Chapter 12 MiGE, Chapter 17 MiGE, International Business Chapter 12 T/F, International Business Chapter 12 Multiple Choice, International Business Chapter 13 Multiple Choice, International Business Chapter 17 T/F, International Business Chapter 17 Mu...

Nantucket Food Products desires to expand internationally. Director of Sales, Esme Jones, prefers that the company export to foreign markets. Which of the following rationales should Jones use as an advantage of choosing exporting as a mode of entry into foreign markets? A. A firm can avoid the cost of establishing manufacturing operations in the host country. B. A firm shares the development costs and risks with its host partner. C. A firm can earn returns from process technology skills in countries where FDI is restricted. D. A firm has access to local partner's knowledge. E. A firm has the ability to engage in global strategic coordination.

A. A firm can avoid the cost of establishing manufaacturing operations in the host country

In the context of expatriate compensation, what is the role of a balance sheet approach? A. It equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting that they enjoyed at home. B. It helps expatriate managers and their families to adjust to the day-to-day life of the host country. C. It rewards expatriates on the basis of merit and performance. D. It helps expatriates to come to terms with the standard of living of the host country. E. It is offered as an inducement to accept foreign postings and live away from family.

A. It equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting that they enjoyed at home

Geodyne, a United States-based player in the energy business is clear-cut in its human resources policy with regard to international expansion. While U.S. nationals staff key positions at its Orlando, Florida headquarters, it recruits locals to manage subsidiaries in each country that it goes into. Which of the following is an advantage of Geodyne's polycentric staffing approach? A. It is less expensive to implement as compared to other staffing approaches. B. It gives host-country nationals unlimited opportunities to gain experience outside their own country. C. It increases career mobility. D. It increases interaction between the headquarters of a firm and its foreign subsidiaries. E. It bridges the gap between host-country managers and parent-country managers.

A. It is less expensive to implement as compared to other staffing approaches

Which of the following is a disadvantage of an ethnocentric staffing policy? A. It leads to resentment in the host country. B. It isolates the headquarters from foreign subsidiaries. C. It does not allow transfer of core competencies. D. It leads to a dearth of qualified managers in the host nation. E. It diversifies corporate culture.

A. It leads to resentment in the host country

There are vast differences in local market needs in the consumer food business across the world. Yamaguchi Media, a Japanese multinational advertising agency, specializes in the food industry. Toward this, Yamaguchi Media uses a geocentric staffing approach. Which of the following is an advantage of adopting a geocentric staffing approach for Yamaguchi Media? A. It tends to reduce cultural myopia and enhance local responsiveness. B. It is inexpensive to implement. C. It reduces the costs of value creation. D. It allows all key management positions of a firm and its subsidiaries to be filled by parent-country nationals. E. It requires minimal documentation for hiring foreign nationals.

A. It tends to reduce cultural myopia and enhance local responsiveness

Which of the following is an advantage of joint ventures as a mode of entry into foreign markets? A. The foreign firm benefits from a local partner's knowledge of the host country. B. The foreign firm can protect its technology from being appropriated by its local partner. C. There is less cause for friction and conflict between the foreign and local partners. D. It gives a firm tight control over subsidiaries, which enables it to realize experience curve or location economies. E. The foreign firm does not have to bear any development costs and risks associated with opening a foreign market.

A. The foreign firm benefits from a local partner's knowledge of the host country

Which of the following is an advantage of franchising as a mode of entry into foreign markets? A. The franchiser is relieved of many of the costs and risks of opening a foreign market on its own. B. The franchiser is allowed to take profits out of one country to support competitive attacks in another. C. The franchiser can easily maintain uniform quality across many geographically dispersed franchisees. D. Manufacturing concerns can be effectively coordinated across adjacent processes. E. The franchiser can support its short-term interests in a country with an unstable economy.

A. The franchiser is relieved of many of the costs and risks of opening a foreign market on its own

Why do acquisitions fail sometimes? A. There is a clash between the cultures of the acquiring and acquired firm. B. Acquisitions take a long time to execute. C. Acquisitions are easily preempted by making greenfield investments. D. The revenue and profit stream generated by an acquisition's resources is usually unknown. E. Losses produced by intangible assets outweigh profits from acquired tangible assets.

A. There is a clash between the cultures of the acquiring and acquired firm

Which of the following is an advantage of acquisitions as a means of entering foreign markets? A. They are quick to execute and help firms to rapidly build their presence in the target foreign market. B. It is much easier to change the culture of an existing organization than build a new organization. C. It is easier to convert the operating routines of acquired units than establish routines in new subsidiaries. D. They give firms access to valuable intangible assets while minimizing a pileup of tangible assets. E. Acquired firms are often undervalued and hence assets can be purchased at minimal prices.

A. They are quick to execute and help firms to rapidly build their presence in the target foreign market

A(n) expatriate manager refers to A. a citizen of one country who is working abroad in one of the firm's subsidiaries. B. a parent-country national who works in the parent country. C. a host-country national who works in the host country. D. any person who lives in a foreign country. E. a person willing to work in different departments of a foreign firm.

A. a citizen of one country who is working abroad in one of the firm's subsidiaries

Which of the following is an example of a first-mover advantage? A. ability to create switching costs that tie customers into one's products or services B. avoidance of pioneering costs that a later entrant into the foreign market has to bear C. increased probability of surviving in a foreign market D. opportunity to observe and learn from the mistakes of other entrants E. ability to let later entrants ride ahead on the experience curve

A. ability to create switching costs that tie customers into one's products or services

If a firm is seeking to enter a market via a wholly owned subsidiary where there are already well-established incumbent enterprises, and where global competitors are also interested in establishing a presence, a suitable mode of entry is a(n) A. acquisition. B. licensing deal. C. greenfield venture. D. turnkey project. E. exporting deal.

A. acquisition

Johnson Food Products believes that as far as its products are concerned, tastes vary worldwide and so it has to customize its product offering, marketing strategy, and business strategy to differing national conditions. Johnson Food Products' ability to increase its profitability and profit growth by expanding globally is constrained A. by the imperative of localization. B. by the economies of scale. C. due to customer surplus. D. due to the leveraging of skills developed in foreign operations. E. due to the dispersion of individual value creation activities.

A. by the imperative of localization

An advantage of choosing exporting as a mode of entry into foreign markets is that a firm A. can avoid the cost of establishing manufacturing operations in the host country. B. shares the development costs and risks with its host partner. C. can earn returns from process technology skills in countries where FDI is restricted. D. has access to local partner's knowledge. E. has the ability to engage in global strategic coordination.

A. can avoid the cost of establising manufacturing operations in the host country

Cost reduction pressures tend to be particularly intense in industries that A. create products that serve universal needs. B. create customized products. C. are not involved in international business. D. produce products that have inelastic demand. E. serve different customers with different needs.

A. create products that serve universal needs

Which of the following is most likely to necessitate the delegation of marketing functions to national subsidiaries? A. differences in distribution channels B. pressures for decreasing consumer surplus C. lack of product customization D. pressures for increasing economies of scale E. pressures for increasing consumers' reservation price

A. differences in distribution channels

According to Michael Porter, what are the two basic strategies for creating value and attaining a competitive advantage in an industry? A. differentiation and low-cost B. value creation and generalization C. one-size-fits-all and zero-sum D. comparison and standardization E. profitability and strategic fit

A. differentiation and low-cost

First-mover disadvantages refer to A. disadvantages associated with entering a foreign market before other international businesses. B. costs that a late entrant to a foreign market has to bear. C. a direct restriction on the quantity of a good that can be imported into a country. D. imperfections in the operation of the market mechanism. E. disadvantages experienced by being a late entrant in a foreign market.

A. disadvantages associated with entering a foreign market before other international businesses

The probability of survival for an international business increases if it A. enters a national market after several other foreign firms have already done so. B. avoids the use of countertrade agreements. C. enters a national market early. D. enters a foreign market via turnkey projects. E. avoids engaging in joint ventures.

A. enters a national market after several other foreign firms have already done so

Kagemusha, Inc., is a Japanese multi-national with operations in 23 countries around the world. It is Kagemusha's policy to staff all the key positions in the company's foreign operations with Japanese managers. What is Kagemusha's staffing policy? A. ethnocentric B. global C. polycentric D. geocentric E. transnational

A. ethnocentric

Which of the following staffing approaches is compatible with an international strategy? A. ethnocentric B. geocentric C. polycentric D. transnational E. ethical

A. ethnocentric

Which of the following staffing policies is concerned with filling all key management positions by parent-country nationals? A. ethnocentric B. global C. polycentric D. geocentric E. transnational

A. ethnocentric

Which of the following refers to systematic reductions in production costs that have been observed to occur over the life of a product? A. experience curve B. learning effects C. location economies D. efficiency slope E. economies of scale

A. experience curve

Which of the following staffing policies limits a firm's ability to reduce its use of expatriates? A. geocentric B. polycentric C. transnational D. regiocentric E. neocentric

A. geocentric

Which of the following strategies is compatible with a geocentric staffing policy? A. global standardization strategy B. localization strategy C. international strategy D. ethical strategy E. global strategy

A. global standardization strategy

If a firm is considering entering a country where incumbents exist, and if the competitive advantage of the firm is based on the transfer of organizationally embedded competencies, skills, routines, and culture, what would be the preferable mode of entry? A. greenfield venture B. joint venture C. licensing agreement D. franchising deal E. turnkey project

A. greenfield venture

In the absence of a reciprocal tax treaty, an expatriate may A. have to pay income tax to both the home- and host-country governments. B. not have to pay any tax. C. not have to pay income tax only to the host-country government. D. not have to pay income tax to the home-country government. E. have to pay 50 percent less tax to the host-country government.

A. have to pay income tax to both the home- and host-country governments

According to R. L. Tung's study, which of the following is the most important reason for expatriate failures for U.S. multinationals? A. inability of spouse to adjust B. difficulties with new environment C. insufficient pay D. personal or emotional problems E. lack of technical competence

A. inability of spouse to adjust

The liberalization of the world trade and investment environment in recent decades, by facilitating greater international competition, has generally A. increased cost pressures. B. decreased the demand for local responsiveness. C. decreased pressures for cost reduction. D. increased consumer surplus. E. reduced the production of conventional commodity products.

A. increased cost pressures

Mayer Life Systems, a manufacturer of surgical and medical appliances, invented and patented a new dialysis machine that radically reduced maintenance and operational issues. Responding to a global demand, it decided to sell the machines manufactured at its plant in the United States to various markets across the globe. Since the product features provided by Mayer were not provided by any other competitor, Mayer did not feel any pressure for cost reductions. Which of the following strategies is most likely being pursued by Mayer? A. international B. localization C. global standardization D. transnational E. nationalization

A. international

While personal fitness trackers (such as Fitbit) are widely available in the U.S., they are scarcely available in international markets. Given the increasing awareness of a healthy lifestyle, such products satisfy an unmet need. A product such as Fitbit in international markets A. is likely to have greater value. B. will have to be priced relatively low. C. will see a decrease in sales volume. D. is not suited to that particular market. E. will fail to make a profit.

A. is likely to have greater value

International businesses differ in terms of their approaches to international labor relations, mainly in the degree to which A. labor relations activities are centralized or decentralized. B. labor relations are formal or informal. C. labor relations are given a high priority or a low priority. D. labor relations are internally or externally managed. E. firms follow a polycentric or geocentric staffing policy.

