Book Title
International Business: The Challenge of Global Competition 13th Edition

MGMT 82630

February 28, 2019
There is a trend toward treating third-country nationals the same as home-country
expatriates in terms of their compensation plans.
The unspoken language cannot tell the international manager something that the spoken
language does not.
Biomass is a category of renewable energy fuels based on their heavy weight.
Customary international law draws on practices that have been followed often for
Sales forecasts are both a control and a planning technique.
Producing a factory ready to operate is similar to producing a turnkey project.
Creating an environment for team norms to come into play is especially useful in global
teams, because they are characterized by high levels of diversity.
Value chain analysis focuses primarily on the question, "What value does the company
want to deliver to these customers?"
Companies with a regional strategic approach can use a polycentric staffing policy,
employing a variety of HCNs and TCNs.
A matrix organization involves two or more dimensions, such as area and product, in
which managers are at the same level but do not have overlapping responsibilities.
Outsourcing is the relocation of some or all of a business's activities or processes to a
foreign location.
Companies sometimes enter markets where strong competitors are in order to distract
their competitors from entering their own home market.
Subsidiary detriment occurs when a small loss for a subsidiary results in a greater gain
for the total IC.
The only reason firms are nationalized is to spread a socialist-communist ideology.
Often new exporters think that they won't have to localize their approach, that a
marketing technique or distribution system that works in one country will work in
The price of one currency stated in terms of another currency is the exchange rate.
Multiplicity for global team leaders is evidenced by more players in the game than in a
domestic setting.
The rapidly changing business environment caused by increased global competition,
customer preference for custom-made rather than mass-produced products, and faster
technological change is pressuring companies to make greater use of global product
During the second screening, analysts are highly concerned with inflation trends,
exchange rates, and interest rates.
Environmental scanning provides the firm with information about world opportunities
and threats.
Pooling alliances are driven by the logic of contributing dissimilar resources, while
trading alliances are driven by similarity and integration.
A historical function of capitalist—but not communist—governments has been the
protection of the economic activities within their geographic area of control.
Trading blocs always bring cost savings to international firms.
Heavy oil is oil weighted down with an extra carbon molecule, and it can be gasified
using the Fischer-Tropsch process.
One possible current currency arrangement is a fixed peg, whereby the exchange rate of
a currency is allowed to move (within a narrow band) with another currency. One
example is the pegging of the Canadian dollar to the U.S. dollar.
Small and medium-sized enterprises accounted for nearly one-third of all U.S.
One of the significant differences between formal and informal institutions is how they
gain compliance.
Regulations allowing the repatriation of earnings are considered an entry barrier.
Mountain barriers found in the area of the Pakistan-Afghanistan border impede travel
and separate populations.
Climate, topography, and natural resources refer to environmental scanning.
Production methods between capital-and labor-intensive methods are classified as
intermediate technology.
The number of FX markets, along with floating exchange rates, varying country
inflation rates, advances in technology for the management of cash, and the growth of
the derivatives market are among the conditions that have led to the growth of
international finance centers.
The largest portion of proven oil reserves can be categorized as being at the highest
level of investment risk.
A global company is an organization that attempts to standardize and integrate
operations worldwide in most or all functional areas.
In the current rate method, assets and liabilities are translated:
A. at their historical rates.
B. at an average of the historical and current rates.
C. on the date the balance sheet is produced.
D. however the company chooses, as long as it is consistent in all its foreign operations.
_____________ is used by management during the planning process and provides
information about threats and opportunities.
A. Market screening
B. Environmental scanning
C. Country screening
D. Segment screening
E. None of the above
ADRs are a way for non-U.S. firms to:
A. participate in U.S. debt markets.
B. lock in dollar exchange rates.
C. leverage in a foreign currency.
D. participate in local U.S. equity markets without incurring the need for a broker or
foreign exchange.
The Pyramid Model of Global Leadership identifies:
A. character traits necessary for global leaders
B. personality traits necessary for global leaders.
C. a progression of skills required for effective global leadership.
D. a progression of activities necessary to build global leadership skills.
E. A and B.
Market research includes:
A. customized research.
B. general surveys.
C. nonprofit surveys.
D. all of the above.
A geocentric staffing policy:
A. enables the practices used at headquarters to be transferred worldwide.
B. tends to be used with a global strategic orientation.
C. selects the best person for each job, without considering national origin.
D. two of the above.
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
Tactical plans:
A. are fairly broad compared to strategic plans.
B. spell out in detail how objectives will be reached.
C. are broad guidelines to assist in handling recurring problems.
D. are less specific than strategic plans.
E. two of the above.
The level of technology chosen may be:
A. all of B, C, and D.
B. intermediate technology.
C. capital-intensive.
D. labor-intensive.
A polycentric staffing policy is appropriate when:
A. there are low levels of pressure for cost reduction and high levels for localization.
B. information technology is of increasing importance.
C. all of A, B, and D.
D. international companies are entering India, where there are more women in
E. two of A, B, and D.
Economies of scale and the experience curve:
A. explain how international trade in manufactured goods will be linked to gross
national income.
