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Teams with strong heartbeats may meet less regularly than at their launch and during
crisis.
In designing an international organization, it is essential that the structures and systems
being implemented are consistent not merely with each other but also with the strategy
the company and its competitors are using.
The International Court of Justice (ICJ) handles all cases brought forward by any
person or organization.
Products placed in a bonded warehouse do not pay import duties until they are
removed.
The L/C sets up the bank as an intermediary between the seller and the buyer and
reduces risk of nonpayment.
In organizing their international activities, there are five dimensions along which
management can globalize or standardize these activities.
Scenarios are multiple, plausible stories for probable futures.
Retaliatory trade restrictions are not made for dumping because price competition is
protected by the WTO.
All the reasons for making decisions at IC headquarters, at 100 percent-owned
subsidiary headquarters, or cooperatively do not apply in joint venture situations.
Virtual communication is more effective than face-to-face communication.
Although engineers are required for the maintenance of specialized machinery, only
highly-skilled people are needed to attend the machines.
Two prominent features of the strategic plan are sales forecasts and the mission
statement.
Environmental sustainability is about maintaining the environment, and it is both local
and global.
People from cultures with high power distance will feel most comfortable with top
managers' making decisions and issuing directives.
Leadership traits may vary some by culture, but underneath they build on the idea that
all people want to be led and directed.
The national defense argument for trade restrictions suggests that some industries, even
if they are not competitive, need protection from imports.
Reflecting their continued economic development, developing countries have
dramatically increased their share of FDI stock, from 1 percent in 1980 to 14 percent in
2010.
Firms that include imported parts in their finished products must pay duty on the
imports, but this duty is returned when the product is exported (customs drawback).
The law of one price states that in an efficient market, like products will never have like
prices.
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.
One way in which contract manufacturing is used is to subcontract assembly work or
the production of parts to subsidiaries overseas.
Global standardization of trade-related law is progressing slowly.
The United Nations uses the term transnational to describe an enterprise doing business
in more than one country.
Tariffs are not a financial force; they are a political force.
Importing refers to the transportation of any good or service to a destination into a
country or region, from a foreign origination point.
Whether to use the current or temporal rates depends on the functional currency of the
foreign operation.
The proportion of merchandise exports coming from Latin America and the Middle
East decreased between 1980 and 2010.
In a money market hedge, the firm matches the balance sheet asset with a liability in the
same currency.
International companies need a new kind of leader for the international environment
due to increased complexity.
There are more global leaders than there is demand for them.
An international company is an organization with multicountry affiliates, each of which
formulates its own business strategy based on perceived market differences.
Fair competition is a strong rationale for trade barriers.
The largest international reserve accounts are held by:
A. Hong Kong and Singapore.
B. the United States, Mexico, and Canada (NAFTA).
C. the EU.
D. China and Japan.
If an international manager runs afoul of a miscellaneous law while working abroad,
calling the embassy:
A. will ensure that the charges are dropped.
B. to let an official know of the situation may be a good idea, but usually the embassy
cannot help much.
C. will lead to meetings that will arrange for everything.
D. to explain the various cultural values in your homeland to the foreign government
official is a reasonable approach.
E. will result in the application of American law to the resolution of the problem.
The Foreign Corrupt Practices Act is U.S. legislation that:
A. outlines bribery practices that are allowed abroad but not in the United States.
B. prohibits bribery by American companies abroad.
C. allows bribery in foreign dealings when culturally sanctioned.
D. outlines and prohibits foreign bribery practices by foreign nationals in foreign
nations.
E. clearly states the basis for illegal bribery.
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.
___________ is(are) economic data that correlate highly with market demand for a
product.
A. Market factors
B. Trend analysis
C. Cluster analysis
D. Market indicators
E. None of the above
Physical barriers that have led to the development of separate languages in the same
country are known as:
A. political and cultural patterns.
B. topographical barriers.
C. linguistic tariffs.
D. differentiating borders.
Generally, producers of _______ experience little difficulty in assessing their basic need
potential.
A. textiles
B. air conditioners
C. specialized industrial materials
D. frequently purchased consumer goods
E. chocolate
The three major taxes governments use to generate revenue are:
A. VAT, income tax, and withholding tax.
B. sales tax, VAT, and income tax.
C. property tax, VAT, and sales tax.
D. income tax, property tax, and sales tax.
The functional currency of a foreign operation is:
A. the currency of the parent company.
B. the currency of the host country.
C. whichever currency the company chooses to declare as the functional currency.
D. the currency in which cash flows, pricing, expenses, and financing are denominated.
An advantage of using home-country citizens abroad is:
A. they have expertise in the host-country culture.
B. they expand their experience, enhancing their potential for promotion at home.
C. they have lower-cost salaries and benefits than HCNs or TCNs.
D. two of the above.
E. all of A, B, and C.
One difference between the U.S. and EU approaches to antitrust law is that:
A. the United States follows the per se concept, wherein actions are illegal whether they
have done harm.
B. the EU forbids market dominance by cartels, no matter the conditions, whereas the
United States does not.