A. labor relations activities are centralized or decentralized

Merck, the pharmaceutical company, has taken more than a thousand drugs through the federal approval process and so can do it more cost efficiently than many of its competitors who are relatively new to the industry. Which of the following refers to cost savings that come to Merck in the drug approval process? A. learning effects B. exponential effects C. ancillary effects D. economies of scale E. location economies

A. learning effects

The two phenomena that help explain the experience curve are A. learning effects and economies of scale. B. technology inputs and wealth transfer. C. leveraging subsidiary and local responsiveness. D. standardized manufacturing and global web. E. efficiency frontier and location economies.

A. learning effects and economies of scale

Typically, the price a firm charges for a good or service is A. less than the value placed on that good or service by the customer. B. more than what customers assume it would be. C. more than the market price for similar goods or services. D. the same as the value placed on that good or service by the customer. E. less than the lowest priced similar good or service in the market.

A. less than the value placed on that good or service by the customer

Which of the following conditions is most favorable to reap gains from global scale economies? A. low demand for local responsiveness B. high pressures for cost reduction C. lack of universal needs D. national differences in accepted business practices E. high pressure to delegate production to domestic subsidiaries

A. low demand for local responsiveness

By using significant standardization in the use of aircrafts and by streamlining its operations, Southwest Airlines competes by offering its' flights at a lower price than the competition. According to Michael Porter, the strategy that Southwest Airlines is using is A. low- cost. B. differentiation. C. value transfer. D. efficiency frontier. E. diversification.

A. low-cost

Processes are the A. manner in which decisions are made and work is performed within the organization. B. metrics used to measure the performance of subunits. C. devices used to reward appropriate managerial behavior. D. metrics used to make judgments about how well managers are running the subunits. E. norms and value systems that are shared among the employees of an organization.

A. manner in which decisions are made and work is performed within the organization

Which of the following staffing approaches limits career mobility and isolates headquarters from foreign subsidiaries? A. polycentric B. transnational C. geocentric D. ethnocentric E. global

A. polycentric

The value creation activities of a firm are categorized as A. primary activities and support activities. B. strategic activities and functional activities. C. ancillary functions and tertiary functions. D. primary activities and core activities. E. goal-oriented activities and organizational activities.

A. primary activities and support activities

Which of the following is a reason why a relatively poor country may be an attractive target for inward investment? A. rapid economic growth B. political instability C. currency depreciation D. high cost of living E. less developed infrastructure

A. rapid economic growth

Managing an alliance successfully requires building interpersonal relationships between the firms' managers, or what is sometimes referred to as A. relational capital. B. interorganizational synergy. C. power equilibrium. D. symbiotics. E. intraorganizational coordination.

A. relational capital

Franchising as a mode of entry into foreign markets is employed primarily by A. service firms. B. manufacturing companies. C. online outfits. D. high-technology companies. E. primary industries.

A. service firms

In the 1960s, organized labor believed that by coordinating union action across countries through an international trade secretariat, it could counter the power of a multinational corporation by A. threatening to disrupt production on an international scale. B. introducing a reciprocal tax treaty. C. trying to farm out highly skilled tasks back to the home country of the firm. D. increasing its bargaining power. E. lobbying for importing employment practices from the home country of the firm.

A. threatening to disrupt production on an international scale

Which of the following terms best represents the requirements that are the same all over the world, such as steel, bulk chemicals, and industrial electronics? A. universal needs B. efficiency frontier C. global web D. lateral requirements E. supreme needs

A. universal needs

Jupiter Systems is a high-tech firm looking to set up operations in a foreign country. The firm's core competency is in technological know-how. Which of the following modes of entry would be most favorable to the firm if it wants to keep a tight control over its technology? A. wholly owned subsidiary B. joint venture C. franchising D. licensing E. turnkey project

A. wholly owned subsidiary

Omega, Inc. sells its fitness wrist band for $100. It cost the company $62 to make the product. Customers value the wrist band at $110. In this scenario, Omega's value creation is A. $38. B. $48. C. $10. D. $28. E. $272.

B. $48

In the context of international labor relations, which of the following is a concern of organized labor? A. An international business increases the bargaining power of organized labor. B. An international business keeps highly-skilled tasks in its home country and farms out only low-skilled tasks to foreign plants. C. An international business faces difficulty in switching production from one location to another. D. An international business does not import employment practices and contractual agreements from its home country. E. An international business signs a reciprocal tax treaty with the host country.

B. An international business keeps highly-skilled tasks in its home country and farms out only low-skilled tasks to foreign plants

Which of the following statements is true about economies of scale? A. Economies of scale lead to an increase in the average unit cost of a product. B. Attaining economies of scale increases a firm's profitability. C. The ability to spread variable costs over a large volume is a source of economies of scale. D. Economies of scale result due to the increase in the perceived value of a product. E. Economies of scale refer to cost savings that come from learning by doing.

B. Attaining economies of scale increases a firm's profitability

_____ is an example of an industry in which cross-licensing agreements are increasingly becoming common. A. Glass-blowing B. Biotechnology C. Organic farming D. Basketry E. Weaving

B. Biotechnology

_____ are a part of the organization architecture that consists of the metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits. A. Reports B. Controls C. Rewards D. Knowledge flows E. Dominions

B. Controls

Which of the following is an observation made by researchers Bartlett and Ghoshal regarding modern multinational enterprises? A. Global logistics industry makes the concept of "location economies" redundant for international firms. B. Core competencies and skills can develop in any of the firm's worldwide operations. C. Flow of skills between a firm and its global subsidiaries should be unidirectional. D. Differentiating across geographic markets helps a firm in reducing costs. E. Customer demands for local customization are on the decline worldwide.

B. Core competencies and skills can develop in any of the firm's worldwide operations

_____ is/are an additional and difficult dimension to the long-standing problem of expatriate failure due to the inability of the spouse to adjust. A. Formal training B. Dual-career families C. Cultural diversity D. Single parenting E. Cultural toughness

B. Dual-career families

_____ refers to a subset of expatriates who are citizens of a foreign country working in the home country of their multinational employer. A. Virtual expatriates B. Inpatriates C. Third-country nationals D. Host-country nationals E. Parent-country nationals

B. Inpatriates

What is the advantage of a geocentric staffing policy? A. It requires firms to provide little or no documentation to hire a foreign national. B. It enables firms to build a cadre of international executives who feel at home working in a number of cultures. C. It is inexpensive to implement the policy in a firm. D. It allows all key management positions of the firms and their subsidiaries to be filled by parent-country nationals. E. It helps firms to follow a localization strategy.

B. It enables firms to build a cadre of international executives who feel at home working in a number of cultures

Diacon Products manufactures and sells a wide variety of complex electronic products. Diacon Products wants to enter foreign markets and is deciding on a mode of entry. Vice President of Manufacturing, Brooke Monroe, is making a strong push for a turnkey project. Which of the following is an advantage of turnkey projects as a mode of entry into foreign markets that would help Brooke Monroe make her case? A. It is an ideal way to gain entry into a country where FDI is not limited by government regulations. B. It is a useful strategy to earn great returns from the know-how of a technologically complex process. C. It is an ideal way to establish a firm's long-term presence in a foreign country. D. It helps protect a firm's competitive advantage. E. The firm that enters into a turnkey project with a foreign enterprise avoids giving rise to potential competitors.

B. It is a useful strategy to earn great returns from the know-how of a technologically complex process

Which of the following is an advantage of turnkey projects as a mode of entry into foreign markets? A. It is an ideal way to gain entry into a country where FDI is not limited by government regulations. B. It is a useful strategy to earn great returns from the know-how of a technologically complex process. C. It is an ideal way to establish a firm's long-term presence in a foreign country. D. It helps protect a firm's competitive advantage. E. The firm that enters into a turnkey project with a foreign enterprise avoids giving rise to potential competitors.

B. It is useful strategy to earn great returns from the know-how of a technologically complex process

Which of the following is a drawback of licensing as a mode of entry into foreign markets? A. The licensor has to bear all costs and risks associated with developing a foreign market. B. Licensing does not give a firm tight control over manufacturing, marketing, and strategy. C. Licensing does not benefit firms lacking the capital to expand operations overseas. D. Licensing deals fail when there are barriers to foreign investment in a particular country. E. A firm that enters into a licensing deal with a foreign country will have no long-term interest in that country.

B. Licensing does not give a firm tight control over manufacturing, marketing and strategy

For an international business, which of the following is most likely to be an outcome of protectionism and nationalism in a host-country? A. increase in the attractiveness of location economies B. pressure for localization of production C. requirement of standardization of products or services D. pressure for cost reduction E. decrease in the significance of local responsiveness

B. Pressure for localization of production

According to the survey undertaken by Towers Watson, which of the following countries provides the highest pay to CEOs? A. Switzerland B. The United States C. Japan D. Australia E. Argentina

B. The United States

Which of the following is a disadvantage of adopting a geocentric staffing approach? A. Cultural myopia negatively influences effective management control. B. Training and relocation costs increase when transferring managers from country to country. C. Host-country nationals cannot progress beyond senior positions in their own subsidiary. D. A gap forms between host-country managers and parent-country managers. E. The lack of management transfers leads to a lack of integration between corporate headquarters and foreign subsidiaries.

B. Training and relocation costs increase when transferring managers from country to country

Which of the following countries presents a favorable benefit-cost-risk trade-off scenario for foreign expansion? A. a country ridden by private-sector debt B. a country with a free market system C. a country experiencing a dramatic upsurge in inflation rates D. a country that is heavily populated E. a country that is less developed and politically unstable

B. a country with a free market system

Which of the following is a risk of being the first to enter developing nations like India and China on a large scale? A. lower potential for long-term rewards B. absence of prior foreign entrants C. lack of control over quality D. fear of rapid imitation of technology E. high management turnover

B. absence of prior foreign entrants

One way organized labor responds to the increased bargaining power of multinational corporations is by trying to A. impose regulations on multinationals through organizations such as GATT. B. achieve international regulations on multinationals through the United Nations. C. establish regional boards. D. lobby multinational corporations to restrict their global reach to three or fewer foreign countries. E. develop a local trade forum.

B. achieve international regulations on multinationals through the United Nations

A firm should configure its value chain to maximize value at each stage when A. government regulations relax. B. cost pressures are intense. C. rapid imitation is expected. D. the number of consumers increases. E. incumbent competitors exist.

B. cost pressures are intense

Gunther Home Products, Gmbh, a German manufacturer did not succeed in its international ventures because it used its domestic marketing mix "as-is" in foreign markets in addition to using the same domestic-centric approach to managing its foreign operations. Gunther Home Products' failure to understand host-country cultural differences that require different approaches to marketing and management is referred to as A. cultural parity. B. cultural myopia. C. power distance. D. cultural toughness. E. cultural polarization.

B. cultural myopia

Rhone-Rohrer Chemicals, a French leader in specialty chemicals used an ethnocentric policy to approach international markets. It followed the same domestic marketing and management practices in foreign markets. Rhone-Rohrer Chemicals' international expansion failed miserably because Rhone-Rohrer Chemicals suffered from A. cultural parity. B. cultural myopia. C. power distance. D. cultural toughness. E. cultural polarization.

