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1. In the context of economic interdependence, which of the following is a concern of the critics of globalization?
a.
The nonregulation of the quality of merchandise produced in foreign markets
b.
The extremely low wage rates paid by some international firms for labor in developing countries
c.
The domination of local businesses over international firms
d.
The reduction in economies of scale as a result of international trade
ANSWER:
b
2. In the context of economic interdependence, identify a true statement about globalization.
a.
Companies may decide to expand globally as a strategy to reduce costs by finding cheaper labor in developing
countries.
b.
France, Germany, and Switzerland top the list for hosting the most multinational enterprises.
c.
Most multinational enterprises have ensured that their foreign factories adhere to high human resource
standards.
d.
Countries such as Cuba and Zimbabwe offer continuity and consistency for global firms because of the
countries’ stable legal and political systems.
ANSWER:
a
3. Identify a true statement regarding globalization.
a.
Critics of globalization cite the extremely high wage rates paid by some international firms.
b.
Countries with repressed social development are attractive to global firms.
c.
Well-established legal systems offer continuity and consistency for global firms.
d.
One of the major criticisms of globalization is the reduction in economies of scale.
ANSWER:
c
4. According to critics, which of the following alliances, formed in 1994, has encouraged employers in the United States
to relocate jobs to Mexico where pay is much lower than in the United States?
a.
The North American Free Trade Agreement
b.
The Transatlantic Trade and Investment Partnership
c.
The Trans-Pacific Partnership
d.
The Organisation for Economic Co-operation and Development
ANSWER:
a
5. Which of the following statements is true of population demographics around the world?
a.
Women constitute 70 percent of international migrants.
b.
The overall population of people under the age of 25 is rapidly growing.
c.
The available workforce is expanding.
d.
People over the age of 65 are becoming a larger share of the world population.
ANSWER:
d
6. Jazz is a high-end handbag manufacturing firm based in Italy. It has achieved peak sales and profits in the home-
country market. Jazz now wants to cater to the different fashion sensibilities of women across the world. The firm sets up
facilities for production, marketing, and sales in the United States, India, and Japan. Which of the following is most likely
the reason for Jazz’s global expansion?
a.
Obtaining investment capital for increased production
b.
Diversifying its customer base
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c.
Accessing better raw materials
d.
Accessing a deeper, more diverse talent pool of skilled managers
ANSWER:
b
7. Cherry is a smartphone manufacturing company based in India. The sales of Cherry phones are declining because of
intense competition from similar products in the market. Cherry decides to pursue global opportunities by opening
marketing and sales offices in Indonesia, Malaysia, and the Philippines. With this move, the company hopes to reduce
investment risk and achieve stable sales. Which of the following is most likely the reason for Cherry’s decision to pursue
global expansion?
a.
Reducing dependence on current markets
b.
Accessing a deeper, more diverse talent pool of skilled managers
c.
Obtaining investment capital for increased production
d.
Decreasing efficiencies/economies of scale
ANSWER:
a
8. Rubizon is a sports equipment manufacturing company in France. It specializes in skiing and ice-skating shoes and
equipment. Each year, the company suffers a decline in demand during the summer months. As a result, Rubizon has
decided to expand in international markets such as Canada, Finland, and Russia to ensure robust sales throughout the year.
Which of the following is the most likely reason for Rubizon’s decision to expand globally?
a.
Accessing a deeper, more diverse talent pool of skilled managers
b.
Accessing cheaper and better raw material suppliers
c.
Obtaining investment capital for increased production
d.
Countering seasonal fluctuations in sales
ANSWER:
d
9. FruYa is a company in the United States that manufactures and sells fruit jams and preserves. FruYa’s best-selling
product is its pineapple preserve, and the company has set up a processing and bottling plant in Brazil, which is one of the
world’s top pineapple producing countries. Which of the following is the most likely reason for FruYa’s global expansion?
a.
Countering seasonal fluctuations in sales
b.
Obtaining investment capital for increased production
c.
Accessing better and cheaper raw material supplies
d.
Accessing a deeper, more diverse talent pool of skilled managers
ANSWER:
c
10. Which of the following is true of the demographic trends in many developed nations around the world?
a.
People under the age of 25 are becoming a larger share of the population.
b.
The financial requirements to provide for older citizens are growing.
c.
The population of people over the age of 65 is declining.
d.
The available workforce is increasing, leading to mass unemployment.
ANSWER:
b
11. Which of the following international orientations places a strong emphasis on the home-country practices, policies,
and culture?
a.
