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1. In the context of the five dimensions of national culture as identified by Dutch scholar Geert Hofstede, uncertainty
avoidance refers to the emphasis placed by a person on long-term values such as thrift and persistence.
a. True
b. False
2. Labor contracts in England are not really legal contracts but are merely understandings that can be broken at any time
by either party with no penalty.
a. True
b. False
3. The actions of management toward labor and the actions of labor toward management are heavily restricted by law.
a. True
b. False
4. In the context of the strategies that organizations adopt for competing in the international environment, the process of
producing products in the domestic marketplace and then selling them in other countries is called importing.
a. True
b. False
5. Every aspect of the human resources management (HRM) process in a geocentric company must be undertaken from a
domestic perspective.
a. True
b. False
6. In the context of the strategies that organizations use for competing in the international environment, a direct foreign
investment occurs when a firm owns physical assets in another country.
a. True
b. False
7. Labor unions in the United States are more concerned with social issues than they are in most other countries.
a. True
b. False
8. It is important for international HR managers to look at the total picture of compensation rather than on some simple
index such as the hourly wage.
a. True
b. False
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9. Future orientation is one of the five dimensions of national culture identified by Dutch scholar Geert Hofstede.
a. True
b. False
10. Organizations using the ethnocentric staffing model have a fully functioning HR department in each foreign subsidiary
that is responsible for managing all local HR issues for lower- and upper-level employees alike.
a. True
b. False
11. Which of the following statements is true of training expatriate managers?
a. It solely focuses on familiarizing expatriates with the language of their foreign destination.
b. It involves teaching managers general skills that will be useful for both present and future jobs.
c. It is typical to have a training component that deals with social manners and issues involved in social exchanges.
d. It is uncommon to send expatriates for short trips to their ultimate foreign destination before their permanent
move as part of the training.
12. Which of the following international business strategies involves cooperation between firms but may not involve
sharing of ownership?
a. Exporting
b. Licensing
c. A strategic alliance
d. A joint venture
13. Tanya, a social activist, works closely with a local NGO to spread awareness about the importance of education in
rural areas. She is actively involved in planning and organizing programs conducted by the community. Together, they
have managed to get 500 students admitted into public schools and have also been responsible for the establishment of 15
new schools. Tanya takes a lot of pride in her work and her association with the NGO. In the context of the dimensions of
national culture as identified by Robert House in his GLOBE project (Global Leadership and Organizational Behavior
Effectiveness), Tanya belongs to a culture that is likely to score:
a. low on femininity.
b. high on in-group collectivism.
c. low on humane orientation.
d. high on individualism.
14. Which of the following companies is an example of an international business that uses the geocentric staffing model?
a. Hydracore, a web development company that hires employees from a pool of qualified candidates from across the
world
b. Franelli, an international convenience store chain that hires employees from its parent country to staff higher-level
positions in its foreign offices
c. Infinite Sports, a sports shoes manufacturing company that only hires local workers to staff its foreign subsidiaries
d. Cielo Vista, a commercial airline that hires parent-country nationals to staff all positions in its foreign offices
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15. Which of the following statements is true of the international business strategy of licensing?
a. It allows a firm to enter a foreign market with relatively little risk.
b. It provides a firm with its own company-owned facilities in a foreign country.
c. It requires a huge outlay of capital.
d. It does not provide market exposure to a firm.