B. cultural myopia

Poor health care and housing standards and inhospitable climate make it difficult for expatriates to adjust to a particular posting. According to Mendenhall and Oddou's four dimensions that predict success in a foreign posting, which of the following is required in this situation? A. perceptual ability B. cultural toughness C. self-orientation D. Others-orientation E. Self-confidence

B. cultural toughness

A number of studies have observed that a product's production costs decline by some quantity about each time A. annual output is halved. B. cumulative output doubles. C. the workforce is trimmed by 75 percent. D. fixed investment triples. E. foreign domestic investment doubles.

B. cumulative output doubles

Which of the following is a value creation activity that falls into the category of primary activities? A. creation and maintenance of information systems B. customer service C. human resources D. logistics E. company infrastructure maintenance

B. cusomer service

In a bid to compete better in a highly-competitive fitness products market, Omega is focusing primarily on increasing the attractiveness of its product. What Omega is doing is referred to as a A. standardization strategy. B. differentiation strategy. C. target-identification strategy. D. low-cost strategy. E. profitability strategy.

B. differentiation strategy

The efficiency frontier has a convex shape because of A. a high-cost structure. B. diminishing returns. C. a significantly low product value. D. low production costs. E. high profit growth.

B. diminishing returns

Omega, Inc. sells its fitness wrist band for $100. It cost the company $62 to make the product. While Tom values the Omega wrist band at $122, his friend Dan values it at $105. The value placed by Tom and Dan are what economists would call A. producer's surplus. B. each customer's reservation price. C. each customer's value price. D. the efficiency frontier. E. competitive advantage.

B. each customer's reservation price

Netflix incurs a huge fixed cost to obtain streaming rights to movies and television programs. However, it is able to spread this cost over a large number of subscribers that results in a cost-savings phenomenon referred to as A. volume synergies. B. economies of scale. C. captured savings. D. size effects. E. location economies.

B. economies of scale

Born and raised in Portland, Michigan, John had never traveled overseas. After finishing his engineering program, John went to work for Cymatics, a Lansing, Michigan-based construction firm. In his fifteen-year career at Cymatics, John's work did not require any travel at all. John has excelled at his work and his superiors have always rated him very highly. An important opening has come up in Cymatics' Dubai operations and the company is considering who to send. According to Mendenhall and Oddou, what is the major problem in the selection of appropriate candidates for overseas assignments in many firms? A. lack of technical abilities B. equating domestic performance with overseas performance potential C. lack of communication between line managers and HRM managers D. geocentric staffing policy E. polycentric staffing policy

B. equating domestic performance with overseas performance potential

Dalian Pharma, a Chinese company, has a core competence in expedited innovative drug discovery. It has used this core competence, which is based on the collective knowledge of hundreds of scientists and project managers, to grow and become a dominant player in the industry. What is the staffing policy likely to be followed by Dalian Pharma when it expands to India? A. eurocentric B. ethnocentric C. polycentric D. geocentric

B. ethnocentric

Dalian Pharma, a Chinese company, prides itself on its corporate culture that it has developed over a twenty-year period. Dalian believes that its corporate culture is a key to its competitive advantage. What is the staffing policy likely to be followed by Dalian Pharma if it expands to Germany? A. eurocentric B. ethnocentric C. polycentric D. geocentric E. transnational

B. ethnocentric

In the Swiss firm Terabithia Systems AG, all the important positions in its international operations are held by Swiss nationals. What is the staffing policy followed by Terabithia? A. eurocentric B. ethnocentric C. polycentric D. geocentric E. transnational

B. ethnocentric

When the Chinese company, Dalian Pharma set up operations in Cambodia, the top management team of Dalian determined that Cambodia lacked qualified individuals to fill senior management positions. What is the staffing policy likely to be followed by Dalian Pharma? A. eurocentric B. ethnocentric C. polycentric D. geocentric E. transnational

B. ethnocentric

Which of the following staffing policies is followed by firms that can reduce the issue of compensation to that of how much home-country expatriates should be paid? A. polycentric B. ethnocentric C. geocentric D. international E. global

B. ethnocentric

Which of the staffing policies requires all the expatriates to be home-country nationals who are transferred abroad? A. geocentric B. ethnocentric C. polycentric D. international E. domestic

B. ethnocentric

Which of the following modes of entry into foreign markets can result in a lack of control over quality? A. exporting B. franchising C. turnkey projects D. wholly owned subsidiaries E. joint ventures

B. franchising

Which of the following modes of entry is suitable for service firms where the risk of losing control over the management skills or technological know-how is not much of a concern, and where the firms' valuable asset is their brand name? A. exporting B. franchising C. licensing D. turnkey projects E. cross-licensing

B. franchising

A(n) _____ staffing policy is pursued by a firm where considerable resentment is caused among foreign nationals who are members of the international cadre and work with U.S. nationals, if pay is not equalized. A. polycentric B. geocentric C. ethnocentric D. regiocentric E. localized

B. geocentric

Countries such as the United States and China require extensive documentation if companies wish to hire a foreign national instead of a local national. This is an important consideration for Santa Ana Wines, a Brazilian wine maker, as it decides on its staffing policy for international expansion. Which of the following staffing approaches is most likely to be affected by this? A. polycentric B. geocentric C. transnational D. ethnocentric E. local

B. geocentric

Which of the following staffing policies is concerned with the need for a cadre of international managers that may include many different nationalities? A. polycentric B. geocentric C. ethnocentric D. regiocentric E. localized

B. geocentric

Which of the following strategies is most likely to be pursued by a firm when there are strong pressures for cost reductions and demands for local responsiveness are minimal? A. domestic strategy B. global standardization strategy C. international strategy D. transnational strategy E. nationalization strategy

B. global standardization strategy

International businesses differ markedly in their approaches to international labor relations. Which of the following current trends reflects international firms' attempts to rationalize their global operations? A. decentralized labor activities B. greater centralized control C. autonomy D. lateral relationships E. national legislation

B. greater centralized control

The CEO of Jamil Circuits is unhappy with the firm's choice of wholly owned subsidiaries as the mode of foreign entry. He has pointed out a number of disadvantages to this mode. However, the CFO of the company is not sure if all of the disadvantages that the CEO is noting are correct. Which of the following is a disadvantage of wholly owned subsidiaries as a mode of entry into foreign markets? A. lack of control over quality B. high costs and risks C. problems with local marketing agents D. inability to engage in global strategic coordination E. lack of control over technology

B. high costs and risks

The CFO of At Home Products is unhappy with the firm's choice of wholly owned subsidiaries as the mode of foreign entry. He has pointed out a number of disadvantages to this mode. Which of the following is a disadvantage of wholly owned subsidiaries as a mode of entry into foreign markets? A. lack of control over quality B. high costs and risks C. problems with local marketing agents D. inability to engage in global strategic coordination E. lack of control over technology

B. high costs and risks

Which of the following functions of an international business is typically responsible for international labor relations? A. public relations B. human resource management C. finance and accounting D. legal E. logistics

B. human resource management

Yuriko, a citizen of Japan, was working as a manager in the Japanese branch of an American firm. Due to her efficiency, she was assigned a temporary posting at the headquarters of the firm in America. In this situation, she is known as a(n) A. repatriate. B. inpatriate. C. third-country national. D. beneficiary. E. parent-country national.

B. inpatriate

Which of the following was established by organized labor in 1960s to provide worldwide links for national unions in particular industries? A. HR watchdog groups B. international trade secretariats C. unorganized labor organizations D. international orientation resources E. reciprocal tax treaties

B. international trade secretariats

Small-scale entry into a foreign market makes it difficult to build market share because it A. necessitates rapid entry into a foreign market. B. is associated with a lack of commitment demonstrated by the foreign firm. C. leads to escalating strategic commitments. D. requires that extra time be spent in analyzing a foreign market. E. leads to increased exposure to a foreign market.

B. is associated with a lack of commitment demonstrated by the foreign firm

Omega, Inc. sells its fitness wrist band for $100. It cost the company $62 to make the product. Customers value the wrist band at $110. One of the reasons why Omega typically charges for its wrist band less than the value placed on it by the customer is because A. the firm attempts to create value for the consumers by providing them a wide range of products. B. it is normally impossible to segment a market based on each customer's reservation price. C. the value creation results in a corresponding reduction in costs of production. D. the firm frequently modifies its products to compete with the products introduced by other firms. E. it is highly unlikely that the same good or service will be available to the customers from other firms.

B. it is normally impossible to segment a market based on each customer's reservation price.

Axiom International, an Australian company, wants to expand its operations to China, a country that is politically, culturally, and economically different. The firm needs to select a mode of entry that would give it access to local knowledge, allow sharing of development costs and risks, and also be politically acceptable. Which of the following modes of entry into foreign markets is most suitable for Axiom International? A. wholly owned subsidiary B. joint venture C. exporting D. greenfield investments E. licensing

B. joint venture

Of all the value creation activities in a firm, which of the following creates value by discovering consumer needs and communicating them back to the R&D function of the company, which can then design products that better match those needs? A. production B. marketing and sales C. human resources D. logistics E. information systems

B. marketing and sales

According to Mendenhall and Oddou, _____ provides an expatriate the ability to understand why people of other countries behave the way they do. A. cultural toughness B. perceptual ability C. self-orientation D. others-orientation E. willingness to communicate

B. perceptual ability

Geodyne, a United States-based player in the energy business is clear-cut in its human resources policy with regard to international expansion. While U.S. nationals staff key positions at its Orlando, Florida headquarters, it recruits locals to manage subsidiaries in each country that it goes into. Geodyne's staffing policy is called A. geocentric. B. polycentric. C. ethnocentric. D. global. E. transnational.

B. polycentric

In terms of training and management development, _____ training is aimed at helping the expatriate manager and family ease themselves into day-to-day life in the host country. A. cognitive B. practical C. house D. cultural E. perceptual ability

B. practical

The rate of return that a firm makes on its invested capital is referred to as A. stakeholder return. B. profitability. C. profit growth. D. process value. E. strategic fit.

B. profitability

OptiCare is a firm that specializes in eye care products such as contact lenses and sun glasses. OptiCare believes that market needs for eye care products are the same worldwide. In keeping with this perspective, OptiCare emphasizes global standardization. Firms such as OptiCare that emphasize global standardization try to create value by A. retaining products and competencies within the parent country. B. realizing experience curve and location economies. C. focusing on local responsiveness. D. emphasizing localization. E. adopting an ethnocentric staffing approach.

B. realizing experience curve and location economies

Which of the following is a primary activity in the operations of a firm? A. logistics function B. research and development C. information systems D. human resource function E. company infrastructure

B. research and development

Why should a high-tech firm avoid selecting licensing as a mode of entry? A. threat of creating efficient partners B. risk of losing control over technology C. fear of rapid imitation of core technology D. lack of a transitory technological advantage E. inability to deter development costs

B. risk of losing control over technology

According to Mendenhall and Oddou, _____ is a dimension that predicts success and allows expatriates to adapt their interests in food, sport, and music. A. perceptual ability B. self-orientation C. others-orientation D. cultural toughness E. empathy

B. self-orientation

Omega, Inc., a U.S.-based maker of personal fitness trackers, is not sure about the attractiveness of entering the country of Mattica. Mattica had recently emerged as a democracy after nearly one hundred years of dictatorship. Which of the following types of entry into Mattica would allow Omega, Inc. to learn about the foreign market while limiting the firm's exposure to that market? A. early entry B. small-scale entry C. large-scale entry D. late entry E. rapid entry

B. small-scale entry

Imogene Davis of Benedict Pharmaceuticals' Human Resources department is responsible for developing the criteria for selecting people for particular jobs. Which of the following strategies is Imogene Davis involved in? A. compensation policy B. staffing policy C. performance appraisal policy D. training policy E. management development policy

B. staffing policy

A cooperative agreement between potential or actual competitors is called a(n) A. tactical union. B. strategic alliance. C. political affiliation. D. economic association. E. nationalization.

