final

One disadvantage of a strategic alliance is

competitors gain a low-cost route to new technology and markets.

Many believe that globalization has created a convergence in

consumer taste preferences

First-mover disadvantages refer to

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

The 1944 Bretton Woods conference created two major international institutions that play a role in the international monetary system- the IMF and the

World bank

Compare and contrast values and norms, and then discuss the various types of norms

a. By values, we mean ideas about what a group believes to be good, right, and desirable. Put differently, values are shared assumptions about how things ought to be. By norms, we mean the social rules and guidelines that prescribe appropriate behavior in particular situations. Norms are the social rules that govern people's actions toward one another. Norms can be subdivided further into two major categories: folkways and mores. Folkways are the routine conventions of everyday life. Generally, folkways are actions of little moral significance. Rather, they are social conventions concerning things such as the appropriate dress code in a particular situation, good social manners, eating with the correct utensils, neighborly behavior, and the like. Although folkways define the way people are expected to behave, violation of them is not normally a serious matter. Folkways include rituals and symbolic behavior. Mores are norms that are seen as central to the functioning of a society and to its social life. They have much greater significance than folkways. Accordingly, violating mores can bring serious retribution. Mores include such factors as indictments against theft, adultery, incest, and cannibalism. In many societies, certain mores have been enacted into law.

Economies of scale are achieved as the result of __ that creates unit cost reductions

Large scale output

Internalization theory promotes the idea that

Licensing may result in a firm giving away valuable technological know-how to a potential foreign competitor

Internalization theory promotes the idea that

Licensing may result in a firm giving away valuable technological know-how to a potential foreign country.

Purchasing power party is used to adjust gross national income in order to make a more direct comparison of __ in various countries.

Living standards

A __ 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.

Localization strategy

In the context of barriers to international communication, __ refers to the amount of other messages competing for a potential consumers attention.

Noise

The foreign exchange market is sometimes referred to as a dirty-float system because

Of the frequency of government intervention

When considering innovations and entrepreneurship, it can be said that

Innovations in production and business processes lead to an increase in the productivity of labor and capital.

In a floating exchange rate, the relative value of a currency

Is determined by market forces

According to internalization theory, one of the drawbacks of licensing is that

It does not give a firm the tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability

An expatriate manager refers to

A citizen of one country who is working abroad in one of the firms subsidiaries.

A righteous moralist is most likely to claim that

A multinationals home country standards of ethics are the appropriate ones for companies to follow in foreign countries

The theory of __ was the first to explain why unrestricted free trade benefits a country

Absolute advantage

As a trade theory, mercantilism was based on the idea that a trade surplus would lead to

Accumulations of gold and silver

How does possessing a core competency help a firm?

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

A major distinction between conventional bank and Islamic bank is that Islamic banks

Cannot pay or charge interest

What is a closed system of stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during individuals lifetime?

Caste system

How is geocentric staffing policy beneficial to a firm?

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

What is an advantage of a polycentric staffing approach?

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

Multipoint pricing occurs when a company

Aggressively prices in one market to elicit a competitive response from a rival in another market.

A zero-sum game occurs when

An economic gain by one country results in an economic loss by another

The last step in the ethical decision making involves

Auditing of decisions

A multinational corporation that adopts the naïve immoralist approach to ethics will most likely

Believe that, in a host country, any action is ethically justified if everyone else is doing it

Which scenario best exemplifies ethnocentrism?

Bryan's belief in the superiority of his culture has resulted in conflicts with his colleagues from different countries

Which legal system is based on tradition, precedent, and custom?

Common law

Right-wing totalitarianism restricts political freedom so as to inhibit the rise of

Communism

Which ethical system that has influenced behavior and shaped culture in parts of Asia, is not considered a religion

Confucianism

The United Nations created CISG in response to __ that occur in international trade

Contract disputes

The phrase "when in Rome, do as the romans" is associated with

Cultural relativism

A __ is considered an external stakeholder of an organization

Customer

According to the product life-cycle theory, the high cost of U.S. labor gave U.S. firms an incentive to

Develop cost-saving process innovations

In the context of strategic pricing, __ takes place whenever a firm sells a product for a price that is less than the cost of producing it.

Dumping

New trade theory argues that, through its impact on economies of scale, trade can

Increase the variety of goods available to consumers

What is the central message of individualism?

Individual economic and political freedoms are the rules on which a society should be based

The international monetary fund has been criticized for

Encouraging moral hazard among banks

The gold standard was adopted in response to the

Expansion in the volume of international trade due to the industrial revolution

__ refers to the extra pay an expatriate receives for working outside his or her country of origin.

Foreign service premium

Firms that pursue a __ strategy focus on increasing profitability and profit growth be reaping the cost reductions that come from economies of scale, learning effects, and location economies.

Global standardization

One advantage of a longer distribution channel is

Greater market access

One common measure of economic development is a country's

Gross national income

Compared to the growth in the world trade and world output, the FDI has

Grown more rapidly

Karl Marx believed that the way to correct the economic inequalities in a capitalist society was to

Have state ownership as the basic means of production

A moral compass is used by manager to

Help them navigate through difficult ethical dilemmas

Within an international business,__ is typically responsible for international labor relations.

Human resource management

During early globalization efforts, outsourcing was typically confined to ___ activities

Manufacturing

What are the three broad forms of economic systems?

