A fronting loan is used when the firm does not have the collateral or reputation to
borrow in a foreign environment.
Low-context cultures such as the United States have explicit communication patterns.
The spot rate is the rate for exchange within two days in the currency market.
If assembly or manufacturing is done in an FTZ using imported components, no duties
need to be paid when the finished product is imported.
If a nation is continuing to receive appreciable amounts of foreign investment, its
investment climate must be favorable.
Once a firm determines that a market exists for its products, it needs to decide to export
directly or indirectly.
The proportion of merchandise exports coming from Latin America and the Middle
East decreased between 1980 and 2010.
Unless a product or service is purchased from a company that is registered to the
appropriate ISO 9000 standard, a buyer cannot be assured that the quality of what was
received will be what was expected.
Of all the promotional mix elements, personal selling has the greatest similarities
worldwide.
Dissimilar cultural patterns generally necessitate changes in marketing of food and
other consumer goods.
According to the text, every successful company uses controls to put its plans into
effect, evaluate, correct, and reward.
Planning for an expatriate’s return should begin while the employee is still on the
overseas assignment.
The trend in the debt financing of foreign subsidiaries is to tap the local markets first, so
Toyota in the United States would tend to tap into U.S. debt markets and Pepsi in Japan
would tend to go to the Japanese debt markets first.
Historically, more aspects of marketing have been standardized and coordinated
worldwide by companies than has been the case for other value chain activities such as
research and development and manufacturing.
The Internet may eventually allow any firm to have the opportunity to conduct surveys
anywhere in the world.
The extent of the changes in the marketing mix a firm must make when going overseas
depends on the country, the political forces, and the degree of market penetration
desired by management.
Climate differences explain differences in human and economic development because
the less temperate climates limit mental powers.
Trading and pooling alliances are typically different in their goals, optimal structures,
and managerial challenges.
Scenario planning helps to emphasize that the business environment is predictable and
helps to emphasize the application of traditional perspectives when solving problems.
The largest portion of proven oil reserves can be categorized as being at the highest
level of investment risk.
Global teams are characterized by low levels of diversity and high levels of geographic
dispersion.
When the government of a host country requires companies to have some local
participation, foreign firms must engage in strategic alliances with local owners.
Effective supply chain management can enhance a company’s ability to manage
regulatory, social, and other environmental pressures, both within a nation and globally.
Changes in an international company’s strategy may require changes in the
organization’s design, but not the reverse.
A sales company is established to market goods or services, not to produce them.
According to the text, an organization that coordinates economic activity to deliver
value to customers using resources outside its traditional boundaries is an integrated
corporation.
Opponents of free trade point out that globalization has contributed to a decline in
environmental and health conditions.
During the second screening, analysts are highly concerned with inflation trends,
exchange rates, and interest rates.
Some of the reasons for the global standardization of a firm’s manufacturing system are
the effects on organization and staffing.
A complete financial analysis is part of the financial and economic forces screening
process.
A way to open up the cultural assumptions team members have is the
map-bridge-integrate model.
Define and discuss country risk assessment, using examples to illustrate your points.
Country risk assessment (CRA) is an evaluation of the risk of losing an investment in a
particular country. It may be conducted by a bank or business and is increasingly
political in nature.
The risks themselves may be economic or financial and include the
balance-of-payments position, inflation levels, labor conditions, productivity levels, and
militancy in unions. Government instability that would lead to currency convertibility
restrictions, tariffs and quota changes, and tax rate and labor permit changes are also
assessed. Reliability and impartiality of the legal system and the risk of terrorism may
be assessed as well. CRA is affected by the nature of the business. Is it a hotel or a
mining company?
Arbitration is often preferred because it is:
A. easier to influence an arbiter than a judge.
B. quicker and more private than the U.S. court system, although often more expensive.
C. more discreet, although more costly than the court system.
D. less bureaucratic than the court system of any country.
E. none of the above.
Smaller nations would like patent protection:
A. extended, to allow them to build their competitive advantage.
B. extended, so that they can recoup development costs.
C. reduced, so that they can enter the game earlier, possibly with generics.
D. extended, so that their profits can increase.
E. to be the same for government patent holders as for multinational companies.
IDA’s purpose is to loan to:
A. the poorest nations.
B. middle-level-income nations needing infrastructure.
C. developed nations for use in trade stimulus efforts.
D. any nation with collateral.
Maznevski’s map-bridge-integrate model helps global team members:
A. more fully understand each other and establish how the team will work.
B. avoid dealing with cultural differences.
C. establish ways to address planning issues.
D. focus more fully on the task.
E. B and D.
Which of the following is the most risky for an exporter?
A. Open account
B. Irrevocable letter of credit
C. Bank collection time draft
D. Cash in advance
E. Revocable letter of credit
Honda’s “You meet the nicest people on a Honda” campaign appealed to Americans
who used their motorcycles as pleasure vehicles, but in Brazil Honda stressed the use of
the same motorcycles as basic transportation. This is an example of which promotional
strategy?
A. Same product-same message
B. Product adaptation-same message
C. Product adaptation-message adaptation
D. Different product for the same use-different message
E. None of the above
To sum up international trade theory, we can say that the primary reason for trade is:
A. the increase in OPEC oil prices.
B. governments want to accumulate money.
C. the existence of price differentials among nations.
D. the creation of new nations from former colonies.
E. none of the above.
Culture is a group of shared worldviews, social rules, and interpersonal dynamics that
is:
A. chosen consciously by each group to set themselves apart from other groups.
B. learned, interrelated, and shared.
C. used as a way to separate economic classes.
D. a collection of noble pursuits including opera, art, ballet, and classical music.
Which country does not belong to the OECD?