B. strategic alliance

From a strategic perspective, the key issue in international labor relations is A. dealing with multiple business units. B. the degree to which organized labor can limit the choices of an international business. C. whether to hire parent-country nationals, host-country nationals, or third-country nationals. D. helping expatriates cope with new role demands. E. the extent to which a reciprocal tax treaty can be brought into effect.

B. the degree to which organized labor can limit the choices of an international business

Who among the following should be viewed as part of a firm's infrastructure? A. procurement manager B. top management C. production manager D. research and development scientist E. marketing personnel

B. top management

In which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational? A. franchising agreement B. turnkey project C. licensing agreement D. wholly owned subsidiary E. joint venture

B. turnkey project

During performance appraisals, two groups evaluate the performance of expatriate managers—host-nation managers and home-office managers. This is aimed at avoiding the problem of A. cultural conflict. B. unintentional bias. C. operational errors. D. central tendency. E. culture shock.

B. unintentional bias

A global car manufacturer wants to start production in China. While catering to local responsiveness, what can the firm do to get scale economies? A. increase costs whenever possible B. use common vehicle platforms and components across many different models C. shorten the production runs for each component D. increase the duplication of functions required for each operation E. manufacture only one type of car and sell it in all the international markets

B. use common vehicle platforms and components across many different models

The value of Omega's top selling fitness product to an average consumer is $150 and the average unit cost of producing that product is $65. In this scenario, $85 ($150-$65) represents A. customer surplus. B. value creation. C. cost curve. D. value efficiency. E. customer reservation.

B. value creation

Omega, Inc. sells its fitness wrist band for $100. It cost the company $62 to make the product. Customers value the wrist band at $110. In this scenario, the consumer surplus is A. $38. B. $48. C. $10. D. $28. E. $272.

C. $10

_____ refers to the extra pay an expatriate receives for working outside his or her country of origin. A. Parity adjustment B. Special bonus C. Foreign service premium D. Expat allowance E. Benefit

C. Foreign service premium

Which of the following is true of international firms considering foreign expansion? A. The timing and scale of entry of foreign expansion are minor details in comparison with the choice of foreign market. B. The long-run economic benefits of doing business in a country are solely a function of the country's population size. C. If the firm's core competence is based on proprietary technology, entering a joint venture might risk losing control of that technology to the joint-venture partner. D. The costs and risks associated with foreign expansion are higher in economically advanced nations. E. Politically unstable and less developed nations offer favorable benefit-cost-risk trade-off conditions.

C. If the firm's core competence is based on proprietary technology, entering a joint venture might risk losing control of that technology to the joint-venture partner

Why do firms pursuing global standardization or transnational strategies tend to prefer establishing wholly owned subsidiaries? A. It gives firms sound knowledge of the local markets, culture, and the political environment. B. It helps protect competitive advantages based on technology. C. It allows firms to use the profits generated in one market to improve its competitive position in another market. D. It is the most politically accepted mode of entry into foreign markets. E. It has the least costs and risks associated with developing a foreign market.

C. It allows firms to use the profits generated in one market to improve its competitive position in another market

How does possessing a core competence help a firm? A. It helps a firm to create value in such a way that premium pricing is impossible. B. It reduces a firm's dependence on its logistics function. C. It enables a firm to reduce the costs of value creation. D. It reduces the scope of transfer of skills to foreign markets. E. It reduces the need to replicate a business model in a foreign market.

C. It enables a firm to reduce the costs of value creation

Which of the following is a disadvantage of franchising? A. The franchiser has to bear development costs and risks associated with foreign expansion. B. Franchising leads to undesirable results for service firms. C. It is difficult to maintain quality control across foreign franchisees that are distant from the franchiser. D. The franchiser has no long-term interests in the foreign country. E. It forces a franchiser to take out profits from one country to support competitive attacks in another.

C. It is difficult to maintain quality control across foreign franchisees that are distant from the franchiser

Geodyne follows a polycentric staffing approach in that key positions at the company's U.S. headquarters are staffed by U.S. nationals while foreign subsidiaries are managed by locals. In recent years, Geodyne's international business has grown substantially while its U.S. business has dwindled due to competition. Which of the following is a drawback of Geodyne adopting a polycentric staffing approach? A. It is expensive to implement. B. It leads host-country managers to make mistakes due to cultural misunderstandings. C. It limits advancement opportunities for host-country nationals. D. It invariably makes a firm suffer from cultural myopia. E. It bridges the gap between the headquarters of a firm and its foreign subsidiaries.

C. It limits advancement opportunities for host-country nationals

How can firms avoid incurring high transport costs when exporting bulk products? A. taking a minority equity interest B. entering into a turnkey project with a foreign firm C. manufacturing bulk products regionally D. setting up subsidiaries irrespective of market reach E. reducing the quantity of the product offering

C. Manufacturing bulk products regionally

Which of the following is a disadvantage of a strategic alliance? A. Entering into a strategic alliance makes it difficult for a firm to enter into a foreign market. B. As a result of strategic alliance, fixed costs of developing new products tend to increase. C. Strategic alliance gives competitors a low-cost route to new technology and markets. D. Firms that enter into a strategic alliance with a foreign firm tend to face higher trade barriers. E. Strategic alliance always leads to a loss to either of the firms involved.

C. Strategic alliance gives competitors a low-cost route to new technology and markets

Assume that the value of a base model computer to an average consumer is $300, the average price that Dell can charge a consumer for that product is $275, and the average unit cost of producing that product for Dell is $150. For this scenario, which of the following is true? A. Dell can easily increase its price above $300 B. The profit for Dell on each computer is $150 C. The consumer surplus per computer is $25. D. The higher the intensity of competitive pressure, the higher the price that Dell can charge relative to $300. E. The lower the consumer surplus, the greater the value for the money the consumer gets.

C. The consumer surplus per computer is $25

According to Mendenhall and Oddou's dimensions that predict success in a foreign posting, which of the following is a result of the attribute of others-orientation? A. The expatriate has high self-esteem. B. The expatriate empathizes with the host-country nationals. C. The expatriate speaks to the host-country nationals in the local language. D. The expatriate adjusts to the inhospitable climate of the host country. E. The expatriate is comfortable working in a male-dominated environment.

C. The expatriate speaks to the host-country nationals in the local language

In terms of expatriate pay, what does a firm typically do when a reciprocal tax treaty is not in force? A. The firm requires the expatriate to pay one-third of the income tax to the host-country government. B. The firm requires the expatriate to pay 50 percent of the income tax to the host-country government. C. The firm pays the expatriate's income tax to the host-country government. D. The firm requires the expatriate to pay the income tax to both the host-country and home-country governments. E. The firm pays the expatriate's income tax to the home-country government.

C. The firm pays the expatriate's income tax to the host-country government

Which of the following statements is true about an international strategy? A. International strategy typically involves taking products first produced for foreign markets and then customizing them for domestic markets. B. International strategy should be pursued by a firm if it manufactures a product that satisfies local, rather than universal, needs. C. When a firm pursues an international strategy, the head office of the firm retains fairly tight control over marketing and product strategy. D. Firms pursuing the international strategy tend to outsource their development functions such as R&D. E. International strategy should be pursued by a firm only if it faces strong competition in foreign markets.

C. When a firm pursues an international strategy, the head office of the firm retains fairly tight control over marketing and product strategy

One of the principal risks associated with a strategic alliance is that A. it brings together the complementary skills of alliance partners. B. it makes it difficult for the partner firms to enter into a foreign market. C. a firm can give away more than it receives. D. it does not allow firms to share fixed costs. E. it almost always fails.

C. a firm can give away more than it receives

According to Mendenhall and Oddou, perceptual ability refers to A. an expatriate's willingness to use the host-country language. B. an expatriate's ability to strengthen his or her self-esteem. C. an expatriate's ability to empathize. D. the relationship between the country of assignment and how well an expatriate adjusts to a particular posting. E. the ability to develop long-lasting friendships with host-country nationals.

C. an expatriate's ability to empathize

In which of the following tasks will the learning effects be most significant? A. pizza delivery for a fast-food major B. data entry for a loan recovery center C. assembly process involving 1,000 complex steps D. sewing buttons onto shirts in a garment factory E. delivering letters to different recipients

C. assembly process involving 1,000 complex steps

The _____ approach is the most common approach to expatriate pay, which equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting that they enjoyed at home. A. merit B. correspondence C. balance sheet D. parity E. perceptual

C. balance sheet

Taviscon International, a Singapore-based agricultural commodities player continuously expands into various African countries to source and process commodities. Taviscon finds that many of these countries lack good higher education institutions and also a lack of major companies that operate there. Taviscon International is likely to pursue an ethnocentric staffing policy in Africa because it A. believes in providing growth opportunities to host-country nationals. B. wants to avoid cultural myopia. C. believes the host country lacks qualified individuals for senior management positions. D. wants to keep all core competencies within the home country. E. wants to build strong cultural and informal management networks in all its subsidiaries.

C. believes the host country lacks qualified individuals for senior management positions

How can a wholly owned subsidiary be established in a foreign market? A. through a turnkey operation with a local partner B. through franchising C. by acquiring an established firm in the host nation D. by exporting E. through a licensing agreement

C. by acquiring an established firm in the host nation

Amanda, an American manager, is successfully adjusting in a country where the culture is extremely male-dominated. According to Mendenhall and Oddou, which of the following dimensions that predict success in foreign postings is involved in this situation? A. perceptual ability B. others-orientation C. cultural toughness D. self-orientation E. empathy

C. cultural toughness

Soo Park, a Korean expatriate did very well in managing the local staff when sent to work in Daigoo's China operations. This came as a welcome relief to the company, because Soo Park's predecessor, Billy Bob Johnson, an American, had failed miserably in the same assignment. According to Mendenhall and Oddou, which of the following dimensions refers to the relationship between the country of assignment and how well an expatriate such as Soo Park adjusts to a particular posting? A. self-orientation B. perceptual ability C. cultural toughness D. others-orientation E. willingness to communicate

C. cultural toughness

According to Michael Porter, superior profitability goes to a firm that A. creates similar products as their competitors. B. keeps the gap between value and cost of production smaller than the gap attained by competitors. C. drives down the cost structure of its business. D. has the highest cost structure in the industry. E. has the least valuable product in the industry.

C. drives down the cost structure of its business

Which of the following shows all of the different positions that a firm can adopt with regard to value creation and low cost assuming that its internal operations are configured adequately to support a particular position? A. demand-value model B. experience curve C. efficiency frontier D. optimal output model E. surplus curve

C. efficiency frontier

A firm's profitability is maximized when it A. creates products similar to the products of its competitors. B. strips all the value out of its product offering. C. ensures that it has the right organization structure in place to execute its strategy. D. picks a position on the efficiency frontier that is not viable. E. does not configure its internal operations to reduce costs.