C. the U.S. focus is on impact on competition, whereas the EU focus is on the
consumer.
D. the EU avoids competition, whereas the United States seeks it.
E. the EU emphasizes the prevention of price fixing, while the United States does not.
An itemized projection of revenues and expenses for a future time period is a:
A. sales forecast.
B. budget.
C. marketing plan.
D. strategic plan.
E. none of the above.
A reason that outsourcing has become an increasingly common option for companies is:
A. it helps companies to focus scarce resources on their core competencies.
B. it avoids problems of different languages or cultures.
C. it enhances flexibility.
D. two of the above.
E. all of A, B, and C.
Mercantilists believed that:
A. merchants should import goods to raise the level of living.
B. governments should lower import duties.
C. a nation should have an export surplus in order to accumulate precious metals.
D. a nation should produce goods for which there is a comparative advantage.
E. two of the above.
Petroleum, a relatively cheap nonrenewable energy source, is:
A. in abundant supply but is not environmentally clean.
B. being increasingly depleted and is expected to run out in another 50 years, but in the
meantime, improved retrieval techniques are being developed.
C. clean, cheap, and available, but most of the reserves are located in countries whose
leadership is critical of the industrialized world.
D. expected to run out in another 10 years and needs to be replaced with renewable
energy sources quickly.
The FCPA has:
A. hurt American business because managers cannot use bribes anymore.
B. challenged the creativity of American managers and consultants to develop ways to
work around the FCPA.
C. brought the discussion of bribery into the open, which has, overall, been positive.
D. resulted in American foreign business going to Japanese and German businesses.
E. eliminated bribery in international business.
What is a controlled foreign corporation?
A. A foreign company with one major stockholder in a foreign country
B. A subsidiary with the parent company having at least 50 percent ownership and
control
C. An FDI in which foreign owners own the corporation fully
D. A centralized structure for foreign ownership
Exporters of a turnkey project may include which of the following?
A. A contractor that specializes in designing and erecting plants in a particular industry
B. A producer of a factory
C. A sales company
D. All of the above
E. Two of A, B, and C
An argument against using trade restrictions to punish an offending nation is that:
A. sanctions seldom achieve their goal of forcing change in the offending country.
B. sanctions are relatively harmful to the citizens of the offending country.
C. sanctions are not condoned by the UN.
D. sanctions decrease the cost of doing business.
E. two of the above.
Individualism-collectivism measures:
A. the degree to which people in the culture are integrated into groups.
B. the tendency to differentiate male roles.
C. the degree to which social inequality is tolerated.
D. A and B.
Where litigation in international disputes should occur is:
A. usually evident from the documentation available.
B. at times unclear, in which case the UN International Court of Justice will make a
jurisdictional ruling.
C. often complex, so contracts should include choice-of-law and choice-of-forum
clauses.
D. dictated by where the problem arose; a problem arising in India is adjudicated in
India.
E. determined by a jury during pretrial discovery.
Patent treatment is standardized thanks to:
A. the WTO.
B. the UN Commission on Patents.
C. domestic laws in various nations.
D. the Paris Union.
E. the ACTA.
For cost-of-living allowances, the U.S. State Department index:
A. is suitable for all locations.
B. is adjusted frequently.
C. neither A, B, nor D.
D. accounts adequately for inflation and currency value changes.
E. two of A, B, and D.
Antitrust laws differ among countries, and complying with them is often difficult for the
firm, so:
A. international firms have had to increase their legal staff to ensure compliance.
B. the U.S. government is pushing for a world organization to clear antitrust issues.
C. firms have moved toward fewer mergers and more regionalized organizations.
D. firms expect to be in antitrust litigation and act accordingly.
E. two of the above.
Bretton Woods led to an exchange rate agreement known as the Bretton Woods System
or:
A. the floating-rate system.
B. the India Accord system.
C. the gold exchange standard.
D. the French rate system.
One danger of using the culture frameworks introduced in Chapter 4 is that if we apply
them prescriptively:
A. we'll be able to understand too much detail of a culture, and this will slow down
decision making.
B. we'll limit rather than enrich our perceptions.
C. our perceptions will become stereotypes, however sophisticated.
D. B and C.
The goal of global leadership development is to:
A. tick off the boxes so that management will recognize your skills.
B. build language fluency.
C. obtain the variety of transformational experiences that are needed to develop global
leadership capability.
D. build allies and networks in the firm where your skills are recognized.
E. all of the above.
Arbitrage functions to:
A. provide French markets access to other EU markets.
B. exploit price differences between markets, so as to profit with no risk.
C. create wealth through interest rate swaps.
D. create increased trading in commodity markets.
Trademarks can be:
A. a color.
B. a sound.
C. a design.
D. two of the above.
E. all of A, B, and C.
According to the text, the type of information a firm will need to judge country risks:
A. none of B, C, and D.
B. varies according to the nature of its business.
C. varies according to its size.
D. varies according to the length of time required to yield a satisfactory return.
E. two of B, C, and D.
