Intro to IB Final
Applying what you know about hard currencies and government intervention in international transactions, which country has the fewest currency exchange controls in place?
Great Britain
Which cultural framework takes into account the entire communication situation, including the spoken language, the speaker's body language, where the conversation takes place, and the order in which the communication takes place?
Hall's high and low context
Which country is the best example of an emerging market economy?
India
Why is it important for businesses to have a basic understanding of the religious tenets associated with another culture?
Religious tenets affect the beliefs and attitudes of individuals.
An international manufacturer of automotive a/c units must decide which of four subsidiaries should fill an order for a major customer. Considerations include production and labor costs, transportation costs, tariffs, government restrictions and taxes. What describes the best decision-making strategy for this IC?
The decision should be made by the parent headquarters.
What should managers be aware of regarding the relationship between a risk analysis and the time period required for satisfactory return on investment opportunities?
The longer the time horizon, the less reliable the risk analysis.
What is an organizational advantage in using bottom-up strategic planning?
Those responsible for attaining organizational goals formulate them.
What are among the most important socioeconomic dimensions for business analysts to consider?
age distribution, population distribution, and population density
The food and clothing associated with a particular culture are examples of
artifacts.
By 2017, which country was exporting the most goods and services to the United States?
China
The United States has imposed trade restrictions on many of Iran's major industries as a political response to Iranian aggression. The purpose of these trade restrictions is to
encourage behavior change.
What are the three largest regional trade agreements?
EU, ASEAN, and NAFTA
Legal actions to enforce antitrust or competition laws are usually brought by
government against business.
What measure does the World Bank use for categorizing countries based on income?
gross national income per capita
When Millie moved from Texas to England to take a job at Whip-Stitch Shoes, she was surprised to learn that it was common for employees at the company to be placed in prominent work positions based on their family name rather than earning the position by working their way up the ranks of the company. In this situation, what facet of a company would be most affected by this cultural practice?
human resources
Today's strategic plans are moving toward becoming
less-structured and shorter.
Which factor will be most attractive to firms looking for favorable investment opportunities?
low unit labor costs
What organizational structure is represented when a firm based in France has a country manager based in Kenya reporting to both an African regional manager and a product-line manager?
matrix structure
Organizations embracing the current approach to sustainable development are working toward which goal?
meeting present needs without compromising needs of future generations
An important function of a stable government is to
protect citizens and businesses from unfair competition.
The impact of globalization on labor standards has
resulted in a "race to the bottom."
What has been the most used central reserve asset in the world since the end of World War II?
the dollar
The programmed-management approach is a type of
"glocal" advertising strategy.
What would global leaders tend to conclude about organizational change after applying either Lewin's or Kotter's change models?
Change rests on learning and human behavior.
In the past four decades, international trade has had the greatest proportional increase in
China
The U.S. invested $1.5 trillion in other nations from 2015-2017. This represents the U.S.'s
FDI outflow.
The accepted quality standard for global operations is the
ISO 9000 collection.
What is the best example of the harmonization of international law?
Incoterms of the International Chamber of Commerce
________ theory argues that to obtain a higher return on its investment, a firm will transfer its superior knowledge to a foreign subsidiary that it controls, rather than sell it in the open market
Internalization
The French reliance on nuclear power as a major producer of its electricity has had what environmental result?
It has one of the lowest rates of greenhouse gas emissions among industrialized nations.
Which statement best describes modern trends in strategic planning?
It is a fundamental task of line management, which explores the company's potential.
What do international marketing managers find is the most significant advantage in using Internet advertising?
It is interactive.
Why is arbitration often a preferred method of resolving international disputes such as cybersquatting?
It is usually quicker and less expensive.
Grumpy Mule Organic Coffee displays the Fair Trade label on its products. This certification demonstrates which characteristic of an environmentally sustainable business?
It is working to integrate equity into the value chain.
What legal advantage does the international business community perceive in conducting business in Hong Kong compared to other regions in China?
It operates according to the rule of law.
Why would top management prefer to standardize the market mix globally?
It produces significant cost savings.
What is the advantage of using the Atlas conversion factor to measure per capita incomes?
It reduces the impact of exchange rate fluctuations in determining GNI.
What does research suggest is a preferred communication strategy for geographically dispersed global teams?
Meet occasionally face-to-face, especially at launch and during crises.
Which statement is most accurate about the size of the global workforce?
Populations in developing countries are increasing, and have a larger population percentage of traditional working age than in developed countries.
You are interested in expanding your business into a foreign country. The government of that country exercises strict control over types and quantities of products that can be imported, so you may be limited in how much you can export. Which driver is most impacting your decision to expand?
Product
________ are prepared by exporters or their freight forwarders so that the shipment can pass through U.S. Customs, be loaded on the carrier, and be sent to its destination.
Shipping documents
When all big decisions are made at the IC headquarters, what is a likely result within its subsidiaries?
Subsidiary management can lose incentive and local prestige.
Which statement about the Ex-Im Bank is least likely to be true?
The Ex-Im Bank competes with institutions in the private sector.
What workforce trend has been experienced globally in the last several decades?