The ethnocentric orientation
b.
The geocentric orientation
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c.
The regiocentric orientation
d.
The polycentric orientation
ANSWER:
a
12. In which of the following international orientations do home-country approaches dominate and operations in other
countries are typically copied from the home country?
a.
The polycentric orientation
b.
The regiocentric orientation
c.
The ethnocentric orientation
d.
The geocentric orientation
ANSWER:
c
13. Mettle Inc. is a multinational toy manufacturing company based in the United States. It has factories and offices in
many countries around the world. In all its foreign offices, Mettle Inc. has applied the practices, policies, and culture
followed in its U.S. office. As a result, Mettle Inc.’s operations are standardized across all countries. Which of the
following international orientations has Mettle Inc. adopted?
a.
The regiocentric approach
b.
The ethnocentric approach
c.
The geocentric approach
d.
The polycentric approach
ANSWER:
b
14. The Republic Corporation is an industrial machinery manufacturing company based in India. It has a production
facility in China. The Chinese facility follows the operations and manufacturing processes of the home-country office.
The HR policies and practices are also copied from the home country. Which of the following international orientations
has the Republic Corporation adopted?
a.
The regiocentric approach
b.
The geocentric approach
c.
The ethnocentric approach
d.
The polycentric approach
ANSWER:
c
15. Which of the following international orientations adopted by multinational enterprises places a strong emphasis on
each country as a unique environment?
a.
The geocentric orientation
b.
The regiocentric orientation
c.
The polycentric orientation
d.
The ethnocentric orientation
ANSWER:
c
16. In the context of the international orientations adopted by multinational enterprises, which of the following statements
is true of the polycentric orientation?
a.
The idea of this orientation is to create a global mind-set that adopts ideas without regard to their origin.
b.
This orientation considers countries as aggregates within a region.
c.
Home-country approaches typically dominate the operations in other countries.
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d.
Practices, culture, and policies rely heavily on what is normal in each country.
ANSWER:
d
17. Identify a true statement about a multinational organization that adopts the polycentric orientation.
a.
The organization emphasizes utilizing the best ideas and practices from anywhere in the world.
b.
Rather than emphasizing each individual nation’s uniqueness, countries are considered as aggregates within a
region.
c.
Home-country approaches dominate, and operations in other countries are typically copied from the home
country.
d.
The organization operates in a local fashion with practices varying widely among operations in different
countries.
ANSWER:
d
18. Onesty Inc. is a manufacturer of handmade paper greeting cards. It has production and sales offices in the United
States, the United Kingdom, Japan, and India. Onesty manufactures and sells greeting cards according to the traditions
and festivals in each of these countries. Its policies and practices too vary widely in these countries. Which of the
following international orientations has Onesty Inc. adopted?
a.
The ethnocentric orientation
b.
The geocentric orientation
c.
The regiocentric orientation
d.
The polycentric orientation
ANSWER:
d
19. Asaii is a transnational health food company with operations in many countries around the world. Asaii places a strong
emphasis on each country’s environment by procuring unique natural products. The yield from each region is processed
according to proven local practices. Asaii’s policies rely heavily on the traditions and norms of each country. Which of the
following international orientations has Asaii adopted?
a.
The polycentric orientation
b.
The geocentric orientation
c.
The regiocentric orientation
d.
The ethnocentric orientation
ANSWER:
a
20. Which of the following statements is true of a transnational company with a regiocentric approach?
a.
The company has a global mind-set that adopts ideas without regard to their region of origin.
b.
The company’s practices vary widely among operations in different countries.
c.
The company considers countries as aggregates within a region.
d.
The company operates in a standardized fashion across all countries.
ANSWER:
c
21. In the context of international orientations adopted by transnational companies, identify a true statement about the
geocentric orientation.
a.
It relies heavily on what is normal in each country.
b.
It places a strong emphasis on home-country practices, policies, and culture.
c.
It is a blending of the ethnocentric and regiocentric orientations.
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d.
It emphasizes utilizing the best ideas and practices from anywhere in the world.
ANSWER:
d
22. Which of the following statements is true of a multinational enterprise with a geocentric approach?
a.
The enterprise has a truly global mind-set that adopts ideas without regard to their origin.
b.
The enterprise places a strong emphasis on the practices, policies, and culture of the home country.
c.
The enterprise operates in a local fashion with practices varying among different countries.
d.
The enterprise operates in a standardized fashion across all countries.
