Adaptation is often necessitated due to ________.
A) differences across countries in language, culture, economic conditions, and other
factors
B) unstable demand
C) high import tariffs
D) similarities in customer preferences across various demographic groups worldwide
and the increased emphasis on the homogenization of global markets
The Coca-Cola Company is an example of ________.
A) born global firm
B) SME
C) multinational enterprise
D) NGO
Exporting, FDI, and sourcing all have identical screening criteria.
Focal firms that internationalize through exporting will most likely perform ________
in the home market.
A) sales
B) distribution
C) marketing
D) manufacturing
In terms of CSR and sustainability, going ________ means institutionalizing
appropriate behavior into the organization’s culture so it becomes part and parcel of
strategy.
A) wide
B) deep
C) local
D) global
Calexor is a telecommunications SME that has been highly successful despite its
limited resources. Stakeholders attribute Calexor’s success to its ability to serve niche
markets. Which of the following, if true, would most strongly support the claim that
Calexor’s growth can be attributed to niche market sales?
A) Calexor developed an interest in serving niche markets through an R & D
experiment.
B) Most of Calexor’s sales are in specialty markets that larger competitors do not serve.
C) Calexor’s sales in mainstream telecommunications markets have always been strong.
D) Calexor’s growth soared after it entered its first overseas market and has continued
to climb.
After managers have chosen an appropriate market for exporting, the next step is to
________.
A) decide about the resources to be committed
B) acquire the skills and competencies to handle export operations
C) engage appropriate international trade attorneys
D) modify advertising and promotional activities to suit individual markets
Which of the following is characteristic of a know-how agreement?
A) exclusive rights to reproduce original art work
B) permission to use manufacturing facilities for a fee
C) exchanging technological or management information for royalties
D) trading the use of a name brand for management advice
The Internet facilitates international trade in the service sector by ________.
A) providing the means to export some types of services to foreign markets
B) providing the means to avoid taxes in the foreign market
C) allowing firms to attain maximum control by establishing ownership of key assets
D) eliminating the need to deal with foreign currency exchange rates
Which of the following is an example of a market-seeking motive for FDI?
A) a firm wishes to gain access to raw materials
B) a firm follows its key customers abroad
C) a company wishes to gain access to knowledge
D) a company intends to avoid trade barriers
International Trade Summit (Scenario)
An international trade summit is held in Geneva, Switzerland. The purpose of the
summit is to cooperatively develop policies that promote international trade.
Representatives from 50 different countries attend the summit.
One of the attendees represents a leading nation in the international services trade. This
attendee is most likely from which of the following countries?
A) Brazil
B) Greece
C) Singapore
D) South Africa
An import license refers to a(n) ________.
A) tax charged on an imported product whose price is below usual prices in the local
market
B) list of complex procedures imposed on importers that hinder trade and investment
C) complicated system of establishing quotas
D) government authorization granted to a firm for importing a product
Which of the following is an advantage of franchising to the franchisee?
A) reduced expenses as the franchisor provides supplies, equipment, and products
B) minimum initial investments or royalty payments are applicable
C) use of a well-known, recognizable brand name
D) franchisee holds much power, including superior bargaining power
The globalization of finance ________.
A) enables companies to minimize offshoring
B) contributes to firms’ abilities to develop and operate world-scale production and
marketing
C) discourages innovation
D) discourages free international exchange of goods and services
Which of the following best explains why export growth has outpaced the growth of
domestic production during the last few decades?
A) Both world exports and domestic production have grown significantly over the past
30 years.
B) The cost to import products is generally higher than the cost to produce domestic
products.
C) Growth in gross domestic product in most countries has steadily increased since
1970.
D) Advanced economies now source many of their consumable products from low-cost
manufacturing nations.
Which of the following countries has weak intellectual property protection?
A) China
B) the United States
C) Australia
D) France
Firms that emphasize global integration make and sell ________.
A) unique products that follow a multilocal strategy
B) an excessive variety of complex products
C) products that require minimal adaptation
D) products designed specifically for local markets
Capital budgeting is intended to ________.
A) assist in the means by which subsidiaries and affiliates charge each other as they
exchange goods and services
B) help managers decide which international projects provide the best financial return
C) defer payment for goods and services received from the parent firm
D) eliminate the need for international accounting experts
In a system franchising agreement, the franchisee provides ________.
A) training and ongoing support
B) trademark-protected business concepts
C) down-payment plus royalty
D) usage rights for products and patents
Which form of government is characterized by private property rights and limited
government?
