Business Principles

When Georgio accepted a job in the U.S.-based subsidiary of his Spanish multinational company, he was surprised to learn that wage rates were (module 1)

30 percent higher than the national average.

Match the following external forces with the appropriate definition.

Competitive: Kinds and number of competitors and their activities Financial: Variables such as interest rates, inflation rates, and taxation Economic: Variables such as gross national income, unit labor cost, and personal consumption expenditure Legal: The many foreign and domestic laws governing business operations Political: Elements of nations' climates such as nationalism and forms of government Physical: Elements of nature such as topography, climate, and natural resources

The structure of the organization is an external environmental force. (module 1)

False

How does the foreign environment operate differently than the domestic environment?

Forces in the foreign environment are interrelated. Forces in the foreign environment have different values. Forces in the foreign environment are difficult to assess.

What is one argument in support of globalization? (module 1)

Free trade enhances economic development.

A(n) ________ company is a company with operations in multiple nations.(module 1)

International

What two statements are true regarding the international environment?

It consists of interactions between the foreign environmental forces of two countries. It consists of the interactions between the domestic environmental forces and the foreign environmental forces

Which of following are considered external forces?

Physical Socioeconomic Distributive Technological Competitive

The international environment consists of which group of interactions? (module 1)

The domestic environmental forces and the foreign environmental forces, as well as the foreign environmental forces of two countries when an affiliate in one country does business in another country.

What is an example of an external force that can affect a company's environment? (module 1)

The newly-elected governor decides to raise property taxes.

Which three international organizations affect the international market?

World Bank European Union OPEC

The argument that free trade is the best strategy for advancing the world's economic development is considered (module 1)

a proposition with which most economists agree

Foreign forces are frequently difficult to

assess

Barriers to the free movement of a nation's people, such as mountain ranges, help maintain pockets of distinct cultures within a country, thus affecting a company's decision making. This scenario is an example of foreign forces Blank

being interrelated

Foreign business denotes (module 1)

business conducted within a foreign country.

An automobile manufacturer decided to enter the European market because if it didn't, then all of the other car companies that were already there would get the business. Which driver is causing internationalization for the manufacturer? (module 1)

competitive

Internal forces are also called

controllable

Production, finance, and marketing are all examples of______ forces.

controllable

Environment involves the forces surrounding and influencing the life and development of the firm and is classified as (module 1)

controllable and uncontrollable.

A company that decides to engage in exporting as a way to increase economies of scale is basing this decision on which driver of international business activity? (module 1)

cost

The _______environment is all the uncontrollable forces originating in the home country that surround and influence the development of the company.

domestic

A company's managers tend to be most familiar with the forces in the______.

domestic environment

The tendency toward an international integration of goods, technology, information, labor, and capital, or the process of making this integration happen, is called (module 1)

economic globalization.

The term ____________ means all the forces influencing the life and development of the firm.

environment

The __________forces are commonly called uncontrollable forces.

external

The forces influencing the life and development of the firm are classified into which two categories?

external and internal

Goodness Industries is located near an urban area, which provides it with a large pool of potential employees. Recruiting employees is an example of a(n) ________blank because it is controllable. (module 1)

external force

A nation's GNI and a company's sales are directly comparable because GNI is a measure of value added, as are sales. (module 1)

false

Critics of globalization point to countries that are fully self-reliant for all the goods and services they need. (module 1)

false

Foreign direct investment includes investment in equipment, organizations, and company stock in a foreign country.(module 1)

false

Lobbyists who advocate for new laws that will affect the production standards of a business are an example of an internal force. (module 1)

false

Multinational corporations consist of several entities in different countries, each of which has its own independent strategy and policies. (module 1)

false

The 17th and 18th centuries have term-11frequently been termed the age of industrialism because this was the period when industrialization was advanced to the masses. (module 1)

false

Sanctions being placed on Russia and Russian companies in response to Russia's actions in Ukraine is an example of:

forces in the foreign environment having different values.

Which environment refers to all the uncontrollable forces originating outside the home country that surround and influence the firm?

foreign

___________ business denotes the operations of a company outside its home market.

foreign

Gentille Manufacturing, based in California, recently purchased a new manufacturing facility and production equipment in Germany that it will use to produce component parts. This purchase is an example of (module 1)

foreign direct investment.