ANSWER:
a
23. Zibb is a transnational electronics company based in Germany. It has factories in China, Mexico, and India. The
company aims to streamline its manufacturing operations for maximum efficiency and profit. To this end, Zibb adopts the
best manufacturing and packaging practices from around the world. This also leads to the creation of a global mind-set
that adopts ideas without regard to their origin. Which of the following international orientations has Zibb adopted?
a.
The polycentric orientation
b.
The regiocentric orientation
c.
The geocentric orientation
d.
The ethnocentric orientation
ANSWER:
c
24. Foce is a premium jewelry company based in France. It has a gemstone mining and jewelry-making facility in South
Africa. The design and execution team in South Africa adopts the best trends in jewelry fashion from all over the world,
irrespective of their origin. The facility also utilizes the most effective advertising methods used the world over. Which of
the following international orientations does Foce employ?
a.
The ethnocentric orientation
b.
The geocentric orientation
c.
The regiocentric orientation
d.
The polycentric orientation
ANSWER:
b
25. Which of the following is a difference between the ethnocentric orientation and the polycentric orientation?
a.
The ethnocentric orientation requires the customization of practices in each country, whereas the polycentric
orientation requires the standardization of practices across all countries.
b.
The ethnocentric orientation relies heavily on what is normal in each country, whereas the polycentric
orientation utilizes the best ideas from anywhere in the world.
c.
The ethnocentric orientation is truly global in its application, whereas the polycentric orientation is local in its
application.
d.
The ethnocentric orientation emphasizes the home-country policies, whereas the polycentric orientation
emphasizes each country’s unique environment.
ANSWER:
d
26. Which of the following is a difference between the geocentric orientation and the ethnocentric orientation?
a.
The geocentric orientation requires the standardization of practices across all countries, whereas the
ethnocentric approach requires the customization of practices in each country.
b.
The geocentric orientation emphasizes each country’s unique environment, whereas the ethnocentric
orientation considers countries as aggregates within a region.
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c.
The geocentric orientation emphasizes utilizing the best ideas and practices from anywhere in the world,
whereas the ethnocentric orientation emphasizes the home-country practices, policies, and culture.
d.
The geocentric orientation adopts a local mind-set, whereas the ethnocentric orientation is truly global in its
application.
ANSWER:
c
27. In the context of global business approaches, which of the following statements is true of non-equity business forms?
a.
They present more financial risk to companies than equity business forms.
b.
They demand little assistance from the headquarters HR staff.
c.
They include joint ventures, mergers and acquisitions, and direct investment.
d.
They offer businesses a high-cost entry into new, global markets.
ANSWER:
b
28. Identify a true statement about the non-equity approaches of entering the international market.
a.
They include joint ventures, mergers and acquisitions, and direct investment.
b.
They demand extensive assistance from the HR department of the home country.
c.
They present more financial risk to companies than equity approaches.
d.
They provide businesses a low-cost entry into new, global markets.
ANSWER:
d
29. Which of the following is a common first step in expanding globally by using non-equity business approaches?
a.
Creating a joint venture between two partners who share ownership and risk in the financial investment
b.
Acquiring a controlling ownership interest in a business in another country
c.
Merging two companies that offer similar products to create a new business entity
d.
Importing and exporting goods and services to customers outside of the home country
ANSWER:
d
30. Salties is a packaged food manufacturing company. It enters into a business arrangement with an overseas firm that
grants the firm the right to use Salties’s business model and brand to generate sales. In return, the overseas firm is required
to pay a fee to Salties. This scenario most likely exemplifies _____.
a.
franchising
b.
offshoring
c.
piggybacking
d.
outsourcing
ANSWER:
a
31. CottonOn is an apparel manufacturing company in Canada. It enters into a business arrangement with a firm in China.
This arrangement grants the Chinese firm the right to use CottonOn’s business model and brand to generate profits. In
return, the Chinese firm has to pay a fee to CottonOn. This scenario most likely exemplifies _____.
a.
offshoring
b.
franchising
c.
piggybacking
d.
outsourcing
ANSWER:
b
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32. SoleAce, a luxury shoe-making company, intends to expand its sales in another country. However, it wants to do so
with limited investment and risk. To this end, it partners with Comfies, an overseas premium socks manufacturing
company. SoleAce and Comfies sign an agreement that allows each firm to sell the products of the other firm. As a result,
both generate higher sales by promoting each other’s products. Which of the following business forms has SoleAce
adopted?
a.
Outsourcing
b.
Franchising
c.
