1) The product life cycle theory is popularly known as the diamond theory.
2) Strategic hedging focuses on using forward contracts and swaps to contain currency
risks.
3) Forward transactions allow participants to buy and sell currencies now for future
delivery.
4) The normative pillar supports informal institutions.
5) The average length of contracts is longer in low-context countries than in
high-context countries.
6) Regional economic integration refers to efforts to reduce trade and investment
barriers within one economic region.
7) The strategic trade theory was mainly proposed for low capital-investment industries.
8) According to the VRIO framework, only valuable and rare resources and capabilities
have the potential to provide temporary competitive advantage for a firm.
9) The resource-based view argues that internalization is a response to the imperfect
rules governing international transactions.
10) Government intervention in international trade was proposed by the factor
endowment theory.
11) Turning over an organizational activity to an international firm or foreign firm is
called _____.
a. captive sourcing
b. onshoring
c. offshoring
d. commoditizing
12) ____ is the strategy that focuses on a firm engaging in rapid learning and then
expanding overseas.
a. Defender strategy
b. Extender strategy
c. Dodger strategy
d. Contender strategy
13) Which of the following is an advantage of R&D contracts?
a. Easy to negotiate and enforce contracts
b. Negligible threat from competitors
c. Continuous improvement of core innovation capabilities
d. Ability to tap into the best, cost-effective locations
14) Top management at a reactive firm not only supports and champions CSR activities,
but also views CSR as a source of differentiation that permeates throughout the
corporate DNA.
15) _____ suggests that FDI, unrestricted by government intervention, will enable
countries to tap into their absolute or comparative advantages by specializing in the
production of certain goods or services.
a. The radical view
b. The free-market view
c. Pragmatic nationalism
d. The monopolistic view
16) Which of the following is an example of secondary stakeholder groups?
a. Suppliers
b. Environmental groups
c. Managers
d. Employee groups
17) Which of the following is an example of a political union?
a. The EU
b. The United States
c. The British Commonwealth
d. The Andean Community
18) Which of the following is a primary cost of FDI to host countries?
a. Capital inflow
b. Increase in competition between local firms
c. Capital and job loss
d. Loss of sovereignty
19) _____ refers to international transactions between two subsidiaries in two countries
controlled by the same MNE.
a. Intrafirm trade
b. Oligopoly
c. Agglomeration
d. Monopolization
20) Which of the following is true of economies in the base of the global economic
pyramid?
a. They are composed of developed economies
b. They are composed of people from North America, Western Europe, and Japan
c. They are largely ignored by MNEs
d. They attract the largest FDI from MNEs
21) With regard to foreign market entry, the resource-based view argues that foreign
firms need to:
a. take actions deemed legitimate and appropriate by the various formal and informal
institutions governing market entries
b. be aware of the numerous regulatory risks and trade and investment barriers
c. deploy overwhelming resources and capabilities to offset their liability of foreignness
d. understand the numerous differences in cultures, norms, and values
22) Which of the following is one of the methods by which entrepreneurial firms
internationalize by staying in domestic markets?
a. Through harvest and exit sell-offs to foreign entrants
b. Through direct exports
c. Through strategic alliances by FDI
d. Through greenfield wholly owned subsidiaries abroad
23) In supply chain management, _____ is a focus to establish, maintain, and enhance
associations with customers.
a. market orientation
b. societal orientation
c. relationship orientation
d. sales orientation
24) Compensation with a _____ makes locations, where pay is higher than in their
home country, a more attractive place to work for PCNs and TCNs.
a. going rate approach
b. balance sheet approach
c. pay-per-impression
d. merit rate
25) Co-marketing refers to _____.
a. a project in which clients pay contractors to market and distribute the product/service
b. outsourcing agreements in marketing between firms
c. efforts among a number of firms to jointly market their products and services
d. selling the rights to intellectual property to another firm for a royalty fee
26) _____ refers to a combination of resources and assets that enables a firm to gain a
competitive advantage.
a. Core assets
b. Standard assets
c. Supplementary assets
d. Complementary assets
27) In the context of tariff barriers, deadweight costs = _____.
a. total inefficiency – net gain
b. net loss – net gain
c. total inefficiency – net loss
d. total inefficiency – net gain – net loss
28) The majority of a multinational enterprises employees would typically comprise of
_____.
a. host-country nationals
b. parent-country nationals
c. third-country nationals
d. multinationals
29) FPI refers to the _____.
