IB Test 1

Which of the following is not true? a. Business conducted outside the confines of any one country is on the decline. b. Global events affect almost all companies. c. By approaching operating strategies from an international standpoint, you may be able to better obtain the resources you need. d. The physical, social, and competitive conditions differ from country to country.

Business conducted outside the confines of any one country is on the decline

_____ peoples account for the largest percentage of global production. a. English-speaking b. Mandarin-speaking c. French-speaking d. Spanish-speaking

English-speaking

An example of a US merchandise import is an automobile made in _____ and sold _____ a. the United States by a Japanese company; in the United States b. the United States by a Japanese company; outside the United States c. Japan by a Japanese company: in the United States d. Japan by a U.S. company; outside the United States

Japan by a Japanese company; in the US

Why do international business managers need a working knowledge of their company's physical and social environments? a. The aggregate of conditions outside the company influences its success. b. Differences in culture, politics and infrastructure have no affect on international trade. c. This knowledge is required in many countries in order to obtain visas to work. d. None of the above

The aggregate conditions outside the company influences its success

An example of a Japanese service export is a visit by a a. Japanese citizen to Disneyland in the United States b. Japanese citizen to the Japan Pavilion at Epcot Center in the United States c. U.S. citizen to the Japan Pavilion at Epcot Center in the United States d. U.S. citizen to Tokyo Disneyland in Japan

US citizen to Tokyo Disneyland in Japan

When two countries are very culturally close, ________. a. communications between them need not be translated b. the people in each country are always in sync c. foreigners and domestic citizens are treated differently d. a company might overlook important subtleties

a company might overlook important subtleties

A major problem when cultures collide in international business occurs when ________. a. a Firm's employees encounter distress because of difficulty in accepting or adjusting to foreign behaviors b. employees disagree on the style of art for decorating the office c. local people have no expectation that foreigners should adjust to their culture d. companies understand and adjust to the national cultures in which they do business

a firm's employees encounter distress because of difficulty in accepting or adjusting to foreign behaviors

Small countries worry about overdependence caused by globalization. Their concerns include all of the following except which? a. A large country on whom they depend may pressure them on political matters. b. An international company may dictate its terms of operations in a small country. c. A company's exploits may result in homogenization of products & social structure. d. A large country may impose a change of religion on its people

a large country may impose a change of religion on its people

If an MNE convinced a popular priest that its vitamin-enriched soft drink would benefit parishioners' health, the MNE would be using ________ to help bring about change. a. participation b. reward sharing c. an opinion leader d. a cost-benefit relationship

an opinion leader

Which of the following statements is true concerning the international competitive environment for companies? a. Although countries' market sizes differ, companies usually face about the same number of competitors in each national market. b. In most industries, companies face the same competitors in each country where they operate. c. It takes about the same amount of resources to gain national distribution in a large country as in a small one. d. Being a leader in one country doesn't guarantee you'll be a leader in any other country.

being a leader in one country doesn't guarantee you'll be a leader in any other country

Ethnocentrism in international business refers to the ________. a. study of group ethics b. comparison of the Protestant ethic with other religious views c. belief that what works best at home should work best everywhere d. study of ethnic segments within countries

belief that what works best at home should work best everywhere

Which of the following types of political risks often is caused by random developments that adversely affect the operations of all companies in a country? a. systemic political risk b. procedural political risk c. catastrophic political risk d. distributive political risk

catastrophic political risk

Political systems based on the ________ paradigm promote the principle that government may intervene to ensure that business practices benefit society. m. individualistic n. collectivistic o. freedom p. community

collectivistic

Safe work environments motivate ________; challenges motivate ________. a. individualists; collectivists b. collectivists; individualists c. non-fatalists; fatalists d. materialists; non-materialists

collectivists; individualists

Companies often expand their business internationally in response to a. increased import restrictions in their domestic markets b. competitive international advantages gained by their competitors c. increased export restrictions in their domestic markets d. a decrease in domestic competition

competitive international advantages gained by their competitors

Cultural change imposed by an alien culture is called ________. a. ethnocentricity b. cultural imperialism c. collectivism d. creolization

cultural imperialism

_____ consists of specific learned norms based on attitudes, values, and beliefs of a group of people. a. Ethnology b. Civilization c. Culture d. Doctrine

culture

Companies need to determine not only the laws affecting business where they plan to operate, but also the _____ of those laws a. origin b. ethical rationale c. legislating bodies d. degree of enforcement

degree of enforcement

_____ refers to a political system in which government is organized by and accountable to the people. y. Totalitarianism z. Fascism aa. Socialism bb. Democracy

