In FAS (free alongside ship, loading port) the buyer pays all the transportation and
delivery expenses up to the ship’s side and clears the goods for export. Risk passes at
the ship’s rail.
The U.S. enforcement of Equal Employment Opportunity Commission (EEOC) law in
U.S. companies operating abroad is an example of extraterritoriality.
Research shows that surviving pioneers hold a smaller average market share when their
industries reach maturity than firms that were either fast followers or late entrants in the
product category.
Country risks are increasingly political in nature.
Most of the foreign direct investment in the United States has been spent establishing
new companies.
International companies need a new kind of leader for the international environment
due to increased complexity.
The World Bank is made up of one large institution, IBRD.
Piracy is an option for helping a firm to enter new markets.
Exporting refers to the transportation of any good or service to a destination inside a
country or region.
There is one main organization that offers IP protection, the UN.
In environmental scanning the firm scans the world for environmental forces that might
affect it.
Reflecting their continued economic development, developing countries have
dramatically increased their share of FDI stock, from 1 percent in 1980 to 14 percent in
2010.
Approximately 15 percent of expatriates leave their firms during the course of their
overseas assignment, and an additional 28 percent leave their companies within a year
of their return from abroad.
Outsourcing is the relocation of some or all of a business’s activities or processes to a
foreign location.
The Global Leadership Triad includes skills in business, relationships, and personal
effectiveness.
General surveys are not done with a specific firm in mind.
Inflated currencies tend to weaken.
Virtual communication is more effective than face-to-face communication.
Foreign environmental forces act as deterrents to the international standardization of
advertising, and among the most influential of these forces are the sociocultural forces.
The sales agreement should not address where disputes will be resolved and by what
legal system. That belongs in a side document.
According to a study by McKinsey & Company, most executives worldwide agree that
environmental, social, and business trends are less critical to company strategy than was
the case five years ago.
Some nations, especially in Asia, follow the Carlos Calvo doctrine, which protects them
against fraud.
A business entity with a clearly defined market, specific competitors, the ability to carry
out its business mission, and a size appropriate for control by a single manager is a
strategic operating unit.
Private brands are responsible for a shift in power from manufacturers to retailers.
The FTA’s Market Access and Compliance Department monitors foreign country
compliance with trade agreements.
Virtual team leadership is similar to co-located team leadership.
Multilateral netting reduces foreign exchange transaction costs.
During the second screening, analysts are highly concerned with inflation rates,
education levels, and entry barriers.
The United States can be considered politically unstable compared to many countries.
Paying ransom makes sense because a life is saved and the payments can be traced.
Zimbabwe’s government offers an example of government instability.
Generally, trade missions consist of 5 to 12 business professors.
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.
An evolving structure for an international organization over time is normal, as the
company’s involvement in foreign markets increases over time.
Family adjustment is not critical in the job performance of expats.
The forward currency market:
A. allows purchasers to lock in purchases of currencies at known rates.
B. provides governments a way to manage their currency’s value.
C. makes trading in several currencies more efficient.
D. helps managers manage domestic debt.
As we use frameworks to help us understand culture, it’s important to remember that
frameworks:
A. describe other cultures with precision.
B. can’t be used to describe our own cultures.
C. are comparative, with our own culture being the reference point.
D. all of the above.
Nonquantitative nontariff barriers:
A. are seen by many to be the most significant nontariff barrier.
B. often involve government participation in trade, especially in customs and other
administrative procedures.
C. often involve standards.
D. all of the above.
E. two of A, B, and C.
For expatriate employees, the salary portion of the compensation package is:
A. usually higher than that for employees at the same level in the home company.
B. usually lower than that for employees at the same level in the home company.
C. usually within the range of that for the employees at the same level in the home
company.
D. usually on a separate, expatriate schedule.
E. none of the above.
Privately owned companies sometimes complain that government-owned companies
have the following unfair advantages:
A. higher-cost financing.
B. ability to charge higher prices.
C. access to government contracts.
D. all of the above.
E. two of A, B, and C.
Fixed-rate relationships among currencies could not stay fixed, according to Obstfeld
and Rogoff, because:
A. the volume of global transactions started to exceed most countries’ foreign exchange
reserves, so governments couldn’t intervene to sustain the value of their currency.
B. the complexity of international trade demanded return of the gold standard.
C. Walmart and other leading firms argued successfully at the Federal Reserve that
fixed rates were too costly to maintain.
D. the EU had decided to float the euro.
Standardization of law:
A. would challenge international business because IB would lose protection.
B. would make IB work more smoothly because uniform, predictable laws would result.
C. has been progressing in some areas, such as taxation, but there is a long road
forward.
