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Indicate whether the statement is true or false.
1. Every aspect of the human resources management (HRM) process in a geocentric company must be undertaken from a
domestic perspective.
a.
True
b.
False
2. In the context of the strategies that organizations adopt for competing in the international environment, the process of
making products in the domestic marketplace and then selling them in other countries is called importing.
a.
True
b.
False
3. The most important index that international HR managers need to consider while hiring a workforce in a host country is
hourly wage.
a.
True
b.
False
4. More than half the world’s workforce outside the United States belongs to labor unions.
a.
True
b.
False
5. Future orientation is one of the four dimensions of national culture identified by Dutch scholar Geert Hofstede.
a.
True
b.
False
6. The actions of management toward labor and the actions of labor toward management are heavily restricted by law.
a.
True
b.
False
7. Organizations using the ethnocentric staffing model have a fully functioning human resource (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
8. 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
9. Labor unions in the United States are more concerned with social issues than they are in most other countries.
a.
True
b.
False
10. In the context of the dimensions of national culture identified by Dutch scholar Geert Hofstede, uncertainty avoidance
refers to the status and authority differences between a superior and a subordinate.
a.
True
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b.
False
Indicate the answer choice that best completes the statement or answers the question.
11. Which of the following is an advantage of exporting as an international business strategy?
a.
It allows a firm to have its own company-owned facilities in a 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.
12. Which of the following dimensions of national culture identified by Robert House’s GLOBE project (Global
Leadership and Organizational Behavior Effectiveness) refers to equal opportunities for men and women in society?
a.
Gender egalitarianism
b.
Power distance
c.
In-group collectivism
d.
Humane orientation
13. In the context of selecting expatriates, which of the following is a type of recruiting firm that actively seek qualified
managers and other professionals for possible placement in positions in other organizations?
a.
Career services centers
b.
Employment contractors
c.
Gatekeepers
d.
Headhunters
14. Which of the following is a reason why host-country nationals are usually hired as nonmanagerial employees in
international businesses?
a.
They demand 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.
15. 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 more
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.
16. John prefers to work alone on projects and avoids tasks that require him to work in a group with other employees in
his organization. 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 identified by Geert Hofstede, John is likely to score high on _____.
a.
gender egalitarianism
b.
individualism
c.
femininity
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d.
in-group collectivism
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.
Uncertainty avoidance
18. 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 of 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
19. Florence is an expatriate manager at 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 problems. In the context of the four
international strategies proposed by Bartlett and Goshal, Florence is working with a company that uses a(n) _____.
a.
transnational strategy
b.
international strategy
c.
global strategy
d.
regional strategy
20. Tanya, a social activist, works closely with a local nonprofit organization (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 helped enroll 500 students in public schools and have also been responsible for setting up
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.
high on masculinity.
d.
low on uncertainty avoidance.
21. 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 that uses a _____.
a.
regional strategy
b.
global strategy
c.
multidomestic strategy
d.
transnational strategy
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22. 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 obtain all the information acquired by an expatriate manager.
d.
faces the least number of threats for opportunistic behavior and the lowest information asymmetry.
23. In the context of the four international strategies 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
24. 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 human resource 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
25. 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 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
26. 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 does Forrest & Barnes most likely use?
a.
Exporting
b.
A joint venture
c.
Licensing
d.
Direct foreign investment
27. 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
_____.
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a.
geocentric staffing model
b.
regiocentric staffing model
c.
polycentric staffing model
d.
ethnocentric staffing model
28. 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 because of 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.
29. 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
30. 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 does Brooks & Bill most likely use?
a.
Exporting
b.
Licensing
c.
A joint venture
d.
A strategic alliance
31. 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 are 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 cooperatively.
32. 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.
33. Which of the following terms is defined as 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
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34. Which of the following international business approaches involves cooperation between firms but may not involve
sharing of ownership?
a.
Direct foreign investment
b.
Licensing
c.
A strategic alliance
d.
A joint venture
35. Hannah is a relationship-oriented manager at a multinational corporation. She ensures 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 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
36. In the context of managing international transfers and assignments, repatriation occurs when a manager is:
a.
sent by his or her company on a second foreign assignment.
b.
brought back home from a foreign assignment.
c.
deported from his home country to a foreign country.
d.
expelled from the foreign country where he or she is sent on an assignment.