International business differs from domestic business in that a firm operating across borders must deal with the forces associated with which three kinds of environments? (module 1)

foreign, domestic, international

The ______ environment refers to all the ______ forces originating outside the home country that surround and influence the firm.

foreign; uncontrollable

An opponent of globalization would state that (module 1)

globalization has had harmful effects on labor and labor standards.

Many opponents of globalization believe that the gap between rich and poor has (module 1)

increased

What is an example of an external force that represents financial factors affecting a business? (module 1)

interest rates

A(n)______ company is a company with operations in multiple nations.

international

In which environment is decision making most complex?

international

The _________environment consists of interactions between the domestic environmental forces and the foreign environmental forces.

international

A bicycle designer and manufacturer is headquartered in Illinois. It does business in the United States and exports to Europe and South America. This company is an example of a(n) (module 1)

international company.

The definition of international business includes:

international trade, foreign manufacturing, & service industries

The forces in the foreign environments are often ______; that is, they are connected to one another.

interrelated

Bernardo's Audio Inc. is struggling in the industry because average salaries are too high in its urban location. What external force is impacting the company's ability to hire? (module 1)

labor force

Which of the following foreign forces are especially difficult to assess?

legal political

Data have shown a clear and definitive link between (module 1)

liberalization of trade and economic growth.

What is identified in the text as being one of the five major drivers of globalization? (module 1)

market

When a supplier to an original equipment manufacturer (e.g., a battery manufacturer supplying an automobile producer) follows its major customer to a new country, it is an example of a ________ driver of international business activity. (module 1)

market

Due to the expanding importance of foreign-owned firms in local economies, host governments have made their policies toward these companies (module 1)

more liberal

Estimates show there are ________blank multinational corporations with hundreds of thousands of foreign affiliates. (module 1)

more than 100,000

Compared to 1980, service exports in 2017 can best be described as (module 1)

more than 15 times larger.

The 17th and 18th centuries have frequently been termed the "Age of Mercantilism" because (module 1)

national power depended on the sponsorship and control of merchant capital.

The forces in the foreign environment differ from the domestic environment in that they originate (module 1)

outside the firm's home country.

What is one of the five major drivers of globalization? (module 1)

political

When a government sees that local industry is threatened by imports, it can threaten to erect import barriers to stop or reduce these imports. This is an example of a ________ driver of international business activity. (module 1)

political

The rise of the Ottoman Empire before 1300 influenced trade as it (module 1)

promoted a search for sea routes from Europe to Asia.

Foreign affiliates must obey the local laws. If they don't, they could be subject to (module 1)

seizure by the host government.

What term refers to the unconscious reference to your own values when judging behaviors of others in a new and different environment?

self-reference criterion

Sankha is the director of operations for Farm Fresh Produce Corp. and is now able to sell his product to the international market thanks to a new computer system that is specifically designed for businesses in the fresh food industry. Which driver helped Sankha's company internationalize? (module 1)

technological

The kinds of forces in the foreign environment are ________blank those in the domestic environment except that they occur in foreign nations.(module 1)

the same as

After Simone was transferred from the U.S. home office to the French satellite office, she was frustrated that most of her workers took the month of August off for vacation. She believed they would work the extra hours if she offered them bonus pay, but they weren't interested. In misunderstanding her workforce's motivations, Simone is exhibiting a self-reference criterion. (module 1)

true

Decision making is more complex in an international environment than it is in a purely domestic environment. (module 1)

true

The global COVID-19 pandemic fostered antagonism toward globalization, with critics saying that the interconnectedness of nations and people exacerbated the scope of the infection. (module 1)

true

Urbanization and industrialization in emerging markets are causing population shifts from Europe and the Americas to Asia. (module 1)

true

When company A in the UK signed a long-term contract to supply essential parts to company B in the U.S., company A decided to move its operations to the U.S. to discourage competitors from taking away the business. This is an example of a market driver. (module 1)

true

Management has no direct control over______, although it can exert influence over them.

uncontrollable forces