Which of the following is subject to importing and exporting?
A) both finished products and intermediate goods
B) finished products but not intermediate goods
C) intermediate goods but not raw materials
D) raw materials and components, but not finished products
________ refers to sourcing from the firm’s own production facilities.
A) Captive sourcing
B) Crowdsourcing
C) Business process outsourcing
D) Externalization
Debt financing can add value to a firm because ________.
A) it enables investors and firms to develop long term relationships through a joint
business endeavor
B) some governments allow firms to deduct interest payments from their taxes
C) it limits the risk of bankruptcy
D) it increases the cash flow toward the company compared to equity financing
A(n) ________ is a type of trade penalty imposed on one or more countries by one or
more other countries.
A) confiscation
B) expropriation
C) subsidy
D) sanction
The level of taxes in a country is a part of the ________ factor that is considered when
selecting an FDI location.
A) political
B) profit retention
C) market
D) infrastructural
Employee Categories (Scenario)
Styleco Inc. is an international manufacturer of leather wallets and briefcases. Based in
Canada, the firm has subsidiaries throughout Europe and Asia. High-level Styleco
employees are often re-located for months at a time to foreign offices depending on the
needs of the firm. Shelly Eaton, a Canadian, has been sent to manage the Styleco office
in Italy. Raj Patel, an Indian, is an experienced software designer who is on assignment
for Styleco in its Paris office. Keiko Tran of Japan is employed as a manager in
Styleco’s Tokyo office. Marcus Field is a Canadian working at the Styleco headquarters
in Ontario as a manufacturing engineer.
Which of the following employees is most likely a host-country national?
A) Shelly Eaton
B) Raj Patel
C) Keiko Tran
D) Marcus Field
________ will internationalize via FDI because they require direct contact with
customers.
A) Insurance firms
B) Accountants
C) Construction firms
D) Retailing firms
Which of the following is the most likely motive behind firms in the mining industry
wanting to enter new foreign markets?
A) access to natural resources
B) availability of excessive non-skilled labor force
C) increase in refining capacity
D) payment of wages remain the same in both the new market as well as the existing
market
Japanese Supercenter (Scenario)
The Tag-Mart chain of discount superstores is nearing completion of its new
supercenter in Tokyo. The Tokyo store is the first foreign store for the large U.S.-based
company. Tag-Mart offers a large variety of products at virtually unbeatable prices. A
group of Tag-Mart representatives has traveled to Tokyo to inspect the new store and
hire a store manager. The top two contenders for the position are Hisako Aoki and
Takematsu Sato. Aoki has 25 years of experience managing a local department store
renowned for its customer service. Sato, born and raised in Japan, earned a college
degree in the U.S. before working six years as a manager at a Texas Tag-Mart.
Which of the following is most important for Tag-Mart’s top management to determine
while making a choice between Sato and Aoki as the new store manager?
A) How many shoppers are expected at the Tokyo Tag-Mart grand opening sale?
B) How many locally owned stores will Tokyo Tag-Mart compete against?
C) Would customers at the Tokyo Tag-Mart prefer strong customer service or a
U.S.-style shopping experience?
D) What is the average age and annual income of Tokyo Tag-Mart shoppers?
Big Boy Burgers (Scenario)
Big Boy Burgers (BBB) is an American fast food restaurant chain that has franchises
around the world. Recently, BBB managers have been concerned about protecting the
firm’s intellectual property, which includes the recipes for its unique burger sauces and
specialty burger buns. Although BBB has never experienced a theft of intellectual
property, the firm’s managers feel BBB should be more cautious. Managers are meeting
with security and legal experts to discuss the options available to the firm which would
protect BBB from future international problems.
Which of the following questions would be more important for the experts to evaluate
when determining how to ensure intellectual property protection for Big Boy Burgers?
A) What should be the penalties for theft of the recipes for their unique burger sauces
and specialty burger buns?
B) Is BBB partnering with ethical franchisees that have no intention of becoming BBB
competitors in the future?
C) What are the commonly counterfeited goods in the market?
D) How are BBB franchisees modifying recipes and menus to meet the needs and
desires of customers in local markets?
Debt financing comes from ________.
A) personal savings of founders
B) loans from financial intermediaries
C) capital contributed by founders
D) selling shares of stock to investors
Titania is a country characterized by a high-context culture. This implies that ________.
A) the people of Titania tend to conduct negotiations as efficiently as possible
B) the people of Titania tend to use legalistic contracts to conclude agreements
C) business is primarily deal-oriented in Titania
D) personal relations and goodwill are valued in Titania
Philip Baxter reported on the risks associated with establishing the plant in Country A.
The most significant risk, in his view, was posed by the government’s complex
bureaucratic structure. Philip reported the likelihood of significant administrative delays
in opening the plant. The risk identified by Philip is an example of which of the
following?
A) country risk
B) commercial risk
C) currency risk
D) cross-cultural risk
Boycotts and protests have the potential to harm businesses by ________.