37. 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
38. 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 has 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
39. 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.
40. In the context of managing international transfers and assignments, which of the following is instruction directed at
enhancing specific job-related skills and abilities and most often focuses on operating employees and technical
specialists?
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a.
Training
b.
Learning
c.
Development
d.
Management
41. If the corporate human resource function in an organization 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, it is evident that the organization has adopted the _____.
a.
ethnocentric staffing model
b.
regiocentric staffing model
c.
geocentric staffing model
d.
polycentric staffing model
42. 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.
c.
undertake every aspect of their human resource management process from an international perspective.
d.
primarily hire home-country nationals to fill higher-level positions in their foreign offices.
43. In the context of Robert House’s GLOBE project (Global Leadership and Organizational Behavior Effectiveness),
which of the following refers to the degree to which people value long-term planning and investing?
a.
Individualism
b.
In-group collectivism
c.
Future orientation
d.
Uncertainty avoidance
44. Suave Inc. is an accessories 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 an advantage
that Suave Inc. is most likely to have 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.
45. According to the new approaches to determining the success of an expatriate’s assignment, the assessment of an
expatriate’s success should be:
a.
equated with how long the expatriate stayed in the foreign location.
b.
tied to the strategic goals the assignment was meant to accomplish.
c.
equated with how early the expatriate returned from the foreign location.
d.
tied to how well he or she assimilated the local culture and values.
46. 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
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b.
Martin, who is very proud of his company and the team that he manages
c.
Belinda, who acknowledges the work of her best employees by rewarding them
d.
Carlos, who plans projects and allocates resources to them well in advance
47. 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 to the threat of
opportunistic behavior. Since the expatriate managers do not rely on headquarters expertise, there is also an asymmetry in
the transfer of information and specialized knowledge. In the context of the four international strategies proposed by
Bartlett and Goshal, Feel Good Inc. uses a(n) _____.
a.
global strategy
b.
international strategy
c.
universal strategy
d.
multidomestic strategy
48. Aimi Corporation, 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 Aimi believes that adopting this
approach will provide the company with instant access to new markets. In this context, the HR function at Aimi
Corporation 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 Aimi’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.
49. Azus is an international food products company with subsidiaries in many countries. It employs host-country nationals
extensively in each of its foreign locations. The corporate human resources (HR) function in Azus focuses primarily on
coordinating relevant activities with their counterparts in each foreign location. Each subsidiary has its own fully
functioning HR department that is responsible for managing all local HR issues for lower- and upper-level employees. In
the given scenario, which of the following staffing models does Azus employ?
a.
Regiocentric staffing model
b.
Polycentric staffing model
c.
Ethnocentric staffing model
d.
Geocentric staffing model
50. Which of the following statements is true of the polycentric staffing model?
a.
This model makes extensive use of host-country nationals (HCNs) as employees in foreign subsidiaries.
b.
This model assumes that parent-country nationals (PCNs) are better equipped to deal with local market
conditions.
c.
Organizations using this approach have one central HR department that is responsible for managing all HR
issues for lower- and upper-level employees.
d.
This model assumes that home-office perspectives and issues take precedence over local perspectives.
51. Which of the following international business strategies has the least effect on the HR function of a firm?
a.
Mergers and joint partnerships
b.
Direct foreign investments and corporate acquisitions
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c.
Exporting and licensing
d.
Joint ventures and strategic alliances
52. Identify a form of trade control that places a limit on the number or value of goods that can be traded.
a.
Quotas
b.
Tariffs
c.
Embargoes
d.
Subsidies
53. 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.
54. In a technology company named X-Core Inc., the managers are friendly with their team members and everyone is on a
first-name basis with each other. The work environment is open, and team members are encouraged to discuss ideas with
their managers. The teams often go on informal lunches with their managers, and the conversations are free and friendly.
In the context of studies of national culture and its influence on behavior at work conducted by Dutch scholar Geert
Hofstede, X-Core Inc. is most likely to score:
a.
low on individualism.
b.
high on masculinity.
c.
low on power distance.
d.
high on assertiveness.
55. Which of the following is the first step in the process of selecting an expatriate manager?
a.
Defining the skills necessary to carry out the foreign assignment
b.
Evaluating the adaptability skills of the prospective candidates
c.