C. ensures that it has the right organizational structure in place to execute its strategy

The liability associated with foreign expansion is greater for foreign firms that A. choose to ride on an early entrant's investments. B. use countertrade agreements. C. enter a national market early. D. ride down the experience curve behind their rivals. E. avoid pioneering costs.

C. enter a national market early

Which of the following describes a turnkey project? A. granting rights to intangible property to other firms B. establishing firms that are jointly owned by two or more otherwise independent firms C. exporting process technology to other countries D. setting up wholly owned subsidiaries in foreign nations E. selling products produced in one country to residents of other countries

C. exporting process technology to other countires

Omega, Inc. is an early entrant for its fitness product in the country of Malnesia. As an early entrant, Omega, Inc. may find itself at a disadvantage if it A. is trying to realize location and experience curve economies. B. incurs low development costs. C. faces a subsequent change in business regulations in Malnesia. D. has a core competence based on control over technological know-how. E. considers a greenfield strategy.

C. faces a subsequent change in business regulations in Malnesia

Licensing is NOT attractive to which of the following firms? A. firms lacking the capital to develop operations overseas B. firms unwilling to commit substantial financial resources to an unfamiliar market C. firms requiring tight control of operations for realizing experience curve and location economies D. firms wanting to explore markets but prohibited from doing so by investment barriers E. firms with intangible properties with business applications that it does not want to develop itself

C. firms requiring tight control of operations for realizing experience curve and location economies

Yamaguchi Media, a Japanese advertising agency, has a policy in its global business of appointing what it believes is the best person for the job in its various locations regardless of the candidate's nationality. Which of the following staffing policies best describes Yamaguchi Media's approach? A. global B. ethnocentric C. geocentric D. polycentric E. transnational

C. geocentric

Omega locates it global manufacturing in Mexico, its global distribution in Honduras, and its design in Germany. By dispersing different stages of its value chain to those locations around the world where the value added is maximized or where the costs of value creation are minimized, Omega has created a(n) A. integral circle. B. dispersal chain. C. global web. D. international mesh. E. worldwide circle.

C. global web

Which of the following allowances is paid when an expatriate is being sent to a difficult location? A. education B. housing C. hardship D. cost of living E. reciprocal

C. hardship

Which of the following postulates that top managers typically overestimate their ability to create value from an acquisition? A. bandwagon effect B. Fisher effect C. hubris hypothesis D. international Fisher effect E. learning effect

C. hubris hypothesis

In the context of international labor relations, one of the reasons for a decline in union influence is the A. introduction of a reciprocal tax treaty. B. retention of low-skilled tasks in an international firm's home country. C. importing of employment practices and contractual agreements that are alien to the host country. D. increased bargaining power of organized labor. E. increased ability to threaten to disrupt production, either by a strike or some other form of work protest.

C. importing of employment practices and contractual agreements that are alien to the host country

A company can increase its growth rate by taking goods or services developed at home and selling them internationally. The returns from such a strategy are likely to be greater if A. the product is already being offered by local companies in the nations that the company enters. B. the product is a generic product that requires little differentiation. C. indigenous competitors in the nations that the company enters lack comparable products. D. there is a high inflation in the nations that the company enters. E. the product is perceived to be very costly in the home country of the company.

C. indigenous competitors in the nations that the company enters lack comparable products

Xerox had a monopoly on photocopiers for several years as the technology underlying the photocopier was protected by strong patents. As it served a universal need, this favorable position led Xerox to pursue a(n) A. global standardization strategy. B. localization strategy. C. international strategy. D. transnational strategy. E. nationalization strategy.

C. international strategy

Which of the following strategies focuses on increasing profitability by customizing the firm's goods or services so that they provide a good match to tastes and preferences in different national markets? A. international strategy B. global standardization strategy C. localization strategy D. transnational strategy E. nationalization strategy

C. localization strategy

Juggernaut, Inc. makes large-size commercial appliances such as freezers and refrigerators. These items are bulky and the firms incur high transportation costs to distribute its products. Juggernaut, Inc. wants to enter foreign markets via exports. How can Juggernaut, Inc. avoid incurring high transport costs when exporting its bulk products? A. taking a minority equity interest B. entering into a turnkey project with a foreign firm C. manufacturing bulk products regionally D. setting up subsidiaries irrespective of market reach E. reducing the quantity of the product offering

C. manufacturing bulk products regionally

Serving a global market from a single location is consistent with A. establishing a high-cost position. B. taking advantage of location economies. C. moving down the experience curve. D. operating from a position which falls inside the efficiency frontier. E. going up the global web.

C. moving down the experience curve

The value that an international business can create in a foreign market is determined by the A. population density in the foreign market B. political stability of the foreign market C. nature of indigenous competition D. per capita income in the foreign market E. type of political system in the foreign market

C. nature of indigenous competition

Geodyne, a United States-based player in the energy business is clear-cut in its human resources policy with regard to international expansion. While U.S. nationals staff key positions at its Orlando, Florida headquarters, it recruits locals to manage subsidiaries in each country that it goes into. As a result of this, in 2016, Geodyne found that of the company's total staff of 1240, nearly 72% were newly-hired managers to work in the company's foreign subsidiaries, forming a gap between host-country managers and parent-country managers. What is Geodyne's staffing policy? A. global B. geocentric C. polycentric D. ethnocentric E. transnational

C. polycentric

Firms that compete in the global marketplace typically face two types of competitive pressure A. pressures for increasing investment and pressures to minimize consumer surplus. B. pressures for labor skill enhancement and pressures to minimize economies of scale. C. pressures for cost reductions and pressures to be locally responsive. D. pressures for global promotions and pressures to move down the efficiency frontier. E. pressures for product standardization and pressures to move up the experience curve.

C. pressures for cost reductions and pressures to be locally responsive

Repatriation refers to A. sending expatriate managers to a new host country. B. training expatriate managers to adjust to the new environment of the host country. C. reentry of expatriate managers into their home-country organization. D. helping expatriate managers build rapport with local employees. E. increasing expatriate managers' effectiveness in dealing with host-country nationals.

C. reentry to expatriate managers into their home-country organization

What gives a firm tight control for coordinating a globally dispersed value chain? A. signing joint-venture agreements B. installing manufacturing units in locations with optimal factor conditions C. setting up wholly owned marketing subsidiaries D. establishing a greenfield venture E. using foreign marketing agents

C. setting up wholly owned marketing subsidiaries

What triggers the conflict of interest over strategy and goals in joint ventures? A. local partner's knowledge of host country's competitive conditions B. giving control of core technology to the foreign partner C. shifts in relative bargaining power of venture partners D. trying to realize location and experience curve economies E. risk of being subject to adverse government interference

C. shifts in relative baragining power of venture partners

Brooke Monroe, the Vice President of Manufacturing for Diacon Products has made a strong argument for the company to enter foreign markets via turnkey projects. However, the company's Chief Financial Officer, Nandu Kishore argues that turnkey projects being short-term propositions could be disadvantageous for the firm if a country subsequently proves to be a major market for the output of the process that has been exported. Brooke Monroe could counter this objection by arguing that Diacon Products can get around this problem by A. selling competitive advantage to competitors. B. competing with the local firm in the global market. C. taking a minority equity interest in the operation. D. withholding vital process technology from the local firm. E. establishing a joint venture with a local firm.

C. taking a minority equity interest in the operation

Turnkey projects being short-term propositions can be disadvantageous for a firm if a country subsequently proves to be a major market for the output of the process that has been exported. The firm can get around this problem by A. selling competitive advantage to competitors. B. competing with the local firm in the global market. C. taking a minority equity interest in the operation. D. withholding vital process technology from the local firm. E. establishing a joint venture with a local firm.

C. taking a minority equity interest in the operation

Omega, Inc. sells its fitness wrist band for $100. It cost the company $62 to make the product. Customers value the wrist band at $110. While Omega's pricing practice results in a consumer surplus, it typically charges a lower price for the wrist band than the value placed on it by customers because A. the value creation results in a corresponding reduction in costs of production. B. it is highly unlikely that the same good or service will be available to the customers from other firms. C. the firm is competing with other firms for the customer's business. D. the firm charges a price that reveals a consumer's assessment of the product's value. E. the firm creates value for the customer by producing a wide range of products.

C. the firm is competing with other firms for the customer's business

Omega, Inc. is considering international expansion and wants to know if it is likely to command a high price for its fitness product. In which of the following situations can Omega, Inc. command higher prices for its fitness product in a foreign market? A. the product is widely available in the foreign market B. sales volumes is relatively low in the foreign market C. the product offers greater value to customers in the foreign market D. the product is more suitable to other foreign markets E. domestic competitors are selling alternatives at reduced prices

C. the product offers greater value to customers

In which of the following situations can an international business command higher prices for a particular product in a foreign market? A. the product is widely available in the foreign market B. sales volumes is relatively low in the foreign market C. the product offers greater value to customers in the foreign market D. the product is more suitable to other foreign markets E. domestic competitors are selling alternatives at reduced prices

C. the product offers greater value to customers in the foreign market

Spring, an American firm, recently acquired another company, Tazel Inc., in Indonesia. The high-level managers at Tazel quit because they could not cope with the domineering and straightforward approach of their American counterparts. This illustrates how acquisitions may fail because A. managers overestimate their ability to create value from an acquisition. B. integration of operations between the two firms takes longer than forecasted. C. there is a clash between the cultures of the acquired and the acquiring firm. D. an acquiring firm overpays for the assets of an acquired firm. E. inadequate pre-acquisition screening has been done.

C. there is a clash between the cultures of the acquired and acuiring firm

Which of the following caveats is most likely to discourage global expansion of businesses? A. economies of scale B. high consumers' reservation prices C. trade barriers D. mass customization E. low transportation costs

C. trade barriers

Firms that pursue a(n) _____ strategy differentiate their product offering across geographic markets to account for local differences. A. international B. global standardization C. transnational D. multidomestic E. nationalization

C. transnational

Which of the following strategies is pursued by international businesses that use management development for a strong unifying corporate culture and informal management networks to assist in coordination and control? A. localization B. international C. transnational D. global standardization E. ethnocentric

C. transnational

Which of the following entry modes into a foreign market best serves a high-tech firm? A. turnkey projects B. franchising C. wholly owned subsidiaries D. joint ventures E. exporting

C. wholly owned subsidiaries

Which of the following is an impediment to cooperation between national unions? A. retention of highly skilled tasks in the host country B. reciprocal tax treaty C. wide variation in the structure and ideology of unions D. common perception unions have about multinational companies E. decreasing bargaining power of multinational companies

C. wide variation in the structure and ideology of unions

Which of the following supports the argument that customer demands for local customization are on the decline worldwide? A. Local and indigenous industries are increasingly filling up available demand. B. High costs of local customization are deterring companies from doing so. C. Governments across the world are standardizing their legal procedures. D. Customer tastes have converged worldwide. E. Managers worldwide ignore the differences in consumer tastes and preferences.

