Logistics is also known as materials management.
Strategies to reduce operational costs are linked to efficiency.
According to the unity-of-command principle, workers and organizations benefit the
most from dual hierarchies of communication.
Many companies merge with or acquire other companies to gain operating efficiencies
that help them compete with or become global leaders.
Because many regional trading groups prohibit companies from producing in more than
one member country, companies need to understand how to evaluate international
geographic alternatives.
An independently floating exchange rate is adjusted periodically at a fixed pronounced
rate.
Most cultural variables are universal.
Studies indicate that employee morale is largely unaffected by a company’s corporate
behavior.
Fundamental forecasting uses trends in economic variables to predict future rates.
The comparable access argument for import restrictions is a more valid economic
argument for products using small-scale technology than for products requiring
substantial economies of scale to be competitive.
One reason that companies use the foreign-exchange market is to diversify their
expenses from other sources.
When a U.S. citizen flies Japan Airlines, the airline acts as a service exporter for Japan.
The bid is the price at which the trader is willing to sell foreign currency.
The U.S. dollar is so widely traded partially because the New York Stock Exchange is
the biggest foreign-exchange center in the world.
Production location is not an important choice when doing business in the European
Union.
The free trade theories of specialization assume that countries will be better off even
though some people are unemployed.
Few turnkey projects to date have been in remote areas of the world.
A licensing agreement is a contract for the granting of rights on tangible property.
The argument that “anything legal is ethical” is insufficient as a basis for ethical
behavior because the law usually does not apply to everyone and does not have
enforceable rules.
Companies and individuals transfer capital internationally primarily because of
expectations of earning higher returns.
Uneven income distribution is largely a problem confined to poorer nations.
Governments primarily cooperate through treaties to create a global division of labor.
Supporters of globalization assert that the process helps countries strengthen their
sovereignty.
Inflation in the United States would cause China’s massive dollar reserves to lose value.
International law takes precedence over national laws in determining permissible
practices in pricing, distribution, advertising, and promotion of products and services in
a particular country.
The character of a company’s corporate culture is a product of the core values and
business principles that management advocates, as well as the behaviors that define
“how we do things around here.”
JIT is the process of sourcing raw materials and parts just as they are needed in the
manufacturing process.
The teleological approach asserts that individuals make moral judgments independent
of consequences.
The comparative advantage theory holds that a country will gain from trade even
though it can produce all goods more efficiently than other countries.
The dependencia theory holds that the terms for a foreign investor’s operations depend
on how much the investor and the host country need each other’s assets.
When income inequality is high in a specific country, the per capita GDP figures are
more meaningful.
An offer is the right but not the obligation to buy or sell foreign currency.
General Electric’s Ecomagination initiative is responding in part to the fact that it is
operating in many countries that require compliance with higher environmental
standards than exist in the United States.
“Born global” firms are those that step straight onto the world stage, making exporting
the primary goal of the firm from day one of operations.
Commercial banks look at foreign-exchange trading as a service extended primarily to
important customers, not as a major business activity of its own.
Companies find it challenging to judge a potential expatriate’s adaptability to foreign
places, people, and processes.
Most U.S. companies have moved from a total quality management (TQM) approach to
an acceptable quality level (AQL) approach.
U.S.-based MNEs are not permitted to set budgets and monitor results using the same
exchange rate.
HIV/AIDS is affecting the operations of Anglo American PLC by forcing the company
to invest outside of South Africa to avoid having to deal with workforce health issues.
Grids are a useful method of comparing countries for international business expansion
because they ________.
A) generally show how countries will perform in the future
B) show risk on one axis and opportunity on another
C) set minimum scores for proceeding further
D) highlight first-mover advantages
The accounting value that illustrates how companies are more liberal in their
recognition of income is ________.
A) optimism
B) transparency
C) income-based accounting
D) measurement
The ________ is the most widely traded currency in the world.