a. direct, hands-on management of foreign assets
b. amount of FDI moving in a given period in a certain direction
c. ability of a firm to engage in downstream stage of the value chain in a host country
d. investment in a portfolio of foreign securities that do not entail the active
management of foreign assets
30) Which of the following statements about the board of directors is untrue?
a. Boards advise the CEO
b. Boards carry out resource acquisition for the focal firm
c. Affiliated directors are independent directors
d. Boards effectiveness stems from norms
31) Which of the following primary activities of a firm corresponds to its support
activity of human resources?
a. Final assembly
b. Marketing
c. Components
d. Research and development
32) An American firm operating in the Middle East struggles with enforcing rules
opposing sexual discrimination against Muslim women working in its management.
Which of the following describes the American firms stand against enforcing local
norms?
a. Ethical relativism
b. Cultural relativism
c. Ethical imperialism
d. Xenocentrism
33) A thrust on rivals core markets likely to result in a bloody price war is referred to as
_____.
a. a red ocean
b. a blue ocean
c. mutual forbearance
d. cross-market retaliation
34) Bristall Inc. is a steel manufacturing company headquartered in the United States
with subsidiaries in India, China, and the United States. To create a global mind-set for
its subsidiary employees, Bristall Inc. relocated its employees in India to the United
States. This employee relocation is an example of _____.
a. inpatriation
b. benchmarking
c. collusion
d. expatriation
35) Which of the following is/are the final phase of acquiring cultural intelligence?
a. Skills
b. Awareness
c. Knowledge
d. Divergence
36) “People of the same trade seldom meet together, even for merriment and diversion,
but their conversation often ends in a conspiracy against the public.” This quote from
Adam Smith is referring to which of the following business relationship terms?
a. Combination
b. Cooperation
c. Collusion
d. Collaboration
37) Which country is now Manpower’s largest market ahead of the United States?
a. France
b. Germany
c. China
d. India
38) Disregarding nationality, a(n) _____ approach focuses on finding the most suitable
managers, who can be PCNs, HCNs, or TCNs.
a. polycentric
b. ethnocentric
c. geocentric
d. regiocentric
39) According to the VRIO framework, a firm with an organized, valuable, rare, but
imitable resources and capabilities will display a(n) _____ performance.
a. below average
b. average
c. above average
d. poor
40) The EU is an example of a(n) ____.
a. free trade area
b. customs union
c. common market
d. economic union
41) Which of the following occurs in the uncoupling stage of an alliance dissolution?
a. Last minute salvage
b. New relationships
c. Reconciliation
d. Mediation by third parties
42) In which of the following types of economic integration systems will the
establishment of a common currency be possible?
a. Customs union
b. Economic union
c. Free trade area
d. Common market
43) _____ refers to the amount of resources committed to entering a foreign market.
a. Scale of entry
b. Mode of entry
c. Institutional distance
d. Benchmarking
44) In profiles of cultural intelligence, a person who creates a comfort zone for people
from different cultural backgrounds by adopting their general posture and
communication style, without resorting to mockery, is characterized as the _____.
a. local
b. natural
c. mimic
d. chameleon
45) The theory of comparative advantage _____.
a. reduces the wealth of the nation in the short run
b. provides direct policy advice
c. explains patterns of trade based on factor endowments
d. was the first theory to incorporate dynamic changes in patterns of trade
46) Which of the following types of societies would most likely foster more
entrepreneurship?
a. Individualistic and high uncertainty-avoidance
b. Collectivistic and high uncertainty-avoidance
c. Collectivistic and low uncertainty-avoidance
d. Individualistic and low uncertainty-avoidance
47) Adopting a code of conduct is a tangible indication of a firms willingness to accept
CSR.
48) The staffing choices in an MNE are always random.
49) Global standardization or transnational strategies often necessitate an ethnocentric
approach, resulting in a mix of HCNs, PCNs, and TCNs.
50) According to the economic theory of supply and demand, a drop in price generates
stronger demand.
51) SMEs tend to be less entrepreneurial than large firms.
52) A voice-based mechanism indicates that shareholders no longer have patience and
are willing to “exit” by selling their shares.