D. Cusomer tastes have converged worldwide

Which of the following steps is true of bias in performance evaluations? A. More weight should be given to an off-site manager's appraisal than an on-site manager's appraisal. B. Cultural bias increases when the on-site manager is of the same nationality as the expatriate. C. Home-office managers should write performance evaluations without consulting on-site managers to avoid bias. D. Due to proximity, an on-site manager is more likely to evaluate the soft variables that are important aspects of an expatriate's performance. E. A performance appraisal is invalid when the on-site manager is of the same nationality as the expatriate manager.

D. Due to proximity, an on-site manager is more likely to evaluate the soft variables that are important aspects of an expatriate's performance

In terms of expatriate pay, which of the following is true of a foreign service premium? A. It ensures that expatriates' children receive adequate schooling. B. It helps to evaluate expatriates' performance without any unintentional bias. C. It ensures that expatriates are prepared for reentry into their home-country organization. D. It is paid as a percentage of base salary, with 16 percent being the average premium. E. It allows a firm to pay expatriates' income tax in the host country.

D. It is paid as a percentage of base salary, with 16 percent being the average premium

Which of the following is a disadvantage of greenfield ventures? A. They have a higher potential for throwing up unpleasant surprises. B. It is much more difficult to build an organizational culture from scratch than to change the culture of an existing unit. C. Companies find it difficult to avoid falling into the trap of the hubris hypothesis. D. It is slower to establish than acquisitions. E. A firm does not have the freedom to build the kind of subsidiary that it wants.

D. It is slower to establish than acquisitions

In the context of international labor relations, which of the following is true of organized labor? A. It supports the pursuit of a transnational standardization strategy. B. It supports the pursuit of a global standardization strategy. C. It increases unintentional bias in evaluating the performance of expatriate managers. D. It limits a firm's ability to integrate and consolidate its global operations. E. It reduces a firm's ability to understand host-country cultural differences that require different approaches to marketing.

D. It limits a firm's ability to integrate and consolidate its global operations

Which of the following is true of a localization strategy? A. It allows a firm to capture the cost reductions of mass-producing a standardized product. B. It reduces duplication of functions. C. It involves longer production runs. D. It makes sense if the value added by customization supports higher pricing. E. It substantially reduces local demand.

D. It makes sense if the value added by customization supports higher pricing

Which of the following is true about learning effects? A. They tend to be more significant in nonrepetitive tasks. B. They tend to be less significant when a task is technologically complex. C. They typically last a lifetime. D. They are important only during the start-up period of a new process. E. They do not have any effect on the cost of production.

D. They are important only during the start-up period of a new process

Which of the following is true of the costs and risks associated with doing business in a foreign country? A. They are greater for late entrants. B. They are higher in politically democratic nations. C. They are less pronounced in the case of licensing. D. They are lower in economically advanced nations. E. They are called opportunity costs.

D. They are lower in economically advanced nations

The risk of failure of an acquisition can be reduced by A. undervaluing the assets of an acquired firm. B. ensuring that firms are acquired in the home country. C. replacing high-level managers of an acquired firm. D. a detailed auditing of operations, financial position, and management culture. E. investing only in a firm that is managing to break even.

D. a detailed auditing of operations, finacial position, and management culture

Which of the following is a course of action suggested by Christopher Bartlett and Sumantra Ghoshal for companies based in developing nations? A. build up financial resources to match those of the largest global competitors B. enter foreign markets at a similar time and scale as multinational companies C. enter markets rapidly and exit at an equally rapid pace to avoid heavy losses D. benchmark one's operations and performance against foreign multinationals E. do not focus on market niches that multinational companies ignore

D. benchmark one's operations and performance against foreign multinationals

The 2,500 people working in Omega's corporate office deal with the organizational structure, control systems, and culture of the firm. These three things comprise which support function of Omega? A. human resources B. logistics C. information systems D. company infrastructure E. inventory management

D. company infrastructure

International trade secretariats have been minimally successful because of the A. similarity in the structure of unions on a global level. B. common perception unions have about multinational companies. C. reciprocal tax treaty. D. competition between national unions to attract investment from international businesses. E. retention of highly skilled tasks in the host country.

D. competition between national unions to attract investment from international businesses

Occidental Pharmaceuticals believes in risk taking and encourages its employees to do so. The company also holds its employees accountable for results. The norms and value systems of Occidental Pharmaceuticals constitute its A. corporate social responsibility. B. cultural toughness. C. cultural sensitivity. D. corporate culture. E. perceptual ability.

D. corporate culture

The appropriateness of the strategy that a firm chooses to use in an international market varies with the extent of pressures for A. quality improvement and product standardization. B. customer surplus and quality improvements. C. customer surplus and product standardization. D. cost reductions and local responsiveness. E. product standardization and cost reductions.

D. cost reductions and local responsiveness

Which of the following is a support activity in the operations of a firm? A. research and development B. customer service C. marketing and sales D. creation and maintenance of information systems E. production

D. creation and maintenance of information systems

Which of the following functions creates a perception of superior value in the minds of consumers by solving consumer problems and by supporting them after they have purchased the product? A. production B. marketing and sales C. human resources D. customer service E. logistics

D. customer service

Joanna's assessment of the value of a handbag sold at $110 is $200. The $200 is referred to as the A. market price. B. customer's negotiated price. C. base value of the product. D. customer's reservation price. E. profit growth price.

D. customer's reservation price

Superior value creation relative to rivals requires that the firm A. creates similar products as its competitors so that consumers do not have to pay a premium price. B. has the highest cost structure in the industry. C. creates the least valuable product in the eyes of consumers. D. ensures that the gap between value and cost of production is greater than the gap attained by competitors. E. drives up the cost structure of its business.

D. ensures that the gap between value and cost of production is greater than the gap attained by competitors

Over 90 percent of Damian Auto Products', a U.S.-based tier 1 auto supplier that has operations in 26 countries, senior managers are U.S. nationals. Which of the following staffing policies relies extensively on the use of expatriate managers? A. global B. polycentric C. transnational D. ethnocentric E. localized

D. ethnocentric

Ichiro Kawasaki, a Japanese citizen, is sent by his company, Kagemusha Corporation, a Japanese company, to head the company's sales office in the United States. In this situation, Ichiro is an example of a(n) A. immigrant manager. B. host-country manager. C. inpatriate manager. D. expatriate manager. E. virtual manager.

D. expatriate manager

Megan, a U.S. citizen, is the operations manager at the Middle East office of HS Constructions Inc., an American firm. In this situation, she is an example of a(n) A. immigrant manager. B. host-country manager. C. inpatriate manager. D. expatriate manager. E. virtual manager.

D. expatriate manager

Omega recently found that its flagship product had cost the company $129 to manufacture when the company launched it ten years ago. Now, the same product cost just $72 to manufacture. Which of the following terms best represents the systematic reductions in production costs that Omega has achieved over the ten-year life of its flagship product? A. global web B. dispersion linkage C. economies of scale D. experience curve E. efficiency frontier

D. experience curve

According to Christopher Bartlett and Sumantra Ghoshal, how can local companies differentiate themselves from foreign multinationals? A. licensing their core technologies B. entering into turnkey projects C. standardizing their product offerings D. focusing on market niches E. raising trade barriers

D. focusing on market niches

The locally manufactured Nirma was a popular mainstream brand of detergent in India. However, with the entry of a foreign multinational such as Procter & Gamble into the Indian market, Nirma began to lose market share. According to Christopher Bartlett and Sumantra Ghoshal, how can Nirma differentiate itself from foreign multinationals? A. licensing their core technologies B. entering into turnkey projects C. standardizing their product offerings D. focusing on market niches E. raising trade barriers

D. focusing on market niches

Firms that pursue a(n) _____ strategy focus on increasing profitability and profit growth by reaping the cost reductions that come from economies of scale, learning effects, and location economies. A. international B. transnational C. localization D. global standardization E. nationalization

D. global standardization

Pressures for cost reduction are intense in firms A. that produce products that are well differentiated. B. whose major competitors are based in high-cost locations. C. with persistent low capacity. D. in which consumers face low switching costs. E. with no international competition.

D. in which consumers face low swithcing costs

According to the results of a seminal study by R. L. Tung, what was the major reason for expatriate failure among European expatriates? A. personal or emotional problems B. inability to cope with overseas responsibilities C. poor pay D. inability of spouse to adjust to a new environment E. lack of technical competence

D. inability of spouse to adjust to a new environment

Which of the following is a reason why firms often overpay for the assets of an acquired firm? A. studies supporting the rise of failed companies post acquisitions B. evidence of high management turnover post acquisitions C. the success rate of acquisitions exceeding that of failures D. interest of more than one party in acquiring a particular firm E. inevitable clash between cultures of acquiring and acquired firms

D. interest of more than one party in acquiring a particular firm

Firms that pursue a(n) _____ strategy take products first produced for their domestic market and sell them across various markets with only minimal local customization. A. nationalization B. transnational C. global standardization D. international E. localization

D. international

Over the course of nearly a hundred years, Omega's labor productivity has increases over time as its employees understand the most efficient ways to perform particular tasks. This is a result of A. diminishing returns. B. location economies. C. economies of time. D. learning effects. E. an efficiency frontier.

D. learning effects

Which of the following is the most likely outcome of a foreign firm entering a developed nation on a small scale after other international businesses in the firm's industry? A. capturing first-mover advantages B. higher pioneering costs C. rapid increase in market share D. limited future growth potential E. increase in sales volume

D. limited future growth potential

Ford believes that by producing its small cars in Mexico they can take advantage of lower wage rates in that country. By pursuing such a strategy, Ford is most likely to realize A. a position inside the efficiency frontier. B. the experience curve. C. economies of scale. D. location economies. E. demographic advantages.

D. location economies

American Apparel produces in-house all the products that it sells through its network of stores. It has a function in its value chain that controls the transmission of physical materials through the value chain, from procurement through production and into distribution. For American Apparel, that function is A. human resources. B. finance. C. marketing. D. logistics. E. research and development.

D. logistics

Which of the following is intended to build a manager's skills over his or her career with a firm? A. ethnocentrism B. cultural toughness C. total quality management D. management development E. learning effects

D. management development

To reduce the risks of failure of an acquisition, managers must A. pay more for the acquired unit to please its existing employees. B. encourage and facilitate management turnover. C. acquire a firm without wasting time on screening. D. move rapidly after an acquisition to put an integration plan in place. E. ensure that the work cultures are significantly different from each other.

D. move rapidly after an acquisition to put an integration plan in place

Which of the following terms best represents the norms and value systems that are shared among the employees of an organization? A. process scenario B. organizational structure C. business structure D. organizational culture E. management structure

D. organizational culture

When John, an expatriate manager for Kinetics USA went to work in the company's Thailand operations, he was often frustrated when his staff showed up thirty minutes late for meetings and did not have an explanation for their tardiness. He remarked to Lisa, his wife, "back home in the Canton, Ohio office, meetings started on the dot and everyone better be there. Why can't my Thai staff do the same?" According to Mendenhall and Oddou, an expatriate manager like John who tends to treat Thai nationals as if they were home-country nationals lacks the dimension of A. cultural toughness. B. self-orientation. C. power distance. D. perceptual ability. E. willingness to communicate.