A) preventing businesses from shipping their products to foreign markets
B) lost sales and increased costs for public relations activities
C) destroying the ability of all local firms to carry on normal business operations
D) raising concerns about a firm’s foreign operations by initiating lawsuits
Which of the following is the underlying principle of socialism?
A) The welfare of individuals far outweighs the welfare of society.
B) Collective welfare of people outweighs the welfare of the individual.
C) Capital and wealth should be vested in the hands of few and used primarily as a
means of profit.
D) The state should protect itself from individual and group interests.
Which of the following is a benefit to a foreign firm collaborating with a family
conglomerate in an emerging market?
A) reduced capital requirements
B) complete exemption from paying taxes
C) complete protection from intellectual property rights violations
D) low dependence on technology
________ is the currency risk that results from exchange-rate fluctuations affecting the
pricing of products, the cost of inputs, and the value of foreign investments.
A) Translation exposure
B) Operating exposure
C) Transaction exposure
D) Interoceptive exposure
Acculturation is defined as the process of ________.
A) segregating ethnic minorities by distinct groups
B) adjusting and adapting to a culture other than one’s own
C) learning the behavioral patterns and rules of one’s own society
D) forcing minority cultures to adopt the values of the dominant culture
Taken together, the key elements of a company’s marketing program are known as the
________.
A) product mix
B) value chain
C) product lifecycle
D) marketing mix
A(n) ________ is a project-based, usually nonequity venture initiated by multiple
partners to fulfill a large-scale project.
A) greenfield investment
B) acquisition
C) merger
D) consortium
Freehold Investment Corp. (Scenario)
Dan Freehold and his business partner, Bethany Quinn, are successful investors
engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand
their foreign investing operations. They hold a meeting for individuals interested in
participating in certain overseas ventures.
At the meeting, Dan explains to the attendees that Freehold direct investment projects
differ from international trade in that ________.
A) the firm itself is crossing international borders to purchase foreign assets
B) the firm is restricting its investments to stocks and does not purchase mutual funds
C) the firm has chosen to focus strictly on the technology sector
D) the firm is engaging in the transfer of products across national borders
Which of the following documents is the contract between the shipping company and
the exporter?
A) pro forma invoice
B) bill of lading
C) export declaration
D) commercial invoice
Which of the following Asian countries had launched an ambitious program of
industrialization and export-led development that contributed to its rise from poverty in
the 1940s to one of the world’s wealthiest countries by the 1980s?
A) Indonesia
B) China
C) Japan
D) India
The term industry market potential can best be defined as the ________.
A) expected competition within a foreign market
B) predicted industry sales over a particular period of time
C) anticipated market growth and expansion
D) forecast of a firm’s sales in a specific market
________ refers to a marketing strategy in which the firm develops both the product
and its marketing to evoke a distinct impression in the customer’s mind, emphasizing
differences from competitors’ offerings.
A) Positioning
B) Standardization
C) Diversifying
D) Adaptation
The U.S. Securities and Exchange Act encourages confidence in business transactions
by ________.
A) protecting public companies from government scrutiny
B) evaluating the inner workings of privately owned firms
C) requiring public companies to frequently disclose their financial indicators to
investors
D) shielding investors from bankruptcy and excessive taxation
Which of the following situations is an example of country risk?
A) Fiesta Corp. is an automobile manufacturer based in the U.S. The company’s
negotiation attempts with China to open a manufacturing factory in Beijing failed
owing to cultural differences.
B) Frostees Inc. is a food and beverages company based in the U.S. Its attempt to set up
an outlet in Thailand failed primarily owing to a misinterpretation of the memorandum
of understanding by a potential business partner in Thailand.
C) Alpha Corp., a rice manufacturer based in Pakistan, suffered losses when the U.S.
Department of Commerce decided to impose tariffs on the import of paddy rice to avoid
competition for the domestic industry.
D) Tamiaz LLC is a U.S. based manufacturer of clothing with outlets in China,
Vietnam, and India. The company incurred a loss due to delayed payments from India
owing to fluctuations in the currency exchange rates.
________ argues that increasing returns to scale, especially economies of scale, are
important for superior international performance in industries that succeed best as their
production volume increases.
A) Comparative theory
B) Competitive theory
C) Cost-advantage theory
D) New trade theory
Many MNEs employ relatively standardized advertising around the world, primarily
because by doing so ________.
A) they can cater to a wide variety of audiences with different preferences
B) they benefit from consumer inputs on effective marketing
C) they are able to produce high-quality ads
D) they are able to save costs
Which of the following activities is applicable to the final stage of exporting?
A) The firm engages appropriate bankers and international trade attorneys.
B) The firm screens the most attractive export markets.
C) The firm modifies advertising and public relations to suit individual markets.
D) The firm acquires product development and foreign language skills.
When outsourcing work to foreign suppliers, managers must ensure that ________.
A) wages in the host country are higher than that in the home country
B) the local level of productivity is more
C) workers in the host country enjoy a high degree of employee empowerment
D) worker productivity in the host country meets acceptable levels
Which of the following is another term for importing?
A) capital investment
B) supply side development
C) global sourcing
D) unilateral procurement