1) According to experts, stakeholder participation in decision making is effective only
in countries with an educated population.
2) In an FX swap, one currency is swapped for another on one date and then swapped
back on a future date.
3) Ericsson, the Swedish MNE, was required as of 2005 to adopt both Swedish and U.S.
GAAP since it lists it securities in both the U.S. and Sweden.
4) Totalitarianism is a political ideology that typically involves constant indoctrination
of the population by agents of the government to eliminate dissent.
5) Many companies merge with or acquire other companies to gain operating
efficiencies that help them compete with or become global leaders
6) Countries with a theocratic legal system encourage precise, detailed contracts
whereas countries with a common legal system encourage shorter and less specific
contracts.
7) For U.S. MNEs, the tax-deferral privilege operating through a foreign subsidiary was
not originally a tax loophole. On the contrary, it was granted by the U.S. government to
allow U.S. firms to expand overseas and place them on a par with foreign competitors,
which also enjoy similar types of tax deferral and export subsidies of one type or
another.
8) Failure rates for overseas postings fall typically between 30 and 50 percent, and
usually reduce performance, sidetrack careers, and corrode morale.
9) Governments primarily cooperate through treaties to create a global division of labor
10) Comparative advantage theory holds that gains from trade are the result of capital
movements from countries with low interest rates to countries with higher interest rates.
11) One advantage of centralized corporate practices is a reduced risk that lower-level
employees make costly, wrong decisions.
12) Relativism is the theory that ethical truths depend on the values of the groups
holding them; thus, MNEs should adhere to or adopt the cultures of the countries in
which they are located.
13) Which of the following describes a cross-licensing agreement?
A) allocation of exclusive rights to a licensee to prevent competition
B) an agreement between two or more companies not to compete in each other’s home
countries
C) an exchange of explicit knowledge for tacit knowledge
D) the exchange of intangible property rights between two or more companies
14) Global Positioning Solutions Inc. is a Utah-based company that ________.
A) provides location assistance for global executives who travel frequently
B) is a division of a banking syndicate in the Western part of the United States
C) assists firms that have foreign-exchange needs but that lack in-house
foreign-exchange teams
D) started out by providing foreign exchange services that were not being offered by
commercial banks
15) A U.S. firm is acquiring an existing company in Germany rather than starting up a
new foreign operation. Which of the following statements best supports this decision?
A) Because the German firm is performing poorly, there is a good turn-around
opportunity
B) The U.S. firm’s U.S. facility is working at capacity
C) Stock market prices have been very high in Germany
D) The German firm has skilled personnel that the U.S. firm cannot hire at a good price
on its own
16) All of the following are benefits of countertrade EXCEPT ________.
A) decreasing trade protectionism
B) increasing access to innovative technology
C) developing new trade relationships with foreign companies
D) preserving foreign-exchange reserves
17) All of the following are reasons that foreign investment may stimulate exports from
the home (donor) country EXCEPT which of the following?
A) The investor often sends home-country components to its facilities abroad
B) The investor often sends home-country equipment to its facilities abroad
C) Home-country aid usually goes where the investments are made
D) The foreign facility is adept at selling the investors’ home country products
18) In most cases, governments ________ in order to regulate inflation.
A) lower interest rates
B) increase taxes
C) raise interest rates
D) decrease taxes
19) Fortis Manufacturing Systems uses a highly focused system of quality control that
takes a statistical approach and scrutinizes the firm’s entire production system. Fortis
most likely uses ________.
A) total quality management
B) acceptable quality levels
C) just-in-time processes
D) Six Sigma processes
20) Which of the following transactions refers to the purchase of goods or services
produced by a company based in one country from sellers that reside in a different
country?
A) importing
B) countertrading
C) exporting
D) freight forwarding
21) IBM puts investments, people, and work anywhere in the world based on the best
mix of costs, skills, and environment and uses sophisticated strategies and technologies
to support and coordinate activities. IBM most likely uses a ________ structure.
A) classical
B) product
C) neoclassical
D) locational
22) Contact among countries brings about cultural change, which is a process called
________.
A) cultural collision
B) cultural imperialism
C) cultural diffusion
D) polycentrism
23) Compare the advantages of locating foreign operations to avoid where competitors
have gone versus locating where competitors are.
24) In a brief essay, explain the roles of the World Trade Organization and the United
Nations in international trade.
25) What is inflation? How does inflation affect international business?
26) You are the chief financial officer at an MNE. What are your main responsibilities
in this position? What taxation issues have a significant effect on the decisions you
make?
27) What are core competencies? How do firms that adopt an international strategy
utilize their core competencies? How do firms that adopt a transnational strategy utilize
their core competencies?
28) As an international business manager, how can you benefit from an understanding
of international trade theories?
29) What is currency speculation? Why is it risky?
30) Explain the difference between macro-uniform-based and micro-based accounting
systems. What are some examples of countries that fit in each system?
31) In a short essay, compare the roles of the Federal Reserve Bank of New York and
the European Central Bank.
32) What role does a firm’s strategy play in determining organizational structure? Why
are boundaries problematic for firms with international strategies?