A) pound
B) yen
C) euro
D) U.S. dollar
Why does price escalation most likely occur in exporting?
A) The WTO requires that prices increase.
B) Companies rely on skimming price strategies.
C) Greater distances and more intermediaries increase distribution costs.
D) Uncertain currency value changes necessitate charging higher prices.
Three major areas of concern when providing financial information to the larger
investing community are language, currency, and the ________ on which financial
statements are based.
A) shareholders’ equity
B) exchange rates
C) underlying GAAP
D) corporate strategy
Which of the following best explains why U.S. firms typically place earlier and greater
emphasis on expansion into Canada and the United Kingdom?
A) most significant sales opportunities
B) similarities in culture and legal systems
C) availability of necessary natural resources
D) government incentives for allied nations
In the context of manufacturing strategy, the degree of consistency between the foreign
investment decision and the company’s competitive strategy is known as ________.
A) compatibility
B) coordination
C) control
D) configuration
The Japanese approach to quality is total quality management (TQM), which stresses
which of the following principles?
A) employee involvement, commitment to international standards, and customer
satisfaction
B) customer satisfaction, continuous improvements, and warranties
C) customer satisfaction, employee involvement, and continuous improvements
D) employee involvement, continuous improvements, and commitment to international
quality standards
The purchasing power parity theory claims that a change in relative ________ between
two countries must cause a change in ________ in order to keep the prices of goods in
two countries fairly similar.
A) exchange rates; inflation
B) inflation; exchange rates
C) interest rates; inflation
D) interest rates; exchange rates
Neomercantilism describes the approach of countries that try to run a favorable balance
of trade to ________.
A) build up gold reserves
B) achieve a social or political objective
C) lower their rates of inflation
D) buy raw materials more cheaply
Because consumers want a greater variety of goods and services at lower prices, many
governments have ________.
A) reduced their restrictions on the international movement of goods and services
B) acted to tax most imports at a lower rate than domestic products
C) sought to eliminate reciprocal advantages negotiated through international
organizations and treaties
D) increased their participation in multinational problem-solving efforts
An economic system is the set of structures and processes that ________ in a country.
A) guides the allocation of resources and shapes the conduct of business activities
B) directs the movement of specific products to specific consumers
C) sets the standards of competitive success for companies in the economy
D) stipulates the roles and responsibilities of consumers
The Internet supports more companies’ efforts to launch a direct exporting strategy by
________.
A) providing information quickly and inexpensively
B) eliminating the need for highly detailed export plans
C) letting software take over customer service responsibilities
D) countering the power of electronic data interchange systems
Which of the following is NOT an example of a service export?
A) a management firm providing advice to a foreign client
B) an investment bank arranging financing for a foreign firm
C) a coffee chain opening a new store in a foreign country
D) an engineering firm building roads in a foreign country
All of the following are reasons piracy has occurred EXCEPT ________.
A) technology allows copyrighted material to be reproduced cheaply without much loss
of quality
B) some countries offer little protection for certain products
C) in some cultures, people see little morally wrong in buying counterfeit goods
D) the protection of intellectual property rights varies little from country to country
The HRM requirements of a(n) ________ strategy are well matched with a polycentric
staffing policy.
A) transnational
B) international
C) multidomestic
D) global
Costa Rica’s recent economic transformation to depend more on high-tech
manufacturing is largely due to its adoption of ________ trade policy.
A) an import substitution
B) a comparative advantage
C) a factor proportions
D) a strategic
A company that decides to “localize” expatriate assignments will offer an expatriate the
option of ________.
A) serving a shorter assignment in the host country
B) becoming a naturalized citizen of the host country
C) moving to an emerging market closer to the home country
D) retaining a foreign assignment provided he or she accepts the status of a local hire
When a company’s primary motive for entering a collaborative arrangement is to learn
from its partner, it is likely to ________.
A) leave control to its partner
B) “go it alone” after it has learned what it needs to know
C) have disagreements with the partner over quality issues
D) prefer the arrangement to be a licensing agreement
Advanced communication systems have contributed to growth in international business
by ________.