democracy

The uneven distribution of resources among countries results in a. uneven enforcement of laws b. different products produced in different places c. the determination of different population levels d. treaties to assure the sharing of those resources

different products produced in different places

A major criticism of offshoring is that it a. increases production costs b. displaces domestic workers c. threatens the sovereignty of larger countries d. allows companies to avoid payment of taxes anywhere

displaces domestic workers

Most people's basic value system is ________. a. inborn b. changed in adulthood through imposition c. affected primarily by teenage peer pressure d. fairly firmly in place at a young age

fairly firmly in place at a young age

A motive for a company to conduct international business is to acquire resources abroad. Which of the following is not an example of a resource acquisition motive? a. producing with lower labor costs b. gaining knowledge that the company can use elsewhere c. following a competitor into a foreign market d. gaining the means to differentiate a product

following a competitor into a foreign market

Because global events and competition affect almost all companies, a student of business needs to a. pressure the government to become more independent of other countries b. take a job with a company headquartered in another country c. find employment with a company without competition from international companies d. gain some understanding of international business

gain some understanding of international business

When a company wishes to introduce change in a foreign country, its likelihood of success can be improved by ________. a. introducing many changes simultaneously b. gaining the support of opinion leaders c. agreeing to make some home-country changes in return d. informing local people that it would not be there if it did not know what was best

gaining the support of opinion leaders

The approach a company takes when it bases foreign operations on an informed knowledge of its organizational culture along with home and host-country needs, capabilities, and constraints is called _. a. polycentrism b. pragmatism c. self-determination d. geocentrism

geocentrism

The widening set of interdependent relationships among people from different parts of the world is known as a. globalization b. offshoring c. international business d. outsourcing

globalization

Which of the following is a reason for recent governmental decreases in restrictions on cross-border trade or resource movements? a. Most countries face shortages of workers, so they seek foreign workers who can help them produce more. b. Governments believe that this will decrease the need to make their own companies more innovative. c. Consumers increasingly want to buy goods and services produced in their own countries, making restrictions less necessary. d. Governments believe that domestic producers will become more efficient as a result of foreign competition.

governments believe that domestic producers will become more efficient as a result of foreign competition

Which of the following is a reason for governmental decreases in restrictions on cross-border trade or resource movements? a. Governments believe that this will decrease the need to make their own companies more innovative. b. Consumers increasingly want to buy goods and services produced in their own countries, making restrictions less necessary. c. Governments hope that other countries will lower their barriers in response. d. Most countries face shortages of workers, so they seek foreign workers.

governments hope that other countries will lower their barriers in response

Companies may be able to better motivate workers through delayed compensation, such as retirement programs, in a society characterized by ________. a. low uncertainty avoidance b. high trust c. high future orientation d. high self-determination

high future orientation

A country in which the norm is a money-and-things orientation and a belief that it's better to "live to work" than to "work to live" is most accurately characterized as a ________ culture. a. high masculinity b. Protestant ethic c. non-fatalistic d. self-actualization

high masculinity

A culture that prefers to first settle principles rather than small issues is most accurately characterized as ___. a. idealist b. polychronic c. high-context d. pragmatist

idealist

Organizing work differently to improve productivity will likely fail ________. i. if the work force has a low tolerance for authoritarianism j. unless workers are compensated with bonuses k. unless the changes are compatible with what competitors are already doing l. if changes interfere with strongly held values

if changes interfere with strongly held values

Most of the world's goods and services are sold a. in international markets b. in the countries where they are produced c. through exports to small countries d. through production abroad by foreign investors

in the countries where they are produced

Foreign direct investment a. is undertaken only by American companies b. includes the ownership of foreign bonds c. includes partially owned foreign operations as long as the owner has controlling interest d. in terms of value, is mainly undertaken by small companies

includes partially owned foreign operations as long as the owner has controlling interest

The principle that an individual has the freedom to pursue his or her interest, even at the risk of threatening the common good, is called ________. e. socialism f. totalitarianism g. individualism h. collectivism

individualism

Which of the following is characterized by low dependence on an organization and a desire for personal time, freedom, and challenges? a. collectivism b. democracy c. individualism d. anarchy

individualism

Generally, one can assess a political system in terms of two related dimensions. These are the degree to which a political system emphasizes ideas of democracy versus and totalitarianism as well as the degree to which it emphasizes the ideals of ________. a. communities versus collectives b. liberalism versus pluralism c. individualism versus democracy d. individualism versus collectivism

individualism versus collectivism

Which of the following refers to a belief in a limited role of government and a series of checks and balances to essentially separate government from business? a. collectivistic b. individualistic c. communitarian d. guarded

individualistic

Which of the following was a condition that powered the worldwide spread of democracy? cc. Totalitarian regimes delivered acceptable economic progress to their populations. dd. In many countries the economic advances of the last quarter century have led to the emergence of content middle and working classes who no longer push for democratic reforms. ee. Few groups have yet to successfully challenge the legitimacy of democratic systems. ff. Information and communications technologies have broken down the ability of the state to control access to uncensored information, especially that from foreign sources.

