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Student name:__________
TRUE/FALSE – Write ‘T’ if the statement is true and ‘F’ if the statement is false.
1) All managers need to have a basic knowledge of international business.
⊚ true
⊚ false
2) Only a company that has foreign operations needs to be aware of what is occurring
globally in its markets and in its industry.
⊚ true
⊚ false
3) The operations of a company outside its home or domestic market are known as foreign
business.
⊚ true
⊚ false
4) An international company (IC) is a company headquartered in another nation.
⊚ true
⊚ false
5) International business differs from domestic business in that a firm operating across
borders must deal with the forces of three kinds of environments—domestic, foreign, and
international.
⊚ true
⊚ false
6) As used in the text, the term environment means all the forces influencing the life and
development of the firm.
⊚ true
⊚ false
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7) External forces are commonly called uncontrollable forces, which are the external
forces that management has no direct control over, although it can exert influence.
⊚ true
⊚ false
8) Lobbyists who advocate for new laws that will affect the production standards of a
business are an example of an internal force.
⊚ true
⊚ false
9) The domestic environment includes all the controllable forces originating in the home
country that surround and influence the life and development of the firm.
⊚ true
⊚ false
10) The international environment refers to all the uncontrollable forces originating outside
the home country that surround and influence the firm.
⊚ true
⊚ false
11) Those who work in the international environment find that decision making is more
complex than it is in a purely domestic environment.
⊚ true
⊚ false
12) When a manager unconsciously imparts his or her own cultural values on a situation
without taking into account the possibility that the culture might vary in a foreign environment,
that manager is exhibiting a self-reference criterion.
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⊚ true
⊚ false
13) Britain was the world’s leading manufacturing country for about 1,800 years, until it was
replaced by the United States in the 1800s.
⊚ true
⊚ false
14) The plague known as the Black Death moved west and affected more people as the
international trading system expanded.
⊚ true
⊚ false
15) The 17th and 18th centuries have frequently been termed the age of industrialism
because this was the period when industrialization was advanced to the masses.
⊚ true
⊚ false
16) Rapid urbanization of populations combined with industrialization in the emerging
markets is quickly shifting the world’s economic center of gravity from Europe and the Americas
back to Asia.
⊚ true
⊚ false
17) Transnational corporations consist of several entities each of which has its own
independent strategy and policies.
⊚ true
⊚ false
18) The five major drivers of international business include political, sociocultural,
technological, market, and competitive drivers.
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⊚ true
⊚ false
19) The advent of globalization has had minimal effect on labor standards around the world.
⊚ true
⊚ false
20) Opponents of free trade point out that globalization has contributed to a decline in
environmental and health conditions.
⊚ true
⊚ false
MULTIPLE CHOICE – Choose the one alternative that best completes the statement or
answers the question.
21) Big Tire Bikes Inc. is headquartered in Maryland and does business within the United
States, as well as within many countries in Europe and South America. This company is an
example of a(n)
A) domestic corporation.
B) foreign subsidy.
C) international affiliate.
D) international business.
22) Why would companies that don’t have any foreign operations still need to acquire a
global perspective?
A) This will help the company provide more efficient domestic services.
B) This would help the companies be more aware of new foreign competitors.
C) This would help companies manufacture products more efficiently.
D) This will help the company create more job opportunities.
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23) Jetson Manufacturing has manufacturing operations in the United States, Germany,
Indonesia, and Brazil. Jetson Manufacturing is an example of a(n)
A) state-owned corporation.
B) distribution center.
C) international affiliate.
D) international company.
24) The increased internationalization of business requires ________ to have a basic
knowledge of international business.
A) all managers
B) managers of multinationals
C) managers of transnationals
D) managers of purely domestic operations
25) An international business is defined as a(n)
A) business whose activities involve crossing national borders.
B) organization with multicountry affiliates.
C) organization that attempts to standardize operations worldwide.
D) organization engaged in domestic trade.
26) Foreign business denotes
A) a business with operations in multiple nations.
B) business conducted within a foreign country.
C) an organization with multicountry affiliates.