D. two of the above.
E. all of A, B, and C.
Sustainable business models:
A. incorporate a more socialist political approach to the marketplace.
B. have as a goal to ensure that the marketplace exists for future generations.
C. regard environmentalism as more important than profit.
D. A and C.
Franchising is a form of:
A. contract management.
B. licensing.
C. contract manufacturing.
D. joint venture.
E. two of the above.
According to the text, the strategic planning process provides a formal structure in
which managers will:
A. two of B, C, and D.
B. set corporate objectives.
C. implement strategies.
D. manage relationships with government and society.
E. all of B, C, and D.
Which of the following is explained by international trade theory?
A. Differences in production costs
B. Differences in levels of technology
C. Foreign exchange rates
D. Differences in efficiency of factor use
E. All of the above
Why are rare earths a concern in industrialized economies?
A. Although they are relatively common, they do not occur in concentrated form often.
B. They are very rare.
C. They are used in the smelting process.
D. They are not a concern, except for political reasons.
The World Bank’s two major institutions are the International Development Association
and the:
A. Collateral-Based Lending Agency.
B. International Bank for Reconstruction and Development (IBRD).
C. International Microloan Bank.
D. International Bank for Development.
Nations whose mountains divide them into smaller regional areas include:
A. the United States, Mexico, and Canada.
B. Switzerland, Afghanistan, China, and Colombia.
C. Luxembourg, France, and Romania.
D. Estonia, Latvia, and Lithuania.
The horizontal corporation:
A. often draws teams from different departments to solve a problem or deliver a
product.
B. has been characterized as “antiorganization.”
C. puts greater decision-making responsibility in the hands of middle managers.
D. all of the above.
E. two of A, B, and C.
Tactical plans:
A. are fairly broad compared to strategic plans.
B. spell out in detail how objectives will be reached.
C. are broad guidelines to assist in handling recurring problems.
D. are less specific than strategic plans.
E. two of the above.
Buyers of __________ usually act on the same motives worldwide.
A. impulse goods
B. mass-consumption products
C. industrial products
D. low-priced products
E. none of the above.
Market research includes:
A. customized research.
B. general surveys.
C. nonprofit surveys.
D. all of the above.
E. two of A, B, and C.
Basic named perils marine insurance covers:
A. perils of the sea, fires, jettisons, hurricanes.
B. theft and larceny.
C. piracy on the seas.
D. accidents and storms other than hurricanes.
E. flooding, tsunamis, earthquakes.
Barriers to trade:
A. are a political issue but affect the cost of imports only marginally.
B. cost consumers billions of dollars per year.
C. save jobs in unprotected industries at $231,289 per job per year.
D. none of the above.
E. two of A, B, and C.
Hofstede’s long-term orientation tends to be found in:
A. Asian cultures.
B. Canada.
C. Brazil.
D. A and C.
The various methods of communicating with the firm’s publics to secure a favorable
impression are:
A. advertising.
B. promotion.
C. public relations.
D. marketing.
E. none of the above.
Incoterms are divided into two basic categories:
A. open account and L/C.
B. general and water transport terms.
C. ship and ground transport.
D. export and domestic shipments.
E. risk and nonrisk terms of sale (buyer’s perspective).
Market screening is divided into:
A. environmental screening and country screening.
B. region screening and segment screening.
C. segment screening and environmental screening.
D. region screening and environmental screening.
E. country screening and segment screening.
In examining the volume of international trade:
A. exports of merchandise grew nearly fivefold between 1990 and 2010.
B. exports of services grew more than 10-fold between 1980 and 2010.
C. the proportion of world exports of commercial services accounted for by the United
States fell by nearly 20 percent between 1980 and 2010.
D. all of the above.
E. two of A, B, and C.
Trademarks can be:
A. a color.
B. a sound.
C. a design.
D. two of the above.
E. all of A, B, and C.
Most firms begin their involvement in overseas business by:
A. exporting.
B. licensing.
C. joint ventures.
D. wholly owned subsidiaries.
E. none of the above.
These countries prefer debt to equity by large margins:
A. France, Italy, and Japan.
B. United Kingdom, Italy, and United States.
C. United States, Canada, and United Kingdom.
D. Japan, United States, and United Kingdom.
The main source(s) of international law is(are):
A. the UN International Court of Justice.
B. the U.S. Supreme Court and the EU Court of Justice.
C. bilateral and multilateral treaties, along with customary law.
D. nonexistent.
E. the WIPO.
Currency exchange controls are found most frequently in:
A. developing countries.
B. developed countries.
C. countries with pegged exchange rates.
D. nondemocratic countries.
Patents are government grants that give the owner:
A. exclusive rights to use, sell, manufacture, or exploit the invention or process.
B. the exclusive right to use the fundamental ideas on which the invention is based.
C. the right to sell the invention, but only beyond the patent-granter’s borders.
D. rights to the invention but do not prevent others from copying the invention.
E. two of the above.
The sooner the team achieves high levels of trust, the sooner the team can:
A. relax and wait for deadlines.
B. rank its members by skills.
C. set up its norms.
D. move to a constructive focus on the task.
E. allocate power.