Historically, foreign direct investment has followed foreign trade, and one reason is that
foreign trade is typically less costly and less risky than making a direct investment into
foreign markets.
Failure rates for expatriate assignments have been reported to range from 25 to 45
percent.
Evidence suggests that the Internet is not an effective tool in personal selling, especially
when used to build trust.
There are three main classes of social institutions, based on the conditions of their
formation: family, kinship, and free association.
One way in which contract manufacturing is used is to subcontract assembly work or
the production of parts to subsidiaries overseas.
Women’s leadership skills coincide with global leadership skills.
Tariffs are not a financial force; they are a political force.
(p.18)-Globalization has produced uneven results across nations and people.
Performance appraisal for global teams is influenced by national-level culture.
Foreign national pricing is the use of the home-country price in foreign markets.
Human resources are influenced by cultural values because values are the foundation of
motivation and evaluation.
The proportion of the outstanding stock of foreign direct investment accounted for by
the United States declined by two-thirds between 1980 and 2010.
An advantage of bottom-up planning is that the people responsible for attaining the
goals are formulating them.
The controlling mechanism for a gold-based exchange system and a floating-rate
system are the same.
Whether to use the current or temporal rates depends on the functional currency of the
foreign operation.
The “over-the-wall” approach to product design involves an initial step in which the
designers prepare the product’s design, followed by sending the newly created design to
the company’s manufacturing engineers.
The term international business is used to describe an organization with multicountry
affiliates, each of which formulates its own business strategy based on perceived market
differences.
According to the text, the product is the central focus of the marketing mix.
One variable commonly used to measure where and how fast internationalization takes
place is the increase in total foreign direct investment.
One of the most common mistakes made by new exporters is not getting advice.
Sometimes there are almost no differences between marketing domestically and
marketing internationally. At other times these differences are great.
Industrialized nations invest primarily in one another just as they trade more with one
another.
All the reasons for making decisions at IC headquarters, at 100 percent-owned
subsidiary headquarters, or cooperatively do not apply in joint venture situations.
The international environment is composed of all the uncontrollable forces that
surround and influence the firm’s life and development.
In larger, older organizations more decisions are made at the subsidiaries.
In Hall’s use, context is the irrelevant environment in a communication act.
Country and segment are units of analysis for market screening.
A variable levy confers benefit on the domestic producer, as with the EU variable levy
on grain.
Because Austria sided with the West in the Cold War, it became a favored location for
offices of international firms servicing eastern European operations.
A multidomestic strategy tends to be used when a company simultaneously confronts
pressures for cost effectiveness and local adaptation.
Coaching is not important in a diverse team if the norms are strong.
The value-added tax (VAT) can be rebated to exporters, according to WTO rules.
The same general criteria for selecting home-country employees apply to host-country
nationals.
Global strategic plans help to ensure that decision makers have a common
understanding of the business and think through the impact of their decisions and
actions firmwide.
In the antitrust area, the United States is concerned with the impact of the business deal
on the consumer, whereas the EU focus is on the competitive structure of the
marketplace, so it pays attention to rivals.
When a firm’s personnel have had no experience in a country, management should
probably use the company’s research personnel to conduct local market research.
The European Patent Organization makes filing for a patent in all 27 EU member-states
more difficult than it was previously.
International strategy helps firms to make choices about how to deploy scarce resources
in order to achieve their international objectives.
The reasons international firms enter foreign markets are all linked to either (1) the
desire to increase profits or (2) the desire to increase sales.
CIBERs are international business research and education efforts located at U.S.
universities.
