D080 Pre-Assessment Questions and Answers

A new start-up company wants to connect directly with its consumers. How many layers of intermediaries should the company consider?

0

For which concern has the World Trade Organization been criticized?

Adoption of labor standards protecting labor rights

The United States-Mexico- Canada Agreement (USMCA), a modification of the North American FreeTrade Agreement (NAFTA), broadened the scope of free trade between member nations and tightened restrictions in the region. Which regulation was established by this new agreement?

Almost half of all automobile parts must be made by a labor force that earns a minimum of $16 per hour by 2023.

Which laws are violated by practices such as price-fixing, price discrimination, restraints, and monopolization?

Anti-trust

A company is interested in working with the technology that will allow consumers to privately and securely store personal information such as social security and credit card numbers, making it accessible around the world. Which piece of technology is of interest to this company?

Blockchain

A U.S. capital investment firm is researching new markets to enter to diversify its portfolio. The director of foreign investments presented a pitch to the board of directors encouraging entry into the Costa Rican telecommunications market by investing in local companies in the region through acquisition. Which alliance supports this director's suggestion?

Central America Free Trade Agreement

An employee for a global technology company was assigned to the overseas office in Asia. Once the assignment was completed, the employee experienced disorientation in repatriating to the head office in the United States. What caused this disorientation?

Changes in work culture and customs

A global company wants to share and store business information online 24/7 for employees so they can access the items when they are not physically in the office. Which tool should the company use for this purpose?

Cloud-based fi le share

A CEO of a multinational corporation tells employees that they are expected to follow the organization's values, remember the mission, and adapt behaviors to be in alignment with the vision and mission, regardless of the situation. Which ethical standard is being stressed by this company?

Code of ethics

Which convention provides gap fillers for terms that may not be expressly stated in agreements between two companies?

Contracts for the International Sale of Goods

Which factor contributes to the creation of a monopoly?

Control of natural resources

A multinational beverage company decides to export products into a new market in order to grow its business. Exporting products was determined to be one of the cheapest methods of market entry for this company; however, the company realizes there are some disadvantages to exporting. Which challenge is this company likely facing by exporting its products?

Costs of transporting goods is high.

A company that is located in Country A would like to sell products in Country B. The government of Country B is pushing for a tariff-based international trade agreement on the product. What is the reasoning behind Country B's decision?

Country B seeks to protect its economy and give it the opportunity for long-term expansion.

A multinational company sources the components for its products from multiple countries around the globe and assembles the final finished product locally in the country of sale. However, the consumers in the local country do not prefer locally made goods. Which phenomenon is the company experiencing?

Country-of-origin effect

Which negative outcome on political systems comes from globalization?

Creation of isolationist policies

What are the four factors in Ghemawat's CAGE analysis?

Culture, administration, geography, economy

A company located in the United States ships its products to a country overseas. Frequent bad weather causes significant delays, thus leading to reduced profits. As a result, the company wants to encourage leadership to consider adding a location in this overseas country. Which strategy solves this problem?

Decentralized manufacturing

An international company's consumers are demanding that the owners make socially ethical business decisions concerning their packaging, but the company is finding that the suggested green modifications are increasing the costs of producing the product. Which concern is this company facing by meeting these ethical demands?

Decreased profitability

An international company works with many economic sectors and notices that one sector, in particular, is slower to adopt artificial intelligence, which limits their opportunities on a global scale. Which economic sector shows this slower pace?

Education

A community has the skills and ability to access computers and the internet but does not value that form of technology. A company is trying to change the situation in order to facilitate increased online transactions. Which stage of the digital divide is the company hoping to correct?

Empowerment

A company would like to expand its corporate social responsibility (CSR) initiatives to a global level. Which strategy should the company use to meet this goal?

Engage stakeholders on the issue of air quality

Workers at a company are struggling to efficiently address daily problems because the company's current information systems do not communicate across departments. What type of system should the company implement to solve this problem?

Enterprise resource planning system

An individual is encouraged to provide a small, quiet fee to local offi cials to get some critical work doneoverseas for a global offi ce. The individual was told that this would greatly expedite the work. Theindividual took that advice, and the work was completed, but the manager in the United States was upsetwith the action and called the individual to discuss the matter. What is the most challenging aspect of this individual's ethical dilemma?

Ethical behaviors are not standardized across the world.

A multinational company hires a distributor to manage the distribution of products in a new international market that it recently entered. Which entry strategy is the company using?

Exporting

What is a characteristic of a market economy?

Firms seek to maximize profi ts.

An international business experienced significant changes due to advances in global technology such as autonomous cars, 3D printing, biometrics, nanotechnology, and quantum computing. Which era caused this impact on the business?

Fourth Industrial Revolution

An international company has employees divided into departments related to designated areas of the business, such as marketing, production, human resources, information technology, and customer service. What is the organizational structure of this company?

Functional

A manufacturing company in the United States acquired a small national supplier based in California. Which accounting method should the company use to record the acquisition?

Generally accepted accounting principles

What is an example of a micro risk for multinational companies?

Government nationalization of assets

As a company enters a foreign market, it provides assets, takes on all of the responsibility, and assumes the significant risk. What is this market entry strategy?

