1) An advantage of locating operations where there are many competitors is that the
cluster of competing firms attracts multiple suppliers and specialized personnel.
2) Some companies that opt for the cost leadership strategy plan to sell products below
the average industry prices in order to capture market share.
3) When using the current-rate method to translate foreign currency financial statements
into the parent currency, translation gains and losses are recognized in comprehensive
income.
4) National origin is an acquired group membership.
5) Centralized manufacturing is most widely used when customers have widely varying
localized needs.
6) The OECD Convention against bribery is an example of an agreement that targets the
demand side of bribery.
7) Companies use the foreign-exchange market to convert money for use in financial
transactions.
8) The character of a company’s corporate culture is a product of the core values and
business principles that management advocates, as well as the behaviors that define
“how we do things around here.”
9) Managers use a value chain analysis to determine how the company will design,
make, move, and sell products; how it will find efficiencies in doing so; and how it will
coordinate the decisions in one part of the business with those made in other parts.
10) The International Anti-Counterfeiting Coalition estimates that international trade in
counterfeit products runs less than 5 percent of the value of total world trade.
11) NAFTA is an example of a common market.
12) Transparency International, the OECD, and the ICC are all working to stop bribery
around the world.
13) Where future orientation is high, people are more willing to delay gratification by
investing.
14) Countries with varied climates and varied natural resources generally ________
than countries with less varied climates and natural resources.
A) have lower per capita incomes
B) depend less heavily on trade
C) have more ethnic subgroups
D) have higher endowments of capital relative to labor
15) Wharton Enterprises, a U.S. firm, manufactures small kitchen appliances. The firm
has recently developed an innovative blender design that Wharton executives anticipate
being very profitable. Currently, Wharton has production facilities in the U.S. and
China. Wharton executives are trying to determine where the new product should be
manufactured. Which of the following questions is most relevant to the decision?
A) What selection procedures would be best in China?
B) Should expatriates or locals manage the Chinese facility?
C) How can the firm guard against counterfeiting in China?
D) How would China’s individualistic system affect the firm?
16) The requirement by the U.S. government that its subsidiaries abroad comply with
trade restrictions with Cuba is an example of ________.
A) utilitarianism
B) extraterritoriality
C) absolute advantage
D) relative advantage
17) Small and medium-size enterprises, such as SpinCent as seen in the opening case
for chapter 14, account for ________ of all U.S. exporters.
A) 38%
B) 54%
C) 79%
D) 98%
18) The market for shares sold outside the boundaries of the issuing company’s home
country is the ________.
A) Eurocurrency market
B) international bond market
C) international equity market
D) Euroequity market
19) Pulte Homes adapts its marketing to foreign differences by making minor changes
to bathrooms and outdoor patios. However, Pulte Homes uses the same floor plans and
exterior attributes in all countries to gain economies of standardization. Pulte Homes
most likely follows a ________.
A) social marketing orientation
B) sales orientation
C) strategic marketing orientation
D) production orientation
20) Which of the following is most likely a true statement about the global economy
since the 1980s?
A) Socialist governments are intervening more in global exchanges
B) Wealthy countries are exercising total control over emerging markets
C) Developing countries are losing growing shares of their foreign-exchange reserves
D) Emerging economies are adopting the principles and practices of free markets
21) Monique has recently been hired as an accounts supervisor at Ballston Enterprises.
She wants to understand Ballston’s values and its expectations for employee behavior.
Which of the following would most likely provide Monique with this information?
A) mission statement
B) code of conduct
C) vision statement
D) employee contract
22) When a company successfully responds to foreign production and market
opportunities, ________
A) other companies will likely emulate its successful practices
B) it likely has a long-term advantage over competitors
C) it will downsize its domestic operations
D) its home government likely raises taxes on the company
23) An advantage of the geocentric outlook to staffing is ________.
A) encouraging workers to appreciate the unique virtues of a particular country
B) giving people a flexible perspective for fitting operations to different countries
C) removing most behavioral barriers to fully adapting to the chosen local market
D) tapping learning opportunities around the world to generate ideas that enhance core
competencies
24) Top executives at Jordan, a U.S. consulting firm, are debating whether or not to
expand into a country with a great deal of violence by staffing mostly with U.S.
personnel. A vice president argues that Jordan should forego sending its employees
there because of the high risk for them of kidnappings in the region. Which of the
following statements best supports the vice president’s position?
A) There is a high correlation between violence and life-threatening natural disasters
B) Violence is a harbinger of additional risks that affect operations negatively
C) Local personnel are immune from violence and are capable of filling positions
D) The ability to evacuate people when necessary is much slower than it was in the past
25) Companies most likely use the foreign-exchange market to ________.
A) establish fair currency trading policies
B) facilitate regular business transactions
C) establish a global market presence
D) diversify their hedge funds
26) A company that makes a foreign investment largely to acquire knowledge is most
likely to use ________ as a means of expansion.
A) a greenfield investment
B) internalization
C) an acquisition
D) a licensing agreement
27) The shifting of national borders has most likely created which of the following
situations for international business?
A) It has left rural residents more isolated from technology
B) It has complicated the understanding of behavioral factors affecting business
C) It has increased physical barriers to exporting
D) It has slowed communications between a company’s headquarters and foreign
operations
28) All of the following are important when establishing and managing a collaborative
agreement EXCEPT ________.
A) setting up mutual goals and expectations
B) avoiding interference about how the partner handles its duties in the operation
C) determining whether the agreement is reaching its goals
D) assessing periodically whether a different operational form would be preferable
29) Advantages of adopting a polycentric approach include which of the following?
A) capitalizing on the availability of qualified local managers
B) helping transfer core competencies from the home nation to local subsidiaries
C) increasing the international career mobility for local managers
D) offsetting tendencies for the company to adapt excessively to the local market
30) A system in which individuals, rather than the government, make the majority of
economic decisions is commonly referred to as a ________.
A) command economy
B) market economy
C) private economy
D) mixed economy
31) Country A and Country B make an agreement to cooperate more closely and
implement tariff reductions. Which of the following best describes this agreement?
A) double commodity integration
B) multilateral integration
C) regional integration
D) bilateral integration
32) Hudson Manufacturing is an MNE based in the U.S. with operations in Asia. The
firm is considering expansion into the European Union. Which of the following
questions is most relevant to the decision?
A) What is the primary language of most workers?
B) Which country has the best production location?
C) Which currency has the most favorable value of the euro?
D) Which country has the lowest tariffs for manufactured products?
33) Which of the following would most likely indicate that a company should handle its
own distribution?
A) high-volume sales and non-complex after-sales servicing
B) local customers and low-tech products
C) low sales volume and few business-to-business sales
D) global customers and high technology