D) an organization that attempts to standardize operations worldwide.
27) The construction industry has joined the ranks of other industries and now carries out
business across national borders. In other words, the construction industry has become a(n)
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A) foreign-owned company.
B) domestic affiliate.
C) international affiliate.
D) international business.
28) International business differs from domestic business in that a firm operating across
borders must deal with the forces associated with which three kinds of environments?
A) geographic, political, economic
B) foreign, domestic, international
C) initial, secondary, primary
D) multicultural, ethnocentric, stereotypical
29) Environment as used in the textbook involves the forces surrounding and influencing the
life and development of the firm and is classified as
A) primary and secondary.
B) controllable and uncontrollable.
C) domestic and foreign.
D) representative and democratic.
30) Hamlin Millworks is frustrated with the lobbyists who are currently trying to influence
Congress to raise taxes for all corporations in the wood products industry. In the environment of
Hamlin Millworks, these lobbyists are an example of
A) a foreign environment.
B) controllable forces.
C) a domestic environment.
D) uncontrollable forces.
31) What is an example of an internal force that can affect a company’s environment?
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A) economic downturn
B) availability of natural resources
C) international competitors
D) human resources
32) What is an example of an external force that can affect a company’s environment?
A) The marketing department decides that online advertising will work best for a new
product introduction.
B) The manufacturing plant purchases new equipment to automate a process.
C) The newly-elected governor decides to raise property taxes.
D) A human resource professional meets with staff to discuss hiring temporary help.
33) Gabriel Industries is located near a port city which allows it to ship products easily
overseas to its international customers. The geographic location of the company is an example of
a(n)
A) sociocultural commodity.
B) labor standard.
C) external force.
D) internal force.
34) What is an example of an external force that represents financial factors affecting a
business?
A) consumer opinion
B) geographic location
C) Interest rates
D) domestic laws
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35) Brennan Audio Inc. is struggling in the industry because it doesn’t have the staff with the
right skills for the job. Which category of external forces does this represent?
A) labor
B) legal
C) physical
D) technological
36) When gross national income rates drop significantly, it affects a company’s environment.
Which type of external force does this represent?
A) technological
B) legal
C) physical
D) economic
37) The forces over which the management does have some command are called
A) domestic.
B) external.
C) foreign.
D) internal.
38) The domestic environment is composed of all the uncontrollable forces originating in the
________ that surround and influence the life and development of the firm.
A) international arena
B) host nation
C) home country
D) foreign country
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39) Which of the environments associated with a company refers to the uncontrollable forces
originating outside the home country?
A) domestic
B) foreign
C) international
D) national
40) The forces in the foreign environment differ from the domestic environment in that they
originate
A) concurrently in the home and host country.
B) in the firm’s home country.
C) in only the host country.
D) outside the firm’s home country.
41) Foreign environmental forces often operate differently than domestic environmental
forces because
A) they typically carry the same value as domestic forces.
B) they are easier to assess than domestic forces.
C) the two forces do not affect each other.
D) the forces are interrelated.
42) The kinds of forces in the foreign environment are ________ those in the domestic
environment except that they occur in foreign nations.
A) different from
B) the same as
C) less demanding than
D) more stringent than
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43) The international environment consists of which group of interactions?
A) The domestic environmental forces and global environmental forces.
B) The foreign uncontrollable forces and the domestic uncontrollable forces.
C) The domestic environmental forces and the foreign environmental forces, as well as
the foreign environmental forces of two countries when an affiliate in one country does business
in another country.
D) The domestic environmental forces and the foreign environmental forces, as well as
the foreign environmental forces of all other countries.
44) Decision making in the international environment is considered ________ it is in a purely
domestic environment.
A) less complex than
B) less demanding than
C) more complex than
D) exactly the same as
45) According to the text, personnel working in a foreign subsidiary are working in the
international environment
A) if they work and live in the foreign subsidiary’s country.
B) if they are responsible for the subsidiary’s exports.
C) if they are responsible for the management of the foreign subsidiary.
D) if they are responsible for manufacturing activities within the foreign subsidiary.