D. perceptual ability

For a firm to maximize its profitability, it is necessary that it A. creates products similar to the products of its competitors. B. does not configure its internal operations to reduce costs. C. minimizes the value of the consumer surplus. D. picks a position on the efficiency frontier that is viable. E. strips all the value out of its product offering.

D. picks a position on the efficiency frontier that is viable

Omega, Inc., a maker of personal fitness trackers (like Fitbit) was the first mover into the country of Malnesia. As the first mover in a new product area, Omega, Inc. had to spend a lot of money educating the population of Malnesia about fitness and tracking one's fitness. In addition, they also had to spend money in developing a distribution channel. The costs that Omega, Inc. incurred in Malnesia as the first mover are called A. retail costs. B. competitive costs. C. greenfield costs. D. pioneering costs. E. moving costs.

D. pioneering costs

A(n) _____ staffing policy is pursued by firms where the lack of managers' mobility among national operations implies that the pay for expatriates should be kept country-specific. A. regiocentric B. ethnocentric C. geocentric D. polycentric E. international

D. polycentric

In international business, an advantage of being a late entrant in a foreign market is the ability to A. create switching costs that tie customers into products or services. B. capture demand by establishing a strong brand name. C. build sales volume and ride down the experience curve before early entrants. D. ride on an early entrant's investments in learning and customer education. E. create a cost advantage over first movers.

D. ride on an early entrant's investments in learning and customer education

According to Mendenhall and Oddou, which of the following dimensions that predicts success in a foreign posting strengthens an expatriate's self-esteem, self-confidence, and mental well-being? A. cultural toughness B. others-orientation C. perceptual ability D. self-orientation E. empathy

D. self-orientation

For Bank of America, "production" typically occurs when the A. customer specifies the service requirements. B. service is paid for by the customer. C. service is designed in-house. D. service is delivered to the customer. E. customer provides feedback.

D. service is delivered to the customer

Which of the following allows two or more firms to share the fixed costs (and associated risks) of developing new products or processes? A. franchising agreement B. global web C. free trade agreement D. strategic alliance E. dispersion linkage

D. strategic alliance

A firm that adopts a polycentric staffing policy is less likely to A. isolate foreign subsidiaries from corporate headquarters. B. implement an expensive staffing policy. C. be controlled by corporate headquarters. D. suffer from cultural myopia. E. provide growth opportunities.

D. suffer from cultural myopia

A distinction can be drawn between firms whose core competency is in which of the following? A. scale of entry and strategic commitments B. location and experience curves C. acquisitions and greenfield ventures D. technological know-how and management know-how E. cost reductions and entry mode

D. technological know-how and mangement know-how

According to the results of a seminal study by R. L. Tung, the top reason why Japanese expatriate managers fail is A. the inability of their spouses to adjust. B. the lack of technical competence. C. their personal or emotional problems. D. the inability to cope with larger overseas responsibilities. E. their inability to deal with difficulties in the new environment.

D. the inability to cope with larger overseas responsibilities

Profit growth is measured by A. dividing the net profits of the firm by total invested capital. B. subtracting the previous year's gross profit from the current year's gross profit. C. calculating the difference between the previous year's profitability and the current year's profitability. D. the percentage increase in net profits over time. E. adding the profitability of the last two fiscal years.

D. the percentage increase in net profits over time

A principal concern of domestic unions about multinational firms is that a company can counter its bargaining power with A. work schedules tied to global rather than domestic standards. B. wage rates tied to global rather than domestic standards. C. the power to import labor from abroad. D. the power to move production to another country. E. the retention of low-skilled tasks in home country.

D. the power to move production to another country

Which of the following strategies is a firm most likely to pursue when it simultaneously faces both strong cost pressures and strong pressures for local responsiveness? A. global standardization strategy B. localization strategy C. international strategy D. transnational strategy E. nationalization strategy

D. transnational strategy

In terms of expatriate pay, which of the following is a characteristic of a foreign service premium? A. It allows a firm to pay expatriates' income tax in the host country. B. It ensures that expatriates' children receive adequate schooling. C. It helps to evaluate expatriates' performance without any unintentional bias. D. It ensures that expatriates are prepared for reentry into their home-country organization. E. It compensates expatriates for having to live in an unfamiliar country.

E. It compensates expatriates for having to live in an unfamiliar country

Which of the following is most likely to be the advantage of locating a value creation activity in the optimal location for that activity? A. It increases the costs of value creation. B. It decreases consumer surplus. C. It helps the firm to achieve a high-cost position. D. It nullifies all trade barriers. E. It enables a firm to differentiate its product offering from those of competitors.

E. It enables a firm to differentiate its product offering from those of competitors

How is a geocentric staffing policy beneficial to a firm? A. It requires the firm to provide little or no documentation to hire a foreign national. B. It is inexpensive to implement. C. It helps the firm follow a localization strategy. D. It allows all key management positions to be filled by parent-country nationals. E. It enables the firm to make the best use of its human resources.

E. It enables the firm to make the best use of its human resources

Which of the following is true of a transnational strategy? A. It is easy to implement because it does not place any conflicting demands on a company. B. It is used when the pressures for cost reductions are low. C. It is usually used when the pressure for local responsiveness is relatively low. D. It enables the one-way flow of core competencies. E. It is used by firms that try to achieve low costs through location economies, economies of scale, and learning effects.

E. It is used by firms that try to achieve low costs through location economies, economies of scale, and learning effects

Which of the following is a characteristic of an ethnocentric staffing policy? A. It requires host-country nationals to be recruited to manage subsidiaries. B. It is used when a firm places a low value on its corporate culture. C. It increases advancement opportunities for host-country nationals. D. It seeks the best people for key jobs throughout the organization, regardless of nationality. E. It places parent-country nationals in key management positions.

E. It places parent-country nationals in key management positions

Which of the following is true of a firm that pursues a global standardization strategy? A. It ensures that it pursues a high-cost strategy on a global scale. B. It has its production, marketing, and R&D activities in only one optimum location. C. It tries to customize its products to local conditions. D. It has shorter production runs. E. It reaps maximum benefits from economies of scale and learning effects.

E. It reaps maximum benefits from economies of scale and learning effects

Learning effects tend to be more significant when A. a task involves a few simple steps. B. a task is repeated for a period of over five years. C. the workforce consists of unskilled labor. D. the cumulative output becomes half of what it was originally. E. a technologically complex task is repeated.

E. a technologically complex task is repeated

The risks associated with learning to do business in a new culture are less if the firm A. engages in global strategic coordination. B. imposes strict marketing guidelines on how to do business. C. enters a greenfield venture in the host country. D. realizes substantial location economies. E. acquires an established host-country enterprise.

E. acquires an established host-country enterprise

In the context of international labor relations, a labor union concern arises when an international business A. keeps low-skilled tasks in its home country. B. signs a reciprocal tax treaty with the host country. C. increases the bargaining power of organized labor. D. faces difficulty in switching production from one location to another. E. attempts to import employment practices and contractual agreements from its home country.

E. attempts to import employment practices and contractual agreements from its home country

When Yum Brands (that owns KFC, Taco Bell and Pizza Hut) entered China, it had to spend heavily to establish itself in that market. Which of the following is a disadvantage of Yum Brand's large-scale entry into China? A. decrease in a firm's exposure to the foreign market B. difficulty attracting customers and distributors for the product C. inability to build rapid market-share irrespective of the scale of entry D. limited product acceptance due to the avoidance of potential losses E. availability of fewer resources to support expansion in other desirable markets

E. availability of fewer resources to support expansion in other desirable markets

Which of the following is a disadvantage of large-scale entry into a foreign market? A. decrease in a firm's exposure to the foreign market B. difficulty attracting customers and distributors for the product C. inability to build rapid market-share irrespective of the scale of entry D. limited product acceptance due to the avoidance of potential losses E. availability of fewer resources to support expansion in other desirable markets

E. availability of fewer resources to support expansion in other desirable markets

The long-term goal for organized labor to establish international trade secretariats was to A. import employment practices and contractual agreements from the home country of the multinational firm. B. retain low-skilled tasks in the host country. C. prevent multinational firms from switching production from one location to another as economic conditions warrant. D. introduce a reciprocal tax treaty. E. be able to bargain transnationally with multinational firms.

E. be able to bragain transnationally with multinational firms

A firm maximizes its profitability when it A. creates products similar to the products of its competitors. B. minimizes the value provided by its products. C. picks a position on the efficiency frontier that is not viable. D. strips all the value out of its product offering. E. configures its internal operations to support the position selected by it on the efficiency frontier.

E. configures its internal operations to support the position selected by it on the efficiency frontier

Which of the following is a disadvantage of small-scale entry for an international firm considering foreign expansion? A. possibility of escalating commitment leading to major financial losses B. limited availability of resources for use in other markets C. lack of flexibility associated with strategic commitments D. increase in economic exposure due to minimal time spent in evaluating a foreign market E. difficulty of building market share and capturing first-mover advantages

E. difficulty of building market share and capturing first-mover advantages

By producing its products in larger volume than its competitors, Omega is able to achieve substantial reductions in unit cost. Which of the following refers to Omega's advantage? A. location economies B. learning effects C. standardization economies D. core economies E. economies of scale

E. economies of scale

In terms of licensing, which of the following is an intangible property? A. infrastructure B. machinery C. leased equipment D. advanced computing systems E. patent

E. patent

In exporting, problems with local marketing agents can be overcome by A. selling intangible property to a franchisee and insisting on rules to conduct the business. B. changing agents frequently. C. engaging in turnkey projects and exporting process technology to foreign firms. D. entering into cross-licensing agreements with foreign firms. E. setting up wholly owned subsidiaries in foreign nations to handle local marketing.

E. setting up wholly owned subsidaries in foreign nations to handle local marketing

Kitchen Guru decided to export its products to foreign markets by hiring local marketing agents in each country. Over the years, Kitchen Guru ran into various problems with these local marketing agents that affected both sales and profitability. Kitchen Guru can overcome its problems with local marketing agents by A. selling intangible property to a franchisee and insisting on rules to conduct the business. B. changing agents frequently. C. engaging in turnkey projects and exporting process technology to foreign firms. D. entering into cross-licensing agreements with foreign firms. E. setting up wholly owned subsidiaries in foreign nations to handle local marketing.

E. setting up wholly owned subsidaries in foreign nations to handle local marketing

According to Mendenhall and Oddou's dimensions that predict success in a foreign posting, relationship development refers to A. an expatriate's willingness to use the host-country language. B. the ability to understand why people of other countries behave the way they do. C. the ability to empathize with foreign nationals. D. the relationship between the country of assignment and how well an expatriate adjusts to a particular posting. E. the ability to develop long-lasting friendships with host-country nationals.

E. the ability to develop long-lasting friendships with host-country nationals

In general, the more value customers place on a firm's products A. the lesser the profitability of the firm. B. the higher the competitive pressure from other firms. C. the lesser the quality of the product. D. the lesser the consumer surplus for those products. E. the higher the price the firm can charge for those products.

E. the higher the price the firm can charge for those products

A firm is most likely to pursue a global standardization strategy when A. it wants to implement a high-cost strategy on a global scale. B. it wants to reduce consumer surplus. C. there are no universal needs to be served. D. there are strong demands for local responsiveness. E. there are strong pressures for cost reduction.

E. there are strong pressures for cost reduction

A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a low-cost strategy

False

According to Mendenhall and Oddou, expatriates with perceptual ability tend to be judgmental and evaluative in interpreting the behavior of host-country nationals.

