Typically, administrative and bureaucratic procedures ________.
A) speed up the investment activities of firms
B) hinder the activities of importers
C) boost investment activities
D) harm late importers
Which of the following is characteristic of cross-border contractual relationships?
A) When compared to FDI, they are less susceptible to volatility and risk, and tend to
bring both parties a predictable stream of revenue.
B) The focal firm attains maximum control by establishing a physical presence, and
ownership of key assets, in the foreign market.
C) It attracts high attention and criticism for the focal firm because of the local
perception of foreign entities.
D) They are governed by a contract that provides the focal firm with no control over the
foreign partner.
________ refers to the tendency to view other cultures through the lens of your own
culture.
A) Codetermination
B) Self-reference criterion
C) Segregation
D) Cross-cultural awareness
Which of the following firms can sustain a higher debt ratio?
A) an automobile firm in a developing economy
B) a software firm that sells software in an emerging economy
C) an insurance firm with stable sales in an advanced economy
D) a small supplier of construction material in a poor country
Which of the following situations often results in a banking crisis?
A) when investors withdraw funds from financial institutions
B) when exchange rates fluctuate dramatically
C) when governments borrow excessively from banks
D) when a nation’s currency rapidly depreciates
Which of the following is a method used by some manufacturers to avoid paying high
tariffs?
A) assemble products in the target market
B) produce a large number of less expensive items in the target market
C) employ highly skilled workers in the export location regardless of the cost
D) ship products to fewer international locations
Global Operations Report (Scenario)
As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with
preparing a comprehensive report on the company’s global operations over the past
twenty years. Deva assigns three strategists to collaborate on the History portion of the
report, which details the rationale behind Pax’s decisions to expand operations in
particular areas. Rashid Ahl focuses on early expansion to China, which occurred after
China began to make its market more accessible to foreign companies. Markus Teller
focuses on Pax’s expansion to Eastern Europe, which was motivated by increased
industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan,
which happened when the company’s commercial bank expanded its service network to
Asia.
Nationalization refers to the gradual integration and growing interdependence of
national economies.
Which of the following is the most critical asset of any organization?
A) goodwill
B) computer programs
C) human capital
D) bonds
Which of the following is/are proving vital to the development of Africa?
A) landline telephony
B) protectionism
C) cell phones
D) high regulations
Vytel Communications (Scenario)
Vytel Communications is a U.S.-based telecommunications company that is considering
doing business in Argentina. Vytel managers hire a consulting firm to investigate the
risks and benefits related to doing business in Argentina. The consulting firm identifies
a number of challenges that might prohibit Vytel from entering Argentina. In addition,
the consultants conduct surveys which indicate a demand for Vytel’s products and
services.
Which of the following would be most important for the consulting firm to evaluate
when making a recommendation to Vytel about doing business in Argentina?
A) Is work-life balance uniformly enjoyed by the Argentine workforce?
B) Do Argentine firms frequently outsource their key operations abroad?
C) Would government regulations significantly impede Vytel’s ability to make profits?
D) What benefits have been gained in the past by Vytel using foreign distributors?
Which of the following is an example of licensing?
A) An American electronics firm has given the right to a new process for manufacturing
e-book readers to an electronics manufacturer in Canada.
B) An Indian automobile manufacturing company buys engines from a Japanese
manufacturer for its environmentally-friendly cars.
C) A South-Korean consumer electronics manufacturer produces the screens for its
brand of television and sends orders to a factory in China to manufacture the casing for
the television.
D) A U.K-based motorcycle manufacturer, produces limited-edition customizations of
the company’s stock models and sells it to customers around the world.
The pattern or geographic arrangement of locations where the firm carries out
value-chain activities is known as ________.
A) configuration of value-adding activity
B) internalization
C) visual merchandising
D) disintermediation
Which of the following financing tactics would most likely help an MNE to avoid
bankruptcy?
A) integrating e-commerce opportunities with domestic sales in order to maintain a
steady balance of income and expenditures
B) agreeing to forward contracts with customers and hedging purchases and sales on
future currency rates
C) organizing the capital structure so that the amount of debt financing is twice the
level of equity financing
D) keeping the debt proportion of their capital structure to a level that can be managed
even during difficult business conditions
________ is the number of units of foreign currency obtained for one unit of domestic
currency.
A) Indirect quote
B) Prime rate
C) Direct quote
D) Repo rate
Organic Towel Exports (Scenario)
The Organic Towel Company (OTC) employs 400 workers at its facility in Liverpool,
England, where the firm has been manufacturing 100% organic cotton towels for five
years. OTC sells towels in the United Kingdom primarily to boutique hotels and
specialty retail stores, as well as to individual consumers through the company’s.
Recently, OTC managers attended a trade show in London where they made contact
with numerous foreign market managers. OTC received a request from Earth Waves, an
organic clothing store in Toronto, Canada, for a large order of towels. OTC had not
been looking into expanding, but firm managers are seriously considering the
opportunity to reach a global niche market with their towels.
Which of the following most likely supports OTC exporting their towels to Earth
Waves?
A) Domestic sales of OTC towels have dwindled, and a new market is needed.
B) Earth Waves is located in an excellent location in central Toronto.
C) OTC is an SME that can readily adapt to the demands of the Canadian market.