Identifying managerial candidates with foreign-language skills
d.
Developing cultural orientation sessions for a pool of qualified applicants
56. 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 must pay equal compensation to their employees in different foreign locations.
c.
Compensation issues must be addressed at an international level for multinational corporations.
d.
Differences in lifestyles cause a variation in the way in which firms compensate their employees in different
foreign locations.
57. 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-
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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
58. Which of the following statements is true of the training of 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.
59. Jared has been working as a manager in a foreign subsidiary of Constructo Inc. for 5 years. When his assignment ends,
the company starts the process of bringing Jared and his family back home. The human resource department briefs Jared
on new openings and opportunities available within the company. In this scenario, Constructo Inc. is involved in Jared’s
_____.
a.
selection
b.
repatriation
c.
compensation
d.
training
60. Sera Pharma, a pharmaceutical company, produces medicines in its home country. It recently started selling its
products to foreign companies in order 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
61. How do international businesses compensate expatriates?
62. List the dimensions of national culture as identified by Geert Hofstede.
63. 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?
64. Briefly discuss international labor relations.
65. Briefly explain some of the local training issues that a multinational company faces when it hires host-country
nationals.
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1. False
2. False
3. False
4. True
5. False
6. True
7. False
8. True
9. False
10. False
11. c
12. a
13. d
14. b
15. d
16. b
17. a
18. b
19. a
20. b
21. d
22. c
23. a
24. b
25. b
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52. a
53. c
54. c
55. a
56. d
57. a
58. c
59. b
60. a
61. Answers will vary. To remain competitive, an organization must provide compensation packages for its managers that
are comparable to those in a given market. Most international businesses need to provide expatriate managers with
differential compensation to make up for differences in currency valuation, standards of living, lifestyle norms, and so on.
If the foreign assignment is for a longer time period, however, compensation is usually adjusted to allow the manager to
maintain her or his home-country standard of living. Occasionally, organizations might have to provide an additional
salary inducement, called a hardship premium or a foreign service premium, simply to convince people to accept a foreign
assignment. Many international businesses also find that they must set up a tax-equalization system for their managers on
foreign assignments. This system ensures that the expatriates’ after-tax income in the host country is comparable to what
the after-tax income would have been in the person’s home country. The other part of compensation besides salary is
benefits. Most international businesses find that, in addition to salary adjustments, they must also provide benefit
adjustments. Special benefits for managers on foreign assignments usually include housing, education, medical treatment,
travel to the home country, and club membership. Firms also find it increasingly necessary to provide job-location
assistance for the spouse of an executive being transferred abroad and to help cover the education costs for their children.
International businesses may also provide expatriates with a travel allowance for trips back to the home country for
personal reasons such as visiting other family members or celebrating holidays.See 3-5 Describe the issues involved in
managing international transfers and assignments.
62. Answers will vary. Dutch scholar Geert Hofstede conducted a study of national values and how they influence
behavior at work. He identified four dimensions of national culture that he believed were important for doing business
across cultures:
• power distance (or status and authority differences between a superior and a subordinate),
• individualism versus collectivism (or the extent to which persons define themselves as individuals rather than as
members of groups),
• masculinity versus femininity (assertive, competitive, success-driven values versus quality of life, relationship-
oriented values in society), and
• uncertainty avoidance (or preferences for structured rather than unstructured situations).
Later work, especially in Asia, led Hofstede to add two more dimensions. These were:
• long-term orientation versus short-term orientation, which associates the connection of the past with the current
and future actions/challenges. A short-term orientation indicates that traditions are honored and kept, and
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65. Answers will vary. Human resource managers must understand the training and development needs of the host
country’s workforce to help host-country nationals perform their jobs most effectively. These needs of a local workforce
depend on several factors. One, of course, is the location of the foreign market. In highly industrialized markets,
organizations can usually find a cadre of capable employees who may need only a small amount of firm-specific training.
But in a relatively underdeveloped area, training and development needs will be much more extensive. Training is also
important if international business wants to take full advantage of locating production abroad. Many firms move
production facilities to areas with low labor costs but then find that the productivity of the labor force is relatively low.
Thus, they have to invest additional training and development dollars to bring the workforce up to the performance
standards they expect. See 3-4: Domestic Issues in International Human Resource Management