Piggybacking
d.
Licensing
ANSWER:
c
33. TrueFoods, a packaged food manufacturing company, intends to expand its business in another country. However, it
wants to do so with limited investment and risk. To this end, it partners with an overseas condiments company. As a
result, both TrueFoods and the condiments company generate higher sales by promoting each other’s products. Which of
the following business forms does this scenario illustrate?
a.
Outsourcing
b.
Franchising
c.
Licensing
d.
Piggybacking
ANSWER:
d
34. Which of the following business forms is likely to present the greatest risk to an expanding firm in the context of both
financial and human investments?
a.
A licensing arrangement
b.
Franchising
c.
Piggybacking
d.
A joint venture
ANSWER:
d
35. Medici and Athena are companies that manufacture medical equipment. The two companies have partnered for a
unique project to create a specialized X-ray machine with the latest and the most expensive technology available. Medici
and Athena will share their knowledge and resources as well as ownership and risk in the investment. However, each
company will retain its own business identity. Which of the following business forms have Medici and Athena adopted for
the project?
a.
A joint venture
b.
A merger
c.
A licensing agreement
d.
Piggybacking
ANSWER:
a
36. Two locomotive manufacturing companies have become partners in a special project to build a final assembly plant
for their engines in China. The two companies will share ownership and risk in the investment. However, each company
will retain its original business identity. Which of the following business forms does this scenario exemplify?
a.
An acquisition
b.
A merger
c.
A licensing agreement
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d.
A joint venture
ANSWER:
d
37. Two small computer manufacturing companies, Zeus and Accent, combine their businesses together to create a larger,
new business entity with a new name and logo. Which of the following business forms does this scenario illustrate?
a.
An acquisition
b.
A merger
c.
A piggyback arrangement
d.
A joint venture
ANSWER:
b
38. Quality Cools, an ice cream company, bought Icee, a smaller ice cream company. The smaller company was folded
into Quality Cools’s business. Which of the following business forms does this scenario exemplify?
a.
An acquisition
b.
Piggybacking
c.
Franchising
d.
A joint venture
ANSWER:
a
39. A certain country in the Mediterranean region is known for its nurturing, cooperative culture. The people of this
country prefer cooperation over competition. In the context of the dimensions of country cultures developed by Dutch
scholar Geert Hofstede, this country is most likely to have _____.
a.
high scores on the power distance index dimension
b.
low scores on the masculinity versus femininity dimension
c.
high scores on the long-term orientation dimension
d.
low scores on the indulgence versus restraint dimension
ANSWER:
b
40. The people of an Asian country feel threatened by ambiguity and the future. As a result, they try to control behavior as
much as possible to reduce ambiguity. In the context of the dimensions of country cultures developed by Dutch scholar
Geert Hofstede, this country is most likely to have _____.
a.
high scores on the indulgence versus restraint dimension
b.
low scores on the power distance index dimension
c.
high scores on the uncertainty avoidance dimension
d.
low scores on the individualism versus collectivism dimension
ANSWER:
c
41. A tribe resides along the Amazon river. The people of this tribe are open with each other and pursue gratification of
their wants and desires freely. They place a strong emphasis on the future and do not believe in the regulation and
suppression of individual desires. In the context of the dimensions of country cultures developed by Dutch scholar Geert
Hofstede, this tribe is most likely to have _____.
a.
high scores on the indulgence versus restraint dimension
b.
low scores on the individualism versus collectivism dimension
c.
high scores on the masculinity versus femininity dimension
d.
low scores on the long-term orientation dimension
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ANSWER:
a
42. In the context of the dimensions of country cultures developed by Dutch scholar Geert Hofstede, a hierarchical society
is most likely to have high scores on _____.
a.
the power distance index dimension
b.
the individualism versus collectivism dimension
c.
the long-term orientation dimension
d.
the indulgence versus restraint dimension
ANSWER:
a
43. In the context of international assignments, which of the following actions by a multinational enterprise (MNE) clearly
conveys the message that the MNE is making a commitment to its host country?
a.
Assigning an expatriate to an international assignment
b.
Employing host-country nationals
c.
Employing third-country nationals
d.
Returning an expatriate to the home country
ANSWER:
b
44. Which of the following terms refers to a citizen of one country who is working in a second country for an organization
that is headquartered in a third country?
a.
A host-country national
b.
A second-country national
c.
A home-country national
d.
A third-country national
ANSWER:
d
45. In the context of compensation for an expatriate, which of the following statements is true of the home-country-
based approach?
a.
