Pricing that is established for transactions between members of the enterprise is called
transfer pricing.
When managers are assigned and move abroad with their families, the most difficult
adjustments are frequently for the children.
Market indicators measure relative market weaknesses.
Sir Isaac Newton established the price of gold in 1717 and de facto put England on the
gold standard.
A shipper’s export declaration (SED) is a document required by the U.S. Department of
Agriculture to control exports and supply export statistics.
The exchange rate for today for delivery within two days is known as the current rate.
Some firms do not grant licenses to other firms because of the fear of having a strong
competitor upon the expiration of the license.
Social loafing is not an issue on virtual teams.
According to Frederick W. Gluck, formal strategic planning teams must assume a more
explicit strategic decision-making role in strategic planning, including dedicating a
large amount of time to deciding how things ought to be instead of listening to analyses
of how they are.
The EU is administered by the European Commission, a group composed of 27
commissioners elected at the EU level.
Country risk assessment is a measure of the threat of nationalization.
A low level of literacy in a country makes the use of mail questionnaires more
appropriate for market research.
Promotion is all forms of communication between a firm and its publics.
A global mindset is built on a thorough knowledge of geography.
The United States in recent years has had a significant deficit in its current account.
This means that U.S. citizens are exporting more than they are importing.
The stakeholder model for environmentally sustainable business has failed because we
don’t have an accounting system to measure the present costs of environmental
irresponsibility.
With a multidomestic strategy, the cost and complexity of coordinating a range of
different strategies and product offerings across national and regional markets can be
substantial.
Kidnap, ransom, and extortion are techniques often used by terrorists against which no
insurance is available.
There are a number of advantages in focusing attention on a nation that is already a
sizable purchaser of goods coming from the would-be exporter’s country.
Porter suggests that adverse conditions can motivate innovation, which may lead to the
development of a competitive advantage.
Turnkey projects export technology, management expertise, and capital equipment.
Effective bridging in a team situation is a substitute for integration.
Leadership involves organizing a group of people in order to achieve a common
purpose or goal.
The tendency toward an international integration of goods, technology, information,
labor, and capital, or the process of making this integration happen, is referred to as
economic globalization.
The production organization in an overseas subsidiary is commonly a scaled-down
version of that found in the parent company.
The degree to which a country’s legal system is based on the rule of law makes no
difference; it is personal relationships that matter in foreign environments.
When developing and assessing strategic alternatives, it is important to remember that
companies competing in international markets confront two opposing forces: reduction
of costs and adaptation to local markets.
Payment terms are incidental once the customer need has been identified and a sales
price agreed to.
One exchange arrangement is to have no separate legal tender.
Objectives must be quantified in order to be useful.
Is the WTO’s idea of “fair competition” really a code phrase for free trade?
A. Yes, the WTO is in favor of free trade and only free trade under all circumstances.
B. Not really. Trade relationships among nations can be exceedingly complex, and the
WTO supports fair competition, which may mean freer trade rather than free trade.
C. Yes, the WTO stands for trade liberalization, which requires transparency, economic
reform, and no protectionism, regardless of the member nation’s economic situation.
D. Yes. The WTO supports free trade and the term fair competition is used to obtain
buy-in from nations opposed to trade liberalization.
Climate, topography, and natural resources are all considered part of the _________
stage of the country screening process.
A. basic needs
B. sociocultural
C. economic/financial
D. political
E. competitive
Chouinard, the founder of Patagonia, observed that:
A. triple-bottom-line accounting is the way to build sustainability.
B. compassion is the first step in sustainability.
C. our approach to fossil fuel consumption is clearly unsustainable.
D. no business can be done on a dead planet.
A multidomestic company is:
A. none of B, C, D, or E.
B. a business whose activities involve crossing national borders.
C. the domestic operations within a foreign country.
D. an organization with multicountry affiliates.
E. an organization that attempts to standardize operations worldwide.
A patent gives the inventor:
A. property rights for 10 years.
B. the right to use the invention until development costs are recouped.
C. exclusive rights to manufacture, exploit, use, and sell the invention for a given time
period.