16. Who among the following individuals is most likely to receive a hardship premium?
a. An intern who puts in extra hours of work on a daily basis
b. A business development manager on a foreign client visit
c. An expatriate manager posted in a war-torn country
d. A physician volunteering to serve the poor in his locality
17. Which of the following dimensions of national culture identified by Dutch scholar Geert Hofstede refers to the status
and authority differences between a superior and a subordinate?
a. Power distance
b. Collectivism
c. Assertiveness
d. Time orientation
18. In the context of international human resource management strategies, the corporate human resource function in
organizations that adopt the _____ is primarily concerned with selecting and training managers for foreign assignments,
developing appropriate compensation packages for those managers, and handling adjustment issues when the manager is
reassigned back home.
a. ethnocentric staffing model
b. regiocentric staffing model
c. geocentric staffing model
d. polycentric staffing model
19. The term _____ refers to the set of values that helps an organization’s members understand what it stands for, how it
does things, and what it considers important.
a. culture
b. diversity
c. ethnicity
d. folkway
20. One of the domestic issues in international human resource management is that firms have to:
a. replace host-country nationals with parent-country nationals for nonmanagerial jobs as the former are expensive
to employ.
b. provide a hardship premium to all local employees as part of their pay packages.
c. provide equal compensation to all workers, irrespective of their place of work.
d. invest additional money to bring the workforce in underdeveloped countries up to the expected performance
standards.
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21. Rapid population growth in developing countries like China and India has:
a. led them to domesticate their business operations.
b. made them a poor market for international consumer goods.
c. resulted in financial instability in these countries.
d. made them attractive sites for new businesses or joint ventures.
22. Which of the following statements is true of the local compensation issues that international businesses face?
a. Multinational corporations must pay a hardship premium to their local employees and their families.
b. Firms pay equal compensation to their employees in different foreign locations.
c. Compensation issues must be addressed at an international level for multinational corporations.
d. Difference in lifestyles causes a variation in the way in which firms compensate their employees in different
foreign locations.
23. In the context of the four international strategies as proposed by Bartlett and Goshal, if an expatriate manager is
expected to acquire, leverage, and transfer specialized knowledge with much independence, he is most likely working
with a firm using the _____.
a. regional strategy
b. global strategy
c. international strategy
d. transnational strategy
24. In the context of managing international transfers and assignments, _____ is instruction directed at enhancing specific
job-related skills and abilities and most often focuses on operating employees and technical specialists.
a. training
b. learning
c. development
d. management
25. John prefers to work alone on projects and avoids group work that requires him to work with other employees,
especially women. He believes in self-reliance and gives precedence to his own ideas and values over the beliefs of others.
In the context of the dimensions of national culture as identified by Geert Hofstede, John belongs to a culture that is likely
to score high on _____.
a. gender egalitarianism
b. individualism
c. femininity
d. in-group collectivism
26. Companies that use the geocentric staffing model:
a. heavily employ host-country nationals to better deal with local-market conditions.
b. have a common HR unit in their parent countries to handle employment issues for all foreign subsidiaries.
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c. require that every aspect of their human resource management process be undertaken from an international
perspective.
d. primarily hire home-country nationals to fill higher-level positions in their foreign offices.
27. In the context of economic communities, which of the following statements is true of the European Union (EU)?
a. It has separate labor agreements for each of its member nations.
b. Twelve early members of the EU make up the eurozone.
c. Each of the member nations of the EU have their own human resource practices.
d. It is a community with strong financial stability and no potential defaults.
28. Feel Good Inc. is a multinational sports goods manufacturer that uses a different strategy in each of its subsidiaries
and operations. Moreover, all decision making is decentralized, which leaves the company open for the threat of
opportunistic behavior. Since expatriate managers do not rely on headquarters expertise, there is also a great imbalance in
transference of information and specialized knowledge. In the context of the four international strategies proposed by
Bartlett and Goshal, Feel Good Inc. uses the _____.
a. global strategy
b. international strategy
c. universal strategy
d. multidomestic strategy
29. Suave is an accessory and jewelry retailer based in France. The company wants to enter new markets to expand its
business. As a result, it decides to sell its goods to retailers in other countries. Which of the following is the most likely
advantage that Suave will have by using this approach?
a. This approach will reduce the transportation costs incurred by Suave.
b. This approach will allow Suave to purchase factory units in other countries.
c. This approach will allow Suave to realize its full profit potential.
d. This approach will involve relatively little risk for Suave.