Greenfield venture

What is the current focus of the World Bank?

Improving quality of life

A business is entering a global market at the same time it has been trying to improve its level of corporate social responsibility (CSR). Which CSR goal should this company remember during this process?

Increase shareholder trust via high ethical standards

Which drawback is associated with regional economic integration?

Increased exclusive internal trade

Countries A and B participate in trade agreements that allow free trade among participant countries. However, Country A imposed quotas on several imported products to protect its domestic products. What is the effect, if any, on the domestic prices of these products?

Increases

A company's distribution channel consists of a producer, a distributor, a retailer, and a consumer. What is a distribution channel with this structure called?

Indirect

Which national cultural dimension in global business refers to people's inclination to take care of themselves and their close circle of family and friends, often at the cost of the whole society?

Individualistic

Which institution helps to maintain availability of global financing to solve trade deficit issues?

International Monetary Fund

Which impact does Islamic law directly have on businesses?

It forbids charging interest.

How is the Special Drawing Right of the International Monetary Fund (IMF) valued?

It is based on the value of the five most significant members' currencies.

Two countries agree to open their borders to international business transactions with one another without tariffs. How does this affect global business?

It leads to developing free trade policies with strategic partners.

What is an advantage of using intermediaries in an indirect distribution channel?

It reduces up-front costs with the use of an existing channel

A country uses its established technology infrastructure to produce a good. What is the impact of this infrastructure on trade?

It will create barriers to entry for other nations.

Two countries decide to open up trade with each other. What is likely to happen when trade opens up?

Jobs will increase in comparative advantage industries.

A computer technology company has several factories in three countries. The headquarters introduces steps in the manufacturing process so that waste decreases dramatically. Which supply chain practice is this company using to optimize production efficiency?

Lean manufacturing

Which form of funding requires a low cost of capital and does not require time to mature?

Loans

What is a major drawback to the home country when companies outsource manufacturing jobs to countries with lower worker wages?

Loss of manufacturing jobs

A multinational company uses transfer pricing to reduce its tax burden in the subsidiaries' countries. Which effect does this action have on subsidiaries?

Lowered profit

A manufacturing facility would like to consider the use of artificial intelligence deep learning. Which practice illustrates the use of this approach?

Machines become familiar with common defects in products

Which organizational structure is common in international high-tech and engineering firms that have projects of limited lengths of time where employees can be put on different teams to maximize ingenuity?

Matrix

Which national cultural dimension refers to how agreeably a society accepts hierarchical differences between people in the global workplace?

Power distance

A global household appliance company competes in three areas: washers, dryers, and refrigerators. Which type of departmentalization does this company use?

Product

Country A and Country B are trying to mend their relationship. A company from Country A would like to invest in a company in Country B. Which action by Country B will help these two countries meet their goal?

Provide tax exemptions

Which factor results in a higher rate of globalization?

Reduced trade barriers

Which organizational structure helps increase employee creativity, productivity, and mutual accountability?

Teams

A firm based in Country A manufactures its products in Country B and pays the manufacturing employees in the currency in which they are located. Which currency situation will result in the maximum profit for the firm?

The currency in Country A is strong relative to the currency in Country B.

A country has a characteristic traditional economic system with poor infrastructure and limited economic opportunity. What is the impact of this system on the process of globalization?

The globalization process is at a disadvantage as the country has a lower standard of living.

A senior manager from the head office of a company based in the United States is assigned to work in its overseas office in Indonesia where the significant emphasis is placed on workplace harmony. The manager ensures that the local culture and language are understood and is often perceived as an insider who follows the normal traditions. How will the cultural dimensions of the local country influence the manager's evaluation?

The senior manager would be given a very favorable performance evaluation.

What was the economic impact of the North American Free Trade Agreement (NAFTA)?

The shift of jobs away from low comparative advantage industries

A multinational corporation (MNC) with headquarters in the United States is seeking to limit its supply chain to U.S. companies so that decision-making authority is localized at the highest level of the organization. What is a result of using this decision-making structure?

There is increased consistency in operations.

What is a drawback of creating regional trade agreements?

They shift employment opportunities.

How do banks and investors use financial statements?

To decide whether to grant access to money

What is a purpose of a country implementing trade protectionism?

To protect an infant industry

Which national cultural dimension in global business refers to the amount of ambiguity a society is willing to accept?

Uncertainty avoidance

Which level of regional economic integration is a key feature of a Customs Union?

Unified trading policies with non-members

A company wants to reduce the effects of currency fluctuations with its host country subsidiaries for the coming year. Which action should the company take?

Use a forward contract

A company is evaluating where it will locate its next facility to minimize its distribution shipping costs. Which factor must the company consider as part of this decision?

Value-to-weight ratio

A company has entered several foreign markets and maintains the same branding in all of them. What is the term for this marketing strategy?

Standardization

A company wants to hold a direct operating presence in a foreign country, so it buys a company in the target country and runs the operations. Which type of business agreement is this company using?

Subsidiary

A company would like to have a direct operating presence in a foreign country. The company is concerned about being exposed to the highest levels of risk and a slow market entry. Which entry strategy is the company concerned about?

Subsidiary