Availability and cost of labor in the local market is crucial to process planning.
Scenario: Excelsior’s Limited
Excelsior’s Limited, a manufacturer of health and beauty aids, is expanding its presence
in several countries around the world. Excelsior’s president is surprised at some of the
responses the company is receiving from other countries.
A voluntary export restraint refers to a quota that a nation imposes on its exports,
usually at the request of another nation.
Interviews and focus groups are two main sources of secondary data that help managers
make informed decisions.
Scenario: Cleanshot USA in Russia
When Cleanshot USA, a photography products company, decided to enter the
international arena, it chose Russia as its main market. Although Russia has been in
transition for years, Cleanshot managers believe their company has tremendous
opportunities there.
Managers who take an active approach to political risk management are likely to rely
on statistical modeling to quantify the precise degree of political risk.
Booking centers are usually located on small territories with favorable tax and/or
secrecy laws.
Under the dual adaptation method, a company adapts its product to local requirements
while retaining the product’s original marketing communication.
Noise refers to anything that disrupts the audience’s ability to receive and interpret a
promotional message.
Nations that invest in worker training programs are usually rewarded with an increase
in productivity and a rise in income.
According to the eclectic theory that explains FDI, an internalization advantage is the
advantage of locating a particular economic activity in a specific location because of the
characteristics of that location.
Product life cycles are becoming shorter because companies are undertaking new
product development at an increasingly rapid pace.
The Court of Justice is the court of appeals of the European Union.
Ombudsman and Data Protection Supervisor are the EU institutions that fulfill
secondary and support roles.
Among asset seizure approaches, expropriation is more common than confiscation and
nationalization.
Low tariffs and high quota limits encourage market entry by means of investment.
Scenario: Jeans Unlimited
Jeans Unlimited produces clothing for young adults. It designs its clothes at its New
York headquarters and produces them at facilities located in two Southeast Asian
countries. The company recently received negative press after one of its facilities was
found using questionable labor practices, such as, employing children and operating in
a manner that damages the environment.
Jeans Unlimited plans to set up new facilities that are designed specifically to reduce
impact on the environment. The management has emphasized on recycling and reusing
most of their resources. What concept is the company emphasizing on in this scenario?
A) sustainability
B) standardization
C) ethnocentricity
D) industrialization
Nations following the theory of ________ believed that the world’s wealth was limited
and that a nation could increase its share of the pie only at the expense of its neighbors.
A) absolute advantage
B) comparative advantage
C) mercantilism
D) factor proportions
A company that is selling unprofitable business units is most likely following a
________ strategy.
A) growth
B) retrenchment
C) stability
D) combined
Which of the following trains managers to be considerate and understanding of other
people’s feelings and emotions?
A) cultural orientation
B) sensitivity training
C) language training
D) cultural narcissism
________ refers to governmental action to dispossess a company or investor.
A) Equity dilution
B) Deracination
C) Expropriation
D) Earnings stripping
Scenario: Wang’s Techno Toys
Ann Wang has been successfully running Wang’s Techno Toys that sells high-tech toys
in the domestic market. Continually increasing and stiff competition at home has now
forced Wang’s Techno Toys to enter international markets through direct exports.
In some countries, people exchange electronic goods for Techno Toys instead of paying
money for them. This practice is known as ________.
A) offset
B) counterpurchase
C) switch trading
D) barter
Which of the following is a characteristic of totalitarian governments?
A) Political dissidents can oppose the government with no repercussions.
B) Citizens are guaranteed civil, property, and minority rights.
C) The means of production are owned by the people who use them.
D) Leaders rule without the explicit approval of the people.
Which of the following is a disadvantage of strategic alliances?
A) They are the most expensive among the investment entry modes.
B) They increase the likelihood that one partner will try to take advantage of the other.
C) They create future competitors.
D) They fail to tap into their competitors’ specific strengths.
Scenario: Gem Jewels
Gem Jewels recently established a number of subsidiaries in various foreign countries
aiming to build high levels of international business involvement in the coming years.
Cultural training has to be given by the company to home-country managers assigned to
work in the new subsidiaries.
The most basic level of training that can be given to the managers is ________.
A) language training
B) field experience
C) sensitivity training
D) environmental briefings
A ________ is a political system in which a country’s religious leaders serve as its
political leaders.
A) democracy
B) theocracy
C) plutocracy
D) septocracy
In the ________ product stage of the international product life cycle theory, increased
competition pressurizes a company to build production facilities in low-cost developing
nations.
A) new
B) maturing
C) standardized
D) declining
Which of the following is true of the techniques used for forecasting exchange rates?
A) Very few forecasts are completely accurate because of unexpected events that occur
throughout the forecast period.
B) The human element involved in forecasting exchange rates perfect the techniques.
C) Fundamental analysts estimate the timing, magnitude, and direction of future
exchange rate changes using charts and models of past data trends.
D) Technical analysts often consider a country’s balance-of-payments situation while
forecasting exchange rates.