38.
Countertrading is a decision by an organization to never accept the market price from its
suppliers, but to save money by negotiating a lower price.
39.
A manufacturing facility in a Mexico was unable to afford the products it needs from an
American supplier because Mexico’s currency dropped dramatically. To acquire the parts
needed to produce its products, the Mexican facility bartered with several companies in
Texas, offering completed goods for parts. This direct exchange of goods for goods is
known as countertrading.
40.
Farm Supply has decided to allow a retailer in Canada to utilize the Farm Supply name and
a number of valuable business services in return for paying the company a fee and part of
its profits. This business arrangement is known as franchising.
41.
Over the last two years an American computer manufacturer has partnered with a
technology organization in Japan to develop and produce computers and printers
benefiting both organizations. This is an example of countertrading.
42.
A foreign subsidiary is a subsidiary that is partly owned by a foreign government and partly
owned by an organization or stockholders.
43.
The greenfield venture is a strategic alliance with individuals and organizations in third–
world nations, in order to assist, educate, and share the risks and rewards of starting a
new nonprofit organization in their country.
44.
Horatio, the CEO of a struggling company, is excited about his trip to New York City to
start participating in a global bartering group that will develop business relationships and
exchange their products and services. This is an example of free trade.
45.
Prior to NAFTA, the United States implemented a number of tariffs to protect the auto
industry and farmers against foreign competition. A tariff is an example of trade
protectionism.
46.
Canada is the top nation the United States exports to, and Mexico is the country it imports
the most from.
47.
There are two types of tariffs: a revenue tariff, designed simply to raise money for the
government; and a protective tariff, which raises the price of imported goods to make the
prices of domestic products more competitive.
48.
An import quota is a trade barrier in the form of a customs duty, or tax, levied mainly on
imports.
49.
An Indian company has been exporting a technology product to American customers and is
marketing its product at a price that is well below the price charged by American
companies to drive down the price of the American product. This is an example of
countertrading.
50.
The United States imposed a ban on the import of products from Iran due to the political
situation in that nation. This disallowing of imports is known as an embargo.
51.
Consisting of 159 member countries, the World Trade Organization is designed to monitor
and enforce trade agreements.
52.
Out of GATT came a series of “rounds,” or negotiations, that resulted in the lowering of
barriers, such as the Uruguay Round.
53.
The IMF operates as a first or primary lender that makes short-term loans to countries
suffering from unfavorable balance of payments because of imports, exports, and other
matters.
54.
Recently, the IMF has been more concerned with addressing income inequality, which has
worsened in most countries in the past three decades.
55.
A trading bloc, also known as global or local trade associations, consists of groups of
global or local organizations that meet on a regular basis to market their products at trade
shows or conferences.
56.
NAFTA is a trading bloc consisting of the United States, Canada, Panama, and Mexico.
57.
David, an owner of a small business, is researching the current value of his products when
they are bartered on the global market. This market rate of an organization’s products
when they are bartered is known as the exchange rate.
58.
Within the European Union, most internal trade barriers have been eliminated, giving the
EU an association of borderless neighbors and the world’s largest free market.
59.
One of the smaller but very vital trading blocs in Europe, with 27 trading partners in
Europe and Africa, is the Mercosur.
60.
A condition in which a country grants other countries favorable trading treatment, such as
the reduction of import duties, is known as a “most favored nation” trading status.
61.
After a morning of global cultural training, Marie, the vice president of marketing, was
having lunch with Ann, who will be managing the new office in South Korea. Marie tells
Ann, “There are cultural differences between the U.S. and South Korea that will affect the
success of our office. For example, I suggest giving a couple of cans of Spam to your larger
customers because Spam is considered elegant.” Marie’s advice to Ann is good, based on
the fact that there are all kinds of cultural differences American managers have to get
used to in other countries.
62.
People first begin to learn their culture when they start utilizing social media, technology,
such as the Internet, and watching television.
63.
A small but groundbreaking committee, headed by Al Gore, that theorized global warming
was known as the GLOBE project.
64.
The degree to which people accept inequality in organizations and social situations is
known as power distance.
65.
Peter Agnefjäll, president and CEO of the IKEA Group, spends plenty of time with IKEA
employees at all levels. This is an example of individualism/collectivism, which refers to
the amount of time the managers, especially upper and middle management, spend with
their employees.
66.
Jamil, who is a successful salesperson, is interested in working for an organization that
supports its employees and offers a compensation package based on performance
improvement and excellence. This describes an organization that, according to the GLOBE
project, is high in performance orientation.
67.
Dawn grew up helping her father work on cars in his auto repair shop and developed into
an excellent auto technician. Because of stereotypes regarding women in this field, she is
interested in finding a shop that minimizes gender discrimination and role inequalities.
This describes an organization that, according to the GLOBE project, is high in gender
egalitarianism.
68.
Pat is concerned about better knowing the cultural tendencies of her business partners
and competitors in Europe and Asia. Pat would be interested in knowing this information
because according to the GLOBE project, this can give her a strategic competitive
advantage.
69.
People of different cultures have different ideas about what is acceptable interpersonal
space and can carry a sexual connotation, such as men holding hands may raise eyebrows
in the Middle East.
70.
Philippe is from the Mediterranean coast of Greece and Sasha is from Iran. In their grocery
store, this married couple is used to focusing on one task at a time rather than
multitasking. This focused work habit by Philippe and Sasha is based on polychronic time.
71.
Employers have found that there is agreement among most religions of the world as to
what is the most important work-related value.
72.
Don, a Texan, is a geologist employed with an oil drilling company who lives and works in
Iran. Don is an example of a global-patriot.
Multiple Choice Questions
73.
Becoming a world citizen includes being global in focus and learning how _____.
74.
Globalization is the trend ___.