New exporters always come to the process with a carefully developed marketing
strategy.
Outsourcing is the relocation of some or all of a business’s activities or processes to a
foreign location.
In the United States, punitive damage rulings have no measureable effect on medicine.
Cluster analysis is a technique for dividing objects into groups based on geographic or
economic similarity.
Informal cognitive institutions are not important to international managers because such
managers localize their hiring, and so they can draw on local talent.
Exports can help to offset cyclical sales in a firm’s domestic market.
Managers may consider entering a market in which strong competition already exists if
they believe entering a competitor’s home market will distract the competitor’s attention
from the new entrant’s own home market.
Triple-bottom-line accounting is built on the assumption that capitalism can become
humanized.
The forces in the international environment are the same as those in the domestic
environment except that they occur in foreign nations.
In exposure netting, a risk management technique similar to multilateral netting, the
firm runs a centralized clearing account that matches and nets out FX exposure across
currencies or currency families.
Although India is a member of the WTO and has benefited greatly from increased trade
as a result of WTO agreements, China is not yet a member.
An evolving structure for an international organization over time is normal, as the
company’s involvement in foreign markets increases over time.
A company’s organizational structure helps to determine where formal power and
authority will be located within the organization.
Both multinational and global companies use regionalized organizations.
Companies with a regional strategic approach can use a polycentric staffing policy,
employing a variety of HCNs and TCNs.
Sales forecasts are both a control and a planning technique.
Companies sometimes enter markets where strong competitors are in order to distract
their competitors from entering their own home market.
The major part of foreign direct investment is made by large, research-intensive firms in
oligopolistic industries.
The EU has been unsuccessful at harmonizing customs and tax formalities within
member nations’ borders.
Sanctions are a trade restriction that is effective in forcing change.
U.S. accounting practice is guided by the Securities and Exchange Commission (SEC)
and the International Accounting Standards Board (IASB), and it follows standards
known as generally accepted accounting principles (GAAP).
The same general criteria for selecting home-country employees apply to host-country
nationals.
As international companies increasingly take the geocentric view, we can be certain to
see less use of third-country nationals.
Objectives direct the firm’s course of action, maintain it within the boundaries of the
stated mission, and ensure its continuing existence.
As discussed in the chapter, institutions are organizations constructed to create jobs for
government employment initiatives.
Accounting is an objective, fact-based discipline and is not influenced by culture.
Transnational corporations account for approximately 25 percent of total global output
and nearly 50 percent of world trade.
The exchange rate for today for delivery within two days is known as the current rate.
Terrorists avoid kidnapping because the repercussions can be harmful to their
movement.
Market indicators measure relative market weaknesses.
The “over-the-wall” approach to product design involves an initial step in which the
designers prepare the product’s design, followed by sending the newly created design to
the company’s manufacturing engineers.
When production equipment is similar, home office control of quality in foreign
affiliates is more difficult because management must ensure that all plants adhere to the
same standard.
The central idea of mercantilism is that there should be an export surplus so a nation
can accumulate precious metals.
In general, the deeper the desired immediate market penetration is:
A. the more the physical product should be standardized.
B. the greater the product must be modified.
C. the more the total product should be standardized.
D. the lower the pricing must be.
E. none of the above.
In the case of the United States, intrafirm trade accounts for ______ percent of exports
of goods.
A. 15 to 30
B. 45 to 60
C. 35 to 45
D. 30 to 40
E. over 60
Which of the following are not identified in the text as being elements of the
competitive forces that an analyst uses to examine markets?
A. Competitors’ market shares
B. Competitors’ marketing strategies
C. Competitors’ staffing levels
D. Competitors’ levels of after-sales service
E. None of the above (All are identified as elements of the competitive forces used by
analysts.)
An important development in the level of worldwide FDI is the emergence of what has
been called the “bamboo network” of ethnic Chinese family businesses based outside
China.
Unconventional sources of petroleum such as oil sands and shale are often grouped
together and referred to as:
A. nonrenewable hopes.
B. new sources.
C. peak sources.
D. heavy oil.
Theory based on ____________________ states that international and interregional
differences in production costs occur because of differences in the supply of production
factors.