False

According to Mendenhall and Oddou, expatriates with perceptual ability tend to be judgmental and evaluative in interpreting the behavior of host-country nationals. True or False

False

According to Michael Porter, all positions on the efficiency frontier are viable

False

According to Michael Porter, all positions on the efficiency frontier are viable. True or False

False

According to a study by R. L. Tung, the most important reason for expatriate failure among U.S. multinationals was difficulty coping with a new environment.

False

According to researchers, firms facing strong pressures for local responsiveness should pursue a global standardization strategy.

False

An expatriate's base salary is normally lower than the base salary for a similar position in the home country.

False

An international firm that adopts a polycentric staffing policy is more likely to suffer from cultural myopia.

False

Citizens of a foreign country working in the home country of their multinational employer are known as repatriates

False

Expatriate managers who lack others-orientation tend to treat foreign nationals as if they were home-country nationals.

False

Firms that pursue an international strategy focus on increasing profitability by reaping the cost reductions that come from economies of scale, learning effects, and location economies.

False

For international firms, an ethnocentric staffing approach is compatible with a localization strategy.

False

Historically, most international businesses have been more concerned with management development than with training.

False

Historically, most international businesses have centralized international labor relations activities.

False

In international businesses, firms pursue a polycentric staffing policy because they see it as the best way to maintain a unified corporate culture.

False

In terms of expatriate pay, the income statement approach equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting that they enjoyed at home.

False

Learning effects will be more significant in an assembly process which involves 100 simple steps than in an assembly process which involves 1,000 complex steps.

False

Organizational architecture refers to an organization's norms and value systems

False

Organizational architecture refers to an organization's norms and value systems. True or False

False

The experience curve refers to systematic increases in production costs that have been observed to occur over the life of a product.

False

The firm that moves up the experience curve most rapidly will have a cost advantage vis-à-vis its competitors.

False

The term organizational structure refers to the totality of a firm's organization, including organization architecture, control systems and incentives, organizational culture, processes, and people.

False

Transnational firm managers need not be able to detect pressures for local responsiveness because it is not part of their skill set.

False

Unintentional bias makes it easy to evaluate the performance of expatriate managers objectively.

False

Universal needs exist when the tastes and preferences of consumers in different nations are different.

False

A concern of organized labor is that an international business keeps highly-skilled tasks in its home country and farms out low-skilled tasks to foreign plants.

True

A concern of organized labor is that an international business keeps highly-skilled tasks in its home country and farms out low-skilled tasks to foreign plants. True or False

True

A global standardization strategy makes most sense when there are strong pressures for cost reductions and demands for local responsiveness are minimal.

True

A localization strategy involves some duplication of functions and smaller production runs.

True

An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries.

True

An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries. True or False

True

An impediment to cooperation between national unions is the wide variation in union structure.

True

An impediment to cooperation between national unions is the wide variation in union structure. True or False

True

An international strategy involves taking products first produced for their domestic market and selling them internationally with only minimal local customization.

True

Bringing managers together in one location for extended periods and rotating them through different jobs in several countries help a firm build an informal management network.

True

Consumer surplus captures some of the value of a product thereby reducing the price a firm can charge for it.

True

Firms that operate internationally are able to realize location economies by dispersing individual value creation activities to locations where they are performed most efficiently and effectively.

True

From a strategic perspective, a compensation system must reward managers for taking actions that are consistent with the strategy of the enterprise

True

Historically, most international businesses have been more concerned with management development than with training. True or False

True

In international businesses, a disadvantage of an ethnocentric staffing policy is that it produces resentment in host-country nationals.

True

In terms of attaining a competitive advantage, support activities can be as important as the primary activities of the firm.

True

International firms that have a broad geographic scope are the most likely to have a geocentric mindset.

True

It is important that the spouse of an expatriate manager, and perhaps the whole family, be included in cultural training programs.

True

It is important that the spouse of an expatriate manager, and perhaps the whole family, be included in cultural training programs. True or False

True

Location economies are the economies that arise from performing a value creation activity in the optimal location for that activity, wherever in the world that might be.

True

Maintaining the company infrastructure is a support activity.

True

Pressures for local responsiveness imply that it may not be possible to leverage skills and products associated with a firm's core competencies wholesale from one nation to another.

True

Profit growth is measured by the percentage increase in net profits over time.

True

Profit growth is measured by the percentage increase in net profits over time. True or False

True

Strategic alliances allow firms to share the fixed costs of developing new products or processes.

True

Strategies that increase profitability can also expand a firm's business and thus enable it to attain a higher rate of profit growth.

True

Strategies that increase profitability can also expand a firm's business and thus enable it to attain a higher rate of profit growth. True or False

True

Successful global expansion requires the transfer of core competencies to foreign markets where indigenous competitors lack them

True

Successful global expansion requires the transfer of core competencies to foreign markets where indigenous competitors lack them. True or False

True

The ability to spread fixed costs over a large volume is one of the sources of economies of scale.

True

The actions that managers take to attain the goals of the firm are referred to as a firm's strategy.

True

The human resource management function can help a firm achieve its primary strategic goals of reducing the costs of value creation and adding value by better serving customer needs.

True

The human resource management function can help a firm achieve its primary strategic goals of reducing the costs of value creation and adding value by better serving customer needs. True or False

True

The major drawback with a polycentric staffing policy is the gap that can form between host-country managers and parent-country managers due to language barriers.

True

Unless a host country has a reciprocal tax treaty with the expatriate's home country, an expatriate must pay income tax to both the home- and host-country governments

True

Unless a host country has a reciprocal tax treaty with the expatriate's home country, an expatriate must pay income tax to both the home- and host-country governments. True or False

True

The amount of value a firm creates is measured by the difference between its costs of production and the value that consumers perceive in its products

True.

An employee takes less time to do a specific task now than it took him when he first started working on it six months ago. This is an example of Multiple Choice a. learning effects. b. lag effects. c. transition effects. d. economies of scale. e. lead strategy.

a

Companies pursue a(n) ______ strategy when they take the products first produced for their domestic market and sell them internationally with only minimal local customization. Multiple Choice a. international b. global standardization c. domestic d. localization e. transnational

a

In terms of the organization architecture, which of the following refers to the employees of the organization, the strategy used to recruit, compensate, and retain those individuals, and the type of people that they are in terms of their skills, values, and orientation? Multiple Choice a. people b. organizational culture c. controls d. incentives e. processes

a

Of the world population today, the largest group comes from ____, while the smallest group comes from ____. Multiple Choice a. Asia; Europe b. Africa; Europe c. Asia; the Americas d. Asia; the Americas e. the Americas; Africa

a

What percentage of the world's customers live outside the United States? Multiple Choice a. 95% b. About 50% c. 80% d. 75% e. About 40%

a

Which of the following is a primary activity in the operations of a firm? Multiple Choice a. research and development b. human resource function c. information systems d. company infrastructure e. logistics function

a

Which of the following staffing policies is concerned with filling all key management positions by parent-country nationals? Multiple Choice a. ethnocentric b. transnational c. global d. geocentric e. polycentric

a

According to Michael Porter, which of the following is a strategy for creating value and attaining a competitive advantage in an industry? Multiple Choice a. transnational b. differentiation c. standardization d. international e. high price

b

Mayer Life Systems, a manufacturer of surgical and medical appliances, invented and patented a new dialysis machine that radically reduced maintenance and operational issues. Responding to global demand, it decided to sell the machines manufactured at its plant in the United States to various markets across the globe. Since the product features provided by Mayer were not provided by any other competitor, Mayer did not feel any pressure for cost reductions. Which of the following strategies is most likely being pursued by Mayer? Multiple Choice a. localization b. international c. transnational d. nationalization e. global standardization

b

Out of every 100 people in the world today, about _____ are children. Multiple Choice a. one half b. one quarter c. one third d. two thirds e. three fourths

b

Performing activities that increase the value of goods or services to consumers refers to Multiple Choice a. differentiation. b. value creation. c. strategic positioning. d. value pricing. e. profit growth.

b

Roughly _______ of every 100 people in the world today are _______. Multiple Choice a. two thirds; Muslim b. one third; Christian c. one third; Buddhist d. one fifth; Muslim te. hree quarter; Christian

b

Which of the following is an example of the "production" function of the value chain? Multiple Choice a. a retailer training and motivating its employees b. a bank originating a loan for a customer c. a skincare company researching consumer needs d. a car manufacturer advertising its new minivan e. a manufacturer of home appliances designing a new dishwasher

b

Occidental Pharmaceuticals believes in risk taking and encourages its employees to do so. The company also holds its employees accountable for results. The norms and value systems of Occidental Pharmaceuticals constitute its Multiple Choice a. cultural toughness. b. cultural sensitivity. c. corporate culture. d. corporate social responsibility. e. perceptual ability.

c

Which is not true of the world population today? Multiple Choice a. Mandarin is the most spoken language. b. Just 8 out of 100 are over 65 years old. c. About two-thirds are women. d. More than 80 out of 100 are literate. e. The number of people with college degrees is increasing.

c

Which strategy should firms pursue when they are trying to simultaneously achieve low costs through location economies, economies of scale, and learning effects; differentiate their product offering across geographic markets to account for local differences; and foster a multidirectional flow of skills between different subsidiaries in the firm's global network of operations? Multiple Choice a. global standardization b. localization c. transnational d. universal e. domestic

c

FedEx is trying to increase its profitability by Multiple Choice a. increasing the number of countries and markets it serves. b. reducing the number of countries and markets it serves. c. cutting prices on all standard shipping. d. offering a range of services to its customers. e. price-matching against major competitors.

d

FedEx's revamped global strategy is designed to Multiple Choice a. eliminate confusion by offering standardized service. b. lower prices on all services. c. create savings through lower cost production. d. create value for the customer. e. follow a one-size-fits-all approach.

d

The main focus of FedEx's strategy is Multiple Choice a. transportation. b. supply chain management. c. logistics. d. value creation e. on-time delivery.

d

Which of the following is true of an international strategy? Multiple Choice a. It is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences. b. It is the most difficult strategy to pursue because it places conflicting demands on the company. c. It makes most sense when there are strong pressures for cost reductions. d. It involves taking products first produced for their domestic market and selling them internationally with only minimal local customization. e. It is used by firms that try to achieve low costs through location economies, economies of scale, and learning effects.

d

A _____ strategy focuses on increasing profitability by customizing the firm's goods or services so that they provide a good match to tastes and preferences in different national or regional markets. Multiple Choice a. domestic b. transnational c. universal d. global standardization e. localization

e

Cooperative agreements between potential or actual competitors are called Multiple Choice a. location economies b. greenfield investments. c. hostile acquisitions. d. demergers. e. strategic alliances.

e

The global marketplace is now comprised of about ________ people. Multiple Choice a. 250 million b. 17 million c. 25 billion d. 75 million e. 7 billion

e

The rate of return that a firm makes on its invested capital (ROIC) is calculated by Multiple Choice a. dividing total invested capital by sales revenues of the firm. b. dividing the total revenues of the firm by total invested capital. c. dividing market price of the firm's stock by earnings per share. d. dividing outstanding long-term debt by equity. e. dividing the net profits of the firm by total invested capital.

e