1) An exception to the PLC theory in terms of production location is often a product
with very rapid change in innovation.
2) Most U.S. companies have moved from a total quality management (TQM) approach
to an acceptable quality level (AQL) approach.
3) The U.S. dollar is important as a vehicle for foreign-exchange transactions between
two countries other than the United States.
4) The success of a global manufacturing strategy depends on compatibility,
configuration, coordination, and control.
5) According to the Ethical Trading Initiative, child labor cannot be used unless there
are no suitable alternatives for employees.
6) An American investing in a London-based company is an example of interest
arbitrage.
7) Neoclassical structures promote tightly connected networks both vertically and
horizontally to ensure that strategic requirements are fulfilled.
8) International marketing is unlike domestic marketing because the basic principles are
completely different.
9) Historically, companies searching their ranks for potential expatriates looked first for
individuals with the necessary language proficiency and then evaluated their technical
competence.
10) Although most foreign-exchange activity takes place through big money center
banks, the use of electronic trading has allowed even regional banks to deal directly in
foreign-exchange markets.
11) An agreement for the use of a trademark and assistance with business operations is
known as a cross-licensing agreement.
12) A comprehensive supply chain strategy should include good inventory management.
13) Which of the following is an example of an exclusive license agreement?
A) Three licensees have worldwide rights to sell the product worldwide for three years,
during which time no other companies can use the asset
B) The licensee is currently the only company using the intangible property, but the
licensor has rights to add other licensees
C) One licensee gets rights for the north island of New Zealand, a second licensee gets
rights for the south island of New Zealand, and the licensor agrees to add no new
licensees to New Zealand for the next five years
D) The licensee and licensor use the property in the same market
14) In the opening case on the Java Lounge in Saudi Arabia, people in the port city of
Jeddah were less culturally conservative than people in the interior of the country. The
most likely reason for this is that ________.
A) people in the port cities have more contact with foreigners
B) the coastal area has to trade with countries using different religious holidays
C) the coastal area has a culture with a higher uncertainty avoidance
D) the coastal area is secular, whereas the interior of Saudi Arabia has a state religion
15) Which stakeholder group primarily wants additional sales and increased
productivity?
A) customers
B) shareholders
C) society at large
D) government
16) Select the correct order, going from low to high total impact on an MNE, of the
following types of political risk: (1) procedural political risks, (2) systemic political
risks, (3) distributive political risks, (4) catastrophic political risks.
A) 3, 2, 1, 4
B) 1, 2, 3, 4
C) 2, 3, 4, 1
D) 2, 1, 3, 4
17) Which of the following best explains why the experience of countries such as
Taiwan and South Korea are used to support export-led development policies?
A) their low inflation
B) their increased FDI
C) their industry diversity
D) their rapid economic growth
18) The industry organization (IO) paradigm reports that, on average, the best predictor
of firm strategy is the ________.
A) company’s stockpile of assets, skills, and capabilities
B) aggressiveness of a company’s marketing objectives
C) link between a company’s products and processes
D) structure of the industry in which it competes
19) All of the following are part of the global financial system except the ________.
A) New York Stock Exchange
B) World Trade Organization
C) International Monetary Fund
D) Bank for International Settlements
20) Under NAFTA, rules of origin ensure that ________.
A) only goods produced mostly within the region are eligible for liberal tariff
conditions
B) only American products are shipped to Canada and Mexico duty-free
C) all members import products only from member nations
D) all members have the same external and internal tariffs
21) Institutional development of services by business and government has aided the
expansion of international business by ________
A) providing a universally agreed upon language for conducting international
transactions
B) removing immigration restrictions so that global firms can move personnel easily
C) developing means to ease the flow of goods among countries
D) spurring competition among domestic producers
22) Which of the following is an example of extraterritoriality?
A) a U.S. subsidiary operating in China that is forced to follow some U.S. laws, even
though China has no comparable laws
B) a U.S. sweatshop operating in Thailand that does not follow U.S. labor laws but
allows children to work 60 hours a week
C) an MNE manager who, after working in the host country, tries to implement foreign
practices in the home-country office
D) a British subsidiary operating in Indonesia that maintains the same health and safety
standards for its foreign factories that are required in Great Britain, even though the
British government does not require it to use those standards
23) Coordination refers to ________.
A) linking various value activities within an organization
B) identifying the span of control within an organization
C) portioning the performance of specific tasks
D) assigning tasks to qualified managers
24) Ted, a manager at Global Manufacturing, is analyzing trends in economic variables
to predict future exchange rates that might affect the MNE’s international operations.
Which of the following is Ted most likely doing?
A) fundamental forecasting
B) technical forecasting
C) resource forecasting
D) economic forecasting
25) Medco Pharmaceuticals charges a market price for heart medication to distributors
in Italy and a discounted price for the same medication to distributors in Bangladesh.
Medco is most likely using ________.
A) discounted pricing
B) skimmed pricing
C) penetrated pricing
D) tiered pricing
26) The degree to which a firm funds the growth of a business by debt is known as
________.
A) leveraging
B) equity financing
C) hedging
D) after-tax cost of debt
27) All of the following would most likely improve the successful repatriation of
expatriates EXCEPT ________.
A) encouraging repatriated workers to take sabbaticals upon return
B) developing mentoring programs to smooth transitions
C) integrating foreign assignments into career plans
D) providing repatriated workers with desirable jobs
28) Which of the following is NOT an advantage of ADRs to U.S. shareholders?
A) Transfer of ownership is done in the U.S. in accordance with U.S. laws
B) In the event of the death of the shareholder, the estate does not go through a foreign
court
C) Settlement for trading is generally faster in the United States
D) All of the above are advantages of ADRs
29) 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
30) In 2010, what was the top remittance-receiving country in the world?
A) Brazil
B) Mexico
C) India
D) China
31) The principle that an individual has the freedom to pursue his or her interests is
called ________.
A) socialism
B) totalitarianism
C) individualism
D) collectivism
32) Which of the following is a difference between export management companies
(EMCs) and export trading companies (ETCs)?
A) ETCs deal with both exports and imports, while EMCs deal only with exports
B) ETCs are subject to antitrust laws, while EMCs are not
C) ETCs typically carry inventory, while EMCs typically do not
D) ETCs operate more on the basis of demand, while EMCs operate more on the basis
of supply
33) Why are the concepts of dependability and quality important when developing a
global manufacturing strategy?
34) What are the four main ways that financial statements differ from country to
country? What role has the IASB played in establishing global accounting standards?
35) What are the major types of published data that managers can use to compare
countries? Describe the tools available to managers for making country comparisons.
36) What is gross national income? How is it calculated? Illustrate your answer with a
specific example.
37) There are two ways companies can invest in a foreign country. They can either
acquire an interest in an existing operation or construct new facilities. In a short essay,
describe the advantages and disadvantages of each alternative.