Hiring others to perform some of the noncore activities and decision making in a
company’s value chain, rather than having the company and its employees continue to
perform these tasks, is:
A. offshoring.
B. outsourcing.
C. supply chain management.
D. subcontracting.
E. all of the above.
According to the text, the reasons international firms enter foreign markets are linked
to:
A. the desire to increase profits and sales.
B. the desire to invest excess capital from domestic markets.
C. the desire to protect profits and sales from being eroded by competitors.
D. all of the above.
E. two of A, B and C.
Knowledge that an individual has but that is difficult to express clearly in words,
pictures, or formulae, and therefore difficult to transmit to others, is known as:
A. explicit.
B. none of A, C, D, or E.
C. tacit.
D. intangible.
E. valuable.
A business established for the purpose of marketing goods and services, not producing
them, is:
A. a franchisee.
B. a direct exporter.
C. a sales company.
D. a joint venture.
E. two of the above.
When nonexporting firms are asked why they do not export, they generally list the
following as problems:
A. locating foreign markets.
B. payment and finance procedures.
C. export procedures.
D. lack of foreign language expertise.
E. A, B, and C.
Two basic ways to understand the role of leadership are as providing direction for a
collection of individuals and as:
A. limiting the freedom of individual group members.
B. integrating a group.
C. linking top management with workers.
D. organizing workers for production.
Porter’s diamond is a model that offers an explanation of:
A. differing levels of success among the national players in world markets.
B. endowment factor differentials.
C. the impact of climate on development.
D. macro-level FDI.
The Triffin paradox suggests that:
A. reserve currencies can never run deficits.
B. eventually, reserve currencies will run deficits, which will lead to lack of confidence
in the currency.
C. the more a currency is held in reserves, the stronger it is.
D. the U.S. dollar could never be a reserve currency.
An ethnocentric staffing policy:
A. utilizes host-country nationals in key foreign management and technical positions.
B. assigns expatriates who have learned the language and culture of the country of their
assignment.
C. is required in order to prepare home-country citizens for high-level managerial
positions at headquarters.
D. two of the above.
E. none of A, B, and C.
Culture includes everything but:
A. religion.
B. religion and politics.
C. higher education and universal values.
D. none of the above.
In planning, there has recently been a decided move among many firms:
A. to use advanced statistical techniques to help produce voluminous and detailed
strategic plans.
B. toward a less structured format and a shorter plan.
C. to concentrate on factors that can be easily quantified.
D. to make detailed forecasts and project them out at least five years.
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.
With factor conditions, Porter’s diamond model distinguishes between basic factors,
those a country inherits, and
A. imported factors, those it brings in from abroad.
B. demand conditions, the aggregate demand in the economy.
C. climate conditions, the basic influence on business options in the specific location.
D. advanced factors, those a country can mold: labor and infrastructure.
The new directions in planning:
A. two of B, C, D, and E.
B. have made strategic planners dominant in the planning process.
C. have brought operating managers into the planning process.
D. have relieved the firm’s chief executive officer of the responsibility for strategic
planning.
E. have made the use of computers and professional planners essential for the planning
process.
Trade names are protected under:
A. national laws in all UN member countries.
B. the International Convention for the Protection of Industrial Property.
C. many local laws in most countries, so illegal trademark use is a local issue.
D. long-standing convention, but no legal agreements.
E. the UN’s Office of Harmonization.
If an international manager runs afoul of a miscellaneous law while working abroad,
calling the embassy:
A. will ensure that the charges are dropped.
B. to let an official know of the situation may be a good idea, but usually the embassy
cannot help much.
C. will lead to meetings that will arrange for everything.
D. to explain the various cultural values in your homeland to the foreign government
official is a reasonable approach.
E. will result in the application of American law to the resolution of the problem.
The Pyramid Model of Global Leadership identifies:
A. character traits necessary for global leaders
B. personality traits necessary for global leaders.
C. a progression of skills required for effective global leadership.
D. a progression of activities necessary to build global leadership skills.
E. A and B.
Global standardization of operations:
A. eliminates the task of maintenance and production control.
B. allows home office personnel to more effectively keep production specifications
current.
C. enables reasonably accurate forecasts of time required to erect plants.
D. all of the above.
E. two of A, B, and C.
The United States is moving toward convergence with IASB standards:
A. and is the only major economy that does not follow them now.
B. and expects to be harmonized by 2015.
C. although the goal is long term, over 50 years.
D. A and B.
The roles of the global leader include:
A. negotiator and change agent.
B. supervisor and administrator.
C. superintendent and monitor
D. marketer and salesperson for change.
E. B and D.
Why is a currency option sometimes preferred to a forward market hedge?