It can result in higher employer costs and more administrative complexity than other plans.
b.
It compensates the expatriate at the same level as workers from the host country.
c.
It aims to significantly elevate the standard of living the expatriate had in the home country.
d.
It makes sense when the cost of living is substantially lower in the host country than in the home country.
ANSWER:
a
46. In the context of compensation for an expatriate, which of the following statements is true of the host-country-based
approach?
a.
It aims to maintain the standard of living the expatriate had in the home country.
b.
It compensates the expatriate at the same level as workers from the host country.
c.
It can result in more administrative complexity than other plans.
d.
It can result in higher employer costs than other plans.
ANSWER:
b
47. In the context of compensation for international assignments, which of the following is a difference between the
home-country-based approach and the host-country-based approach?
a.
Unlike the home-country-based approach, the host-country-based approach involves calculating taxes and
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discretionary spending expenses based on those items’ costs in the home country.
b.
Unlike the host-country-based approach, the home-country-based approach compensates the expatriate at the
same level as workers from the host country.
c.
Unlike the host-country-based approach, the objective of the home-country-based approach is to maintain the
standard of living the expatriate had in the home country.
d.
Unlike the home-country-based approach, the host-country-based approach results in higher employer costs
and more administrative complexity.
ANSWER:
c
48. Which of the following statements is true of union management relations in the United States?
a.
Unions provide training programs that improve worker readiness and allow companies to hire a highly skilled
workforce.
b.
Unions typically focus on improving wages, benefits, job security, and working conditions.
c.
Unions focus exclusively on activism and integration with ruling governmental and political powers.
d.
Unions make agreements with the government and argue their cases before arbitration tribunals.
ANSWER:
b
49. Which of the following is a key difference between union management relations in the United States and union
management relations in other countries?
a.
Unlike other countries, national unions in the United States bargain with the government or with employer
groups.
b.
Unlike other countries, unions in the United States focus on activism and integration with ruling governmental
and political powers.
c.
Unlike other countries, unions in the United States provide training programs that improve worker readiness
and allow companies to hire a highly skilled workforce.
d.
Unlike other countries, collective bargaining contracts in the United States usually spell out compensation,
work rules, and the conditions of employment for several years.
ANSWER:
d
50. Identify a true statement about union management relations in the United States.
a.
In the United States, management and labor traditionally take the roles of competing adversaries who often
clash to reach agreement.
b.
In the United States, union agreements are made for only one year because of political and social instability.
c.
In the United States, labor unions typically provide training programs that improve worker readiness.
d.
In the United States, unions focus exclusively on activism and integration with ruling governmental and
political powers.
ANSWER:
a
51. The cognitive component of intercultural competence training is most likely to include:
a.
the Culture Assimilator method to modify individual behaviors.
b.
social skills training focusing on unclear situations to reduce uneasiness.
c.
a communication skills course focusing on nonverbal cues and empathy to enhance sensitivity.
d.
culture-specific training focusing on the history of a culture.
ANSWER:
d
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52. The emotional component of intercultural competence training is most likely to include _____.
a.
language courses
b.
coaching that clarifies prejudices
c.
training on cultural customs
d.
lessons on the history of a culture
ANSWER:
b
53. In the context of intercultural competence, the emotional component of training includes:
a.
The Culture Assimilator method
b.
Culture-specific training that includes traditions, history, and cultural customs
c.
Sensitivity training that includes active listening, verbal/nonverbal cues, and empathy
d.
A language course
ANSWER:
c
54. In the context of intercultural competence, behavioral training is most likely to include:
a.
the Culture Assimilator method.
b.
culture-specific training focusing on cultural customs.
c.
a communication skills course.
d.
a language course.
ANSWER:
a
55. In the context of global career concerns, which of the following statements is true of repatriates?
a.
They seldom need to reacclimate to home-country lifestyles, transportation, and cultural circumstances.
b.
They may feel a net decrease in total income, even if they receive promotions and pay increases.
c.
They often continue to receive special compensation packages even after their return from international
assignments.
d.
They must adjust to a lack of close working and reporting relationships with home-country staff after having
little flexibility or autonomy while living overseas.
ANSWER:
b
56. In the context of global career concerns, identify a true statement about repatriation.
a.
Repatriation efforts should focus on building organizational support to promote ethnocentrism.
b.
It requires organizations to offer higher pay and benefits to repatriates after their return than when they were
on overseas assignments.
c.
