why the Japanese firm Canon relocated much of
its production to China?
A) low-cost financial capital
B) low-cost labor
C) access to raw materials
D) lack of skilled managerial talent in home country
Typically, ________ provide(s) a means for collective bargaining.
A) government agencies
B) the top management of MNEs
C) labor unions
D) NGOs
A global market segment refers to ________.
A) a group of customers who share similar characteristics across many national markets
B) a group of customers belonging to the same generational group within a country
C) a group of less-affluent customers in the global market
D) a group of buyers in the international market who are largely unaffected by changes
in pricing
As market globalization intensifies, ________.
A) the gap between the rich and the poor shrinks rapidly
B) the distance between consumers worldwide expands
C) individual firms respond to the challenges and new advantages that it brings
D) firms internationalize solely as a reaction to it
Collaborative ventures benefit SMEs by providing them with ________.
A) better trained employees
B) increased amount of capital
C) larger and newer facilities
D) more advanced technology
Acme Ethical Standards (Scenario)
Four senior managers of Acme International meet to discuss strategies for improving
ethical practices in the company’s worldwide operations. Jang heads the company’s
manufacturing division in China, while Luis and Marta are based in the Finland and
U.S. sales divisions, respectively. Geoff manages the research and development office,
based in Brazil.
The managers discuss various ethical problems commonly encountered in their local
territories. Which of the following representatives is most likely to label counterfeiting
of goods as the biggest challenge in his/her country?
A) Jang
B) Luis
C) Marta
D) Geoff
Strategy is ________.
A) a quality of executive management that provides inspirational guidance and
motivation to personnel, leading the firm to a better future
B) the pattern of shared values, behavioral norms, systems, policies, and procedures
that employees learn and adopt
C) a planned set of actions that managers employ to make the best use of the firm’s
resources and core competencies to gain competitive advantage
D) the procurement of selected value-chain activities, including production of
intermediate goods or finished products, from independent suppliers
________ refers to the superior features of a country that provide unique benefits in
global competition, typically derived from either natural endowments or deliberate
national policies.
A) Comparative advantage
B) Competitive advantage
C) Absolute advantage
D) Industrial cluster
An underground economy ________.
A) refers to the informal economic sector
B) refers to the formal economic sector
C) is characterized by dominantly legal transactions
D) is regulated and monitored by public authorities
Freedom Energy Group (Scenario)
Freedom Energy Group (FEG) is a major American energy services group based in
Oklahoma. FEG manufactures products to facilitate oil and gas exploration and is
involved in the construction of oil refineries and gas pipelines around the world. FEG
managers are considering the purchase of a Canadian energy firm, Maple Leaf Energy,
which manufactures pipeline stabilization products. The financial management division
of FEG is considering the risks and benefits of purchasing Maple Leaf.
Which of the following should most likely be considered by financial managers before
FEG purchases Maple Leaf?
A) How will environmentalists react to the purchase of Maple Leaf by FEG?
B) Should FEG integrate the Maple Leaf logo into the FEG marketing campaign?
C) What is the best way for FEG to manage currency fluctuation between U.S. dollars
and Canadian dollars?
D) How will NAFTA affect the legal negotiations between FEG and Maple Leaf?
Islamic law is based on the ________.
A) Bible
B) Bhagavad Gita
C) Tanakh
D) Qur’an
Private consumption as a percentage of GDP is used to measure ________.
A) market intensity
B) market size
C) market receptivity
D) market growth rate
Which of the following statements is true of a dirty float?
A) exchange rates fluctuate with occasional central bank intervention
B) beneficial exchange rates are offered in trade with certain nations
C) fixed exchange rates are set and maintained by the World Bank
D) currency values rise and fall according to the U.S. dollar
Host-Country Legal System (Scenario)
Super Sports, a large sporting goods chain based in Australia, wants to open a store in
Norway. With stores around the world, Super Sports executives realize that legal
systems vary from country to country. Having never opened a store in Norway, the
Super Sports legal team is investigating Norwegian laws to determine how they would
impact the corporation and its ability to do business in Norway.
Which of the following would most likely oppose the opening of a Super Sports store in
Norway?
A) labor unions
B) local sports retailers
C) international banks
D) local sports enthusiasts
Which of the following may allow a manufacturer to practice dumping?
A) countervailing duties
B) subsidies
C) currency control
D) import license
According to relativists ________.
A) a passive acceptance of others’ values is unethical
B) ethical truths differ from group to group
C) firms and individuals should seek to uphold ethical behavioral standards consistently
around the world
D) ethical truths are absolute
What leading advocate of microfinance was awarded the 2006 Nobel Peace Prize?
________.
A) Muhammed Yunus
B) Bill Gates
C) Melinda Gates
D) Bill Clinton
As part of opening manufacturing units abroad, a U.S. apparel firm decided to send its
apparel production coordinator Chris to Bangladesh. Chris is distressed that people
don’t come to meetings on time and finds it disrespectful when his team members stand
too close to him. Chris may trigger a cross-cultural risk by a(n) ________.
A) ethnocentric orientation
B) anthropocentric orientation
C) polycentric orientation
D) geocentric orientation
Which of the following tasks in the global market opportunity assessment process
should be performed directly before the task of estimating company sales potential?
A) analyze the company’s readiness to internationalize
B) screen countries to identify target markets
C) assess industry market potential
D) choose qualified foreign business partners
Which of the following benefits of IT is specific to smaller firms?
A) It mitigates organizational anarchy.
B) It creates competitive advantages by encouraging organizational learning.
C) It aids in the consolidation of market monopolies.
D) It allows firms to design and produce customized products they can target to narrow,
cross-national market niches.
The Chinese government’s policy of requiring foreign firms to enter the Chinese market
via joint ventures is intended to ________.
A) limit the amount of FDI
B) create jobs for Chinese workers
C) protect China’s national security
D) stimulate foreign investment
In which of the following industries is an adaptation strategy LEAST likely to be
appropriate?
A) consumer electronics
B) publishing
C) furniture
D) television broadcasting