A. It is an optional contract, so the company could not exercise it and be able to benefit
from upside swings in the foreign currency value.
B. The rates are cheaper.
C. Currency options are available for longer periods.
D. The IRS favors currency options for tax credits when they are exercised.
Leading global change is:
A. just like leading domestic change.
B. like leading domestic change, but exponentially more complex due to globalization.
C. similar in every location on the globe.
D. a well-understood process with models and theories underpinning it.
E. C and D.
Generalizations about TCNs are difficult because:
A. the IC usually does not know enough about their backgrounds.
B. the geocentric staffing policy prohibits these generalizations.
C. two of A, B, and D.
D. people achieve the TCN status in different ways.
E. all of A, B, and D.
The largest portion of the world’s proven oil reserves is located in:
A. low-risk areas.
B. high-risk areas.
C. climate-challenging areas.
D. developed nations’ oil fields.
In the current rate method, assets and liabilities are translated:
A. at their historical rates.
B. at an average of the historical and current rates.
C. on the date the balance sheet is produced.
D. however the company chooses, as long as it is consistent in all its foreign operations.
Global companies:
A. none of the following is correct.
B. do not have international divisions.
C. are large companies with numerous overseas manufacturing facilities.
D. are organized on the basis of products and do not have other organizing dimensions
in a pure organization.
A nation having absolute disadvantages in the production of two goods with respect to
another nation has ___________ in the production of the good in which its absolute
disadvantage is less.
A. a comparative advantage
B. an absolute advantage
C. a mercantilist advantage
D. none of the above
E. two of A, B, and C
According to the text, companies are now accepting:
A. two of B, C, and D.
B. the need for frequent reorganization.
C. the need for reducing the size of middle management.
D. the use of pagers and mobile phones for faster communication.
E. all of B, C, and D.
Freight forwarders’ responsibilities may include all of the following except:
A. booking space on a ship.
B. preparing the export documents.
C. verifying that the seller has money in the bank.
D. arranging to have the merchandise delivered to the port.
E. D and C.
Economic exposure results from:
A. exchange rate variations on projected cash flows.
B. operating exposure.
C. A and B.
D. poor planning.
Production managers have discovered that their introduction of new production
methods across cultures is affected by varying attitudes toward:
A. their personalities.
B. developed economies.
C. change.
D. technology.
According to the text, increased emphasis on the achievement of effective supply chain
performance has resulted from:
A. shorter, more predictable product life cycles.
B. the impact of unplanned political and social events.
C. web-enabled tools for planning, executing, and optimizing supply chains.
D. all of the above.
E. two of A, B, and C.
Regarding annual inflows of FDI:
A. industrialized nations primarily invest in one another.
B. an average of nearly 70 percent of annual FDI investments has been going into
developed countries in recent years.
C. developed countries obtained a 70 percent increase in the level of FDI between 2000
and 2009.
D. all of the above.
E. two of A, B, and C.
Discuss the advantages and disadvantages of employing third-country managers.
Explain why and where decisions are made among ICs and their subsidiary units.
Discuss the arguments supporting and opposing globalization of trade and investment.
Why have more companies, at home and abroad, begun to obtain licenses instead of
making illegal copies?
What is the value of government-sponsored trade missions and trade fairs?
Discuss Dunning’s eclectic theory of international production as a theory to explain
flows of international trade and foreign direct investment.
Discuss the problems associated with global sourcing.
Explain Trompenaars’ achievement-ascription dimension, and comment on its
usefulness in an international business setting.
Describe the impact of the EU on a non-EU firm.
How could an IC benefit from leading and lagging?
With global leadership, global teams, and global change, the global context adds
substantial complexity to the activity.
Discuss the use of market indicators.
Given what you have read about institutional theory, comment on the quote from
William Inge, former dean of St.
Discuss the concerns conducting business in a foreign currency raises from an
accounting perspective.
What are the drawbacks of indirect exporting?