information and communications technologies have been broken down the ability of the state to control access to uncensored information, especially that from foreign sources

Although there are different views about the purpose of a political system, most analysts agree that an essential task of a political system is to ________. q. integrate the different elements of a society into a functioning unit r. allocate scarce resources among competing users s. develop reasonable attitudes and outlooks within the population t. protect individuals within the country from foreign threats

integrate the different elements of a society into a functioning unit

The business term of globalization is sometimes used to mean the a. movement of jobs to low-wage countries b. business being undertaken outside the confines of any nation c. uneven distribution of resources and their influence on different products and services in different parts of the world d. integration of world economies through the reduction or elimination of barriers to the movement of trade, capital, technology, and people

integration of world economies through the reduction or elimination of barriers to the movement of trade, capital, technology, and people

Cultural group membership ________. a. is based only on nationality or ethnic background b. is usually multiple because people belong to different groups based, for example, on nationality and profession c. refers to membership in organizations such as book clubs that promote cultural improvement d. is ascribed rather than acquired

is usually multiple because people belong to different groups based on, for example, nationality and profession

_____ tends to stabilize a culture; ________ tends to create cultural change. a. Normativism; relativism b. High-power distance; low-power distance c. Isolation; contact d. Natural selection; changes in gene frequency

isolation; contact

When a company does business in another country whose official language is the same as its home country's, ________ a. it can assume that communications will go smoothly b. it should use back-translation on written documents c. it may encounter differences in meanings of the same words d. it can assume that although some spellings are different that words will mean the same thing

it can assume that communications will go smoothly

Which of the following best defines international business? a. It includes all economic flows between two or more countries. b. It includes all private economic flows between two or more countries. c. It includes all business transactions involving two or more countries, whether the transactions are conducted by private or governmental organizations. d. It includes all business transactions in countries other than your home country

it includes all business transactions involving two or more countries, whether the transactions are conducted by private or governmental organizations

When two or more organizations share ownership of a foreign direct investment, the operation is called a a. portfolio investment b. transnational corporation c. turnkey operation d. joint venture

joint venture

What is civil law?

law developed by core principles in society

What is common law?

law developed by judges and courts

What is theocratic law?

law developed by religion

The mechanism for creating, interpreting, and enforcing the laws in a specified jurisdiction are aspects of a country's ________. a. political system b. philosophical orientations c. legal system d. basis of rule

legal system

Richer countries tend to regulate business activity ________, whereas poorer countries tend to regulate business activity ________. a. unpredictably; predictably b. without cause; as warranted c. more; less d. less; more

less; more

Royalties from the use of assets abroad, such as trademarks or patents, are an example of a. merchandise trade b. licensing c. direct investment d. a joint venture

licensing

One of the potential problems for an MNE that practices too much polycentrism is ________. a. loss of effective and innovative home-country practices in deference to proven host-country practices b. indifference to cultural differences c. losses incurred by using risky but innovative practices in unfamiliar markets d. excessive dependence on home-country control

loss of effective and innovative home-country practices in deference to proven host-country practices

A culture in which people prefer to finish one task before starting another is most accurately characterized as which of the following? e. low-context f. monochronic g. pragmatist h. high power-distance

monochronic

Although English is referred to as the "international language of business,"________. a. it is less frequently used than French in international business b. there is a growing disagreement over which version of English to use, e.g. British, American, or Australian c. companies headquartered outside English-speaking countries all use their official language as their operating language d. monolingual English speakers may experience more difficulty in the future in communicating on a worldwide basis

monolingual English speakers may experience more difficulty in the future in communicating on a worldwide basis

In terms of international business, we can say that a. there is a universal "best way" to conduct business b. global competition affects large companies but not small ones c. Most companies are either international or compete with international companies d. government regulation of international business has little effect on a company's profits

most companies are either international or compete with international companies

In spite of cultural differences, people working abroad are often able to do business successfully while still retaining their own cultural habits because ________. a. other cultures have always admired foreign values b. Most host country nationals are aware of differences and are willing to accept them in foreigners c. the business world has become culturally numb d. host country nationals enjoy the humor of ridiculing these differences privately

most host country nationals are aware of differences and are willing to accept them in foreigners