30. _____, a form of trade control, place a limit on the number or value of goods that can be traded.
a. Quotas
b. Tariffs
c. Embargoes
d. Subsidies
31. In the context of the dimensions of national culture as identified by Robert House’s GLOBE project (Global
Leadership and Organizational Behavior Effectiveness), who among the following individuals is most likely to belong to a
culture with high performance orientation?
a. Frieda, who believes in offering equal job opportunities to both men and women
b. Martin, who is very proud of his company and the team that he manages
c. Belinda, who makes sure her employees are rewarded for their excellence at work
d. Carlos, who plans projects and allocates resources for them well in advance
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32. Robert, an executive manager, works in a firm with a clearly-defined hierarchical structure. He prefers to strictly
follow the work schedule designed by the top management and assigns tasks to his subordinates well in advance. He
expects his subordinates to follow his directions without questioning them and favors a standardized and structured
approach to work. In the context of Geert Hofstede’s dimensions of national culture, Robert belongs to a culture that is
likely to score:
a. low on power distance.
b. low on assertiveness.
c. high on uncertainty avoidance.
d. high on femininity.
33. GeNext, a leading mobile software developer in Japan, agrees to develop exclusive software application programs for
a new line of affordable smartphones to be launched by CelCom, a smartphone manufacturer in China. The brand
reputation and pricing strategies of both these companies are expected to bring in large volumes of smartphone sales. The
profits from the sales will be divided between these two firms. In the given scenario, GeNext and CelCom have _____.
a. entered into a licensing agreement
b. formed a strategic alliance
c. entered into an agreement for a merger
d. made a direct foreign investment
34. Which of the following is a disadvantage of the international business strategy of licensing?
a. It subjects the original firm to high transportation expenses.
b. The profits of a firm using this strategy are limited to those it receives from royalty payments.
c. It allows a firm to enter a foreign market in high risk conditions.
d. The costs of licensing are quite high and must be borne solely by the original firm.
35. In the context of corporate international strategies, a firm using a transnational strategy:
a. expects its expatriate managers to rely heavily on direction from the home office.
b. has centralized decision making, with the lowest risk of agency problems.
c. can implement a knowledge contract to get all the information acquired by an expatriate manager.
d. faces the least number of threats for opportunistic behavior and the lowest information asymmetry.
36. Which of the following is a reason why host-country nationals are usually hired as nonmanagerial employees in
international businesses?
a. They charge lesser hardship premium than parent-country nationals.
b. They are cheaper to employ than parent-country or third-country nationals.
c. They do not require training and eliminate the training costs of organizations.
d. They are not eligible for the provisions of international labor standards.
37. In the context of selecting expatriates, _____ are recruiting firms that actively seek qualified managers and other
professionals for possible placement in positions in other organizations.
a. career services centers
b. employment contractors
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c. gatekeepers
d. headhunters
38. Which of the following countries is an original member of the European Union (EU), an economic community?
a. Italy
b. Denmark
c. Greece
d. Sweden
39. Forrest & Barnes, a pharmaceutical company in the United States, builds a research and development facility in Japan.
This helps the company make the best use of the efficient labor and technology available in Japan. Which of the following
international business strategies is Forrest & Barnes most likely using in the given scenario?
a. Exporting
b. A joint venture
c. Licensing
d. Direct foreign investment
40. Which of the following companies uses a strategic alliance to compete in the international business environment?
a. Manolo, a large organic farming business that partners with a chain of retail supermarkets to sell its produce
b. Frentech, a large consulting organization that holds several operating facilities in another country
c. Mellissa, a clothing business that purchases subsidiaries in another country to expand its business
d. Benedicts, a frozen food producer that permits other firms to manufacture and market its products using its logo
41. Sera Pharma, a pharmaceutical company, produces medicines in its home country. It recently started selling its
products to foreign companies to expand its business and enter new markets. Which of the following international
business strategies does Sera Pharma use in the given scenario?