A. comparative advantage
B. absolute advantage
C. mercantilist advantage
D. resource endowments
E. none of the above
The regionalized organization:
A. has the advantage that it avoids duplication of product and functional specialists.
B. seems to be popular with companies that have diverse products, each with different
product requirements, competitive environments, and political risks.
C. often encounters problems with global product planning.
D. two of the above.
E. all of A, B, and C.
Much of the confusion in the ongoing discussion about whether a global firm can have
global products results from the discussants not clarifying whether they are referring to
the:
A. total product, physical product, or brand name.
B. final product, physical product, or brand name.
C. total product, final product, or brand name.
D. physical product, final product, or brand name.
E. none of the above.
In the process of bridging, team members:
A. discuss their similarities.
B. relate their personal histories.
C. decenter.
D. discuss their task-relevant skills.
E. A and E.
Understanding the religious beliefs of foreign markets is:
A. not really necessary because religion is one and the Truth is universal.
B. useful, because religions affect attitudes and beliefs across cultures.
C. not necessary because religion is not a part of culture; it is beyond culture.
D. useful because there is always the possibility of conversion.
In developing economies, informal institutions tend to play a greater role than in
developed economies, possibly because
A. the developing economies have more ambiguity and lack formal institutions by
definition, so informal institutions step into the breach.
B. developing economies show cultural preference for informality.
C. informal institutions emerge to give order to the unstructured, chaotic environment.
D. A and C.
Which of the following is false regarding sociocultural screening?
A. Sociocultural factors are fairly subjective.
B. Data are difficult to assemble, particularly from a distance.
C. Unless an analyst is a specialist in the country, he or she must rely on the opinions of
others.
D. The use of checklists of sociocultural components can be useful.
E. Immigrants from the country are valuable as being representative data sources.
With factor conditions, Porter’s diamond model distinguishes between basic factors,
those a country inherits, and
A. imported factors, those it brings in from abroad.
B. demand conditions, the aggregate demand in the economy.
C. climate conditions, the basic influence on business options in the specific location.
D. advanced factors, those a country can mold: labor and infrastructure.
In response to China’s requirement to censor Internet searches:
A. two of B, C, and D.
B. Google chose not to enter that country.
C. Google refused to engage in censorship, including a disclosure on its site that no
censorship had occurred.
D. Google provided users of its Chinese site with a hot link to its uncensored U.S. site,
to circumvent censorship.
E. none of the above.
The Panama Canal:
A. has to be enlarged for larger ship sizes.
B. increases shipping costs from New York to Los Angeles.
C. can handle Panamax-size ships.
D. makes shipping competitive with air freight.
E. reduces travel time between the U.S. West Coast and Europe by 21 days.
When a company faces relatively weak pressures for local responsiveness and cost
reductions, it should tend to use a:
A. global strategy.
B. multidomestic strategy.
C. transnational strategy.
D. differentiation strategy.
E. home replication strategy.
Backward vertical integration refers to:
A. the purchase of competitive firms.
B. the installation of production facilities to produce inputs for the production of final
products.
C. the placing of minorities in charge of production processes.
D. the installation of production facilities to consume the outputs of the production
system.
That almost everyone in the United States self-identifies as middle class suggests that:
A. the United States is a successful meritocracy.
B. the United States measures low on the uncertainty avoidance dimension.
C. the U.S. economy has failed to support an aristocracy.
D. the United States measures small on the power distance dimension.
Training and development of potential candidates for expatriate assignments:
A. are unnecessary with host-country nationals.
B. are unnecessary with home-country nationals.
C. depend on whether the candidate is a home-, host-, or third-country national.
D. wastes company resources because management is an art form, not a skill.
E. none of the above.
The three nations that exported the largest amount of goods to the United States in 2010
were:
A. Japan, Canada, and China.
B. China, Mexico, and the UK.
C. Japan, China, and Saudi Arabia.
D. Canada, Japan, and Mexico.
E. Canada, Mexico, and China.
The continuum from insensitive to sensitive to foreign environment begins with
__________ and ends with __________.
A. basic consumer staples; high-style and faddish consumer products
B. industrial products; high-style and faddish consumer products
C. high-style and faddish consumer products; industrial products
D. basic consumer staples; industrial products
E. high-style and faddish consumer products; basic consumer staples
The Multi-Fiber Arrangement (MFA) was an orderly marketing arrangement to regulate
textiles and clothing exports.
