1) adam smith’s basic argument is that a country should produce goods at home even if
it can buy at a lower cost from other countries.
2) a firm may be prevented from using standardized advertising because of advertising
regulations.
3) if a firm that makes bicycles in germany acquires a french bicycle producer,
greenfield investment has taken place.
4) producing greater product variety from a factory implies longer production runs.
5) if the spot rate is $1 = 120, and the 30-day forward rate is $1 = 130, the dollar is
selling at a discount in the forward market.
6) a mudarabah contract banking method of islamic banks is similar to a profit-sharing
scheme.
7) bureaucratic control involves personal contact with subordinates.
8) porter’s diamond of competitive advantage has proven to be a powerful predictor of
world trade patterns.
9) support activities include the design, creation, and delivery of a product.
10) one solution many international businesses adopt for allocating product
development responsibilities to various centers involves establishing a global network
of r&d centers.
11) one benefit of a shorter channel is that it cuts selling costs when the retail sector is
very fragmented.
12) the tqm philosophy was first adopted by the american companies
13) which of the following is an argument favoring centralization?
a.it permits greater flexibility
b.motivational research favors it
c.it can avoid the duplication of activities
d.it gives top management time to focus on critical issues by delegating routine issues
to lower-level managers
14) identify an advantage of a low minimum efficient scale.
a.allows the firm to accommodate demands for local responsiveness
b.discounts currency risk by manufacturing all products in one location
c.helps keep overheads low at the expense of fixed costs
d.helps a firm to standardize its products for all markets
15) identify the country whose accounting practices have not been influenced by the
u.s. accounting system.
a.canada
b.mexico
c.philippines
d.germany
16) if foreign debt obligation must be served, the amount of local currency required to
do this will:
a.increase as the currency depreciates, and this effectively raises the cost of capital.
b.decrease as the currency depreciates, and this effectively decreases the cost of capital.
c.increase as the currency appreciates, and this effectively raises the cost of capital.
d.increase as the currency appreciates, and this effectively decreases the cost of capital.
17) companies with historic roots in one nation are broadening their stock ownership by
listing their stock in the equity markets of other nations because of all of the following
reasons, except:
a.listing stock on a foreign market is often a prelude to issuing stock in that market to
raise capital
b.they can tap into the liquidity of foreign markets, thereby increasing the funds
available for investment and lowering the firm’s cost of capital
c.it facilitates future acquisitions of foreign companies
d.it helps in decreasing the company’s visibility with local employees, customers,
suppliers, and bankers
18) control through a system of rules and procedures that directs the actions of subunits
is:
a.personal control
b.bureaucratic control
c.output control
d.cultural control
19) which of the following is not true regarding culture?
a.culture is static
b.culture is evolving
c.it is a system of values and norms that are shared among a group of people
d.it involves the knowledge and beliefs of people
20) ethical dilemmas exist because of all of the following reasons except:
a.many real-world decisions are complex and difficult to frame
b.decisions may involve first, second, and third-order consequences that are hard to
quantify
c.doing the right thing, or knowing what the right thing might be, is often far too easy
d.they are situations in which none of the available alternatives seem ethically
acceptable
21) identify the incorrect statement pertaining to the european union.
a.in 1993, it formally removed many barriers to doing business across borders within
the eu
b.its member states have launched a single currency, the euro
c.it was joined by two countries switzerland and norway, in 2007
d.it has expanded to 27 countries in 2007
22) identify the correct statement pertaining to financial structures.
a.the financial structures of firms are remarkably similar across countries.
b.it can be described as the mix of debt and equity used to finance a business.
c.if interest income were taxed at a high rate, a preference for equity financing over
debt financing would be expected.
d.according to empirical research, country differences in financial structure are
systematically related to country differences in tax structure.
23) the technical process by which an independent person gathers evidence for
determining if financial accounts conform to required accounting standards and if they
are also reliable is known as:
a.an accounting guideline
b.an operating procedure
c.standardization
d.an audit
24) _____ is/are the linchpin of a firm’s organization architecture.
a.people
b.strategy
c.business processes
d.organizational structure
25) which of the following is not one of the main instruments of trade policy?
a.tariffs
b.credit portfolios
c.local content requirements
d.administrative policies
26) a firm’s _____ determines where in its hierarchy the decision-making power is
concentrated.
a.integrating mechanism
b.vertical differentiation
c.knowledge network
d.horizontal differentiation
27) which of the following observations concerning latin american countries is true?
a.complete restrictions on direct investment by foreign firms
b.characterized by low growth, high debt, and hyperinflation
c.debt and inflation are up compared to previous decades
d.substantial opportunities exist, but are accompanied by substantial risks
28) discuss the location of decision-making in a firm that is following a transnational
strategy.
29) discuss privatization. why is it important?
30) compare and contrast a free trade area and a common market. provide an example
of each type of integration.
31) what are the determinants of culture?
32) what are the three challenges related to strategy and structure that firms must
accomplish if they are to achieve superior profitability?
33) what is considered normal practice in one country may be considered unethical in
others. discuss.