46) Kendall was recently assigned to a management role in his company’s overseas operation.
He has been taken off guard several times when his employees responded negatively because
they said he didn’t take their culture into consideration when he made decisions. His employees
are referring to a
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A) self-reference criterion.
B) production orientation.
C) self-fulfilling prophecy.
D) marketing orientation.
47) Unconscious reference to one’s own cultural values when judging behavioral actions of
others in a new and different environment is called the self-reference
A) culture.
B) values.
C) criterion.
D) customs.
48) An international manager has three choices when deciding how to employ a technique
used in domestic operations to an international operation: transfer it intact, not use it, or
A) provide it to the competition.
B) adapt it to customization.
C) produce it in mass quantities.
D) adapt it to local conditions.
49) Historically, international business as a business practice is considered
A) relatively new.
B) to have existed before the Roman Empire.
C) to have begun in China.
D) a result of the rise of the Ottoman Empire.
50) International business really began
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A) with the East India Company chartered in 1600.
B) when Singer Sewing Machine put up a factory in Scotland in 1868.
C) when Phoenician and Greek merchants sent representatives abroad to sell goods.
D) when Colt Fire Arms set up a plant in England.
51) What company was the first to issue stock and is often identified as the world’s first
multinational corporation?
A) Dutch East India Company
B) Ford Motor Company
C) Ottoman Empire
D) Singer Sewing Machine
52) ________ was the world’s leading manufacturing country for about 1,800 years, until it
was replaced by Britain in about 1840.
A) The United States
B) Germany
C) India
D) China
53) The rise of the Ottoman Empire before 1300 influenced trade as it
A) eliminated trade between Europe and Asia.
B) reduced the cost of Asian trade for Europeans.
C) reduced the cost of European trade for Asians.
D) promoted a search for sea routes from Europe to Asia.
54) The 17th and 18th centuries have frequently been termed the “Age of Mercantilism”
because
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A) the merchant class was created during this time.
B) the Americas were discovered.
C) individual states were able to support themselves as more merchants were
established.
D) national power depended on the sponsorship and control of merchant capital.
55) Rapid urbanization of populations combined with industrialization in the emerging
markets is quickly shifting the world’s economic center of gravity from
A) the United States to South America.
B) the Americas and Europe to Asia.
C) Europe and Asia to Africa.
D) China to India.
56) Estimates show there are ________ transnational corporations with hundreds of
thousands of foreign affiliates.
A) about 5,000
B) fewer than 12,000
C) more than 100,000
D) nearly one million
57) State-owned transnationals currently account for ________ of all transnational
corporations.
A) almost 15 percent
B) nearly 100 percent
C) about 50 percent
D) less than 1 percent
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58) Due to the expanding importance of foreign-owned firms in local economies, host
governments have made their policies toward these companies
A) more strict.
B) more liberal.
C) extremely conservative.
D) inflexible.
59) When nations and corporations were ranked by GNI and total sales, respectively, for
2016, how many had GNI greater than the total annual sales of Walmart Stores?
A) 73
B) 32
C) 24
D) 59
60) Foreign subsidiaries must obey the local laws. If they don’t, they could be subject to
A) legal action by the United Nations.
B) legal action by the country of the parent company.
C) seizure by the host government.
D) reciprocal behavior by competitor companies.
61) Harrison Manufacturing, based in Toledo, recently purchased a new manufacturing
facility and production equipment in Germany that it will use to produce component parts. This
purchase is an example of
A) intrastate commerce.
B) economies of scale.
C) importing and exporting.
D) foreign direct investment.
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62) The total level of outward FDI worldwide increased about ________ between 1990 and
2018.
A) threefold
B) fivefold
C) ninefold
D) fourteenfold
63) ________ refers to the transportation of any domestic good or service to a destination
outside a country or region.
A) Importing
B) Foreign direct investment
C) Exporting
D) International business
64) ________ refers to the transportation of any domestic good or service to a destination
inside a country or region, from a foreign origination point.
A) Importing
B) Investing
C) Exporting
D) Divesting
65) The level of merchandise exports worldwide were ________ larger in 2017 than they
were in 1980.