Repatriation efforts should include some focus on the individual employee’ needs and career aspirations.
d.
It requires repatriates to adjust to a lack of close working and reporting relationships with home-country staff
after having little flexibility or autonomy while living overseas.
ANSWER:
c
57. Michael is an employee of TechNew Corporation, a multinational enterprise based in the United States. He worked on
an overseas managerial assignment in Chile for five years. During this period, he enjoyed a high degree of flexibility and
autonomy. Michael is now set to return to the home-country office. Which of the following is most likely to happen in this
scenario?
a.
Michael will be offered a generous benefit package with a net increase in total income upon his return.
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b.
Michael will need to adjust to a lack of close working and reporting relationships with home-country staff
upon his return.
c.
Michael is likely to be offered an upper management position by the management to promote ethnocentrism.
d.
Michael is likely to wonder about how he will be accepted back into the organization and what job he will
have.
ANSWER:
d
58. The Organisation for Economic Cooperation and Development is a consortium of 45 democratic nations that aims to
foster sustainable international trade and economic development.
a.
True
b.
False
ANSWER:
False
59. Companies seeking globalization can review the guidelines developed by the Organisation for Economic Cooperation
and Development on operating internationally to become a multinational enterprise.
a.
True
b.
False
ANSWER:
True
60. Japan and Germany top the list for hosting the highest number of multinational enterprises.
a.
True
b.
False
ANSWER:
False
61. Critics of globalization cite the extremely high wage rates paid by some international firms.
a.
True
b.
False
ANSWER:
False
62. Countries with well-established and stable political and legal systems are attractive to firms seeking globalization as
they offer continuity and consistency for global firms.
a.
True
b.
False
ANSWER:
True
63. Nations functioning under turbulent and varied legal and political systems are unattractive to global organizations.
a.
True
b.
False
ANSWER:
True
64. An organization that adopts a geocentric orientation places an emphasis on utilizing the best ideas and practices from
anywhere in the world.
a.
True
b.
False
ANSWER:
True
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65. The North American Free Trade Agreement promotes free trade between the United States, Cuba, and Mexico.
a.
True
b.
False
ANSWER:
False
66. In the context of regional alliances, within the Schengen Area, passport controls have been eliminated, and citizens of
the Schengen nations can easily move between the countries.
a.
True
b.
False
ANSWER:
True
67. The Transatlantic Trade and Investment Partnership is the largest economic entity in the world and accounts for nearly
one-fourth of the world’s economy.
a.
True
b.
False
ANSWER:
False
68. Migration of working age individuals from less-developed countries to more-developed countries can bolster
economic growth and progress.
a.
True
b.
False
ANSWER:
True
69. Reducing dependence on current markets by spreading risk is one of the reasons for a company to seek global
expansion.
a.
True
b.
False
ANSWER:
True
70. Companies seek global expansion to decrease their economies of scale.
a.
True
b.
False
ANSWER:
False
71. Foreign direct investment occurs when a company partners with another firm that sells complementary products, and
both generate higher sales by promoting each other’s products.
a.
True
b.
False
ANSWER:
False
72. The term power distance index refers to the extent to which people in a society prefer to act as individuals or as
members of a group.
a.
True
b.
False
ANSWER:
False
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73. The World Federation of People Management Associations is a professional association for HR professionals who
oversee HR practices in multiple countries.
a.
True
b.
False
ANSWER:
True
74. In the context of global employees, a third-country national is an employee who is working in his or her home country
for a firm that is headquartered in a different country.
a.
True
b.
False
ANSWER:
False
75. For an expatriate, the ability to communicate in the host-country language, both verbally and in writing, is one of the
key competencies for success.
a.
True
b.
False
ANSWER:
True
76. In the context of key competencies for successful global employees, the preferences and attitudes of spouses and other
family members can influence the success of expatriate assignments.
a.
True
b.
False
ANSWER:
True
77. Organizations that value consistency and hope to encourage employee mobility may favor a more customized
approach to compensation, while those that wish to encourage local adaptation will likely choose a more standardized
approach.
a.
True
b.
False
ANSWER:
False
78. Union-led agreements and political support in Germany have encouraged employee wages in that country to steadily
increase.
a.
True
b.
False
ANSWER:
True
79. Employers in the United States are required by law to provide paid holidays, vacation, and sick leave to all employees.
a.
True
b.
False
ANSWER:
False
80. In the context of compensation for international assignments, Australia, Sweden, and France offer the best-designed
benefit programs to employees.
a.
True
b.