A) autocratic
B) democratic
C) socialist
D) totalitarian
________ belongs to the folk cultural makeup that we are aware of.
A) Fine arts
B) Methods of problem solving
C) Nonverbal communications
D) Diet
Self-reference criterion is ________.
A) the tendency to assume that all people from one culture are the same
B) the tendency to understand a culture without regard to country boundaries
C) the propensity to view other cultures through the lens of one’s own culture
D) the propensity to understand culture as an inherited trait
Audio Component Outsourcing (Scenario)
Echo Corp., a company based in Boston, manufactures high-quality audio components,
such as speakers, amplifiers, and receivers for home entertainment systems. Echo has
been losing market share in recent years due to the competitive pricing of other audio
component manufacturers that engage in global sourcing. Echo managers are
attempting to convince Nathan Douglas, the firm’s founder and CEO, that global
sourcing would enable the firm to be more competitive without sacrificing quality.
Which of the following is a potential benefit that Echo can derive from global sourcing?
A) cheap R&D
B) access to qualified personnel in the home country
C) strong intellectual property protection
D) improved productivity and service
Adaptation is more costly than standardization because ________.
A) a firm that chooses adaptation over standardization is likely to lose customers in the
long run
B) adaptation often requires the firm to engage in substantial modifications to product
design, manufacturing, pricing, distribution, and communications
C) adaptation requires the firm to scale up production without regard to quality
D) standardization holds no market risks
Which of the following countries exhibit a high-context culture?
A) Japan
B) Germany
C) The United States of America
D) Switzerland
Brand equity can best be defined as the ________.
A) market value of a brand
B) attractiveness of a brand name
C) durability of a brand
D) lack of customer confidence in a brand
The growth of global sourcing has been driven by ________.
A) the declining demand for highly skilled workers
B) the rapidly aging population in advanced economies
C) technological advances in communications
D) the rising costs of international business
The absence of reliable or consistent governance from recognized government
authorities ________.
A) decreases risks
B) increases managers’ ability to forecast business conditions
C) increases business costs
D) increases inward FDI
Which of the following is true with regard to bribery?
A) Bribery promotes a culture of dishonesty and immorality.
B) Bribery poses no significant threat to market economies.
C) Bribery is considerably rare in developing economies.
D) Bribery is not acceptable in much of the world.
International Advertising (Scenario)
Quik-Vac Corporation, a U.S.-based company, manufactures small, inexpensive
vacuum cleaners that work on rechargeable batteries. Quik-Vac customers typically live
in small apartments where a large vacuum cleaner is neither necessary nor easy to use.
Quik-Vac managers believe there is a market for the vacuum cleaners outside of the
United States, especially in communities where living space is limited. The Quik-Vac
marketing department has been assigned the task of creating an advertising campaign to
introduce Quik-Vac’s offerings to global consumers.
Before developing a print media campaign, which of the following must the marketing
department of Quik-Vac determine about the company’s target market?
A) the number of homes with TVs
B) the percentage of people owning radios
C) the number of global ad agencies in the target market
D) the literacy rate among the target population
In which of the following situations is the employee considered a host-country
national?
A) a French MNE sends a French employee to work in its Canadian subsidiary
B) a Japanese MNE sends an American employee to work at its Hong Kong subsidiary
C) a Chinese MNE employs a Chinese citizen for its subsidiary in Singapore
D) an American MNE employs a Mexican citizen for its subsidiary in Mexico
Phone Center (Scenario)
The Technix Computer Corporation recently finished construction of a customer service
phone center in New Delhi, India. Phone center agents will be responsible for
answering technical questions from customers around the globe. Technix has hired 55
local computer experts as phone agents, and a training session is underway. Technical
specialists and call center specialists from the United States have flown to India to train
the new Indian employees. Hank Patelli, a senior manager of a Technix phone center in
Michigan, will oversee the New Delhi phone center for six months until a local
manager is hired and trained to replace him.
Ashok, one of the Indian employees, asks Hank if the weekend training session could
be rescheduled because it is a Hindu festival day. What will be the most likely outcome
if Hank agrees to Ashok’s request?
A) Instances of absenteeism will become more pervasive among Indian employees.
B) Hank will develop a relationship of trust and understanding with the Indian
employees.
C) Hank’s decision will create divisiveness between the American and Indian
employees leading to irreparable damages.
D) Ashok will replace Hank as manager after six months when Hank returns to the
United States.