A. Belgium
B. France
C. Japan
D. China
Nuisance tariffs:
A. annoy the importers with red tape and administrative paperwork.
B. are a historical anomaly.
C. are found in developed nations more than in developing nations.
D. have no point other than to indicate that tariff regulations change quickly.
E. two of the above.
A way to measure a company’s success in sustainable business practices is:
A. to examine the return on investment.
B. triple-bottom-line accounting.
C. to monitor the company in a social context.
D. to review the marketing materials.
Trompenaars’ particularist dimension describes a culture in which:
A. people apply the rules equally to everyone.
B. context is considered when rules are applied.
C. relationships rather than rules regulate behaviors.
D. B and C.
Kinship and free association are:
A. structures for political action.
B. social structures used to develop marketing programs.
C. social institutions found in all societies and categorized by the conditions of their
formation.
D. levels of the Masons found in Europe but not the United States.
Informal institutions are composed of sets of:
A. mandatory agreements, a bit like the mind’s software.
B. orthodox accords whose goal is to establish rigor.
C. agreements that are for the most part written and taken for granted.
D. voluntary agreements.
A follower firm stands the best chance for success in market-share leadership when:
A. there are high barriers to entry.
B. the firm has small size.
C. there is high potential for imitation.
D. all of the above.
E. two of A, B, and C.
According to the text, __________ are the most insensitive to the foreign environment.
A. high-style products
B. faddish and consumer products
C. industrial products
D. basic consumer staples
E. none of the above
Under new institutional theory, institutions can be categorized as formal and informal,
and the informal institutions can be further categorized as:
A. normative and cognitive.
B. normal and abnormal.
C. informally cognitive and formally cognitive.
D. effective and ineffective.
Frederick Gluck, management consultant, says that for firms to develop the flexibility
to compete, managements must make the following change(s) in their planning
methods:
A. top management must dedicate more time to deciding how things ought to be done.
B. the nature of planning must change from being an exercise in forecasting to being an
exercise in creativity.
C. planning processes and tools that assume a future much like the past must be
replaced.
D. strategic planning must be restored to strategic planning departments.
E. two of the above.
Trading companies are privately owned firms that develop international trade and serve
as intermediaries between foreign buyers and domestic sellers, and vice versa.
Where litigation in international disputes should occur is:
A. usually evident from the documentation available.
B. at times unclear, in which case the UN International Court of Justice will make a
jurisdictional ruling.
C. often complex, so contracts should include choice-of-law and choice-of-forum
clauses.
D. dictated by where the problem arose; a problem arising in India is adjudicated in
India.
E. determined by a jury during pretrial discovery.
Anyone studying legal forces affecting international business soon realizes that:
A. there is a remarkable level of coordination among legal systems in the developed
nations.
B. most laws are predictable, and that, although there is variance, what constitutes
illegal behavior is commonly shared.
C. the variety of these forces complicates the task of understanding the laws.
D. thanks to the World Court, officials in most legal systems are open to collaborating
with their international colleagues.
E. none of the above.
Uncertainty avoidance describes man’s search for Truth, according to Hofstede,
because:
A. Truth is primary to our human value system; everything else depends upon it.
B. it describes how comfortable the culture’s members feel in an unstructured situation.
C. once you have Truth, you can avoid change, which is always disruptive.
D. All of the above.
The kinds of forces in the foreign environment are __________ those in the domestic
environment except that they occur in foreign nations.
A. different from
B. the same as
C. less than
D. more stringent than
E. none of the above
Historically, gold has been used as a way for people to store value because of its:
A. purity and scarcity.
B. high transportation and security costs.
C. lack of interest-earning ability.
D. all of the above.
How many countries in the EU use the euro as their currency?
A. 17
B. 23
C. 15
D. 7
As an energy source, nuclear power:
A. is growing significantly, especially in developing countries.
B. has been growing as the price of oil climbs and cleaner energy sources
(nonpolluting) are sought.
C. has been exploited by France, which has one of the lowest greenhouse gas emissions
in the industrialized world.
D. all of the above.
Of the 12 most common mistakes and pitfalls awaiting new exporters, which of the
following is not on the list in the textbook?
A. Failure to develop an international marketing plan
B. Treating international distributors on an equal basis with domestic counterparts
C. Insufficient care in selecting overseas distributors
D. Failure to get good advice
E. None of the above (They are all on the list.)
In the case of the United States, intrafirm trade accounts for ______ percent of exports
of goods.
A. 15 to 30
B. 45 to 60
C. 35 to 45
D. 30 to 40
E. over 60
Regarding the way international companies are structured and integrated:
A. no single structure is best for all companies and contexts.
B. managers must consider the nature of their company’s international operating
environment and their competitors’ strategies when deciding when and how to modify
the company’s organizational structure.
C. gains from increased specialization will be nullified by increased costs of
coordination, requiring managers to choose between the two.
D. all of the above
E. two of A, B, and C.
According to Trompenaars, a culture’s attitude toward the environment can range from:
A. peaceful to warlike.
B. overwhelmed by aesthetics to dominating the environment.
C. control over the environment to harmony with it.
D. submission to atheism.
According to the text, a company that wishes to own a foreign subsidiary outright may:
A. make a greenfield investment.
B. purchase its distributor.
C. acquire part of a going concern.
D. all of the above.
E. two of A, B, and C.