According to the text, which of the following dimensions provide(s) the basis for
organizational subdivisions at the secondary, tertiary, and still lower levels?
A. Two of B, C, and D
B. Process
C. Customer class
D. Nature of competition
E. All of B, C, and D
The monopolistic advantage theory suggests that firms in oligopolistic industries are
likely to _______________ foreign direct investment when they have technical and
other advantages over indigenous firms.
A. increase
B. reduce
C. ignore
D. not change
E. none of the above
Taxation is a financial force in that:
A. if the firm can achieve a lower tax burden than its competitors, it can generate higher
revenues and then lower its prices or pay higher wages and dividends.
B. governments, which enact taxes, are formal institutions that enforce tax law via
force.
C. businesses are compelled by foreign governments to pay taxes.
D. it is not controlled by the firm.
Chouinard, the founder of Patagonia, observed that:
A. triple-bottom-line accounting is the way to build sustainability.
B. compassion is the first step in sustainability.
C. our approach to fossil fuel consumption is clearly unsustainable.
D. no business can be done on a dead planet.
Procedures:
A. all of B, C, and D.
B. prescribe how certain activities will be carried out.
C. are broad guidelines used to assist lower-level managers to handle recurring
problems.
D. ensure that all budgets will be prepared using the same format.
E. two of B, C, and D.
Deserts and tropical forests seem opposites, but they have this trait in common:
A. they are good vacation spots, and thus an economic stimulator.
B. they have small populations on their edges.
C. they separate markets, increasing transportation costs.
D. they are hospitable to insects.
According to the text, which of the following can be outsourced?
A. Product design
B. Human resources
C. Two of A, B, and E
D. All of A, B, and E
E. Logistics
Home leave is:
A. a standard allowance.
B. a bonus standard for every employee.
C. a periodic trip back to the home country made by employees and their families.
D. an encouragement for the employee to travel outside the home country.
E. two of the above.
A business established for the purpose of marketing goods and services, not producing
them, is:
A. a franchisee.
B. a direct exporter.
C. a sales company.
D. a joint venture.
E. two of the above.
What is organizational design, and why is it an important topic for managers of
international companies to understand?
What are the benefits of standardization of global operations?
What are the primary opportunities and challenges associated with expatriate positions?
Explain what a “global mindset” includes and why this may be important for
international companies and their managers.
Discuss Dunning’s eclectic theory of international production as a theory to explain
flows of international trade and foreign direct investment.
Although air freight rates are usually higher than ocean freight rates, air freight may be
less costly for a firm. Explain why this statement is correct or incorrect.
Discuss the risks associated with transaction exposure and how to hedge them.
Why is the design of products and services important to global supply chain
management, and what are the main design alternatives that are available?
What two aspects of the culture frameworks would you share with a colleague leaving
on her first foreign assignment, and why?
Your firm operates in Seattle and is signing a contract to supply advisory services to a
design firm in Beijing. Your payment is 50 percent on contract signing and 50 percent
on completion, which is two years out. Would you want your payment in dollars or
yuan/renminbi for today’s portion? What about the portion on completion? Why?
Under what circumstances is a follower likely to succeed when entering into
international markets?
Discuss why imports do not completely measure market potential.
How might inflation influence the firm in its foreign markets?
Compare and contrast home replication, global, multidomestic, and transnational
strategies.
Explain why and where decisions are made among ICs and their subsidiary units.
Identify the appealing factors of online advertising in the international sphere, as
discussed in the text.
Why is the international marketing manager’s task complex?
In the Global Debate concerning Lady Gaga, we mentioned that it can be difficult to
draw a line between a changed product and an unchanged one. Discuss this and other
examples where it is difficult to define a “changed” or “unchanged” product.