CFR (cost and freight, foreign port) is similar to CIF except that the buyer purchases
the insurance because it can obtain it at lower cost or because its government, to save
foreign exchange, insists that it use a local insurance company.
Inflated currencies tend to weaken.
Moving funds can reduce tax exposure in high-tax locales and can be used as a way to
address limitations placed by foreign governments on the repatriation of profits.
Sources of successful managers for IC activities include the home country, the host
country, and a third country.
Pricing that is established for transactions between members of the enterprise is called
transfer pricing.
Luxury items such as perfume can often be sold without adaptation in many different
foreign markets.
Kotter’s model for change is an eight-step process that includes ways to make the
change stick through leadership and succession.
A form of organization characterized by lateral decision processes, horizontal networks,
and a strong corporatewide business philosophy is a horizontal corporation.
All EU members use the euro and thus have given up part of their national sovereignty
to the EU.
Research indicates that global leaders are born, not developed through experience or
training.
BOP accounts are recorded in a double-entry bookkeeping method, with each
transaction having debit and credit sides.
Unless a product or service is purchased from a company that is registered to the
appropriate ISO 9000 standard, a buyer cannot be assured that the quality of what was
received will be what was expected.
Evidence suggests that the Internet is not an effective tool in personal selling, especially
when used to build trust.
Once a firm determines that a market exists for its products, it needs to decide to export
directly or indirectly.
Tactical/operational plans are more detailed than strategic plans.
With less than 50 percent of the voting stock, or even with no voting stock, an IC can
still have control.
Manufacturing rationalization is a division of production among a number of
production units, thus enabling each to produce only a limited number of components
for all of a firm’s assembly plants.
The ISO (International Organization for Standardization) is the only international
standardizing organization.
In U.S. industry, the proportion of purchased materials in the overall cost of goods sold
has been rising for several decades.
Customary international law draws on practices that have been followed often for
centuries.
Bodies of water, much like deserts and mountains, also serve as barriers to trade.
The disadvantages of using employees from the home or host countries can sometimes
be avoided by sending third-country nationals to fill management posts.
The type of structure that simplifies the task of directing worldwide operations because
every country in the world is clearly under the control of someone who is in contact
with headquarters is global product.
Generally, industrial products require greater adaptation than consumer products to
meet the demands of the world market.
Many U.S. laws affect activities of international firms, and their impacts have been
coordinated.
Generally, as marketers go down the economic and social strata in each country, they
tend to find greater similarities among countries on social and cultural values.
Under U.S. law, price fixing is illegal per se, while in other countries, damage or harm
has to be done; this is the case in the EU.
The United States at times applies antitrust law extraterritorially.
Repetition of the bottom-up or top-down planning process until all differences are
reconciled is sequential planning.
Where litigation should occur has to do with the location of the problem and is usually
clear to both the defendant and the plaintiff.
Parent-country nationals usually are not knowledgeable about the host-country culture
and language, but many such expatriates have adapted, learned the language, and
become thoroughly accepted in the host country, which allows them to avoid any biases
of their own cultural experience and to be able to understand and perform effectively
within the new operating context.
Companies have the potential to achieve competitive advantages through leveraging
their organizational knowledge across national boundaries.
An important consideration in design is the extent to which the international company’s
products and services will be standardized across nations or regions.
Export merchants are exporters that sell for the manufacturer but do not take ownership
of the product.
Globalization increases the complexity of the external but not the internal context of the
company.
Sam Palmisano, CEO of IBM, has described a new way of doing business that goes to
equity of distribution by observing that:
A. profit sharing will need to increase.
B. stakeholder theory provides a way forward, combining local and global.
C. IBM would end its colonial company model and move on to an integrated model
with high levels of trust among stakeholders.
D. A and B.
An example of environmental dumping can be found in the:
A. maquiladora plants of Mexico, located near the U.S. border and operating at lower
environmental standards than would be required in the United States.
B. nuclear waste shipments to developing nations.
C. garbage shipments from New Jersey to developing nations.
D. all of the above.
E. two of A, B, and C.
Incoterms include:
A. FAS and DAF.
B. CFR and COD.
C. INSAP and ECO.
D. SAE and EBI.
E. DOA and EDP
A polycentric staffing policy:
A. involves human resource policies that are created at the local level for the specific
context in which the local operations operate.
B. results in the company hiring local managers who are familiar with the home country
of the IC and with its corporate culture, policies, and practices.
C. may confront the problem of having the best people pirated away by local firms or
other IC subsidiaries.
D. two of the above.
E. all of A, B, and C.
Franchising is a form of:
A. contract management.
B. licensing.
C. contract manufacturing.
D. joint venture.
E. two of the above.
New types of dumping include:
A. cultural, social, financial services, and tax dumping.
B. truck, financial services, and black-market dumping.
C. gray-market, subsidiary, and transfer-pricing dumping.
D. two of the above.
E. all of A, B, and C.
Copyrights are protected under:
A. The WIPO Copyright Treaty.
B. the International Convention for the Protection of Industrial Property.
C. The Berne Convention of 1886.
D. the Treaty of Rome.
E. two of the above.
Virtual teams that meet frequently to build trust are said to:
A. live in airport terminals.
B. have nomadic norms.
C. have high levels of consideration.
D. B and C.
E. create a regular heartbeat.
The level of service exports worldwide increased more than _______ between 1980 and
2010.
