The degree to which a country’s legal system is based on the rule of law makes no
difference; it is personal relationships that matter in foreign environments.
In 2009, the top 10 exporting and importing nations collectively accounted for over half
of all exports and imports of merchandise and services worldwide.
The goal of international strategy is to achieve and maintain a unique and valuable
competitive position both within a nation and globally, a position that has been termed
comparative advantage.
According to a study by McKinsey & Company, most executives worldwide agree that
environmental, social, and business trends are less critical to company strategy than was
the case five years ago.
In cultures with hierarchical values, such as Japan and Brazil, a single leader with
decision-making power is often the case.
Intermediate technology will create more jobs and require less capital than will
capital-intensive processes.
The purpose of all accounting is to provide internal and external decision makers with
the financial data they need to make their decisions.
Generally, trade missions consist of 5 to 12 business professors.
Feminine cultures in Hofstede’s dimensions care about relationships and are not focused
on business success. It is quality of life that matters.
The international standardization of the sales promotion function is not difficult,
because experience has shown that what is successful in the United States generally
proves effective overseas.
Lack of control is one of the strongest arguments against a joint venture.
One type of strategic alliance between competitors is an R&D partnership.
Globally, the overall level and rate of growth of merchandise exports exceed those of
commercial services.
Relatively few expatriate failures are family-related. Most relate to the expatriate’s lack
of technical skills.
International markets served often differ widely because of great variations in the
uncontrollable environmental forces.
One exchange arrangement is to have no separate legal tender.
Hall’s high-and low-context framework is based upon communication styles.
Operating in more than five local currencies is unusual for the international firm.
Business makes few costly mistakes in product introductions into foreign markets.
In POB accounting, a deficit in the current account is always accompanied by a surplus
in the capital account.
“When in Rome, do as the Romans do” is a solid, moral guideline.
To hedge the terrorism risk, there are insurance, antiterrorist schools, and even
companies to handle negotiations.
Sanctions against nations are not a form of trade restriction because the motivation is
political.
The means of supplying overseas markets—exporting to and production in those
markets—depend on nonequity modes of entry.
The primary reason for sourcing globally is to obtain lower prices.
The overall goal of cash flow management is to reduce risk and position the firm so that
it can benefit from opportunities.
Britain was the world’s leading manufacturing country for about 1,800 years, until it
was replaced by the United States at the end of the 1800s.
The UN International Court of Justice hears cases that involve disputes between
national governments.
The Bretton Woods system worked until the late 1960s.
Global managers who want to drive change need to be able to communicate across
cultural boundaries and build trust.
Both the ISO and the IEC promote:
A. harmonization in international accountancy.
B. standardization in technology-related fields through specifications.
C. union membership in fields that are technology-intensive.
D. shared bankruptcy standards across the globe.
E. none of the above.
Policies:
A. prescribe how certain activities will be carried out.
B. are broad guidelines used to assist lower-level managers to handle recurring
problems.
C. ensure that all budgets will be prepared using the same format.
D. all of the above.
E. two of A, B, and C.
Electronic procurement exchanges:
A. can facilitate efforts to obtain letters of credit.
B. can permit bid/quote systems for buyers and suppliers.
C. protect companies from potential loss of proprietary data.
D. two of the above.
E. all of A, B, and C.
A company can engage in indirect exporting by using which of the following companies
in its own country?
A. Manufacturers’ export agents
B. Export merchants
C. Sales offices
D. All of the above
E. Two of A, B, and C
The use of a global product organization structure:
A. frequently represents a return to pre-export department times.
B. has domestic product divisions responsible for the worldwide operations such as
marketing and production of products under their control.
C. helps to avoid duplication of area experts.
D. all of the above.
E. two of A, B, and C.
According to Trompenaars, a culture’s attitude toward the environment can range from:
A. peaceful to warlike.
B. overwhelmed by aesthetics to dominating the environment.
C. control over the environment to harmony with it.
D. submission to atheism.
The international marketing manager’s task is more complex than that of the domestic
marketing manager because:
A. marketing strategies must be developed by assessing potential markets and analyzing
alternate marketing mixes.
B. it is usually not possible to have a single, standardized worldwide strategy for the
overall marketing mix.
C. the uncontrollable environmental forces vary widely among markets.
D. two of the above.
E. all of A, B, and C.
The process of transferring value across borders is complex because it involves:
A. currency exchange rates.
B. restrictions on the movement of funds.
C. differing tax systems.
D. A, B, and C.
According to the text, approximately ______ of expatriate failures are family-related.
A. 25 percent
B. 40 percent
C. half
D. nearly 75 percent
E. 90 percent
What is the essential difference between an income tax and a VAT?
