Because inventory is carried at each stage in the supply chain, and because inventory
ties up money, it has been argued that the ultimate goal of effective supply chain
management systems is to reduce inventory.
Estimation by analogy is an example of a market factor.
Market indicators and market factors measure market demand.
Straight bills of lading are negotiable documents.
Top management of companies generally accepts the fact that, to be effective, strategic
planning processes should permit ideas to surface from anywhere in the organization
and at any time.
Production coordination poses difficult problems in many regionalized organizations,
which has led many companies to assign many specialized product managers who have
line authority.
Incoterms are established by the UN Commission on International Trade.
The types of information a firm will need to judge country risks vary according to the
nature of its business and the amount of money invested.
Critics of large global firms compare these firms’ sales with nations’ total sales to
illustrate the tremendous size of these firms.
Nuisance tariffs require importers to go through the administrative paperwork
connected to paying tariffs, even though the payment itself might be quite small.
The Fisher effect describes interest rate parity; it’s the law of one price applied to
interest rates. Interest rates vary to take into account anticipated differences in inflation
levels.
The source of international law is mostly the tendency of powerful nations to apply
their laws extraterritorially.
Foreign business refers to the operations of a company outside its home or domestic
market.
Value chain analysis focuses primarily on the question, “What value does the company
want to deliver to these customers?”
As the term is used in the text, foreign business is business whose activities are carried
out across national borders.
Companies with a primarily international strategic orientation may adopt an
ethnocentric staffing policy.
The existence of two or more partners, which typically have differences in strategies,
operating practices, and organizational cultures, is a factor that tends to promote
successful management and performance of strategic alliances.
As the 21st century evolves, it is expected that managers will make greater use of the
dynamic network structure to integrate smaller units into an operation better
coordinated by a large central headquarters organization.
Marketing managers of global firms who may want to use a single worldwide strategy
realize that doing so is often impossible.
Licensing refers to a contractual agreement in which the licensor grants access to its
patents, trade secrets, or technology for a fee paid by the licensee.
Allowances are paid by firms in recognition of the fact that expatriates and their
families undergo hardship and make sacrifices while living abroad.
The effectiveness of supply chain management efforts is strongly influenced by how a
company manages the interface of logistics with sourcing and manufacturing.
Worldwide uniformity or standardization in manufacturing methods hinders
headquarters’ effectiveness in keeping production specifications current.
When engaging in international business, banks are concerned with the merchandise,
not the documents.
The world stock of outward foreign direct investment was $19 trillion at the beginning
of 2010, which was more than nine times what it was in 1990.
International business managers need to be able to communicate across cultural
borders, even if they don’t speak foreign languages.
Voluntary export restraints are imposed by the importing nation to avoid violating WTO
rules.
An example of an informal, cognitive institution would be the celebration of
Halloween.
In the case of the United States, intrafirm trade accounts for 30 to 40 percent of exports
of goods.
The government officials who make decisions about import restrictions are particularly
sensitive to their country’s broad population of consumers, who will be hurt by
international competition.
An organization in which top-level divisions are required to heed input from a staff
composed of experts of another organizational dimension in an attempt to avoid the
double-reporting difficulty of a matrix organization but still mesh two or more
dimensions is called a hybrid organization.
Arguments in support of mercantilism largely disappeared after the end of the
mercantilist era in the late 1700s.
Expanded international trade is linked with the creation of more and better jobs.
All managers need to have a basic knowledge of international business.
One example of the effect of topography is:
A. isolated language groups, which require special marketing adjustments.
B. regional metals markets.
C. a unified China.
D. equal distribution of populations.
_____________ is used by management during the planning process and provides
information about threats and opportunities.
A. Market screening
B. Environmental scanning
C. Country screening
D. Segment screening
E. None of the above
To facilitate Kraft’s goal of enhancing growth prospects within developing-country
markets, the company:
A. moved an increasing proportion of decisions to the company’s Illinois headquarters.
B. gave full profit-and-loss accountability to the business units.
C. expanded core product categories into large developing countries.
D. all of the above.
E. two of A, B, and C.
Companies that adopted the global organizational form felt that this organization
would:
A. permit them to obtain cheaper labor.
B. be more capable of developing strategies to confront new global competition.
C. enable them to get lower interest rates to finance expansion.
D. all of the above.
E. two of A, B, and C.
Services are generally less complex to market globally than:
A. consumer products.
B. industrial products.
C. luxury products.
D. basic consumer staples.
E. None 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.
If people belong to strong, cohesive in-groups that look after them in exchange for
loyalty, the culture is likely to be:
A. low context.
B. collectivist.
C. economically underdeveloped.
D. democratic.
Control activities:
A. are the efforts to develop strategic plans for an organization.
B. are needed more by domestic companies than international companies.
C. should be linked to evaluation and reward systems.
D. none of the above.
E. two of A, B, and C.
Bodies of water that provide inexpensive access to interior markets are known as:
A. inland waterways
B. seaway outlets.
C. river systems.
D. inland oceans.
The results of liberalized trade so far have been:
A. beneficial for developing economies.
B. harmful for developing economies.
C. unconnected to developed economies.
D. uneven for developing and developed economies.
A regiocentric staffing policy:
A. involves human resource policies that are created at the local level for the specific
context in which the local operations operate.