a. Exporting
b. Licensing
c. An acquisition strategy
d. A strategic alliance
42. Hannah is a relationship-oriented manager at a multinational corporation. She makes sure her subordinates know that
she values their positive rapport with each other. She also makes it a point to reward her subordinates for improving as
well as for showing excellence in their work. In the context of the dimensions of national culture as identified by Robert
House’s GLOBE project (Global Leadership and Organizational Behavior Effectiveness), Hannah most likely displays
high _____.
a. power distance
b. performance orientation
c. masculinity
d. individualism
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43. Jared has been working in his company’s foreign subsidiary as a plant manager for five years. He decides to move
back to his home country for personal reasons and his company starts the process of bringing him and his family back
home. The company also provides Jared with career counselling in case he decides to look for a new job on his return. In
this context, Jared is involved in the _____ step of managing the human resources of global business.
a. selection
b. repatriation
c. compensation
d. training
44. In the context of economic communities, unlike the European Union (EU), the North American Free Trade Agreement
(NAFTA):
a. has unified the human resource management practices and laws of its member nations.
b. has a common currency designed to eliminate exchange-rate fluctuations.
c. is a comprehensive and commonly cited economic community.
d. attempts to reduce the trade barriers that exist among Canada, the United States, and Mexico.
45. Which of the following is a difference between labor relations in Japan and labor relations in most European nations?
a. Unlike Japan, the use of a third-party mediator to solve disputes is rare in most European nations.
b. Unlike most European nations, confrontation and hostility is encouraged in Japan.
c. Unlike Japan, temporary work stoppages and strikes are rare in most European nations.
d. Unlike most European nations, unions and management in Japan tend to work together cordially.
46. Which of the following international business strategies least affect the HR function of a firm?
a. Mergers and joint partnerships
b. Direct foreign investments and corporate acquisitions
c. Exporting and licensing
d. Joint ventures and strategic alliances
47. In the context of managing international transfers and assignments, repatriation occurs when a:
a. manager is sent by his or her company on a second foreign assignment.
b. manager is brought back home from a foreign assignment.
c. manager is deported from his home country to a foreign country.
d. manager is expelled from the foreign country where he is sent on an assignment.
48. Which of the following statements is true of selecting expatriates for international assignments?
a. People with foreign-language skills and international travel experience are attractive expatriate candidates.
b. Success in foreign assignments is based more on technical skills than on cultural skills.
c. More firms are increasingly hiring global managers due to their abundance in the international market.
d. The first step in selecting expatriates is to employ a headhunter to identify a pool of qualified applicants.
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49. Which of the following dimensions of national culture was identified by Robert House’s GLOBE project (Global
Leadership and Organizational Behavior Effectiveness)?
a. Humane orientation
b. Power distance
c. Time orientation
d. Uncertainty avoidance
50. Which of the following companies is an example of an international business that uses the ethnocentric staffing
model?
a. ComCor, a computer manufacturing company that heavily uses host-country nationals at all levels of the
organization in its foreign offices
b. Albits, a beverage producing company that hires parent-country nationals to staff higher-level positions and host-
country nationals for entry-level positions in its foreign offices
c. LifePro, an investment company that has fully-functioning HR departments in all its foreign offices to handle HR
issues for both upper- and lower-level employees
d. Denkins, a software development company that undertakes all human resource management processes from an
international perspective
51. Which of the following is the first step in the process of selecting an expatriate manager?
a. Defining the skills necessary to do the foreign assignment
b. Evaluating the adaptability skills of the prospective candidates
c. Employing a headhunter to identify prospective managerial candidates
d. Developing a pool of qualified applicants
52. Flaherty Steel Company, based in Japan, decides to open a big manufacturing and distribution center in China. It does
this by acquiring operating facilities from another company in China. The management at Flaherty believes that adopting
this approach will provide the company with instant access to new markets. In this context, the HR function at Flaherty
Steel Company will:
a. need to extend and expand its scope and operations to provide the appropriate contributions to firm performance.
b. need to be extended to include another set of employees but will not change in any other meaningful way.
c. become complicated because of the disparate relationship between the staff in Flaherty’s home-country and the
staff of the acquired company.
d. need to be extended to include employees of the Chinese company involved in the acquisition.