A. VAT is European; income tax is American.
B. VAT is indirect; income tax is direct.
C. VAT is greater than income tax.
D. VAT is reimbursable; income tax is not.
Relocating some or all of a business’s activities or processes to a foreign location is:
A. offshoring.
B. outsourcing.
C. supply chain management.
D. subcontracting.
E. all of the above.
The Triffin paradox suggests that:
A. reserve currencies can never run deficits.
B. eventually, reserve currencies will run deficits, which will lead to lack of confidence
in the currency.
C. the more a currency is held in reserves, the stronger it is.
D. the U.S. dollar could never be a reserve currency.
Income tax is a direct tax levied on earnings, and:
A. VAT is also a direct tax.
B. VAT is not a tax, in the legal sense.
C. VAT, vertical added tax, is indirect.
D. VAT is an indirect tax.
A patent gives the inventor:
A. property rights for 10 years.
B. the right to use the invention until development costs are recouped.
C. exclusive rights to manufacture, exploit, use, and sell the invention for a given time
period.
D. the right to keep the patented process but not the product for five years.
E. two of the above.
The domestic environment is composed of all the uncontrollable forces originating in
the __________ that surround and influence the life and development of the firm.
A. international arena
B. host nation
C. home country
D. foreign country
E. two of the above.
This is the only industrialized country that has not ratified the Kyoto Protocol, a UN
convention on climate change:
A. China.
B. France.
C. Russia.
D. the United States.
The three characteristics of evolving sustainable business practices are:
A. local, global, and improving quality of life.
B. environmental sustainability, quality-of-life sustainability, and triple-bottom-line
accounting.
C. limits, interdependence, and equity.
D. none of the above.
Proponents of the horizontal corporation:
A. claim that lateral relationships inhibit innovation and new-product development.
B. state that this approach to organizing helps to place more decision-making
responsibility in the hands of middle managers and other skilled professionals.
C. claim that it enhances increased control and supervision by upper management.
D. all of the above.
E. two of A, B, and C.
In 2008, foreign firms investing in the United States spent about ____________ on
establishing new firms as they did on acquiring going firms.
A. twice as much
B. 25 percent as much
C. nine times as much
D. one-thirteenth as much
E. the same amount
All UN member-countries belong to the UN’s:
A. Peace Jurga.
B. General Assembly.
C. Internal Court of Justice.
D. Committee on Intelligence.
In 1717, Sir Isaac Newton took Britain from the silver standard (pounds sterling) to:
A. floating exchange rates.
B. fixed exchange rates, using silver.
C. the gold standard, with fixed rates.
D. pegged rates.
The forward currency market:
A. allows purchasers to lock in purchases of currencies at known rates.
B. provides governments a way to manage their currency’s value.
C. makes trading in several currencies more efficient.
D. helps managers manage domestic debt.
All forms of communication between a firm and its publics are:
A. advertising.
B. promotion.
C. limited by government regulations.
D. an accepted part of doing business in emerging markets.
E. two of the above.
That the common interest of all nations in a workable international exchange rate
system transcends their conflicting international interests is the premise of:
A. the International Monetary Fund (IMF).
B. the Bank for International Settlements.
C. the World Central Bank.
D. the World Bank for Reconstruction and Development.
All the reasons for making decisions at IC headquarters, at subsidiary headquarters, or
cooperatively:
A. do not apply in joint venture situations.
B. apply equally in joint venture situations.
C. apply only to a corporate entity between two or more companies that are foreign to
the area where the joint venture is located.
D. apply only to a corporate entity between an IC and local owners.
Which of the following is(are) true about assistance provided to the spouses of
expatriates?
A. Over half of companies provide education or training assistance to spouses.
B. Nearly 70 percent of companies provide language training to spouses.
C. About one-quarter of companies sponsor work permits.
D. Two of the above.
E. All of A, B, and C.
The sooner the team achieves high levels of trust, the sooner the team can:
A. relax and wait for deadlines.
B. rank its members by skills.
C. set up its norms.
D. move to a constructive focus on the task.
E. allocate power.
Privately owned companies sometimes complain that government-owned companies
have the following unfair advantages:
A. higher-cost financing.
B. ability to charge higher prices.
C. access to government contracts.
D. all of the above.
E. two of A, B, and C.
The extent to which members of a society expect and accept that power is to be
distributed unequally is termed by Hofstede as:
A. uncertainty avoidance.
B. feminist.
C. power distance.
D. nondemocratic.
It has been estimated that at least ____________ percent of products currently on the
market were not available five years ago, creating additional pressure to locate suppliers
worldwide that can provide inputs at competitive prices and quality and with quick
responsiveness to market changes.
A. 30
B. 45
C. 50
D. 55
E. 60
Generally, management prefers global product standardization because:
A. there can be longer production runs, which lowers costs.
B. a standardized corporate visual identity can help project a consistent image.
C. the creative work needed for promotion doesn’t need to be done for each market.
D. two of the above.
E. all of A, B, and C.
The planning method that is becoming more popular is:
A. top down.
B. bottom up.
C. sequential.
D. a combination of top down and bottom up.
E. centralized planning.