Market, command and mixed

Globalization critics argue that the decline in unskilled wage rates in advanced economies is due to the

Migration of low-wage manufacturing jobs offshore

In a __ economy, certain sectors of the economy are left to private ownership and free market mechanisms, while other sectors have significant state ownership and government planning.

Mixed

Once it undertakes FDI, a firm becomes a

Multinational enterprise

Which statement is true about culture?

Multinational enterprises can themselves be engines of cultural change

According to the theory of comparative advantage, consumers in all nations can consume more if there are

No restrictions on trade

The goal of market segmentation is to

Optimize the fit between the purchasing behavior of consumers in a given segment and the marketing mix.

A __ approach to staffing limits career mobility and isolates headquarters from foreign subsidiaries.

Polycentric

___ refers to the use of price as a competitive weapon to drive weaker competitors out of a national market.

Predatory pricing.

The value creation activities of a firm are categorized as

Primary activities and support activities.

The deregulation of an economy involves

Privatizing state-owned enterprises

According to the Human Development Index, average income adjusted for PPP should be sufficient to

Provide basic needs such as food and shelter

The main goal of GATT was to

Reduce trade barriers

Repatriation refers to

Reentry of expatriate managers into their home-country organization

People in the West tend to associate a __ with a free market system, strong property rights protection, and economic progress.

Representative democracy

Those who attempt to achieve the same ideologies as that of the communists without violent revolution and totalitarian dictatorship are called

Social democrats

Expatriate failures refers to

The premature return of an expatriate manager to his or her home country.

Firms for which licensing is not a good option include those

That have valuable know-how

One advantage of joint ventures is that

The foreign firm benefits form a local partners knowledge of the host country.

How have new information and communication technologies, including the internet, affected the political economy in general?

The have reduced a state's ability to control access to uncensored information

A firm will favor FDI over exporting as an entry strategy when

The transportation costs or trade barriers are high

Why do acquisitions fail sometimes?

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

What is a disadvantage of greenfield ventures?

They are slower to establish than acquisitions.

Why did many nations impose high tariffs on imports of manufactured goods prior to World War II

To protect domestic industries from foreign competition

Firms that pursue a __ strategy differentiate their product offering across geographic markets to account for local differences.

Transnational

In a __, a firm agrees to ser up an operating plant for a foreign client and hand over the plant when it is fully operational.

Turnkey project

Describe two of the four different forms of totalitarianism

a. Four major forms of totalitarianism exist in the world today. Until recently, the most widespread was communist totalitarianism—a version of collectivism advocating that socialism can be achieved only through a totalitarian dictatorship. A second form of totalitarianism might be labeled theocratic totalitarianism, which is found in states where political power is monopolized by a party, group, or individual that governs according to religious principles. Iran and Saudi Arabia are examples of theocratic totalitarianism. A third form of totalitarianism might be referred to as tribal totalitarianism, a political system in which a party, group, or individual that represents the interests of a particular tribe (ethnic group) monopolizes political power. It has arisen from time to time in some African countries. A fourth major form of totalitarianism might be described as right-wing totalitarianism, a political system in which political power is monopolized by a party, group, or individual that generally permits individual economic freedom but restricts individual political freedom, including free speech, frequently on the grounds that it would lead to the rise of communism.

Define globalization and give two examples of how it has changed the business environment.

a. Globalization is defined as the shift toward a more integrated and interdependent world economy (Hill, p.6). Globalization has several facets , including the globalization of markets and the globalization of production. Globalization can stimulate economic growth, raises income of consumers, helps creates jobs in countries, etc. (Hill, p. 23)'-Internet the process by which businesses or other organizations develop international influence or start operating on an international scale.

Describe two of the six cultural dimensions in Hofstede's model. Please be clear and concise in your answer.

a. Hofstede first isolated four dimensions that he claimed summarized different cultures—power distance, uncertainty avoidance, individualism versus collectivism, and masculinity versus femininity. The power distance dimension focused on how a society deals with the fact that people are unequal in physical and intellectual capabilities. The individualism versus collectivism dimension focused on the relationship between the individual and his or her fellows. Hofstede's uncertainty avoidance dimension measured the extent to which different cultures socialized their members into accepting ambiguous situations and tolerating uncertainty. His masculinity versus femininity dimension looked at the relationship between gender and work roles.

What are the roles of the International Monetary Fund (IMF) and the World Bank? Which of these institutions is more controversial? Why?

a. The International Monetary Fund (IMF) and the World Bank were both created in 1944 by 44 nations that met at Bretton Woods, New Hampshire. The IMF was established to maintain order in the international monetary system; the World Bank was set up to promote economic development. The IMF is the more controversial of the two sister institutions. The IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil and whose currencies are losing value against those of other nations. IMF loans come with strings attached, however; in return for loans, the IMF requires nation-states to adopt specific economic policies aimed at returning their troubled economies to stability and growth. These requirements have sparked controversy. Some critics charge that the IMF's policy recommendations are often inappropriate; others maintain that by telling national governments what economic policies they must adopt, the IMF is usurping the sovereignty of nation-states. On the other hand, the World Bank has focused on making low-interest loans to cash-strapped governments in poor nations that wish to undertake significant infrastructure investments (such as building dams or roads).