The relocation of a business process or entire manufacturing facility to a foreign
country is known as ________.
A) offshoring
B) captive sourcing
C) outsourcing
D) subsidizing
Which of the following would most likely be considered an appropriate action for a
multinational company in meeting its global corporate social responsibility obligations?
A) lowering production costs for specific manufactured items
B) improving the efficiency of assembly line operations
C) developing a strategic plan to enter an emerging market
D) devoting substantial R&D to poor-country ailments
Which of the following refers to a risk, stemming from environmental factors, that is
closely associated with global sourcing?
A) weak intellectual property laws
B) overreliance on suppliers
C) high energy costs
D) rapid turnover of skilled employees
Which of the following is true about emerging market economies in international
business?
A) They account for nearly two-thirds of world GDP and host the world’s largest
MNEs.
B) They have tremendous purchasing power with minimal restrictions on international
trade and investment.
C) These markets have evolved from manufacturing economies to service-based
economies.
D) Businesses in emerging markets are important targets for machinery, equipment, and
technology sales.
With a futures contract, the purchaser agrees to buy or sell a currency ________.
A) within a certain amount of time, at the rate applicable on that day
B) when the exchange rate reaches a set amount
C) at any rate after a specified period of time has elapsed
D) at a pre-determined price on a specific date
In the ________ strategy, a firm views international business as separate from, and
secondary to, its domestic business.
A) home replication
B) multilocal
C) global
D) transnational
Which of the following managers portrays high uncertainty avoidance?
A) Greg manages the market development fund team for a leading computer
manufacturing firm. He is entrepreneurial and makes decisions quickly under tough
situations.
B) James is the business head of marketing in a leading automobile manufacturing
company. He coaches his team members to become accustomed to risk and
organizational change.
C) Henry is the managing editor at Paes publications. He emphasizes careful evaluation
of all options and ensuring they are consistent with company policies, which often
slows down the progress.
D) David manages the technical team at TR Solutions. He is open to different opinions
from team members and is not threatened by differing opinions.
The third phase of globalization was triggered by ________.
A) the end of World War II
B) the invention of electricity
C) the end of World War I
D) the Great Depression
Early multinationals from the third phase of globalization originated in ________.
A) Japan
B) China
C) India
D) Brazil
Privatization has provided many opportunities for foreign firms to enter transition
economies by ________.
A) initiating joint ventures with local businesses
B) purchasing former state enterprises
C) exporting products with a high mark-up price
D) exporting products of inferior quality
Which of the following is an example of a customs union?
A) NAFTA
B) ASEAN
C) MERCOSUR
D) EFTA
Governments impose export controls for the purpose of ________.
A) improving available opportunities for domestic sales
B) boosting derived demand in the domestic market
C) preventing the export of certain products to certain countries
D) boosting derived demand in foreign markets
International Management Qualifications (Scenario)
Core Computer Corporation (CCC) recently opened a customer service facility in New
Delhi, India. Managers of the Texas-based firm have been displeased with the local
manager hired to run the New Delhi facility because of a variety of problems that took
place. CCC managers believe that a representative from the headquarters should
manage the Indian facility for one year in order to train personnel and to improve the
quality of customer service. Two CCC executives have expressed a desire to work and
live in India: Craig Springer and Devon Parks. The CCC human resources department is
comparing the qualifications and characteristics of the two men in order to determine
which candidate would be the most successful in India.
Which of the following, if true, would strengthen the argument in favor of hiring a local
manager for the New Delhi facility?
A) Indians are mostly multilingual.
B) Local connections are crucial to achieve success in the local marketplace in India.
C) CCC wants to have strong control over all its foreign operations.
D) The quality of labor in New Delhi is no lesser than that in Texas.
________ refers to offering, giving, receiving, or soliciting anything of value to
influence the actions of a government official or a corporate manager.
A) Patenting
B) Piracy
C) Bribery
D) Normativism
Which of the following is an example of an offensive rationale for government
intervention?
A) The government of Erbia imposes trade restrictions on the export of plutonium to
certain countries.
B) The government of Berylia imposes a trade barrier to curtail the import of
low-priced products from manufacturers in the developed economies.
C) The government of Argonia imposes investment barriers to safeguard special interest
groups.
D) The government of Rhodia requires foreign companies to enter its huge markets
through joint ventures with local firms.
Global Operations Report (Scenario)
As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with
preparing a comprehensive report on the company’s global operations over the past
twenty years. Deva assigns three strategists to collaborate on the History portion of the
report, which details the rationale behind Pax’s decisions to expand operations in
particular areas. Rashid Ahl focuses on early expansion to China, which occurred after
China began to make its market more accessible to foreign companies. Markus Teller
focuses on Pax’s expansion to Eastern Europe, which was motivated by increased
industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan,
which happened when the company’s commercial bank expanded its service network to
Asia.
The Great Depression marked the beginning of the second phase of globalization.
