IB quiz 4

Which of the following staffing approaches will be most effective for a firm that is pursuing a transnational strategy?

A geocentric staffing policy

Which of the following statements about price discrimination is true?

A necessary condition for profitable price discrimination is different price elasticities of demand in different countries.

Which of the following is an example of a positive source effect?

An Audi R8

Which of the following is a factor that transforms a low-cost location to a high-cost location?

Appreciation of local currency

Which of the following is the most common approach to expatriate pay?

Balance sheet approach

Which of the following is a major drawback of engaging in countertrade?

Countertrade may involve the exchange of unusable goods.

Which of the following statements is true of countertrade?

Countertrade occurs when goods and services are traded for other goods and services

Which of the following statements is true?

Direct selling may be the only way to reach consumers in poor nations with low literacy levels

Which of the following is one of the four elements that constitute a firm's marketing mix?

Distribution strategy

Which of the following is a nationwide group of international trade attorneys who provide free initial consultations to miniature businesses on export-related matters?

ELAN

Which of the following statements is true of EMCs?

EMCs are export specialists that act on behalf of their client firms

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 a technological factor that affects international business?

Fixed costs of setting up a production plant

Which of the following makes being dependent on one location particularly risky?

Floating exchange rates

Which of the following statements about fragmented retail systems is true?

Fragmented retail systems tend to promote the growth of wholesalers to serve retailers

Which of the following is a hidden cost associated with basing production in a foreign location?

High employee turnover

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 one of the important factors in determining the elasticity of demand for a product in a given country?

Income level

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

Which of the following is NOT an action taken by organized labor to respond to the increased bargaining power of multinational corporations?

Increasing competition between national unions

What is the most important advantage of using a geocentric staffing policy?

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

How has the adoption of just-in-time inventory systems, computer-aided design, and computer-aided manufacturing impact firms' associations with suppliers?

It has increased pressures to establish long-term relationships with suppliers.

Which of the following statements is true of exporting?

It helps a firm achieve economies of scale.

Which of the following statements is true of Six Sigma?

It is a statistically based philosophy to reduce defects and boost productivity.

Which of the following is an advantage of countertrade?

It is an effective way of doing business with developing nations.

Which of the following statements is true regarding management development?

Management development facilitates the creation of an informal network for sharing knowledge within the multinational enterprise.

Which of the following is true regarding approaches to labor relations?

Many firms are now using the threat to move production to another country in their negotiations with unions.

Which of the following products will most likely have high value-to-weight ratios?

Pharmaceuticals

____ pricing is the use of price as a competitive weapon to drive weaker competitors out of a national market.

Predatory

Which of the following is a desired outcome of flexible manufacturing technology?

Reducing setup times for complex equipments

Which of the following products will have low value-to-weight ratios?

Refined sugar

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

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 is an argument that supports global advertising?

Standardized advertising lowers the costs of value creation by spreading the fixed costs of developing the advertisements over many countries.

Which of the following terms refers to the use of a specialized third-party trading house in a countertrade arrangement?

Switch trading

According to Levitt, which of the following statements is true?

Technology drives the world toward a converging commonality

Which of the following statements is true about Small Business Administration (SBA)?

The SBA employs trade officers throughout the United States.

The international trade secretariats (ITS) have had virtually no real success. Which of the following is NOT a cause of the ITS's ineffectiveness?

The codes of conduct developed by International Labor Organization and the Organization for Economic Cooperation and Development prevented the ITSs from exercising absolute power.

Which of the following is a disadvantage of using a letter of credit (L/C)?

The importer must pay a bank fee for the letter of credit.

Which of the following statements about the choice of distribution strategy is true?

The longer a channel, the greater the aggregate markup, and the higher the price that consumers are charged for the final product.

Which of the following statements is true of products with high value-to-weight ratios?

Their transportation account for a very small percentage of the total costs.

Which of the following statements is true of reactive firms?

They consider exporting only after their domestic market is saturated

Which of the following countries has a concentrated retail system?

USA

_____ makes it difficult to evaluate the performance of expatriate managers objectively.

Unintentional bias

In a concentrated retail system:

a few retailers supply most of the market.

An ethnocentric staffing policy is one in which:

all key management positions are filled by parent-country nationals.

Dynamic capabilities describe skills that _____.

become more valuable over time through learning

In a letter of credit transaction, the importer secures the letter of credit ____.

before product shipment

Which of the following is a document used to give the title of the products to a bank?

bill of lading

Other things being equal, the rate of new-product development seems to be greater in countries where:

consumers are affluent.