B. state that a nation will trade goods that can be produced with the production factor
that is most abundant.
C. explain why many companies will engage in international trade.
D. two of the above.
The United States became one of the first countries to prohibit dumping into its own
market, in:
A. 2006.
B. 1856.
C. 1916.
D. 1776.
E. none of the above.
A turnkey project includes all of the following except:
A. plan design.
B. technology supply.
C. supply of raw material.
D. personnel training.
E. none of the above. (All four are included.)
Coal pollutes heavily:
A. so its use has declined markedly in the past 15 years.
B. yet its consumption has increased and is projected to continue on this trend,
especially in China and India.
C. and contributes to greenhouse gas emissions, especially in China, India, and the
United States.
D. B and C.
According to the text:
A. design is an important factor in the structure of a company's global supply chain.
B. design determines the extent to which a company's strategy will be standardized
across nations.
C. common approaches to design are concurrent engineering and "over the top."
D. all of the above.
The area with the greatest capacities in renewables as of 2010 is:
A. the United States.
B. European Union.
C. India.
D. Japan.
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.
Historically, international business:
A. is relatively new as a discipline and as a business practice.
B. existed before the time of Christ.
C. two of A, B, and D.
D. was influenced by the rise of the Ottoman Empire.
Incoterms are divided into two basic categories:
A. open account and L/C.
B. general and water transport terms.
C. ship and ground transport.
D. export and domestic shipments.
E. risk and nonrisk terms of sale (buyer's perspective).
The United States and the EU:
A. both apply antitrust law extraterritorially.
B. both oppose the Japanese Anti-Monopoly Law.
C. share a commitment to the per se concept in law.
D. two of the above.
A description of the company's desired future position if it can acquire the necessary
competencies and successfully implement its strategy is known as a:
A. strategic plan.
B. mission statement.
C. vision statement.
D. values statement.
E. none of the above.
Foreign business denotes:
A. a business whose activities involve crossing national borders.
B. the domestic operations within a foreign country.
C. an organization with multicountry affiliates.
D. an organization that attempts to standardize operations worldwide.
The WTO exists to:
A. establish and help implement rules of trade among nations in order to increase trade
B. monitor and reduce the amount of trade from developing nations to developed
C. ensure that the industrial revolution continues to support the economies of developed
D. B and C.
The key issue related to translation exposure is:
A. the local interest rates.
B. what method to use for the translation, current rate or temporal.
C. strategic planning.
D. A and C.
In the case of the United States, intrafirm trade accounts for ___ ___ percent of imports
of goods.
A. 15 to 30
B. 45 to 60
C. 35 to 45
D. 30 to 40
E. over 60
A global company is:
A. a business whose activities involve crossing national borders.
B. the domestic operations within a foreign country.
C. an organization with multicountry affiliates.
D. an organization that attempts to standardize operations worldwide.
Strategic alliances are:
A. partnerships between competitors, customers, or suppliers that may take various
B. another name for a growth triangle.
C. arbitration.
D. none of the above.
Some methods for the IC to maintain control of less than 50 percent-owned
organizations are:
A. all of B, C, and D.
B. a management contract.
C. control of the finances or technology.
D. putting people from the IC in important executive positions.
E. two of B, C, and D.
When Lady Gaga took her act to India, she adapted her product, ______, to the local
environment by _______.
A. song performances; changing rhythm tracks to fit Indian preferences.
B. song performance; having an Indian singer redub her songs in Hindi.
C. clothing; adapting the clothing line to the thinner Indian figure.
D. all of the above.
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.
Porter in his diamond model distinguishes two types of factor conditions:
A. positive and negative factors.
B. contributing and disaggregating factors.
C. advanced and basic factors.
D. foreign and domestic factors.
The capability of one nation to produce more of a good with the same amount of input
than another country is:
A. a comparative advantage
B. an absolute advantage
C. a mercantilist advantage
D. none of the above
E. two of A, B, and C