A) four times
B) nearly six times
C) two times
D) nine times
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66) Compared to 1980, service exports in 2017 can best be described as
A) decreasing due to more international corporations.
B) struggling to flourish based on government restrictions.
C) lower than they were in 1980.
D) more than thirteen times larger.
67) What is one of the five major drivers of globalization?
A) political
B) social
C) cultural
D) economic
68) What is identified in the text as being one of the five major drivers of globalization?
A) monetary
B) transportation
C) cultural
D) market
69) Honest Yogurt Company of Denver, Colorado, was relieved when trade barriers on dairy
products were lifted in Europe and the company could sell its products there. Which type of
driver was affecting the company’s ability to do business in Europe?
A) political
B) social
C) technological
D) market
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70) An example of political drivers of globalization would be
A) privatization of industries.
B) increased communication created by advanced communication technologies.
C) globalizing product lines to decrease costs of production.
D) the introduction of competitor firms.
71) The trend toward unification and socialization of the global community is illustrated by
which of the following?
A) progressive increases in barriers to foreign investment by most governments
B) preferential trading arrangements that group several nations into a single market
C) increased public ownership of much of the industry in formerly communist nations
D) expanded barriers to trade by most governments
72) Jensen Control Corp. now uses videoconferencing which helps the sales team
demonstrate products to prospective international customers while eliminating expensive travel
costs. Which of the five drivers of international business does this represent?
A) political
B) market
C) technological
D) competitive
73) When a government sees that local industry is threatened by imports, it can threaten to
erect import barriers to stop or reduce these imports. This is an example of a ________ driver of
international business activity.
A) technological
B) market
C) political
D) cost
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74) Relatively inexpensive international communication enables firms to “body shop,” that is,
transmit computer-oriented tasks worldwide to a cheap but skilled labor force. This is an
example of a ________ driver of international business activity.
A) political technological
B) market
C) technological
D) cost
75) Sanjay is the director of operations for Fresh Farm Produce Corp. and is now able to sell
his product to the international market thanks to a new computer system that is specifically
designed for businesses in the fresh food industry. Which driver helped Sanjay’s company
internationalize?
A) technological
B) cost
C) market
D) political
76) When a supplier to an original equipment manufacturer (e.g., a battery manufacturer
supplying an automobile producer) follows its major customer to a new country, it is an example
of a ________ driver of international business activity.
A) political technological
B) market
C) technological
D) cost
77) Harman Advertising Agency, based in Toronto, decided to establish an operation in
France because it was concerned that its competition would try to take over their clients in
Europe, which represents 65 percent of their business. Which type of driver is responsible for
this decision to go international?
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A) political
B) technological
C) cost
D) market
78) A company that decides to go abroad as a way to increase economies of scale is basing
this decision on which driver of international business activity?
A) cost
B) political
C) competitive
D) market
79) A business that decides to increase sales by entering the international market may do so
in order to create economy of scale. This would be an example of which driver of
internationalization?
A) political
B) market
C) competitive
D) cost
80) What is an example of the competitive driver of international business activity?
A) a manufacturing company that lobbies its home country government for protection
against imports
B) a company that expands its local manufacturing facility in a foreign country in order
to qualify for tax rebates
C) a company that searches for markets with rising gross domestic product per capita
and population growth
D) a company that enters a foreign market to distract companies with similar products or
services
81) The automobile manufacturer decided it had to enter the European market because if it
didn’t, then all of the other car companies that were already there would get the business. Which
driver is indicating internationalization for the manufacturer?
A) political
B) market
C) cost
D) competitive
82) The tendency toward an international integration of goods, technology, information,
labor, and capital, or the process of making this integration happen, is called
A) internationalization.
B) international business.
C) economic globalization.
D) multinationalization.
83) Who is credited with being the first person to coin the term “globalization?”
A) John Keynes
B) Theodore Levitt
C) Sigmund Freud
D) James Wolfensohn
84) The term globalization was first coined in a Harvard Business Review article in which
the author maintained that