D. the right to keep the patented process but not the product for five years.
E. two of the above.
The major globalization drivers include all of the following except:
A. political.
B. social.
C. cost.
D. market.
E. none of the above. All of the above are major kinds of globalization drivers identified
in the text.
Offshoring is an application of:
A. comparative advantage.
B. differences in taste.
C. money market rates.
D. exchange rate theory.
E. none of the above.
In designing the organizational structure, management knows two concerns,
__________ and __________, run counter to each other.
A. finding the most effective way to departmentalize; coordinating activities
B. earning profits; paying taxes
C. hiring employees; reducing labor costs
D. sales growth; research and design expenditures
E. none of the above.
Which of the following was stated in the text as being a concern with licensing?
A. It requires the licensor to invest scarce funds in the licensee’s company.
B. It can create a competitor.
C. License terms are often not upheld by the courts.
D. All of the above.
E. Two of A, B, and C.
A fronting loan enables the firm to:
A. protect itself from the risk of blocked asset transfers, such as remittances, loan
payments, and profit repatriations.
B. build collateral with local firms.
C. devote more resources to bricks and mortar.
D. gain a competitive advantage in new markets.
The U.S. government’s attitude toward transfer pricing on subsidiary transactions in
foreign locations is:
A. uninterested, because these transactions are outside the United States and, thus,
beyond U.S. jurisdiction.
B. interested, because transfer pricing has tax implications for the host governments—
hence the IRS guidelines.
C. neither interested nor uninterested, because, although there are tax implications for
the host country, the U.S. tax authorities feel comfortable exercising their authority
globally.
D. uninterested, because foreign taxes are of no interest to them.
The theory of overlapping demand:
A. explains how international trade in manufactured goods will be linked to gross
national income.
B. states that a nation will trade goods that can be produced with the production factor
that is most abundant.
C. explains why companies will add excess capacity to their production systems.
D. two of the above.
E. none of A, B, or C.
Which of the following is false regarding sociocultural screening?
A. Sociocultural factors are fairly subjective.
B. Data are difficult to assemble, particularly from a distance.
C. Unless an analyst is a specialist in the country, he or she must rely on the opinions of
others.
D. The use of checklists of sociocultural components can be useful.
E. Immigrants from the country are valuable as being representative data sources.
Social dumping occurs when an exporting country:
A. imposes an export tax on domestic businesses that export, to compensate for the
opportunity cost to the domestic market.
B. creates unfair competition based on lower costs, which undermines social support
systems to the worker.
C. target-markets to specific vulnerable groups in the importing country.
D. exports goods that are not sellable in the domestic environment due to hazards and
safety issues.
E. two of the above.
Historically, firms making a foreign direct investment have generally preferred:
A. direct exporting.
B. joint ventures.
C. strategic alliances.
D. wholly owned subsidiaries.
E. contract manufacturing.
This group of resources, which includes chrome and manganese, is used in many
technology applications, and the United States imports many of these resources 100
percent:
A. rare earths.
B. nonfuel minerals.
C. rare minerals.
D. mineral gems.
The domestic environment is composed of all the uncontrollable forces originating in
the __________ that surround and influence the life and development of the firm.
A. international arena
B. host nation
C. home country
D. foreign country
E. two of the above.
A vehicle currency is a currency:
A. used to trade in the transportation sector and is usually the dollar, euro, or yen.
B. whose value lies in its function in transfer pricing.
C. specifically used in arbitrage deals as a trading medium only.
D. used for international trade or investment.
Global leadership can be regarded as different in kind from domestic leadership
because:
A. it requires much more knowledge of foreign languages and geography.
B. the differences between them are inconsequential.
C. their differences are of such great degrees with regard to their level of skills and
application.
D. the domestic context does not require travel or knowledge of geography.
E. the domestic context is so limited.
Problems associated with e-procurement include:
A. it cannot be isolated from the company’s overall business system.
B. it must be completed before the firm can engage in other purchasing functions, such
as supplier determination and analysis.