A. 4-fold
B. 6-fold
C. 10-fold
D. 12-fold
E. 17-fold
The UN’s International Court of Justice (ICJ) is also known as:
A. the Court of Europe.
B. the Court of International Law and Regulations (CILR).
C. the International Court of Peace.
D. the World Court.
The lowest corporate tax rates are found in:
A. the United States, Brazil, India, and France.
B. Brazil, China, Australia, and Japan.
C. Peru, Australia, Italy, and Luxembourg.
D. Switzerland, Ireland, Singapore, and Russia.
With patents:
A. there is standardization, to some degree, through the Paris Union.
B. there is no standardization, so often companies such as Nestl file many patent
applications in different countries.
C. total harmonization has been reached through UN accords and the EPO.
D. an inventor is automatically granted rights to her invention as long as she completes
a patent filing.
E. the first person to file is the one who receives patent protection.
Economic exposure occurs at the operations level and results from:
A. poor decision making in foreign markets.
B. higher tax rates in foreign operations.
C. risks incurred during foreign transactions.
D. exchange rate changes on projected cash flows.
The __________ organization has evolved from management’s attempt to mesh product
and regional and functional expertise while maintaining clear lines of authority.
A. hybrid
B. matrix
C. global
D. functional
E. network
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.
U.S. antitrust law is applied:
A. to all firms based in the United States, but not others.
B. to all firms, including extraterritorially.
C. only to U.S. owned firms with assets in the United States.
D. to all firms, as long as they have assets in the United States.
E. all of the above.
Patents are government grants that give the owner:
A. exclusive rights to use, sell, manufacture, or exploit the invention or process.
B. the exclusive right to use the fundamental ideas on which the invention is based.
C. the right to sell the invention, but only beyond the patent-granter’s borders.
D. rights to the invention but do not prevent others from copying the invention.
E. two of the above.
Between 1980 and 2010, the level of merchandise exports from Africa:
A. doubled as a proportion of overall world merchandise exports.
B. increased by 250 percent.
C. declined by half.
D. grew more rapidly as a proportion of world merchandise exports than did the
European Union.
E. two of the above.
In a personal interview or phone survey situation, some respondents want to help the
interviewer out of politeness or just to please the interviewer. This is known as:
A. market research.
B. response bias.
C. interviewer bias.
D. social desirability bias.
E. none of the above.
A global mindset:
A. is a “prerequisite for global industry dominance.”
B. combines an openness to and awareness of diversity across cultures and markets
with a propensity and an ability to synthesize across this diversity.
C. results from a combination of training and language skills.
D. all of the above.
E. two of A, B, and C.
Under the country screening process, in what order is the selection of foreign markets
process presented in the textbook?
A. Basic needs, sociocultural, economic/financial, political, and competitive
B. Basic needs, economic/financial, political, sociocultural, and competitive
C. Basic needs, political, economic/financial, competitive, and sociocultural
D. Basic needs, competitive, political, economic/financial, and sociocultural
E. None of the above
The level of services exports in 2010, worldwide, was:
A. $3.7 trillion.
B. $8.5 trillion.
C. $15.2 trillion.
D. $18.9 trillion.
E. $23.4 trillion.
Nations whose mountains divide them into smaller regional areas include:
A. the United States, Mexico, and Canada.
B. Switzerland, Afghanistan, China, and Colombia.
C. Luxembourg, France, and Romania.
D. Estonia, Latvia, and Lithuania.
Knowledge of foreign languages:
A. requires too much work to be worth the effort.
B. can be of great assistance in making export sales.
C. is useless if you know English.
D. is of academic but not business value.
E. none of the above.
In an inflationary economy the following conditions may be present:
A. demand exceeds supply.
B. money supply is increasing.
C. prices are rising.
D. all of the above.
According to the text, which of the following dimensions provide(s) the basis for
organizational subdivisions at the secondary, tertiary, and still lower levels?
A. Two of B, C, and D
B. National subsidiary
C. Domestic or international
D. Function
E. All of B, C, and D
The Trompenaars dimension that describes a society whose rules regulate behaviors for
all members and are applied evenly is:
A. particularist.
B. universalist.
C. feminist.
D. specific.
Extraterritoriality is:
A. a nation’s attempt to enforce its law beyond its borders.
B. added territory as a result of dispute settlements in wars, such as the Sakalin Islands.
C. a citizen’s claim to government assistance in a foreign environment.
D. a taxable condition most international firms attempt to avoid.
E. two of the above.
More than half of the exports from developing nations go to developed nations, and:
A. this proportion has been declining over the past 35 years.
B. approximately 70 percent of exports from developed economies also go to other
industrialized nations.
C. the proportion of world trade accounted for by members of regional trade
agreements has grown to nearly 50 percent.
D. all of the above.
E. two of A, B, and C.
Government protection of economic activities is:
A. two of the following.
B. a historical function of government.
C. a recent responsibility of government.
D. a socialist characteristic.
E. stronger in democracies.
Monetary and fiscal policies:
A. have nothing to do with exchange rate movement.
B. influence interest rates and taxation, and so may influence exchange rates.
C. have no predictable influence on inflation.
D. have no influence on trade patterns.
According to the text, management contracts usually stipulate that a fee of __________
be paid to the firm providing the management expertise.
A. 2 to 5 percent of sales
B. 30 to 50 percent of sales
C. 2 to 5 percent of profits
D. 30 to 50 percent of profits
E. 5 to 7 percent of profits
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.