57) Natalya operates a retail store in Romania. She buys consumer electronics from vendors in
China and Japan to sell in her store. Natalya is engaging in ________,
A) global sourcing
B) licensing
C) importing
D) franchising
58) Harley Davidson makes motorcycles but in its retail stores it also sells clothing, motorcycle
accessories, jewelry, and many related products made by other companies. Harley Davidson is
engaging in ________.
A) global sourcing
B) exporting
C) franchising
D) licensing
59) Adam has been hired by an organization that has a partnership with a foreign company. Both
the partners share resources and knowledge while developing new products. Adam’s organization
has formed a ________.
A) licensing company
B) franchising company
C) strategic alliance
D) foreign subsidiary
60) In 1984 Toyota and General Motors formed a company called NUMMI to build cars carrying
both the General Motors and Toyota brands. NUMMI is an example of a(n) ________.
A) equity strategic alliance
B) joint venture
C) global venture
D) nonequity strategic alliance
61) Joint ventures are a type of ________.
A) license
B) franchise
C) foreign subsidiary
D) strategic alliance
62) Melamark LLC has customers on four continents. It would like to increase its global
presence as a supplier to its global customers. The most expensive option would be to
________.
A) form a strategic alliance with an existing company in another country
B) directly invest in a production facility in another country
C) export from a single production plant
D) license producers in several countries
63) A domestic firm and a foreign firm sharing the cost of developing new products or building
production facilities in a foreign country constitute a ________.
A) franchising agreement
B) strategic alliance
C) foreign subsidiary
D) joint venture
64) Melamark’s advisor on global affairs is concerned that ________ carries too much risk.
A) a strategic alliance
B) franchising
C) setting up a foreign subsidiary
D) a joint venture
65) If Shana’s company decides to open another company in France but centralizes its
management in the United States, it would be considered a ________.
A) transnational corporation
B) global company
C) borderless organization
D) multidomestic corporation
66) If Marla’s company dropped its organizational structure based on country and reorganized
into industry groups, it would best be considered a ________.
A) borderless organization
B) foreign subsidiary
C) global company
D) multidomestic corporation
67) One section of Jose’s company’s business plan involves setting up a foreign subsidiary. This
arrangement involves ________.
A) making products domestically and selling them abroad
B) Jose’s company giving the foreign subsidiary the right to use its brand name
C) directly investing in a foreign country
D) minimum global investment
68) A transnational organization reflects an ethnocentric attitude.
69) Managers who want to get into a global market with minimal investment start with global
sourcing.
70) The process of exporting involves acquiring products made abroad and selling them
domestically.
71) Licensing and franchising are similar approaches involving one organization giving another
organization the right to use its brand name, technology, or product specifications in return for a
lump sum payment or a fee usually based on sales.
72) Licensing is primarily used by service organizations and franchising is primarily used by
manufacturing organizations.
73) A strategic alliance is a partnership between an organization and a foreign company partner
in which both share resources and knowledge in developing new products or building production
facilities.
74) Explain the differences between a multidomestic corporation, a global company, and a
borderless organization. Include examples of companies for each of the types of organizations
discussed.
75) Describe the different approaches that a company may use when it decides to go
international.
76) Unlike the United States, the change from one regime to another in foreign countries can be
less than peaceful. Differences in the ________ can lead to uncertainty and risk for global
managers.
A) economic environment
B) cultural environment
C) political/legal environment
D) demographic environment
77) A ________ economy is one in which resources are primarily owned and controlled by the
private sector.
A) free market
B) planned
C) command
D) democratic
78) In Malbadia, a central committee formed by the political powers decides what products and
how many of each will be produced. This situation is typical of ________.
A) a free market economy
B) a freely planned economy
C) a free enterprise economy
D) a planned economy
79) For American company Leather Exporters, first quarter sales in Italy were higher compared
to the preceding year but profits were down. What could account for this difference?
A) a difference in the currency exchange rate
B) a change in the national leadership in Italy
C) a cultural change in Italian society
D) a reduction in trade barriers with Italy
80) If the rate of inflation in Tomturkistan increased suddenly, what effect would that have on
the exchange rate of Tomturkistan currency for U.S. dollars?
A) More U.S. dollars would be needed to purchase the same quantity of Tomturkistan goods as
before inflation.
B) One U.S. dollar would purchase more Tomturkistan currency.
