1) Members of short-term orientation societies emphasize perseverance and savings for
future betterment.
2) In terms of international trade competitiveness, a strong dollar makes it easier for US
firms to export and to compete on price when combating imports.
3) Equity modes tend to reflect relatively smaller commitments to overseas markets,
whereas non-equity modes are indicative of relatively larger, harder-to-reverse
commitments.
4) Transitional economies have static institutions.
5) Greenfield operations are a type of wholly owned subsidiary that does not require
any FDI.
6) One of the main objectives for establishing the WTO was to strengthen the trade
dispute settlement mechanism.
7) Onshoring is the process of turning over an organizational activity to a foreign
supplier that will perform it on behalf of the focal firm.
8) FPI refers to investment in a portfolio of foreign securities that do not entail the
active management of foreign assets.
9) In a command economy, all factors of production should be government-owned or
state-owned.
10) Compared to licensing, FDI provides more direct and tighter control over foreign
operations.
11) An original design manufacturer includes final assembly in its value chain activities.
12) Contracts in civil law countries tend to be long and detailed compared to contracts
in common law countries.
13) Emerging MNEs primarily lack proprietary ownership of technology compared to
MNEs from developed economies.
14) Respect for institutional context is one of the guiding principles proposed by
business ethicist Thomas Donaldson.
15) In the context of FDI, ownership refers to MNEs possession and leveraging of
certain valuable, rare, hard-to-imitate, and organizationally embedded (VRIO) assets
overseas.
16) Under the gold standard, to be able to redeem its currency in gold at a fixed price,
every central bank needed to maintain gold reserves.
17) Which of the following nations has the lowest level of VC investment, as a
percentage of GDP, in the world?
a. Sweden
b. The United States
c. Greece
d. South Africa
18) Listing shares on foreign stock exchanges is known as _____.
a. capital rationing
b. diagonal spread
c. cross-listing
d. primary listing
19) Which of the following is a feature of right-wing totalitarianism?
a. It does not curtail an individuals right to freedom of expression and organization
b. It concentrates power in the hands of one or more religious groups
c. It bases its economic policies on communist ideologies
d. It does not allow room for political freedom
20) _____ refers to the clustering of economic activities in certain locations
a. Joint venture
b. Agglomeration
c. Expropriation
d. Intrafirm trade
21) _____ alliances are based on ownership or financial interest between the firms.
a. Contractual
b. Hubristic
c. Equity-based
d. Synergistic
22) _____ determines the institutional mix of competition and cooperation that gives
rise to the market system and also seeks to balance efficiency and fairness.
a. Competition policy
b. Antitrust policy
c. Mutual forbearance
d. Fairness policy
23) ____ is the informal interpersonal relationships among managers of different units
that may greatly facilitate intersubsidiary cooperation among various units.
a. Social capital
b. Absorptive capacity
c. Micro-macro link
d. Subsidiary initiative
24) _____ have specified upper or lower bounds within which the exchange rate is
allowed to fluctuate.
a. Fixed exchange rates
b. Target exchange rates
c. Free float exchange rates
d. Dirty float exchange rates
25) ____ is an attack on a competitor’s other markets if this competitor attacks a firm’s
original market.
a. Cross-market retaliation
b. Market commonality
c. Multimarket dependency
d. Mutual forbearance
26) At which stage in the formation of alliance must a firm decide whether to take a
contract or an equity approach?
a. Stage 1
b. Stage 2
c. Stage 3
d. Stage 4
27) Which of the following is an example of innovation resources and capabilities of a
firm?
a. Integrated management information systems
b. Possession of patents, trademarks, copyrights, and trade secrets
c. Formal planning, command, and control systems
d. Research and development capabilities
28) _____ is leading the world in managerial compensation.
a. United States
b. Japan
c. China
d. Germany
29) A _____ antirust policy would protect established firms that have already invested
and nurtured an industry from new entrants.
a. pro-imitability
b. pro-incumbent
c. pro-competition
d. pro-consumer
30) In the context of equity-based alliances, _____ involves both firms investing in
each other.
a. strategic fit
b. acquisition premium
c. strategic investment
d. cross-shareholding
31) According to the VRIO framework, non-value-adding resources and capabilities
will lead to _____ for a firm.
a. a temporary competitive advantage
b. a competitive parity
c. a sustained competitive advantage
d. a competitive disadvantage
32) Which of the following is an advantage shared by both greenfield operations and
acquisitions?
a. Protection of know-how
b. Fast entry speed
c. Add new capacity to industry
d. Low development costs
33) Which of the following is a benefit of FDI to home countries?
a. Decrease in competition between local firms
b. Capital outflow
c. Learning from operations
d. Creation of new jobs
34) A disadvantage of acquisitions is _____.
a. the inability to add new capacity to industry
b. the inability to coordinate globally
c. high development costs
d. the slow entry speed
35) Which of the following is true of licensing/franchising?
a. The licensor/franchisor has to bear the full costs and risks associated with foreign
expansion
b. The licensing/franchising strategy creates very limited competitors
c. The licensor/franchisor has the ability to coordinate globally
d. The licensor/franchisor does not have tight control over production and marketing
36) _____ is an examination as to whether a firm has resources and capabilities to
perform a particular activity in a manner superior to competitors.
a. Commoditization
b. Performance appraisal
c. Asset appraisal
d. Benchmarking
37) The _____ refers to the coercive power of governments.
a. normative pillar
b. regulatory pillar
c. cognitive pillar
d. informal pillar
38) The _____ view of global business focuses on internal factors that can help a firm
overcome its external environment.
a. resource-based
b. industry-based
c. socio-cultural
d. institution-based
39) A non-management member of the board is called _____.
a. outside director
b. co-manager
c. executive manager
d. inside director
40) _____ is a neutral, third-party intermediary in the supply chain that provides
logistics and other support services.
a. LCL
b. FOB
c. 3PL
d. PPB
41) The _____ was a multilateral agreement, created in 1948, governing the
international trade of goods (merchandise).
a. WTO
b. GATT
c. UN
d. EU
42) Which of the following statements with respect to differences in knowledge
management among the four types of MNEs is true?
a. Interdependence on knowledge management in moderate in a transnational strategy
b. The role of foreign subsidiaries in a localization strategy is to adapt and leverage
parent company competencies
c. There is extensive flow of knowledge and people in multiple directions in a
transnational strategy
d. Knowledge is developed and retained within each subsidiary in a home replication
strategy
43) Which of the following is true of the bid rate in foreign exchange markets?
a. It is always higher than the offer rate
b. It is always lower than the offer rate
c. It is always equal to the offer rate
d. It does not affect the spread of the exchange
44) A non-equity based alliance is also called a _____.
a. cross-border alliance
b. synergistic alliance
c. hubristic alliance
d. contractual alliance
45) Market orientation is the effort to establish, maintain, and enhance relationships
with customers.
46) Compare and contrast civil law, common law, and theocratic law.
47) The degree of tacitness is low in non-equity-based alliances.
48) Define predatory pricing. Why is it difficult to win a domestic predation case in the
United States?
49) The advantage of hiring employees who are host-country nationals is that it
facilitates control by headquarters.
50) Global sustainability refers only to a sustainable social and natural environment.
51) An accommodative strategy focuses on regulatory compliance.
52) Microfinance emerged in response to the lack of financing for entrepreneurial
opportunities in many developing countries.
53) Family ownership and control may lead to the selection of less-qualified managers.