The "Swiss Made" label has leveraged several watch-making companies (for example, TAG Heuer) for decades now. This is an example of a ____ effect

country of origin

The extent to which the place of manufacturing influences product evaluations is known as ____.

country of origin effects

In the 1960s, the Swedish vacuum manufacturer Electrolux successfully marketed vacuums in the United Kingdom with the slogan "Nothing sucks like an Electrolux". The informal U.S. meaning of the word 'sucks' was already well known in the UK at the time, and the company hoped the slogan, with its possible double entendre, would gain attention. When this slogan was used in the American market, it was a catastrophe. This is an example of:

cultural differences.

To overcome cultural barriers, companies should:

develop cross-cultural literacy

The means a firm chooses for delivering the product to the consumer is its ____.

distribution strategy

A _____ is simply an order written by an exporter instructing an importer, or an importer's agent, to pay a specified amount of money at a specified time.

draft

Just-in-time inventory systems _____.

economize on inventory holding costs

In theory, the advantage of EMCs is that they are __________________.

experienced specialists who can help the neophyte exporter

The ____ industry is often thought of as one in which global standardization of the marketing mix is the norm.

financial services

A(n) _____ is a grouping of various types of machinery, a common materials handler, and a centralized cell controller.

flexible machine cell

The most important determinant of channel length is the degree to which a retail system is ____.

fragmented

A(n) _____ seeks the best people for key jobs throughout the organization, regardless of nationality.

geocentric staffing policy

The idea that valuable knowledge does not reside just in a firm's domestic operations but can also be found in its foreign subsidiaries is called _____.

global learning

The benefits of making all or part of a product in-house seem to be greatest when the firm _____.

has highly specialized assets

In a typical international trade transaction, the ____.

importer's bank sends a letter of credit to the exporter's bank

A citizen of France who moves to the U.S. to work at Ford is a(n):

inpatriate.

An ethnocentric approach to staffing is appropriate for firms that are pursuing a(n):

international strategy.

A banker's acceptance ____.

is a time draft that has been drawn on and accepted by a bank

Flexible manufacturing technology is also known as _____.

lean production

A _____ states that the bank will pay a specified sum of money to a beneficiary, normally the exporter, on presentation of particular, specified documents

letter of credit

A polycentric approach may be effective for firms pursuing a(n):

localization strategy

Bringing managers together in one location for extended periods and rotating them through different jobs in several countries is a part of:

management development programs.

The identification of distinct groups of consumers whose purchasing behavior differs from others in important ways is known as ____.

market segmentation

Research has long maintained that a major factor of success for new products is the closeness of the relationship between:

marketing and R&D.

The set of choices the firm offers to its targeted market is known as the ____.

marketing mix

In order for price discrimination to be successful:

national markets must be kept separate.

The probability of effective communications is reduced by:

noise.

Contrary to Levitt's suggestions, consumers in the most developed countries are often:

not willing to sacrifice their preferred attributes for lower prices.

If a company recruits host-country nationals to manage subsidiaries while parent-country nationals occupy key positions at corporate headquarters, the firm is following a(n):

polycentric staffing policy.

In a country where competition is limited, ____.

prices will be high

Consumers in highly developed countries value ____ as compared to their counterparts in less developed nations.

product attributes

Tight cross-functional integration between R&D, production, and marketing can help a company to ensure that all of the following take place except:

product development projects are driven by internal needs.

A firm that depends more on mass media advertising to communicate the marketing message to potential consumers is using a:

pull strategy

A geocentric staffing policy _____.

requires extensive documentation

A country with high car ownership, a large number of households with refrigerators, and a large number of two-income families tend to have:

retail concentration.

A _____ is payable on presentation to the drawee.

sight draft

Bank charges on a letter of credit will depend on the ____.

size of the transaction

If a ____ change in a price produces a ____ change in demand, then demand is said to be elastic.

small; large

A _____ is an asset whose value is contingent upon a particular relationship persisting.

specialized asset

The major cost saving associated with JIT systems comes from _____.

speeding up inventory turnover

In an international transaction involving a bank as a third party, the exporter ships the product after ____.

the bank promises to pay on the importer's behalf

If market segments transcend national borders:

the company can view the global market as a single entity and pursue a global strategy.

A pull strategy should be used when:

the distribution channels are long.

A foreign service premium is:

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

An advantage of buying component parts, or even an entire product, from independent suppliers is that _____.

the firm can maintain its flexibility by switching orders according to circumstances

Expatriate failure refers to:

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

A _____ allows for a delay in payment.

time draft

Logistics is the activity that controls the _____.

transmission of physical materials through the value chain

Decentralization of production is appropriate when _____.

volatility in key exchange rates is expected

A hardship allowance is paid:

when the expatriate is being sent to a location where such basic amenities are grossly deficient by the standards of the expatriate's home country.