53. In the context of the dimensions of national culture as identified by Dutch scholar Geert Hofstede, _____ means
emphasizing long-term values such as thrift and persistence as opposed to short-term values such as fulling social
obligations.
a. individualism
b. uncertainty avoidance
c. time orientation
d. collectivism
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54. Brooks & Bill is an organic chemicals and fertilizer manufacturer. It allows Fixit Chemicals, a company based in
another country, to manufacture Brooks & Bill’s products using the Brooks & Bill name, logo, and materials. Fixit
Chemicals then sells these products in its own local market. Fixit Chemicals also pays a royalty to Brooks & Bill for every
unit that it sells. Which of the following international business strategies is Brooks & Bill most likely using in the given
scenario?
a. Exporting
b. Licensing
c. A joint venture
d. A strategic alliance
55. In the context of the four international strategies as proposed by Bartlett and Goshal, which of the following strategies
poses the highest risk of agency problems?
a. The multidomestic strategy
b. The transnational strategy
c. The regional strategy
d. The global strategy
56. Axtara, an automobile manufacturer, has several factories in foreign countries. The management strongly believes in
giving precedence to the values and perspectives of its home office over those of its foreign subsidiaries. As a result, the
management hires workers from the home country to staff the upper-management positions in all the foreign offices of the
company. In the context of the different staffing strategies used by international businesses, Axtara most likely uses the
_____.
a. geocentric staffing model
b. regiocentric staffing model
c. polycentric staffing model
d. ethnocentric staffing model
57. Which of the following is an advantage of using exporting as an international business strategy?
a. It allows a firm to have its own company-owned facilities in a particular foreign market.
b. Products exported to other countries are exempt from trade controls like tariffs and taxes.
c. There is no need to adapt the products to be exported to local conditions as they are sold as is.
d. It reduces the transportation expenses incurred by a firm.
58. Florence is an expatriate manager for a multinational corporation. Her managers expect her to act independently and
acquire specialized knowledge and transfer it to her subordinates. The only issue she faces is being unable to get the local
employees to go along with her ideas. As a result, there is a high risk of agency problem. In the context of the four
international strategies proposed by Bartlett and Goshal, Florence is working with a company that uses the _____.
a. transnational strategy
b. international strategy
c. global strategy
d. regional strategy
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59. Philip, a French national, is hired by an international corporation based in Japan for its London office. After joining,
Philip learns that two other candidates, one from the company’s home office in Japan and the other from its London
branch, were also considered for the same position. After a complete assessment, however, the management had hired
Philip because they found him better qualified for the job. In the context of the different staffing strategies used by
international businesses, the company that hired Philip most likely uses the _____.
a. polycentric staffing model
b. geocentric staffing model
c. regiocentric staffing model
d. ethnocentric staffing model
60. Which of the following is a general human resource issue in international business?
a. Organizations must formulate common human resource processes for all countries where they operate.
b. Organizations must deal with conflicts existing between the laws of the home country and those of the host
country.
c. Organizations must deal with the pros and cons of the international business strategy that they adopt.
d. Organizations must deal with the conflicts between labor unions in the host country and the home country.
61. What are the various strategies that organizations can adopt to compete in the international environment? What are the
challenges that these strategies pose for human resource managers?
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62. List the five dimensions of national culture as identified by Geert Hofstede.
63. How do international businesses compensate expatriates?
64. Briefly explain some of the local training issues that a multinational company faces when it hires host-country
nationals.
65. Briefly discuss international labor relations.
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