Final Exam part 5
What is the difference between an ethnocentric and a polycentric staffing approach?
An ethnocentric staffing approach is more expensive compared to a polycentric staffing approach.
____ occurs when an individual or business capitalizes on a price differential for a firm's product between two countries by buying the product in the country where the price is low and reselling it in the country where prices are higher.
Arbitrage
Which of the following terms refers to the metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits?
Control systems
Which of the following is NOT associated with firms following the global standardization strategy?
Customize product offering and marketing strategy to local conditions
_____ imply that when a firm already has significant value built into its product offering, increasing value by a relatively small amount requires significant additional costs.
Diminishing returns
With a(n) _____ system, suppliers, shippers, and the purchasing firm can communicate with each other with no time delay.
EDI
Which of the following issues was not addressed by Mendenhall and Oddou's study?
Expatriate failure due to a spouse's inability to adjust.
Which of the following is an exchange rate policy where the exchange rate is determined completely by market forces?
Free float
Which among the following should be done in order to reduce bias in the performance appraisal process for expatriates?
Home-office managers should be consulted before an on-site manager completes a formal termination evaluation.
Which of the following is a drawback of the polycentric approach to staffing?
Host-country nationals have limited opportunities for advancement beyond senior positions in their subsidiary.
Which of the following is a major source of the improvement in the capabilities of a foreign site?
Increasing abundance of advanced factors of production in the nation where the factory is located
In which of the following organizational structures are the domestic operations and foreign operations isolated from each other leading to coordination problems?
International division structure
Which of the following is true of fixed-rate bonds?
Investors get back the face value of the bond at maturity of fixed-rate bonds.
Identify an advantage of adopting a low minimum efficient scale.
It allows the firm to accommodate demands for local responsiveness.
Which strategy focuses on increasing profitability by customizing the firm's goods or services so they provide a good match to tastes and preferences in different national markets?
Localization strategy
_____ activities are basically concerned with creating the product, marketing and delivering the product to buyers, and providing support and after-sales service.
Primary
Which dimension of Mendenhall and Oddou's study suggests that an expatriate with high self-esteem, self-confidence, and mental well-being is likely to succeed in a foreign job posting?
Self-orientation
Which of the following is a disadvantage of the integration facilitated by technology?
Shocks that occur in one financial center will spread globally.
RSA is a bicycle manufacturing company. Which of the following is a make-or-buy decision that the company will have to make?
Should the company outsource production to a low-cost vendor?
Which of the following statements is true of foreign bonds?
Such bonds are denominated in the issuing country's currency.
Which of the following observations is true of the current system of foreign exchange market?
The current system is a combination of government intervention and speculative activity.
What is the long-term goal of international trade secretariats (ITSs)?
To be able to bargain transnationally with multinational firms
_____ makes it difficult to evaluate the performance of expatriate managers objectively.
Unintentional bias
_____ exist when the tastes and preferences of consumers in different nations are similar if not identical.
Universal needs
Practical training is:
aimed at helping the expatriate manager and family ease themselves into day-to-day life in the host country.
A Eurocurrency is any currency ____.
banked outside of its country of origin
Other things being equal, the rate of new-product development seems to be greater in countries where:
consumers are affluent.
To overcome cultural barriers, companies should:
develop cross-cultural literacy.
Which of the following is one of the four elements that constitute a firm's marketing mix?
distribution strategy
The ____ industry is often thought of as one in which global standardization of the marketing mix is the norm.
financial services
Which of the following is a technological factor that affects international business?
fixed costs of setting up a production plant
After World War II, the world's major industrial nations arranged their currencies against each other at a mutually agreed on exchange rate. This is an example of a _____ system.
fixed exchange rate
United States sells bonds that are denominated in dollars in Europe. This is an example of a _____ bond.
foreign
The most important determinant of channel length is the degree to which a retail system is ____.
fragmented
A firm can establish a wholly owned subsidiary in a country by building a subsidiary from the ground up, called the ____.
greenfield strategy
Contracting out manufacturing allows companies to reduce economic exposure because ____.
it allows companies to shift suppliers from country to country
The main factor that makes the Eurocurrency market attractive to both depositors and borrowers is that it ____.
lacks government regulation
When individuals gain knowledge of the most efficient ways to perform particular tasks, they are saving costs through:
learning effects
There is low interdependence, performance ambiguity, and costs of control in firms pursuing a(n):
localization strategy.
Deming, the proponent of total quality management, argued that _____.
management should train employees in new skills
In order for price discrimination to be successful:
national markets must be kept separate.
When using the Euromarkets, companies ____.
pay less for the loans
The costs of promoting and establishing a product offering when a firm enters a foreign market prior to its rivals are known as ____.
pioneering costs
The manner in which decisions are made and work is performed within the organization is known as the firm's:
processes.
When a company's product has a low value-to-weight ratio, the company should _____.
produce the product in multiple locations close to major markets
The percentage increase in net profits over time measures:
profit growth.
A geocentric staffing policy _____.
requires extensive documentation
If market segments transcend national borders:
the company can view the global market as a single entity and pursue a global strategy.
According to the concept of economies of scale, as plant output expands, _____.
unit costs decrease
In a ____, the firm owns 100 percent of the stock.
wholly owned subsidiary
