Critics of large global firms compare these firms’ sales with nations’ total sales to
illustrate the tremendous size of these firms.
U.S. ocean shipping companies are benefiting from U.S. government subsidies.
Licensing and joint venture agreements cannot be useful business forms for new
exporters.
The first formulation of international trade theory, by Adam Smith, was motivated by
political considerations.
Product liability is an area of torts in which the U.S. courts can make large awards,
unlike in other countries.
Japanese attitudes toward Western women expats assigned to Japan suggest that these
women would be ineffective in their assignments.
Although international firms maintain manufacturing facilities in countries at various
levels of development, manufacturing systems should not vary significantly within the
same company.
Exporting can extend a product’s life cycle by exporting to currently unserved markets
where the product will be at the introduction stage of the life cycle.
The magnitude of international trade and how it has grown are reflected in the fact that
one-fourth of everything grown or made in the world is now exported.
Free trade zones are areas designated by the government of a country for duty-free
entry of any nonprohibited good.
Exchange rate forecasting is an advanced science; with the correct data, we can predict
with accuracy exchange rate movements.
Only those companies that have foreign operations need to be aware of what is
occurring globally in foreign markets and their industry.
Value chain linkages must be examined not merely across activities within the company
but also in terms of managing relationships with external entities such as suppliers,
alliance partners, distributors, or customers within and across nations.
The Doha Development Agenda is an extended development plan for Doha, Qatar.
We are each born with a unique culture.
Exporting is an expensive option for testing foreign markets and foreign competition.
The benefits from standardization of the marketing mix are lower costs, easier control,
and reduction of time in preparing the marketing plan.
Commonly, in designing plants for developing countries, engineers will use a hybrid of
capital-intensive processes when they are considered essential to ensure product quality
and labor-intensive processes to take advantage of the abundance of skilled labor.
China and India combined are using more marketed energy than is the United States,
and this trend is projected to increase.
The means of supplying overseas markets—exporting to and production in those
markets—depend on nonequity modes of entry.
International institutions provide nations the opportunity to build multilateral solutions,
and thus make significant contributions to international stability.
As the 21st century evolves, it is expected that managers will make greater use of the
dynamic network structure to integrate smaller units into an operation better
coordinated by a large central headquarters organization.
On an open account, payment can be made once the exports have been sold.
The increasing pace of change and intensity of competition in many markets of the
world, as well as continued differences across many markets, are causing even large
experienced companies to delegate at least some decision-making authority to
subsidiary managers.
Companies controlled by other companies through ownership of enough voting stock to
elect majorities on the board of directors are called subsidiaries or affiliates.
There are three points at which operating in a foreign currency raises accounting issues:
when transactions are made in foreign currencies, when foreign subsidiaries consolidate
their results to the parent company, and when debt is acquired in foreign currencies.
Some firms promote host-country employees to international status without transferring
them abroad.
According to the text, the domestic environment is all of the uncontrollable forces
originating in the home country that surround and influence the firm’s life and
development.
If a firm decides to become involved in overseas manufacturing, it has two options: (1)
wholly owned subsidiary and (2) joint venture.
Limits, interdependence, and equity are characteristics of sustainable business practices.
A comparison based on hourly wages is a reasonable guide to a need to protect
domestic jobs.
As discussed in the text, global sourcing arrangements include overseas joint ventures,
independent overseas manufacturers, and wholly owned subsidiaries.
Team establishment involves weakly linked member identification to ensure creativity.
The EU has been unsuccessful at harmonizing customs and tax formalities within
member nations’ borders.
Although strategic planning is not a widely used management tool among global
executives, according to a Bain & Company survey there is a high level of satisfaction
among those executives who do utilize strategic planning.
Kurt Lewin’s model of change involves understanding the need for change, changing,
and evaluating the change.
Mountain barriers found in the area of the Pakistan-Afghanistan border impede travel
and separate populations.
To achieve global objectives, the selection and training of IC managers are the same
whether the candidate is from the home country, the host country, or a third country.
Contingency plans are developed in some firms for the best-and worst-case scenarios
and for critical events.
The primary reason for sourcing globally is to obtain lower prices.
According to the theory of comparative advantage:
A. a nation should produce those goods which it is more efficient at producing than are
other nations.
B. a nation can gain from trade if it is equally inefficient in producing two goods.
C. a nation must have an absolute advantage in at least one good to gain from trade.
D. all of the above.
E. none of A, B, or C.
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.
The masculine-feminine dimension is about:
A. task vs. relationship.
B. the gap between men’s and women’s roles in the culture.
C. doing vs. being.
D. quality of work vs. quality of life.
According to the text, competencies:
A. are skills or abilities required in order to achieve competitive advantage.
B. refer to the ability of a company to have higher rates of profits than its competitors.
C. create value for customers and for which customers are willing to pay.
D. two of the above.
E. none of A, B, and C.
The goal of global leadership development is to:
A. tick off the boxes so that management will recognize your skills.
B. build language fluency.
C. obtain the variety of transformational experiences that are needed to develop global
leadership capability.
