The compensation of nonmanagerial workers is strongly influenced by increased
cross-border business investment.
Scenario: Not-So-Free Freeland
Freeland is a semi-closed economy whose government believes in protecting national
identity and building a self-sustained economy. The government’s priority is to protect
local jobs and provide opportunities to Freeland’s emerging industries to flourish
without the threat of external competition. The main cultural motive behind government
intervention in trade includes protection of domestic jobs.
Debt appeals to companies because it lowers the amount of taxes the companies must
pay.
Small businesses will be completely immune to events in the international business
environment.
Under a turnkey project, one company supplies another with managerial expertise for a
specific period of time.
The process of aggregating the currencies that one bank owes another and then carrying
out the transaction is called clearing.
Scenario: Cleanshot USA in Russia
When Cleanshot USA, a photography products company, decided to enter the
international arena, it chose Russia as its main market. Although Russia has been in
transition for years, Cleanshot managers believe their company has tremendous
opportunities there.
Political risk tends to be higher in developing countries compared to industrialized
countries.
Scenario: Susan Goes Global with Grape Fizz
Susan is the CEO of Grape Fizz, a global drinks-manufacturing company. She wishes to
set up production facilities in other countries and has been advised to assess the
political system of each country before she does so.
Secular totalitarianism is a political system in which government leaders are elected
directly by the wide participation of the people or their representatives.
A company that sells differentiated products may maintain the ability to respond
quickly to changing buyer preferences by utilizing ________.
A) vertical integration
B) decentralized production
C) lean production
D) continuous production
Which of the following best describes the infant industry argument?
A) It states that small businesses that have just started to export are financially stable
and seldom require financing from government agencies.
B) It states that protecting a country’s emerging industries from international
competition will enhance domestic companies’ incentives to obtain knowledge to be
competitive.
C) It states that a country’s emerging industries need protection from international
competition during their development until they become sufficiently competitive.
D) It states that domestic companies that are provided protection from international
competition become more competitive and less reliant on protection.
Scenario: The French Government
The French Government has placed many restrictions upon the use of the English
language within their borders. They argue that the inflow of English movies, music, and
literature is responsible for the dilution of their rich culture.
Upon what assumption does their argument rest?
They argument assumes that ________.
A) the people of France prefer English music and movies to French music and movies
B) the people of France no longer speak French
C) the people of other countries aren’t open to French cultural elements
D) Hollywood movies don’t have French subtitles
Which of the following do governments impose upon people to help pay for the
consequences of using a particular product?
A) income taxes
B) consumption taxes
C) property taxes
D) value-added taxes
Which of the following is a reason why there are only a few managers who are ready
and willing to go to foreign branches on short notice?
A) expatriate failure
B) decruitment
C) culture shock
D) social loafing
Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin
America. To that end, Blickinstock is trying to decide whether to purchase an existing
company in a remote region of Argentina or build its own subsidiary. Keith Moon,
Blickinstock’s vice president of global business development, will be making a
presentation to the board outlining the company’s options. A majority of the regulatory
changes that governments around the world introduced in recent years are unfavorable
to FDI.
The term ________ refers to a company’s efforts to reach distribution channels and
target customers through communications such as personal selling, advertising, public
relations, and direct marketing.
A) social marketing
B) viral marketing
C) promotion mix
D) positioning
Which of the following statements is true regarding the ISO 9000 standards?
A) They specify details on how companies should develop its quality processes.
B) The standards are applicable to Asia exclusively.
C) ISO 9000 is a certification that companies get for their environment-friendly
initiatives.
D) The standards require each company to define and document its own quality
processes.
________ refers to the takeover of an entire industry by the government.
A) Decentralization
B) Globalization
C) Nationalization
D) Automatization
It is often difficult to conduct focus groups in ________ cultures where people have a
tendency to agree with others in the group.
A) collectivist
B) masculine
C) low uncertainty avoidance
D) long term oriented
Which of the following is most likely to occur in the honeymoon stage of culture
shock?
A) new arrivals are fascinated by aspects of the new culture
B) individuals become annoyed by unpredictable quirks of the new culture
C) emotions hit rock bottom for visitors
D) visitors better understand and appreciate local customs and behavior
The main purpose of the ________ is to debate and amend legislation proposed by the
European Commission of the EU.
A) European Parliament
B) Council of the European Union
C) Court of Auditors
D) Court of Justice
________ occurs if ownership of a property or assets of a company is transferred to the
host government.
A) Internalization
B) Nationalization
C) Deportation
D) Deracination
Scenario: Moonland Union
Twenty-six nations of Moonland region, have decided to cooperate with one another to
eliminate trade barriers among them and create the Moonland Union. They are not sure,
however, to what extent they want to cooperate.
Country M wants member nations to harmonize their tax, monetary, and fiscal policies
and wants to create a common currency. Country M is requesting for the creation of
a(n) ________ in the Moonland nations.
A) free trade area
B) economic union
C) customs union
D) common market
The World Bank was created by the ________.
A) Jamaica Agreement
B) Bretton Woods Agreement
C) Smithsonian Agreement
D) Plaza Accord
Scenario: Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc., a business that develops,
manufactures, and markets sports products. The company is looking to expand its
operations into the European market. Herb believes that if the company expands its
product line to include products reflecting sports that are popular in Europe, the
company will achieve success there.
The CEO of Sports Stuff has decided that the company needs to retain complete control
over its operations in Europe. To achieve this objective, Herb would most likely
recommend that the firm establish a ________.
A) joint venture
B) cross licensing agreement
C) wholly owned subsidiary
D) strategic alliance
Which of the following statements is true of countertrade?
A) Countertrade is practiced by countries when there is a lack of hard currency.
B) Countertrade involves products whose prices on world markets tend to remain
steady.
C) Countertrade usually involves industrial products and computer softwares.
D) Hedging risk in countertrade is prohibited.
Which of the following statements is true of ethnocentric staffing?
A) Ethnocentric staffing appeals to companies that maintain lose control over
decision-making in branch offices abroad.
B) Companies that use ethnocentric staffing formulate policies designed to work in
every country in which they operate.
C) Ethnocentric staffing is generally used to fill positions at all levels of an
organization.
D) In ethnocentric staffing, individuals from the host country manage the operations
abroad.
Which of the following steps of the market screening process involves the
determination of a product’s income elasticity?
A) identification of basic appeal of a product
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site
What are the options available to companies seeking financial resources?
Why might companies decide to reinvest, scale back, or divest local operations?
Explain the role of equity in a national capital market. What factors are responsible for
the growth of the international equity market?
What is country image? Explain how it affects the screening process using examples.
Describe the different types of tariffs and provide an example of each.
Discuss the advantages of licensing, low-cost production, and low-cost shipping for
international companies.
Discuss the dangers of trade dependency.
Using examples, explain the circular process of marketing communication.