The workforce has shifted from rural to urban.
Which statement is accurate regarding international patent rights?
Three types of patents are available in the United States: utility, design, and plant.
If you don't know the import category of your product, you should ask ________ to identify the category in advance and put it in writing.
U.S. Customs
Which sustainability measure is a voluntary reporting scheme for businesses that addresses efforts in human rights, labor, the environment, and anticorruption?
United Nations Global Compact
Big JIT, also called lean production, is
a system covering the management of people, materials, and relationships with suppliers.
Research identifies what essential global leadership competency as a prerequisite for getting things done?
ability to make connections
In Europe and the United States, the relationship between labor unions and management can usually be characterized as
adversarial.
Which promotion mix strategy relies on the paid, nonpersonal presentation of ideas, goods, or services by an identified sponsor?
advertising
When organizations prepare strategic plans, what are the main determinates of an appropriate time horizon?
age of the firm and stability of the market
Trade restrictions exist in almost every country for what industry?
agricultural
Country Z has a large supply of a rare mineral that is used in automobile manufacturing. No other country is able to produce it in the same quantity at a lower cost. As such, Country Z demonstrates
an absolute advantage
If a company sends components for a product to Mexico to be assembled there and then returned to the United States, it is using
an in-bond plant contractor.
One cultural difficulty that market researchers encounter is social desirability bias: this means that the respondent
answers in a way to please the interviewer, rather than accurately.
A car manufacturer in South Korea is conducting economic analyses of the United States, a market in which it sells many cars. Its primary purpose is to
assess the impact of factors that will affect the firm's operations.
What is increasingly used to access customer information and market trends, such as when online retailers micro-target the shopping experience for shoppers?
big data analytics
Foreign business is that which is conducted
by a domestic business outside its domestic market.
A tire manufacturer adopts sustainability goals in compliance with local regulations. Management begins by collecting data on waste, energy use, distribution methods, and several other measures in order to calculate total greenhouse gas emissions caused by the product's manufacturing and use. This manufacturer is measuring its
carbon footprint.
Among the most basic transactions that can occur over electronic purchasing exchanges are ________, which include a list of products available and buyers can access, review, and place orders for desired items at a listed price.
catalog purchases
Under what legal system does a judge actively question the prosecution, the defense, and witnesses during the proceedings, and then ultimately issue a decision based on codified law?
civil law
According to the World Bank, many factors responsible for underdevelopment in tropical nations can be attributed to
climate.
Which force is considered an external environment force?
competition
Factoring permits the exporter to be more ________ by selling on open account rather than the letter-of-credit method.
competitive
The primary purpose of developing an international strategy is to increase a firm's
competitive advantage.
What is the most difficult level of market screening analysis based on the accessibility and subjectivity of the data?
competitive forces screening
Action plans that enable organizations to reach their objectives are known as
competitive strategies.
According to the "right stuff" model of leadership development, what is the major determinant of an effective global leader?
context and developmental experiences
A company made the decision to export its products abroad to increase its sales and enable economies of scale in production. Which driver is most impacting the company's decision to export?
cost
As an expatriate worker in London, Lucas receives additional money each month because of the higher cost of food, utilities, transportation, and medical expenses he and his spouse experience while living there during his assignment. This is an example of what type of compensation?
cost-of-living allowance
The Harmonized Tariff Schedule of the United States includes rates of duty with three levels for each item: general, special, and
countries not considered friends of the United States.
U.S.-based Marcia's Candies wanted to expand into France, so it bought an existing candy company in France and added its products to the product line. What type of FDI did Marcia's Candies choose?
cross-border acquisition
While the United States is often viewed as an individualistic society, the country also has the highest rate of charitable contributions. What is this an example of?
cultural paradox
A maker of luxury watches is assessing potential market segments across South America. As they screen the market, they are seeking a target segment which is young, owns upscale fashion products, and lives in urban areas. This represents which type of segment?
definable
Most multinationals are based in ________ countries, but recently there has been a surge in the number arising in ________ countries.
developed; emerging
According to research, most consider the primary purpose of expatriate assignments to be
developing management and leadership skills.
Amazon has made it possible to order and receive groceries in less than two hours in many markets. Amazon's distribution strategy is an example of
disintermediation.
What is the general motivation behind business-related cybercrime?
economic gain
The U.S. Foreign Corrupt Practices Act was designed to increase accounting transparency and to
eliminate bribery of foreign officials.
An athletic shoe manufacturer who utilizes a life cycle assessment is evaluating what about its products?
environmental impact of its product at every stage
During discussions with the foreign affiliate, Mitchell realized that his team felt U.S. production standards were superior and team members from the foreign affiliate felt production standards in their home country of Germany were superior. Each team is demonstrating
ethnocentricity.
The conditions of sale that stipulate the point at which costs and risks are borne by the buyer are called the
export terms of sale.
What website brings together resources on exporting from government agencies?
export.gov
Tim's company has just offered him a position in the London office. He will live and work there for the next two years but retain his U.S. citizenship. Tim is surprised to learn that he must still pay U.S. employment taxes. This is an example of
extraterritorial application of laws.
