52) A computer firm has high foreign sales in Asia and wants to expand sales into Europe. Which of the
following statements provides the most appropriate advice for Elway executives?
A) Although countries’ market sizes differ, companies usually face about the same number of
competitors in each national market.
B) In most industries, companies face the same competitors in each country where they operate.
C) It takes about the same amount of resources to gain national distribution in one country versus
another.
D) Being a leader in one country does not guarantee market leadership in another country.
53) When companies face the same competitors in almost all countries where they operate, ________.
A) what they learn about each other in one country is useful in predicting the other’s strategies and
actions elsewhere
B) the market leader is the same everywhere
C) there is less need to understand the physical and societal factors of each country
D) they are less likely to enter joint ventures with other companies
54) The view that globalization is inevitable is most likely based on the belief that ________.
A) international organizations will replace nation-states
B) protesters against globalization will be persuaded to change their views
C) people want more global homogeneity of cultures
D) technical advances in transportation and communications are highly pervasive
55) Critics of the view that regionalization will prevail over globalization most likely base their
argument on the belief that ________.
A) regionalization is a transition stage toward globalization
B) neighboring countries are more apt to disagree politically than distant countries
C) neighboring countries are too geographically similar to benefit from trade
D) business in non-territorial areas is not regional
56) Which of the following is NOT a common argument for the slowing of future globalization?
A) Antiglobalization interests have been successful in electing parties that oppose freer movement of
trade or people.
B) Technological, transportation, and communication advances will decline in the near future.
C) Major countries have either ignored certain international treaties or have refused to sign them.
D) The growing split between those who succeed in a global environment and those who do not will
foster greater antiglobalization sentiments.
57) Some observers feel that international institutions and the people working in them cannot adequately
handle the complexities of an interconnected world. Based on this, these observers believe that
________.
A) globalization will slow in the future
B) globalization is nevertheless inevitable
C) international business will grow primarily on a regional basis
D) private companies will replace international organizations in running the world’s economy
58) The owner of a U.S. football team and the owner of a Canadian hockey team purchase a British
soccer team. This is an example of a ________.
A) royalty
B) portfolio investment
C) turnkey operation
D) joint venture
59) Carnival Cruise Lines lowers its taxes by all of the following EXCEPT ________.
A) hiring host-country nationals who pay no taxes
B) taking advantage of taxation laws in foreign countries
C) sailing in international waters outside countries’ tax jurisdiction
D) paying substantial port fees instead of taxes during stopovers
60) A flag of convenience is ________.
A) the declaration that a product is made in a country that has easier legal access to a given foreign
market
B) a designation for products originating within a particular trading group
C) the registration of a shipping company in a country that charges low taxes
D) the indication that a shipping organization can sail in international waters
61) Globalization refers to all economic transactions among countries.
62) International business includes all commercial transactions between two or more countries.
63) Gaining some understanding of international business is important for any business student because
global events and competition affect almost all companies.
64) The best way of conducting business domestically is also typically the best way to conduct business
internationally.
65) It is difficult to compare globalization of business over time because shifting national borders have
changed the nature of transactions from domestic to international and vice versa.
66) Most countries’ imports account for more than half of their citizens’ consumption.
67) The lowering of tax rates around the world is one of the seven major forces behind recent
globalization.
68) Globalization of business has been stimulated by institutional developments that aid foreign trade
and investment.
69) The recent expansion of technology has contributed to the growth in international business by
creating new products that are important in world trade.
70) Improvements in transportation and communications enable managers to better oversee foreign
operations.
71) Import restrictions are becoming less important because consumers increasingly want to buy goods
and services produced in their own countries.
72) Countries have reduced import trade barriers in the expectation that other countries will do the same.
73) Many companies merge with or acquire other companies to gain operating efficiencies that help
them compete with or become global leaders.
74) It is rare for a new company to locate its operations near competitors and suppliers.
75) Governments primarily cooperate through treaties to create a global division of labor.
76) Supporters of globalization assert that the process helps countries strengthen their sovereignty.
77) A criticism of globalization is that as economic growth increases, too many nonrenewable resources
are used.
78) The process of shifting production to a foreign country is known as outsourcing.
79) Critics of offshoring assert that the short-term cost savings derived from offshoring hinder firms
from developing more efficient production methods.
80) Many professional basketball teams recruit tall youngsters in foreign countries into basketball camps
where they can develop basketball skills and perhaps become candidates for professional play. This is an
example of engaging in international business to acquire resources.
81) By operating internationally, a company may take advantage of business-cycle differences among
countries and thereby reduce its financial risks.
82) The production of goods by a French company in Italy for sale in Italy is an example of an Italian
merchandise import.
83) When a U.S. citizen flies Japan Airlines, the airline acts as a service exporter for Japan.
84) A joint venture is an example of a portfolio investment.
85) The ownership of foreign bonds is an example of a portfolio investment.
86) The terms multinational corporation and multinational company are frequently used synonyms for
strategic alliances.
87) Geographical barriers typically affect distribution channels within countries, but they rarely affect
distribution channels between countries.
88) Managers need to understand not only the laws of countries where they operate, but also how those
laws are enforced.
89) A company with limited resources is more likely to achieve national distribution within a small
country than within a large country.
90) The fact that a company is the market leader in one country is no guarantee that it will be the leader
in another country.
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91) The view that regionalization, rather than globalization, will prevail in the future is largely based on
the use of common languages among countries in a region.
92) Why should domestic managers have an understanding of globalization and international business?
What are the current views regarding the future of globalization?
93) What are three factors that have led to the increased growth in international business in recent
decades? Which do you think has been most important and why?
94) In a short essay, discuss why governments have been liberalizing cross-border movements of goods,
services, and resources.
95) What is international business? What are the primary reasons that companies engage in international
business?
96) What are the differences between merchandise and service imports and exports? Provide examples
to illustrate your answer.
97) What is globalization? What modes of international business are used by firms that want to
globalize? Briefly describe each method.
98) What is a multinational enterprise (MNE)? How do physical and social factors affect how an MNE
functions in a foreign country?
99) What is foreign direct investment? What social factors in the external environment might affect
FDI?
100) In a short essay, identify and explain three competitive factors that influence international
businesses.