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.
Restrictions on the convertibility of one currency into others is called administrative
delays.
An ethnocentric policy toward staffing is typically reserved for top-level managers.
A common example of a push strategy is the creation of consumer demand through
direct marketing techniques.
A main goal of the global product structure is to bring together geographic and product
area managers in joint decision making.
The lower a product’s value density, the more localized is the distribution system for
that product.
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.
Consumers are benefitted when a government imposes import quotas on products.
Nations with the poorest infrastructures and lowest personal incomes are called
developing countries.
NAFTA is the international organization that enforces the rules of international trade
worldwide.
Companies typically recruit locally for nonmanagerial positions.
Research shows that pollution-intensive U.S. companies tend to invest in nations with
lenient environmental standards.
An arm’s length price is the price that is charged for products sold among a company’s
divisions or subsidiaries.
Firms that standardize their advertising usually control campaigns from the home
office.
Companies involved in direct exporting typically rely on ________.
A) distributors
B) agents
C) export management companies
D) export trading companies
The practice of insuring against potential losses that result from adverse changes in
exchange rates is called currency ________.
A) hedging
B) arbitrage
C) speculation
D) conversion
Lingua franca is ________.
A) a language spoken by all countries in a continent
B) a form of non-verbal language adopted by all nations as the official language for
business transactions
C) a unique language developed by Asian countries
D) a “link” language understood by two parties who speak different native languages
While ________ encourages free trade among Canada, Mexico and the United States,
manufacturers and distributors must abide by local content requirements and rules of
origin.
A) NAFTA
B) LAFTA
C) CAN
D) CAFTA-DR
A(n) ________ structure is best suited to companies that treat each national market as
unique due to the vast cultural, political, or economic differences between nations.
A) international division
B) international area
C) global matrix
D) global product
An Asian jewelry company maintains production facilities in South Korea, Vietnam,
and Malaysia. Which of the following is the company exemplifying?
A) lean production
B) decentralized production
C) vertical integration
D) continuous production
An organizational structure that organizes a company’s entire global operations into
countries or geographic regions is referred to as a(n) ________ structure.
A) international area
B) international division
C) global matrix
D) global product
________ teams can help break down barriers between departments and reorganize
operations around processes in an organization.
A) Cross-functional
B) Self-managed
C) Global
D) Virtual
Scenario: Learning the Americas’ Way
The newly-formed countries that emerged after the break up of the United Frontier
States (UFS) are interested in learning more about integration in the Americas. Because
the former UFS nations have many similarities with the countries of North and South
America, they believe they can learn from the integration experience in the Americas.
To that end, they pose the following questions. The Andean Community most closely
resembles a(n) ________.
A) economic union
B) customs union
C) common market
D) political union
________ is a countertrade whereby one company sells to another its obligation to
make a purchase in a given country.
A) Franchising
B) Joint venture
C) Switch trading
D) Barter
Which of the following countries is a member of the North American Free Trade
Agreement (NAFTA)?
A) Costa Rica
B) Honduras
C) Venezuela
D) Canada
What are the advantages of American Depository Receipts (ADRs)?
Using any two of the four theories that appear in your text, explain why companies
engage in foreign direct investment.
Explain how the national competitive advantage theory supports and builds upon the
factor proportions theory.
Explain the function of spot rates and the spot market.
Describe the differences between human resource management in a domestic setting
and an international setting, and explain the three phases of human resources planning.
Explain franchising with examples. Mention the advantages and disadvantages
associated with franchising. How is franchising different from licensing?
Explain the benefits and drawbacks of a value-added tax.
Briefly explain each of the three main methods companies use to manage political risk.
Explain the risk-management method of “adaptation.” Why would it most likely be less
costly and time-consuming to pursue this method in a nation that practices civil law
rather than in a nation that practices common law?
Globalization’s impact on jobs and wages is an important topic for debate. Discuss the
major points for globalization in the jobs and wages debate, and describe how the
actions of large multinational corporations affect the issues in the jobs and wages
debate.