False
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ANSWER:
True
81. Countries such as Great Britain, Chile, South Korea, Thailand, Brazil, and Canada have universal health care
programs.
a.
True
b.
False
ANSWER:
True
82. The percentage of union membership is the highest in continental Europe, followed by the Scandinavian countries.
a.
True
b.
False
ANSWER:
False
83. Codetermination refers to the shared mind-set of a group of people that distinguishes them from others in the world.
a.
True
b.
False
ANSWER:
False
84. Define a multinational enterprise.
ANSWER:
A multinational enterprise (MNE), sometimes called a transnational enterprise, is an organization that has
facilities and other assets in at least one country other than its home country.
85. Explain outsourcing as a global business approach.
ANSWER:
Outsourcing is defined as transferring the management and performance of a business function to an external
service provider. Companies outsource to save costs, access special expertise, or supplement their own
capabilities. Outsourcing may involve partial ownership of the outsourcing firm or a contractual relationship.
Outsourcing is done both in the domestic and foreign marketplaces.
86. Explain offshoring as a global business approach.
ANSWER:
Offshoring is a broad term describing a company’s relocation of a business process or operation from one
country to another. Some aspects of the business are moved overseas, usually as a cost-saving strategy. All
offshoring represents international business, and ownership of the offshore firm can be in the form of an
acquisition, a merger, or foreign direct investment.
87. Define culture.
ANSWER:
Culture is the shared mind-set of a group of people that distinguishes them from others.
88. In the context of the country culture dimensions developed by Dutch scholar Geert Hofstede, briefly explain the term
power distance index.
ANSWER:
The power distance index refers to the inequality among the people of a country. High power distances lead
to a hierarchical society, while societies with low power distances are more egalitarian.
89. In the context of the country culture dimensions developed by Dutch scholar Geert Hofstede, briefly explain the
individualism versus collectivism dimension.
ANSWER:
The individualism versus collectivism dimension refers to the extent to which people in a society prefer to
act as individuals or as members of a group. High scores on this dimension reflect emphasis on I, while low
scores reflect an emphasis on We.
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Business leaders choose to enter the international market in different ways, from limited investment to full
90. In the context of the country culture dimensions developed by Dutch scholar Geert Hofstede, briefly explain the
masculinity versus femininity dimension.
ANSWER:
The masculinity versus femininity dimension refers to the preference for competition versus cooperation.
High scores on this dimension indicate a more aggressive, competitive culture; low scores indicate a more
nurturing, cooperative culture.
91. In the context of the country culture dimensions developed by Dutch scholar Geert Hofstede, briefly explain the
uncertainty avoidance dimension.
ANSWER:
The uncertainty avoidance dimension refers to the level of comfort people in a society feel regarding
ambiguity and the future. High scores on this dimension mean that the society will try to control behavior as
much as possible, while low scores mean a more relaxed outlook.
92. In the context of the country culture dimensions developed by Dutch scholar Geert Hofstede, briefly explain the long-
term orientation dimension.
ANSWER:
The long-term orientation (LTO) dimension refers to the emphasis on the future or the present and past.
Societies high in LTO value thrift and persistence, and those favoring short-term orientation respect fulfilling
social obligations.
93. In the context of the country culture dimensions developed by Dutch scholar Geert Hofstede, explain the indulgence
versus restraint dimension.
ANSWER:
The indulgence versus restraint dimension reflects free gratification or behavioral constraint within a society.
High scores on this dimension are found in societies where people are open and free and pursue gratification
of their wants and desires. Low scores lead to regulation and suppression of individual desires.
94. Explain the North American Free Trade Agreement.
ANSWER:
The North American Free Trade Agreement (NAFTA) promotes free trade between Canada, Mexico, and the
United States. Gross domestic product of these combined countries exceeds $20 trillion, and, therefore,
commerce without tariffs or restrictions has become important to all three nations. Some critics say that it has
encouraged employers to relocate jobs to Mexico where pay is much lower than in the United States.
Conversely, cheaper food from Mexico has kept U.S. grocery prices lower. The NAFTA agreement is subject
to renegotiation due to an Executive Order issued in 2017. Companies with operations throughout the North
American continent will need to respond to any changes brought about by a revised agreement.