A) enabling better oversight of global operations
B) reducing the effects of global competition
C) decreasing the cost of cargo transportation
D) reducing export regulations
Most countries have agreed on how to assess values when their customs agents levy
tariffs. Which of the following best expresses this agreement?
A) They should use the value of similar goods arriving at about the same time.
B) They should use the declared invoice price unless they doubt its authenticity.
C) They should assess a value based on local costs to produce a similar product.
D) They should assess a value based on the expected final consumer sales price.
Because the size of the market increases when trade barriers fall, companies can
increase their production, which will result in lower costs per unit. This phenomenon is
known as ________.
A) trade creation
B) economies of scale
C) diseconomies of scale
D) increased competition
In which of the following situations would Company X most likely seek a collaborative
arrangement with Company Z in which Company Z would handle work for Company
X?
A) Company X has excess capacity.
B) Fixed costs for the work are high, and Company X has large volumes of work.
C) Company X is inexperienced in outsourcing work.
D) Fixed costs for the work are high, and Company X has small volumes of work.
Pulte Homes adapts its marketing to foreign differences by making minor changes to
bathrooms and outdoor patios. However, Pulte Homes uses the same floor plans and
exterior attributes in all countries to gain economies of standardization. Pulte Homes
most likely follows a ________.
A) social marketing orientation
B) sales orientation
C) strategic marketing orientation
D) production orientation
All of the following tend to be more expensive when sourcing abroad, EXCEPT
________.
A) transportation costs
B) inventory holding costs
C) brokers and agents fees
D) labor rates
The Ethical Trading Initiative (ETI) is primarily focused on ________.
A) fair trade laws for undeveloped countries
B) tiered pricing by pharmaceutical firms
C) greenhouse gas emission reduction
D) employment practices of MNEs
Which of the following would most likely pressure an MNE to globally integrate its
value activities?
A) costs of producing in separate facilities exceeding those of producing in a single
facility
B) variability in consumers’ tastes and preferences shifting across countries
C) market pressures to add new product features continually
D) demands imposed by host country governments
Germany’s accounting system has historically been a ________ system.
A) micro-pragmatic
B) macro-pragmatic
C) law-based
D) political-based
Uneven income distribution ________.
A) exists in almost every country
B) is largely a problem for poorer nations
C) primarily affects people in urban settings
D) is limited to a small share of the world population
Which term refers to restricting imports in order to boost domestic production and
consumption of goods that would otherwise be imported?
A) import substitution
B) terms-of-trade
C) most-favored nation
D) in-sourcing
German companies like Deutsche Bank and DaimlerChrysler have been relatively
optimistic and transparent in their financial reporting compared with many Germanic
companies because ________.
A) German accounting standards have always been optimistic and transparent
B) they adopted U.S. Generally Accepted Accounting Standards
C) they do not have to adopt International Accounting Standards
D) most of their revenues are from the United States and United Kingdom
Which of the following BEST describes a company that follows a social marketing
orientation?
A) It considers political and safety dimensions of its products.
B) It is a not-for-profit entity based in a developed country.
C) It is a government-owned entity from an emerging economy.
D) It generates sales to niche markets using social networking sites.
Dispersing value activities where and in how many places in the world is the issue of
________.
A) logistics
B) clustering
C) coordination
D) configuration
You are the manager of an SME in the United States, and your firm wants to begin
exporting. Since you have never been involved with exporting, there are many
compelling reasons that encourage contacting the ________ to obtain expert counseling
on exporting.
A) U.S. Treasury Department
B) Small Business Administration
C) Federal Credit Insurance Association
D) U.S. Commerce Department
Expatriate managers located in cultures characterized by ________ have noticed that
local employees are highly motivated by retirement programs.
A) low uncertainty avoidance
B) high future orientation
C) low masculinity
D) high power distance