B. may send TCNs to fill management posts, to avoid problems from using PCNs or
HCNs.
C. selects the best person for each job, without considering national origin.
D. two of the above.
E. all of A, B, and C.
Due to the expanding importance of foreign-owned firms in local economies, host
governments have made their policies toward these companies:
A. more strict.
B. more liberal.
C. harsher.
D. more confronting.
E. two of the above.
By means of a licensing agreement:
A. an international firm receives permission from a foreign government to set up a
subsidiary in that country.
B. one firm grants to another the right to use stipulated parts of its expertise.
C. a foreign company receives products made for it by another company.
D. one firm grants to another the right to use all of its expertise.
E. two 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.
The law of one price is that:
A. only one price can be charged for an item in a contract deal.
B. in an efficient market, one price only is the permissible price.
C. in an efficient market, like goods will have like prices.
D. even in international markets, bait and switch is illegal.
Dalton suggests that moral reasoning is a skill:
A. not needed by global leaders.
B. that belongs in the legal arena, not the business arena.
C. needed by global leaders to confront ethical dilemmas.
D. included in the concept of complexity.
E. needed by global managers who implement, not leaders.
In the traditional strategic planning approach:
A. the CEO and the head of planning got together to devise a corporate plan, which
would then be handed to the operating people for execution.
B. interaction with important customers and suppliers was included.
C. governments and other stakeholders were direct participants.
D. tended to fall victim to collective mind-sets about the competitive environment.
E. two of the above.
In spite of the advantages of global standardization, many firms find it necessary to:
A. use the domestic marketing mix overseas.
B. modify the present mix or develop a new one for overseas markets.
C. use different marketing mixes overseas, to save money.
D. two of the above.
E. all of A, B, and C.
The disadvantages of indirect exporting include:
A. foreign business can be lost if the exporter changes supply sources.
B. no expertise or large cash outlays are required.
C. the firm gains little experience from transactions.
D. two of the above.
E. all of A, B, and C.
Reengineering is:
A. the redesign of the company’s products to improve the quality.
B. the significant reduction of middle management.
C. the empowerment of employees.
D. two of the above.
E. all of A, B, and C.
The first principle of the WTO’s five basic principles is trade without:
A. negotiation.
B. economic reform.
C. discrimination.
D. competition.
In the United States, the Smoot-Hawley Tariff Act:
A. outlawed tariffs for U.S. imports.
B. led to the Wall Street crash of 1929.
C. established some of the highest tariffs the United States has known.
D. two of the above.
E. all of A, B, and C.
According to the text, the proportion of expatriates who are women has increased to
_____ percent.
A. 15
B. 21
C. 29
D. 35
E. over 50
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.
Mass customization:
A. is enhanced by a company’s use of computer-aided manufacturing systems to
produce and deliver products and services in a batch size of one.
B. is usually appropriate in situations where there is the potential for differentiating a
product for a particular customer.
C. typically requires the company to reconceptualize the design of its products as well
as the design and integration of the processes used for producing and delivering the
product to customers.
D. all of the above
E. two of A, B, and C
Is the WTO’s idea of “fair competition” really a code phrase for free trade?
A. Yes, the WTO is in favor of free trade and only free trade under all circumstances.
B. Not really. Trade relationships among nations can be exceedingly complex, and the
WTO supports fair competition, which may mean freer trade rather than free trade.
C. Yes, the WTO stands for trade liberalization, which requires transparency, economic
reform, and no protectionism, regardless of the member nation’s economic situation.
D. Yes. The WTO supports free trade and the term fair competition is used to obtain
buy-in from nations opposed to trade liberalization.
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.
A global company is:
A. a business whose activities involve crossing national borders.
B. the domestic operations within a foreign country.
C. an organization with multicountry affiliates.
D. an organization that attempts to standardize operations worldwide.
E. two of the above.
When a firm offers its stock in a foreign market, it is:
A. encountering foreign currency exposure.
B. trying to limit its investor pool.
C. violating domestic law in the EU or United States.
D. cross-listing.
A company can engage in indirect exporting by using which of the following companies
in its own country?
A. Import merchants
B. Sales companies
C. Export commission agents
D. Overseas merchants
E. Two of the above
A description of the company’s desired future position if it can acquire the necessary
competencies and successfully implement its strategy is known as a:
A. strategic plan.
B. mission statement.
C. vision statement.
D. values statement.
E. none of the above.
ASEAN began as a defensive alliance of 10 Asian nations concerned about:
A. trade barriers in the West.
B. translation issues for their export products.
C. the spread of communism in their region.
D. Japan’s influence in the region.
When a company faces strong pressures for reducing costs and limited pressure to adapt
products for local markets, it should tend to use a:
A. global strategy.
B. multidomestic strategy.
C. transnational strategy.
D. differentiation strategy.
E. home replication strategy.
Global team leaders want to set specific team norms because:
A. leaving the norming process to team members will allow the predominant culture to
dominate.
B. global teams work best with norms of accountability and independence.
C. without norms or with dysfunctional norms, global teams are likely to under
perform.
D. norms that support consideration and cooperation lead to good team functioning.
E. only when norms are set can the global team leader go on to the next step in the team
process.