D. build allies and networks in the firm where your skills are recognized.
E. all of the above.
The Organization for Economic Cooperation and Development provides information
on:
A. military alliances.
B. economic and other activities within its member-nations.
C. trade imbalances for nonmember countries.
D. sovereign debt risk.
An arrangement by which one firm provides management in all or specific areas to
another firm is:
A. a license.
B. a franchise.
C. a management contract.
D. all of the above.
E. two of A, B, and C.
Knowledge of foreign languages:
A. requires too much work to be worth the effort.
B. can be of great assistance in making export sales.
C. is useless if you know English.
D. is of academic but not business value.
E. none of the above.
Part of the problems with international accounting convergence efforts has to do with:
A. cultural differences in value systems between the EU and the United States.
B. stubbornness on the part of U.S. negotiators.
C. accounting’s objectivity.
D. difficulties related to quantification.
The Multi-Fiber Arrangement (MFA) was an orderly marketing arrangement to regulate
textiles and clothing exports.
Studies conducted by the World Bank indicate that tropical climates allow for:
A. the unimpeded reproduction and growth of weeds, viruses, birds, insects, and
parasites.
B. lack of the need to provide heat and shelter that is present in northern climates.
C. unparalleled trade.
D. cultivation of citrus and four crops per year.
Investigation of export and import data shows:
A. there is a strong relationship between global sourcing and ownership of the foreign
sources.
B. there is no relationship between global sourcing and ownership of the foreign
sources.
C. American firms, but not Japanese firms, buy from their U.S. subsidiaries.
D. American firms import twice as much from their overseas subsidiaries as foreign
firms import from their U.S. affiliates.
E. two of the above.
Material culture includes:
A. what people in the culture make, such as tools, art, and everything material.
B. tapestries but not their frames and the wool or other fabric before it is woven.
C. only manufactures of which the culture is proud.
D. only pottery, glassware and eating utensils.
When designing production facilities, designers generally find that:
A. automated machinery is severely limited in flexibility regarding product variety and
sizes.
B. general-purpose machines require skills that are built into a special-purpose machine.
C. they have to choose between low-output specialized machinery and higher-output,
general-purpose machines.
D. all of the above
E. two of A, B, and C
“Trade without discrimination” in the WTO means that
A. the MFN principle can be ignored.
B. all trading partners must be treated the same.
C. racially based trading patterns are tolerated.
D. developing and developed nations must be separated for trading purposes.
All of the following are part of the e-commerce readiness index except:
A. mobile phones per 1,000.
B. number of PCs per 1,000.
C. electricity consumption.
D. Internet hosts per million people.
E. two of the above.
The EU applies its competition policy:
A. extraterritorially.
B. only within the EU.
C. within the EU and applicant states.
D. within the EU and other European nations.
E. none of the above.
An arrangement in which one firm contracts with another firm to produce products to
its specifications but assumes responsibility for marketing is:
A. a license.
B. a franchise.
C. a management contract.
D. contract manufacturing.
E. a turnkey project.
Elkington suggests that the drivers for triple-bottom-line accounting can be:
A. corporate profits and growth.
B. markets, values, transparency, life-cycle technology, partnerships, time, and
corporate governance.
C. CSR.
D. the SEC.
Leading and lagging is a practice:
A. of timing, leading with receivables in a weakening currency and payables in
strengthening currencies.
B. a defensive marketing strategy with finance implications.
C. of interest rate manipulation, borrowing in low-rate environments and lending in
high-rate environments.
D. of leading with payables in weakening currencies and with receivables in
strengthening currencies.
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
A purchase of foreign goods from the United States (requiring importing) will:
A. be recorded in the BOP as an asset in the current account.
B. be recorded in the BOP as a debit in the current account.
C. have no record in the BOP because the purchase is made in the United States.
D. be recorded in the BOP as a liability in the foreign transfer account.
Opportunities for corporations to tap into varying international markets exist because:
A. markets, although interconnected, are not fully integrated.
B. some regional markets favor certain business sectors (Mexico, cement; U.S., fast
food; EU, cheese).
C. national markets favor domestic companies.
D. B and C.
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.
According to the text, the types of information an IC needs to have reported by
subsidiaries include:
A. technological.
B. market opportunities.
C. economic events.
D. all of the above.
E. two of A, B, and C.
Generally, consumer products require __________ adaptation than (as) industrial
products to meet the demands of the world market.
A. greater
B. less
C. the same amount of
D. about the same
E. none of the above
With regard to globalization’s complexity, the condition of multiplicity means that:
A. many currencies may be used.
B. financial markets may have different rules.
C. there are many more players and many more relationships to maintain.
D. increased ambiguity can work in the global leader’s favor.
E. B and D.
Standards are a way to establish nontariff barriers, and examples are:
A. all of B, C, and D.
B. Japan’s refusal to import light mayonnaise.
C. Canada’s categorization of orange juice with added calcium as a drug and subject to
special requirements.
D. the prohibition of imported drugs at the consumer level in the United States.
E. two of B, C, and D.
The WTO exists to:
A. establish and help implement rules of trade among nations in order to increase trade
flows.
B. monitor and reduce the amount of trade from developing nations to developed
nations.
C. ensure that the industrial revolution continues to support the economies of developed
nations.
D. B and C.
An advantage of hiring personnel who are citizens of neither the home country nor the
host country may be that they:
A. may accept lower wages and benefits.
B. may come from a culture similar to that of the host country.
C. all of A, B, and D.
D. have international experience.
E. two of A, B, and D.
Reasons for global standardization of manufacturing systems include:
A. simpler organization at headquarters.
B. less design time required for a new plant.
C. easier and more cost-effective purchasing.
D. all of A, B, and C.
E. two of A, B, and C.
Exchange rate forecasting is:
A. important because exchange rates influence all aspects of business.
B. important because markets depend on solid information.
C. unimportant because exchange rate forecasting does not have a theoretical model.
D. unimportant because exchange rate movements do not impact international
transactions.