C) Tomturkistan currency would purchase more U.S. goods than before.
D) There would be no change; inflation is a domestic problem only.
81) Jack moved to China to manage his company’s production facility there. Immediately he
instituted the company practice of recognizing an employee of the month. The Chinese
employees were horrified. Why might this be so?
A) The employees are acting on their national cultural influences.
B) Each employee took the competition seriously and wanted to win the recognition.
C) None of them wanted to lose face by not being recognized.
D) The company culture was stronger than their national culture.
82) Hofstede’s Five Dimensions of National Culture would predict which of the following?
A) American employees working in the United States prefer to work in teams and to share team
rewards.
B) The French employees believe that rank should have its privileges.
C) An Italian manager will readily and comfortably make decisions with few acts; he is willing
to take great risks.
D) A manager in Sweden will be driven to compete, to excel, and to amass wealth.
83) Alfredo believes that the CEO is no better than the janitor of the organization and neither
should receive preferential treatment. Using the GLOBE model, what can we infer about
Alfredo’s culture?
A) Alfredo’s culture is high in power distance.
B) Alfredo’s culture is high in assertiveness.
C) Alfredo’s culture is low in low in humane orientation.
D) Alfredo’s culture is low in power distance.
84) Bettina likes to know the end from the beginning. She gathers as much information as
possible before making a decision. Bettina likely lives in a culture ________.
A) with high power distance
B) with high uncertainty avoidance
C) with high future orientation
D) with high performance orientation
85) Caron admits she’s a tough cookie. She thrives in an environment in which employees
compete against each other for big rewards. It is likely that Caron’s culture ________.
A) is high in performance orientation
B) is high in in-group collectivism
C) is high in future orientation
D) is high in assertiveness
86) In South America, the Sawi tribe values deceit and treachery. Taking advantage of other
tribes is cause for celebration. This culture is ________.
A) high in assertiveness
B) low in humane orientation
C) high in future orientation
D) low in gender differentiation
87) “Let’s forget about tomorrow for tomorrow never comes.” “Live for today.” These
expressions would be typical of a culture that is ________.
A) high in assertiveness
B) low in humane orientation
C) high in performance orientation
D) low in future orientation
88) Outsiders would call them clannish. Ianos and his family are very close. At work, he gives
his all to the team. His neighbors support each other but exclude people they do not know. This
describes a culture that is ________.
A) high in institutional collectivism
B) high in in-group collectivism
C) low in humane orientation
D) high in performance orientation
89) The hero is always a loner, riding off into the sunset. Employers expect key employees to
make critical decisions alone; rewards are given to individuals, not to teams. This describes a
culture that is ________.
A) low in institutional collectivism
B) high in institutional collectivism
C) high in assertiveness
D) low in in-group collectivism
90) Helga has noticed an increasing number of female CEOs of large corporations and also that
more fathers are staying home to raise children while the mothers assume positions of leadership
in business. This is a culture with ________.
A) high gender differentiation
B) low gender differentiation
C) high humane orientation
D) low humane orientation
91) “In this company, what you do matters a whole lot more than your last name.” Bill’s father,
the company founder, expected Bill’s supervisor to mentor the young man, to help him set goals,
to train him and to develop his managerial skills with an emphasis on continuous improvement.
Bill likely lives in a country with ________.
A) a high in-group collectivism culture
B) a high institutional collectivism culture
C) a high performance orientation culture
D) a high assertiveness culture
92) Only when a country’s political/legal environment is unstable or revolutionary is it of
concern to managers.
93) When an American company earns profits in a foreign country, those profits are taxed
according to the tax laws of the United States.
94) The GLOBE framework for assessing cultures is similar to Hofstede’s framework, but
measures fewer dimensions.
95) Mexico is an example of a collectivistic nation.
96) The United States is an example of a country with low power distance.
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97) A high uncertainty avoidance society is threatened by ambiguity and experiences high levels
of anxiety.
98) A global mind-set refers to attributes that allow a leader to be effective in cross-cultural
environments.
99) Discuss four global economic issues and how they affect management decisions, providing
examples of each.
100) List and explain Hofstede’s five dimensions of national culture.
101) Discuss the dimensions of the Global Leadership and Organizational Behavior
Effectiveness (GLOBE) framework. Describe how each dimension compares to Hofstede’s five
dimensions of national culture.