95. List the various reasons why organizations pursue global expansion.
ANSWER:
Organizations may pursue global opportunities for various reasons. In general, businesses seek to gain access
to capital, customers, suppliers, and employees. The following are the primary reasons for global expansion:
• Diversifying markets and customer base
• Extending the sales life of current products
• Reducing dependence on current markets by spreading risk
• Countering seasonal fluctuations
• Accessing a deeper, more diverse talent pool
• Accessing cheaper, better supplies/suppliers
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involvement. In general, non-equity approaches demand little from the headquarters HR staff while equity
approaches require more assistance from the HR staff.
Non-equity business forms include importing and exporting, licensing and franchising, and piggyback
arrangements. These business forms provide a low-cost entry into new, global markets. Organizations may
begin global expansion with limited investment and risk to determine if operating outside of their home
market is viable.
Equity-based expansions include joint ventures, mergers, acquisitions, and foreign direct investment. These
business forms present greater risk to firms and often involve more human resource considerations.
Organizations that undertake serious international expansion may determine that financial and human
investments are needed to truly achieve their international objectives.
97. Discuss the challenges involved in global human resource management.
ANSWER:
The global HR function is still relatively new as companies have only recently begun to understand the
importance of developing HR practices specifically designed for a global workforce. Operating in multiple
countries requires the HR staff of a company to navigate diverse laws and cultural practices in establishing
effective human resource programs.
Derived from the organizational strategy and consistent with the international orientation adopted by the
company, HR practices must be designed to achieve the best results possible in various environments.
Maintaining an appropriate balance between standardization and localization is an ongoing effort.
Significant HR challenges created by global operations include worldwide population trends that will lead to
ever greater workforce diversity. As older workers retire and younger workers ascend in their organizations,
development efforts will be needed to ensure that new managers are competent. Further, managing talent
across multiple countries requires creative solutions. Work can be performed more easily without regard to
time or location, leading to a more dispersed workforce. Engaging and motivating workers from a distance
creates a new workplace dynamic that HR professionals will need to address. HR professionals should learn
about HR demands around the world to adopt effective practices and prepare for opportunities in their own
organizations.
98. In the context of global staffing strategies, discuss the benefits of using host-country nationals for international
assignments in a multinational enterprise (MNE).
ANSWER:
A host-country national is an employee working in their home country for a firm that is headquartered in a
different country. Employing host-country nationals is important for several reasons. One reason is that this
clearly conveys the message that the multinational MNE is making a commitment to the host country. Host-
country nationals know the culture, politics, laws, and business customs better than outsiders. Additionally,
using host-country nationals provides employment in the host country, an important consideration
particularly in developing economies. Since compensation levels in developing economies are often lower
than those in the home country, the MNE can also save costs by employing host-country nationals.
99. In the context of global staffing strategies, discuss the issues involved in employing third-country nationals for
international assignments.
ANSWER:
A third-country national is a citizen of one country who is working in a second country for an organization
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out compensation, work rules, and the conditions of employment for several years. In other
countries, the agreements are made with the government and employers, sometimes for only one
year because of political and social issues.
• Competitive relations: In the United States, management and labor traditionally take the roles of
competing adversaries who often clash to reach agreement. In many other countries, tripartite
bargaining occurs between the national government, employers’ associations, and national labor
federations with little conflict or obstruction.
103. Explain the necessity of global leadership development and describe the elements that should be included in a global
development plan.
ANSWER:
Multinational organizations focus on developing employees who can manage people and operations in
diverse environments. Competencies needed for global leadership are more complex than those focused on
only one country. In addition to core leadership skills such as future orientation, empathy and concern for
others, ethics and integrity, and team development, the global leader must also be able to work across
cultures and contexts. Managers operating in a global setting need to manage paradoxes, appreciate the
unique attributes of each context, and communicate effectively across time and geography.
A series of studies on global leadership, commonly known as the GLOBE studies, resulted in the
identification of leadership profiles for various societies or cultures. Different leadership styles may be
required to successfully lead organizations in various countries. Leaders who recognize and value diverse
cultures will be more effective than those who view the world from only one perspective. Consulting
company I4cp recommends incorporating the following elements into a global development plan:
1. Make global cultural fluency an organization-wide priority.
2. Tap into the best minds inside and outside of the organization to share knowledge and stories.
3. Offer a diverse slate of hard and soft skills development.
4. Leverage strategic workforce planning to determine skills gaps and to identify candidates for
succession plans from the global workforce.
Leadership development programs for diversified MNEs should include participants from both developed
and emerging economies. Managers from developed countries can learn firsthand about distinct cultural
attributes from representatives working in less-developed countries. Likewise, those from emerging
economies can interact with participants from developed nations and learn about the organization’s