Scenario: Better Mousetrap Inc.
Better Mousetrap Inc. is a manufacturing company that sells pest control products.
Recently the company launched an innovative mousetrap with a unique design that has
been selling well in the U.S. market. Senior Vice President Marc Wallace, even
recommended expanding sales overseas in order to increase company revenues.
Trade in services tends to be relatively more important for the world’s richest countries.
Scenario: The French Government
The French Government has placed many restrictions upon the use of the English
language within their borders. They argue that the inflow of English movies, music, and
literature is responsible for the dilution of their rich culture.
When going global with an Internet presence, it is highly beneficial for a business to
localize its Web site.
Antidumping tariffs punish producers in the offending nation by increasing the price of
their products to a fairer level.
Donna Bader, Globalization opponent
Donna Bader spent her final year at college studying the effect of various economic
factors on the economy of developing nations. Based on the results of her study, she
concluded that globalization does these countries more harm than good.
Extranets give distributors and suppliers access to a company’s database to place orders
or restock inventories electronically.
The purpose of a combination strategy is to mix growth, retrenchment, and stability
strategies across a corporation’s business units.
A low-cost leadership strategy typically requires a company to have a large market
share.
Which of the following terms is used to refer to the ideas, beliefs, and customs to which
people are emotionally attached?
A) attitudes
B) memetics
C) aesthetics
D) values
________ says that nations should accumulate financial wealth, usually in the form of
gold, by encouraging exports and discouraging imports.
A) Absolute advantage theory
B) Factor proportions theory
C) Mercantilism
D) Communism
Which of the following is true of inflation?
A) It occurs when money is injected into an economy that is experiencing greater
output.
B) It is the result of supply and demand for a currency.
C) It increases people’s purchasing power.
D) It is not particularly affected by the unemployment in a country.
In Country B, Color-Me-Green is faced with a tight labor market and a low
unemployment rate. This low unemployment rate will most likely result in ________.
A) lower interest rates
B) lower wages for workers
C) higher purchasing power
D) higher rate of inflation
Which of the following statements is true of a centrally planned economy?
A) Individual concerns are as important as the government’s concerns.
B) Consumers determine the prices of products and labor.
C) Factories are privately owned.
D) The government sets the production goals.
Which of the following represents a country or territory whose financial sector features
very few regulations and few, if any, taxes?
A) offshore financial center
B) interbank market
C) international financial services district
D) Eurocurrency market
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.
Which of the following arguments against globalization, if true, could be made using
Jeans Unlimited as an example?
A) Globalization results in the government making nearly all economy-related
decisions.
B) Globalization permits the use of unethical practices as long as it brings the company
profits.
C) Globalization causes companies to produce goods in nations with the most lenient
labor regulations.
D) Globalization places least emphasis on corporate social responsibility.
Which of the following statements is true of attitudes?
A) Over the years, they become more rigid than values.
B) They are learned from role models.
C) Because they’re formed within a cultural context, they mirror the attitudes of
surrounding countries.
D) They are developed only for the most important aspects of life.
Which of the following statements best differentiates between franchising and
licensing?
A) Licensing gives a company greater control than franchising over the sale of its
product in a target market.
B) Franchising is common in manufacturing industries while licensing is primarily used
in service industries.
C) Franchising requires ongoing assistance from the franchiser while licensing
normally involves a one-time transfer of property.
D) Licensees must often meet strict guidelines on product quality, day-to-day
management duties, and marketing promotions unlike franchisees.
Scenario: The French Government
The French Government has placed many restrictions upon the use of the English
language within their borders. They argue that the inflow of English movies, music, and
literature is responsible for the dilution of their rich culture.
Their argument is vulnerable to criticism because ________.
A) most restaurants still display their menu cards in French
B) they fail to take other social and cultural factors into account
C) they do not distinguish between movies made by studios in England and movies
made in Hollywood
D) no other country screens French movies or star French actors
Scenario: Hafstrom Motors
Based in Kentucky, Hafstrom Motors has always used spare parts made in America for
its automobiles. However, sales and profits have slumped over the past three years. A
senior manager at the company comes up with new strategies for improving the firm’s
production activities.
The senior manager recommends that Hafstrom obtain auto parts from a country where
production activities would generate more value than it would generate elsewhere. He
wants to take advantage of ________.
A) just-in-time manufacturing
B) facilities layout planning
C) process planning
D) location economies
Managers who are asked to go into a particularly unstable country or one with a very
low standard of living often receive a bonus called ________.
A) hardship pay
B) performance-related pay
C) stock options
D) fringe benefits
Companies with centralized production facilities are often pursuing ________
strategies.
A) low-cost
B) differentiation
C) retrenchment
D) combination
The Toro-Hessians are a minority group in the Margoza Archipelago, with a set of
preferences, attitudes, and taboos, distinct from that of the national culture. Therefore,
they are often overlooked when foreign businesses choose to customize their products
for the inhabitants of the islands. The Toro-Hessian community is an example of
________.
A) cultural universal
B) monoculture
C) subculture
D) stratification
A(n) ________ channel creates a barrier that makes it difficult or impossible for
outsiders to penetrate.
A) exclusive
B) intensive
C) selective
D) two-level
Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin
America. To that end, Blickinstock is trying to decide whether to purchase an existing
company in a remote region of Argentina or build its own subsidiary. Keith Moon,
Blickinstock’s vice president of global business development, will be making a
presentation to the board outlining the company’s options. A current account deficit
occurs when a country exports more goods and receives more income from abroad than
it imports and pays abroad.
Why is it important to assess R&D costs when considering FDI? Given its costs, how
can FDI benefit the host country with access to technology, management skills, and
employment?
How does the dual extension method work as a promotional strategy?
How does the international capital market reduce the cost of money for borrowers?
What are the two components for every quoted exchange rate?
Compare and contrast the methods of cultural training. Is any single method better than
all the others?