C. it can expose the company to a wide range of potential security issues.
D. all of the above.
E. two of A, B, and C.
A contractual arrangement in which one firm grants access to its patents, trade secrets,
or technology to another for a fee is:
A. an exporter.
B. a sales company.
C. a management contract.
D. a joint venture.
E. none of the above.
Unlike antitrust or competition proceedings in the EU, in the United States such
proceedings:
A. may involve civil and criminal penalties.
B. are heard at the local level.
C. involve the top management team.
D. are headed by a three-judge panel.
E. two of the above.
Culture plays a role in global team member expectations. For example:
A. Americans are likely to want strong group identity.
B. Japanese are likely to want hierarchical leadership.
C. Germans are likely to want high levels of task ambiguity.
D. Thais are likely to want group accountability.
E. B and D.
When a new plant can be built that is a duplicate of others already functioning:
A. labor trainers experienced in the operation of the machinery can be sent to the new
locations without undergoing any training.
B. costs will be the same as in existing locations.
C. vendors will be requested to furnish equipment that they have supplied previously.
D. all of the above.
E. two of A, B, and C.
(p.226)-Which of the following are reasons that many firms engage in exporting?
A. Exports can allow the firm to serve markets where it has no or limited production
facilities.
B. Exports can offset cyclical sales in the firm’s domestic market.
C. Exports can test foreign markets and foreign competition inexpensively.
D. All of the above.
E. Two of A, B, and C.
Running afoul of miscellaneous laws in a foreign country is:
A. easily understood and forgiven by foreign police.
B. a serious error, so the local law should be known.
C. not a major issue, since the embassy can work out your release.
D. not a serious issue because your country and company stand behind you.
E. none of the above.
According to the text, the tendency toward an international integration of goods,
technology, information, labor, and capital, or the process of making this integration
happen, is called:
A. internationalization.
B. international business.
C. economic globalization.
D. multinationalization.
E. global integration.
According to the text, it has been argued that the ultimate goal of effective supply chain
management systems is to:
A. reduce costs.
B. improve quality.
C. reduce inventory.
D. increase sales.
E. increase standardization.
Credit availability, paying habits of customers, and rates of return are considered in the:
A. first screening.
B. second screening.
C. third screening.
D. fourth screening.
E. none of the above.
Which of the following are reasons that many firms engage in exporting?
A. Exports enable the firm to serve markets where it has sufficient production facilities.
B. Exports can offset cyclical sales in the firm’s domestic market.
C. Exports eliminate the risk of losing the firm’s technology to potential competitors.
D. All of the above.
E. Two of A, B, and C.
Unconventional sources of petroleum such as oil sands and shale are often grouped
together and referred to as:
A. nonrenewable hopes.
B. new sources.
C. peak sources.
D. heavy oil.
Identify the seven dimensions along which management can globalize in organizing
their international activities.
The five principles of the WTO (trade without discrimination, freer trade, predictability,
fair competition, and encouraging development and economic reform), if followed,
would provide developing nations a boost in their development.
Identify and discuss the five major kinds of drivers that are leading international firms
to the globalization of their operations.
What is international law?
Explain the ethnocentric, polycentric, regiocentric, and geocentric approaches toward
international human resource management, including when and how each is best used.
Select a country and show a relationship between its physical forces and its economy.
Discuss why imports do not completely measure market potential.
Explain the concept of sustainability as applied to business, using examples.
Discuss the keystone of international trade, the theory of comparative advantage.
What advice would you give to a friend who wants to develop global leadership skills
and is an English major?
Explain the principles on which The Economist‘s Big Mac index is built, and comment
on its use to international managers.
Why should international managers study the religion of the country they are planning
to work in even if they are not especially interested in the general area of religion?
Discuss the observation made recently by an undergraduate philosophy major that “the
major international institutions are concerned with keeping the rich countries rich, at the
expense of the poorer ones.
Discuss cluster analysis as a method of estimating market demand.
Explain the different reasons for firms to enter foreign markets.
(p.287)-What are the differences between traditional and global teams?
Discuss the three environments in which an international company operates.