According to most writers today, a company with operations in more than one country is a a. multinational enterprise b. joint venture partner c. multi purpose enterprise d. born-global company

multinational enterprise

Because certain cultural attributes can link groups from different nations more closely than groups within a given nation, international businesspeople ________. a. must be careful to compare relevant groups when comparing nations b. should assume that there are few significant cultural differences among nations c. should adopt universal operating methods d. must avoid cultural imperialism

must be careful to compare relevant groups when comparing nations

The process of shifting production from a domestic to a foreign location is known as a. offshoring b. outsourcing - ordering parts from a different country to be shipped back to home country c. service imports d. a turnkey operation

offshoring

Critics of offshoring claim all expect which of the following? a. Cost savings are seldom passed on to final consumers. b. Workers who have been displaced by offshoring do not have the skills needed for higher-value jobs. c. Offshoring results in less expensive products. d. Offshoring keeps the income of people in low-wage countries from rising

offshoring results in less expensive products

When a company successfully responds to foreign production and market opportunities a. other companies will likely emulate the successful practices b. it always expands its domestic marketss c. it always downsizes its domestic operations d. its home government reduces taxes on the company

other companies will likely emulate the successful practices

Which of the following has not been a major force behind recent globalization? a. Liberalization of cross-border trade b. People feel powerless c. Cooperation among countries to deal with problems they cannot solve alone d. Growing consumer pressure

people feel powerless

Because people can be classified, for example, on the basis of their nationality, ethnicity, religion, gender, work organization, profession, age, political party, and income level, ________. a. they live in a state of cultural collision b. the study of national cultures can tell us little about expected behaviors c. identity crises make lives chaotic d. people have more than one cultural group membership

people have more than one cultural group membership

Old age is ________. a. a barrier in the workplace regardless of occupation b. considered to be advantageous in climbing the corporate ladder in the United States c. a greater barrier to employment than gender universally d. positive for organizational advancement in societies that equate age with wisdom

positive for organizational advancement in societies that equate age with wisdom

People generally prefer little consultation between superiors and subordinates where _______ is high. a. power distance b. fatalism c. collectivism d. masculinity

power distance

The attempt to resolve small issues before principles is a characteristic of which of the following? a. relativism b. monochromic behavior c. pragmatism d. uncertainty avoidance

pragmatism

In a(n) ________culture, people tend to regard seemingly peripheral information as pertinent to decision making and infer meanings from things that people say either indirectly or casually. a. pragmatist b. idealist c. fatalistic d. high-context

pragmatist

Because their citizens want a greater variety of goods and services at lower prices, many governments have a. reduced their restrictions on the international movement of goods and services b. lowered consumption taxes, such as sales tax c. increased their restrictions on the international movement of goods and services d. enacted more pricing controls

reduced their restrictions on the international movement of goods and services

Which of the following is an example of an acquired group membership? a. national origin b. religion c. gender d. race

religion

An individual who is transferred back to his or her home country after working for some time abroad and is then dissatisfied with life in the home country is experiencing ________. a. reverse culture shock b. polycentrism c. culture shock d. ethnocentrism

reverse culture shock

Societies in which people are willing to work hard and to blame and reward themselves for outcomes are most accurately characterized by a belief in ________. a. self-determination b. fatalism c. collectivism d. low power distance

self-determination

Understanding the importance of potential clients or partners by the way they dress is an example of ___. a. pragmatism b. silent language c. polychronism d. fatalism

silent language

International businesspeople need to understand social stratification systems where they do business because ________. a. such systems reflect the willingness of the local society to accept product innovations b. such systems indicate who people in a given culture will respect more c. the high similarity among countries indicates that companies can effectively use uniform hiring and promotion practices globally d. what is an ascribed group membership in one country is an acquired one in another

such systems indicate who people in a given culture will respect more

By operating internationally, a company may reduce its risks because it can a. take advantage of business-cycle differences among countries b. buy competitive risk insurance not available in its home country c. prevent competitors from operating in the countries it has entered d. operate in less competitive environments than those at home

take advantage of business-cycle differences among countries

The view that globalization is inevitable is based on the belief that a. international organizations will replace nation states b. protesters against globalization represent only a very small minority c. people want more global homogeneity of cultures d. technical advances in transportation and communications are too pervasive for globalization's growth to be hindered

technical advances in transportation and communications are too pervasive for globalization's growth to be hindered