D) The founder of OTC has numerous contacts in Canada.
An MNE would most likely employ a host-country national when ________.
A) it has substantial knowledge regarding upstream value-chain activities
B) it emphasizes R&D and manufacturing
C) it wants to maintain strong control over local operations
D) it needs specialized knowledge about the local market
A collective mark ________.
A) is intended to improve the product’s aesthetics and usability as well as increase its
production efficiency, performance, or marketability
B) protects original works of authorship, giving the creator the exclusive right to
reproduce the work, display and perform it publicly, and authorize others to perform
these activities
C) is a distinctive design, symbol, logo, word, or series of words placed on a product
label
D) is a logo belonging to an organization whose members use it to identify themselves
and associate their products with a level of quality or accuracy, geographical origin, or
other positive characteristic
Which of the following statements strengthens the proposition that free trade is
beneficial to nations?
A) Free trade increases the standard of living by reducing consumer expenses.
B) Imported products tend to be more expensive than domestically produced products.
C) Unrestricted international trade generally lowers the overall prosperity of poor
countries.
D) Unrestricted international trade generally boosts inflation in developed economies.
Counterfeiting is fairly uncommon in China, Indonesia, and Russia.
Organizational culture is ________.
A) the pattern of shared values, behavioral norms, systems, policies, and procedures
that employees learn and adopt
B) an approach in which a firm views international business as separate from, and
secondary to, its domestic business
C) a reporting structure inside the firm that specifies the links between people,
functions, and processes
D) an organizational design in which all international activities are centralized within
one division in the firm, separate from domestic units
The computer industry is an example of a ________.
A) locally responsive industry
B) multidomestic industry
C) global industry
D) country-by-country competitor
The per-capita GDP of the United States in 2014 converted at market exchange rates is
________.
A) $54,597
B) $5,715
C) $11,000
D) $87,300
Restaurant Chain Internationalization (Scenario)
Harold Meyer is the vice president of a successful U.S. restaurant chain. He is getting
ready to transfer to the Gulf Arab region to help establish the restaurant chain in Saudi
Arabia. He is in the process of gathering information to learn about Saudi culture.
Harold decides to drop alcoholic drinks from the restaurant chain menu in Saudi Arabia.
Which of the following might have led to his decision?
A) Alcoholic drinks are not allowed in Saudi Arabia.
B) Saudi consumers prefer local alcoholic drinks.
C) Imported alcoholic drinks are more expensive than local drinks.
D) Saudi consumers prefer European alcoholic drinks .
International entrepreneurship is a new field of scholarly inquiry that is a result of the
________ phenomenon.
A) standardization
B) industrial cluster
C) localization
D) born global
Fun Play Global Sourcing (Scenario)
Fun Play Inc., a company manufacturing toys for children, has decided to outsource
some of its value-chain activities. However, the firm has no experience with global
sourcing and has hired a consulting firm to assist its managers. The consulting firm has
been assigned the task of determining which activities should be outsourced and where
the outsourced activities should be located.
Which of the following is most likely to be the consultants’ utmost concern while
deciding if clothing for Fun Play dolls needs to be outsourced?
A) Is doll clothing part of Fun Play’s core competencies?
B) What kind of fabric is used for clothing Fun Play dolls?
C) Do the competitors of Fun Play outsource accounting activities abroad?
D) Does Fun Play intend to follow a strategy of product diversification in the near
future?
Each of the following factors significantly affects the balance of trade EXCEPT
________.
A) exchange rate
B) market share
C) prices of goods
D) trade barriers
Buyer receptiveness differs as a function of ________.
A) culture and language
B) lobbying
C) media expenses
D) product quality
Which of the following best explains why Taiwanese computer manufacturers
established subsidiaries in the United States?
A) low-cost financial capital
B) low-cost labor
C) access to raw materials
D) lack of skilled managerial talent in home country
Which of the following is an example of global sourcing?
A) After the recent global recession, major banks in Palladia were funded more quickly
under national ownership and control.
B) Titania, a country with a major stake in automobile manufacturing, employs citizens
to keep its level of quality and commitment to the automobile industry.
C) Camden Ltd., a Berylia-based pharmaceutical company has opened manufacturing
centers in Rhodia.
D) To manage the steel industry in Cadmia, over 900 coal mines were taken under
public ownership.
A(n) ________ is a voluntary refusal to engage in commercial dealings with a nation or
a company.
A) expropriation
B) sanction
C) boycott
D) confiscation
A U.S. shoe manufacturer is considering internationalizing to promote growth by
diversifying its markets. Which of the following, if true, would most strongly support
the claim that moving to France would help the company grow through market
diversification?
A) Doing business in France would likely expose the company to new ideas for product
innovation.
B) French women tend to purchase shoes more frequently than do French men.
C) French consumers represent a sizeable market that could significantly boost the
company’s sales.
D) Many of the company’s U.S. customers have moved overseas to Europe.
Which of the following is an effect caused by capital flight?
A) It increases the need for domestic investment holdings.
B) It decreases the ability of the nation to service debt and pay for imports.
C) It reduces harmful currency restrictions.
D) It decreases the nation’s supply of hard currencies.
Base remuneration is also referred to as ________.
A) incentives
B) allowance
C) wages
D) benefits