Chapter 04 Global Management: Managing across Borders Answer
Key
True / False Questions
1.
Keith Reinhard of the nonprofit group Business for Diplomatic Action said, “Americans are
seen throughout the world as compassionate, caring people, who are helpful and soft
spoken.”
2.
Becoming a world citizen includes being global in focus, but thinking local, learning what’s
appropriate behavior, knowing your field, and becoming at least minimally skilled in the
language of the local country.
3.
Learning how to enhance the American global image of being a “caring, wonderful person”
is part of becoming a world citizen.
4.
Before you travel and conduct business abroad, spend some time learning about other
patterns of interpersonal communication, such as in Afghanistan, where a man does not
ask another man about his wife.
5.
Developing a more globally interdependent system defines nationalism.
6.
Great civilizations have had the characteristic of a strong economy, despite their
communication problems.
7.
While in Italy, Tony was able to communicate important information to George, his
business partner, via e-mail. Later that day, Tony remarked to George about how helpful it
was that he was able to return to their office in New York in less than nine hours. This
“shrinking” of time and space as air travel and the electronic media have made it easier for
people around the globe to communicate with one another defines the global village.
8.
The process whereby managers are able to utilize Microsoft Excel to improve the record–
keeping related to marketing their products and services is known as e-commerce.
9.
ABC Investments has been advising customers financially since 1902. In 1989, ABC was
able to open an office in Berlin, after the Berlin Wall came down. Later, ABC opened
several offices in Asia when several Asian countries opened their economies to foreign
investors, then as governments began to deregulate their economies, ABC was able to
allow their global customers to move their money freely around the world. ABC
Investment’s experience is evidence of the three historic global changes which Rosabeth
Moss Kantor of the Harvard Business School spoke of.
10.
The availability of goods, people, and money to be able to move more freely worldwide is
known as the flexible economy.
11.
Foreign companies have built plants in the United States, slowly revitalizing parts of
industrial America, with foreign direct investment only at 5% of America’s GDP. In addition,
companies based overseas provide jobs for about 1% of U.S. workers.
12.
A negative effect of global economic interdependency is the movement, or outsourcing, of
formerly well-paying jobs overseas as companies seek cheaper labor costs.
13.
Certain industries, like telecommunications and financial services, are especially suited for
being midsize and local, so these companies are not trying to become bigger or merge with
other big companies.
14.
Sally has seen such great interest in her scented candles that she has decided to start her
own small business selling them. One benefit that Sally’s company can achieve with the
Internet and the World Wide Web is that her organization can operate globally, helping her
get started more easily because she can put products on a website and sell worldwide,
with the advantages of distribution and scope that large companies have.
15.
One advantage of small companies over large organizations is the ability to make
decisions more slowly and methodically if needed, which gives small companies a global
advantage in terms of time and distance over large companies.
16.
Paul McDonald, executive director of recruitment firm Robert Half Management
Resources, said, “Anyone with international experience will have a leg up, higher salary,
and be more marketable.”
17.
Don, the CEO of Pie Technology, announced in a conference call the corporate strategic
goal of operations in several countries. When this long-term vision by Don is realized, it
would qualify Pie Technology as a multinational corporation.
18.
A nonprofit organization with operations in several states is a multinational organization.
19.
Susan, a teacher, is interested in helping children in other countries learn how to read. She
has formed an international nonprofit organization that travels to several nations in Africa
to donate books and work in schools as tutors. Susan’s organization is an example of a
multinational corporation.
20.
Technology, such as e-mail and videoconferencing, works best to show commitment to
customers and handle joint ventures and mergers.
21.
The study of international management is not important for some people because most
individuals and companies are not affected by global companies.
22.
Greg, a manager at the Rome, Italy, store for an American-owned cell phone company,
understands the differences and similarities between American and the Italian customers,
customs, culture, and practices. As a result, Greg is very skilled at utilizing either the
American or Italian technique that helps him market his products and services to
customers in Rome. Greg is an example of a geocentric manager.
23.
Phillip, the global sales manager for a cosmetic company, believes that employees and
managers in each of his foreign stores understand best how to handle the personnel and
practices in their locations. So when a corporate executive approached Phillip about
reprimanding Aki, the Tokyo store manager, for not doing things as corporate dictates,
Phillip backed Aki. Phillip feels the home office should leave her alone. Phillip is an
example of an ethnocentric manager.
24.
Two managers from an Electronics Mart were talking to Ty, their district manager, about
Harriet, the unpopular store manager. Susan, the assistant manager, said, “I believe I
speak for other managers and employees when I say that Harriet acts like she knows it all.
We all feel that Harriet does not listen to any of us because she always thinks her way is
right and does not want to consider any other opinion.” Harriet is an example of a
geocentric manager; geocentricism is also called parochialism.
25.
Multinational organizations expand to take advantage of availability of supplies, new
markets, and lower labor costs or to avoid tariffs and import quotas.
26.
Amy, the CEO of a large manufacturing organization, knows that many of her competitors
have closed their American factories to utilize production facilities in Mexico because
labor is cheaper there and they receive special privileges in return for employing Mexican
citizens. However, Amy refuses to shift her operations down south, believing that it is
important to keep jobs in the U.S., despite the cost savings. These manufacturing plants
that are allowed to operate in Mexico, with special privileges in return for employing
Mexican citizens, are known as internationldoras.
27.
Many companies are moving production outside the United States because of the effects
of geopolitics, a trend known as deglobalization.
28.
Jose, the owner of a citrus farm in Mexico, discovers the United States is offering a new
larger tariff on the import of Mexican-grown oranges A tariff is a bonus paid to foreign
companies by the American government on imported products.
29.
To help American companies, the U.S. government utilizes import quotas, which
encourage foreign countries to increase the number of goods exported to the United
States.
30.
A company that produces boats, which is headquartered in Japan, formed a new company
in the United States to avoid paying a tariff on its boats manufactured for the U.S. market.
This new company is an example of a subsidiary.
31.
Franchising is a form of licensing in which a company allows a foreign company to pay it a
fee and a share of the profit in return for using the first company’s brand name and a
package of materials and services.
32.
Adriana, a CEO, is interested in expanding her clothing business globally. She loves the
excitement and challenge of forming something new that is totally owned and controlled
by her organization, knowing that the risky investment will possibly yield a large return.
Adriana’s desire to form a firm that is totally owned and controlled by her company is an
example of a wholly owned subsidiary.
33.
The Johnson family in Ohio approached Top Builders, an American construction company
specializing in new homes, to build their new home. To complete its jobs, Top Builders
likes to support small, locally owned American companies that specialize in high-quality
products. The use by Top Builders of suppliers outside its company to provide goods and
services is known as global outsourcing.
34.
To complete the Johnson family’s new home in Ohio, Top Builders, an American
construction company specializing in new homes, utilized a Swiss company that
specializes in fine-quality doors, using the wood of trees from the Alps region. Top’s use of
a foreign company’s products and labor is known as offshoring.
35.
A likely reason for modern outsourcing is the lower cost of labor in another country.
36.
Aiden, the purchasing manager for a company that produces high-end, quality medical
equipment, is interested in meeting with the management of Diamond Cut, a production
facility in the state that specializes in intensive research, precision assembly, and complex
technology. Aiden’s organization is less likely to offshore the manufacture of its products,
and want to meet face-to-face with Diamond Cut because Diamond produces high-end
products.
37.
In 1999, the top exporting nation was the United States, but in 2013 the world’s top
exporting nation was Japan.