Which of the following must be true about a company in order for it to be considered a multinational enterprise? a. The company is large with vast resources. b. The company holds direct investments in at least five countries. c. The company does not limit its evaluation of markets and production to any one country. d. The organization must be a born-global company

the company does not limit its evaluation of markets and production to any one country

When a company concentrates on national cultural differences in terms of averages, which of the following is most likely? a. The company finds polycentrism to be an ineffective operating method. b. The company overlooks the possibility of being successful by dealing with the outliers who don't conform to the averages. c. The company avoids cultural collision. d. The company increases the likelihood of encountering protests from minority groups.

the company overlooks the possibility of being successful by dealing with outliers who don't conform to the averages

In societies where trust is high, ________. a. people tend to be more future-oriented b. the cost of doing business tends to be lower c. people tend to be fatalistic d. family businesses are dominant

the cost of doing business tends to be lower

The term cultural distance refers to ________. a. the normal space between people in a society when communicating b. the time it takes people to adjust to a different culture c. the degree to which countries' cultures are separated by attributes such as language, religion, and economic development. d. the preferred relationship between superiors and subordinates in a given culture

the degree to which countries' cultures are separated by attributes such as language, religion, and economic development

Although globalization may bring economic growth, critics nevertheless contend that a. the growth is not fast enough b. the inequality of gains results in a winner/loser mentality in some people. c. this growth is mainly for the future, thus ignoring present economic growth needs d. the cultural foundations of sovereignty are supported by globalization

the inequality of gains results in a winner/loser mentality in some people

From a business standpoint, why is English the world's most common second language? a. The largest portion of global output is in English-speaking countries. b. A large portion of MNEs don't understand English. c. In most countries in the world, English is the first spoken language. d. English-speaking countries decided it would be so

the largest portion of global output is in English-speaking countries

In a country that emphasizes collectivism, ________. i. the interests of the individual are more important than the interests of the state j. one person or political party exercises absolute control over the political and economic systems k. the needs of society and the needs of individuals are treated as equally important l. the needs of society take precedence over individual freedoms

the needs of society take precedence over individual freedoms

Creolization refers to ________. a. government efforts to maintain a distinct cultural identity b. the process of mixing elements of an outside culture to a national culture c. the use of stereotypes to describe a culture d. changes as cultures evolve over time

the process of mixing elements of an outside culture to a national culture

In Saudi Arabia, Saudi businessmen engage in chit-chat while drinking coffee at a café during the conduct of business. Which of the following was the most likely reason for their behavior? a. They are fatalistic, believing that the business outcome was predetermined. b. Their religious convictions kept them from discussing business over alcoholic drinks. c. A high femininity culture that believes it's better to "work to live" than to "live to work." d. They come from a high-context culture in which small talk and seemingly unrelated information is important to decision making.

they come from a high-context culture in which small talk and seemingly unrelated information is important to decision making

All of the following are reasons why governments cooperate with each other except which of the following? a. to attack problems that one country acting alone cannot solve b. to deal with areas of concern that lie outside the territory of any nation c. to gain reciprocal advantages d. to encourage large capital movements in response to interest rate differences

to encourage large capital movements in response to interest rate differences

The term sometimes used by the United Nations as a synonym for multinational enterprise is a. multinational corporation b. transnational company c. stateless company d. global enterprise

transnational company

Superiors may need to be more precise in their directions to subordinates when ________. a. the company has a philosophy of geocentrism b. the society believes age is equated with wisdom c. power distance is low d. uncertainty avoidance is high

uncertainty avoidance is high

Based on the hierarchy-of-needs theory, in which of the following would fulfillment of lower-order needs be the best motivator? a. wealthy countries b. collectivist countries c. countries with conservative religious beliefs d. very poor countries

very poor countries

A foreign direct investment occurs a. only when a company owns more than 50 percent of a foreign firm b. when a company controls a company abroad c. in a strategic alliance d. with the 100% purchase of a foreign firm

when a company controls a company abroad

A multinational enterprise (MNE) is one that is a. Always among the world's most popular companies b. owned and managed by different companies c. licensed to operate as cultural centers d. willing to consider market and production locations anywhere in the world

willing to consider market and production locations anywhere in the world

Companies operate more easily in a country a. where people's incomes are high b. whose land mass is small c. with physical and social conditions similar to those in their home countries d. where the major competitors are local rather than international companies

with physical and social conditions similar to those in their home countries

In a practical sense, the term political system is meant to signify the ________. u. organization of military power in a country v. working government in a country w. philosophical orientations in a country x. cultural values in a country

working government in a country