Financial market integration makes it easier for internationally active firms to
________.
A) nationalize manufacturing industries
B) minimize offshoring
C) increase tariffs on the import of automobiles and industrial machinery
D) engage in foreign currency transactions
Which of the following, if true, would most strongly support the claim that national
prosperity is increased by participation in international business?
A) Countries that participate in international trade have higher GDP per capita than
non-participating countries.
B) Individuals in advanced economies tend to set purchasing trends for consumers
worldwide.
C) For most countries, levels of international trade have increased significantly in
recent decades.
D) National literacy levels are strongly correlated with a country’s degree of political
freedom.
Global Sourcing Debate (Scenario)
Prof. Sean Peterson’s class of international business has been studying the controversies
surrounding global sourcing. Prof. Peterson divided the class into two groups, A and B.
Group A was assigned the task of defending global sourcing, whereas Group B was
assigned the task of arguing against global sourcing.
The concept of creative destruction can be reasonably used by Group A to support the
view that ________.
A) firms that engage in offshoring are more likely than not to fail in the long run
B) offshoring forces unskilled workers to seek additional education
C) global sourcing creates opportunities and stimulates innovation
D) outsourcing technical jobs leads to brain drain
Which of the following is true about low-context cultures?
A) People belonging to low-context cultures do not prefer explicit communications.
B) Low-context cultures emphasize an indirect and polite face-saving style of
communication.
C) Low-context cultures rely on elaborate verbal explanations, putting much emphasis
on spoken words.
D) People belonging to low-context cultures view communication as a means to
promote smooth, harmonious relationships.
Which of the following is true about the determinants of national competitive
advantage?
A) The presence of strong competitors in a nation adversely affects national competitive
advantage.
B) The presence of demanding customers pressures firms to innovate faster and produce
better products.
C) Demand conditions describe the nation’s position in factors of production, such as
labor, natural resources, capital, technology, entrepreneurship, and know-how.
D) Vigorous competitive rivalry among firms lowers national innovativeness.
Channel length can best be defined as ________.
A) the number of products sold under a single brand name
B) the number of transactions a business buyer makes in the market at a given point of
time
C) the number of intermediaries between the manufacturer and the retailer
D) the length of time it takes for goods to be manufactured for sale
Which of the following is the first task in international financial management?
A) managing working capital and cash flow
B) managing currency risk
C) choosing a capital structure
D) managing the diversity of international accounting and tax practices
Values in a culture ________.
A) represent the symbolic, material, and creative productions unique to a society
B) are rigidly held attitudes, usually unfavorable and usually aimed at particular groups
of people
C) represent a person’s judgments about what is good or bad, acceptable or
unacceptable, important or unimportant, and normal or abnormal
D) are similar to opinions but are often unconsciously held and may not have a rational
basis
An individual from a country with a high degree of political risk would most likely be
from ________.
A) Canada
B) Singapore
C) Iraq
D) Japan
Which of the following is characteristic of a global industry?
A) A small number of major players compete head-on in multiple markets.
B) Competition is designed on a country-by-country basis.
C) Numerous firms compete within the industry worldwide.
D) Different marketing activities are designed to meet local needs across the globe.
Happy Pet Internationalization (Scenario)
Based in California, the Happy Pet Corporation has 45 pet supply stores across the
United States. Given the firm’s success in the U.S. market, Happy Pet managers are
considering internationalizing their operations to the EU. The market research
conducted by the company identified several established pet product manufacturing
companies. Beth Schultz, the founder and CEO of Happy Pet, has expressed concerns
about expanding the firm’s operations into the EU. She believes internationalizing in the
EU is not profitable because of the presence of these established competitors. However,
Edward O’Neal, the COO of Happy Pet, believes the corporation is ready for the next
step. Happy Pet executives and managers have gathered to discuss their organization’s
readiness to internationalize.
Which of the following questions would be more important for Happy Pet executives to
evaluate when determining the firm’s readiness to internationalize?
A) What does Happy Pet hope to gain from internationalizing its operations?
B) How are the domestic sales figures of Happy Pet’s competitors?
C) What product pricing strategies should Happy Pet adopt?
D) Where would be the best location for a Happy Pet product distribution center?
Which of the following is an acronym for a diagnostic tool used by organizations to
determine international readiness?
A) SWOT
B) PEST
C) PERT
D) CORE
________ is used by some firms to gauge long-term sales potential without fully
committing to a foreign market.
A) Competitor assessment
B) Test marketing
C) Market segmentation
D) End-user surveys
Which of the following is true about foreign units of a company using a multidomestic
strategy?
A) They are centralized to ensure efficiency and learning.
B) They are highly controlled by the company’s headquarters.
C) They are autonomous and operate independently.
D) They pursue global integration.
In the ________ stage of the internationalization process, a firm targets numerous
foreign markets via various entry modes, especially FDI.
A) pre-export
B) domestic focus
C) experimental involvement
D) committed involvement