What is an advantage of hiring host-country nationals as local managers?
familiarity with local customs, culture and language
Marcus gathered balance sheets and income statements for his meeting with the foreign bank as his company prepared to merge with a foreign affiliate. He was surprised when the banker briefly glanced at the papers and seemed more interested in how long Marcus had worked at the business and where he had received his training. What area of business is being affected by culture in this scenario?
finance
Tesla recently built a factory in Shanghai to build and sell cars in China. This demonstrates the concept of
foreign direct investment.
What includes all the uncontrollable forces outside the home country that surround and influence a firm?
foreign environment
When a snack mix producer in one country bases its product price on the market forces in another country, they are utilizing what pricing strategy?
foreign national pricing
A international financial services company headquartered in Sweden hires and promotes its executives based strictly on ability and experience. Each executive must meet global goals related to social responsibility and profitability. Policy dictates that decision making is handled collaboratively between regional management and headquarters management. According to Heenan and Perlmutter's IHRM model, this company's human resource strategy is
geocentric.
Tariffs placed on products from another country may bring in more money to the government of the country that initiated the tariffs, but they may hurt consumers in that country in the form of higher prices for goods. This demonstrates how forces in the foreign environment
have different values.
In the EU, authorized testing houses require inspection of
hazardous goods.
The process of global strategic planning typically includes which of the following elements?
identifying opportunities and threats
When a company examines import data, what does it learn about basic needs potential in a country?
immediate market potential at going price
Which market selection factor is considered during a screening of political and legal forces?
import restrictions by host country
Governments with a large international debt are likely to
impose price controls.
What long-term strategy is employed by the UN Security Council in order to reduce kidnappings of businesspeople and humanitarian aid workers?
increase intergovernmental cooperation
When structuring international companies, gains realized through labor specialization are often cancelled by
increased coordination costs.
In culturally dissimilar countries, if deep immediate market penetration is desired, what is usually the most successful strategy?
increased product modification
Manufacturing automation results in
increasing the productivity of workers.
The purchasing of goods and services that are not part of finished goods is called
indirect procurement.
While leadership and management are related, they are not the same thing. For example, a leader ________, while a manager ________.
inspires; controls
A mattress manufacturer in Brazil uses packing materials produced by a subsidiary in Asia. Without these materials, the product cannot be shipped to distributors. This demonstrates what type of global management challenge?
interdependence
With no one responsible for its international business, an athletic shoe manufacturer establishes a new division which is responsible for all overseas activities, and is at the same level as its domestic division. What organizational structure is in place?
international division structure
Which of the following is an equity-based mode of entry?
joint venture
Since holding inventory is very expensive for companies, many have gone to a(n) ________ inventory system that enables them to reduce inventory and still fill orders quickly.
just-in-time
At Skyjet International Aviation, inexperienced staff members are paired with culturally savvy managers during business interactions outside the home country. The firm feels that this process enables new managers to observe and absorb appropriate words, behaviors, and attitudes during meetings, social gatherings and negotiating sessions. By using this approach, Skyjet International is applying
knowledge management.
Unlike the United States, many countries around the world currently require labeling of genetically modified foods. This represents what type of environmental force faced by international marketers?
legal
Which factor is reflected by trends toward global or regional advertising?
lower cost uniform brand image standardized quality
When Hilton Hotels provides management for foreign hotels that use the Hilton name and receives a fee for doing so, they are participating in which form of market entry?
management contract
Adam Smith's publication An Inquiry into the Nature and Causes of the Wealth of Nations was an attack on
mercantilism.
Patagonia broadly defines its purpose and scope as, "Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis." This declaration is an example of a
mission statement.
Which of Trompenaars's seven dimensions is concerned with how members of a culture express emotions?
neutral vs. affective
According to findings by Project GLOBE, which leadership trait is universally unacceptable?
nonexplicitness
A cosmetics company is considering the market potential in northern Africa. What aspect of their analysis deals with socioeconomic factors?
numbers of working women
Company A was struggling to contain production costs in its U.S. manufacturing plant, so it decided to relocate some of the processes to a factory in the Philippines where labor was cheaper. This decision is an example of
offshoring.
What is an essential element of a global mind-set?
open to understanding others from different backgrounds
A company with a polycentric staffing orientation would generally hire candidates from which group for critical headquarters' positions?
parent-country nationals
The word aesthetics has a Greek origin, which means
perceptible by the senses.
What is the last step in market screening and environmental analysis, before officials are ready to make a final decision?
personal visit to potential markets
With revolutions and government changes occurring on almost every continent, what reporting aspect has grown significantly in importance to IC management?
political and economic reporting
What can an international manager learn from a country's balance of payments account?
potential changes in economic environment
A cotton grower in India has a contract with a clothing manufacturer in Bangladesh. The relationship between these two companies is governed by
private international law
Under Prime Minister Cameron, the British government sold the Royal Mail; shares can now be purchased on the London Stock Exchange. This is an example of
privatization.
A document with the exporter's formal quotation, a description of the merchandise, price, delivery time, proposed method of shipment, terms of sale, and ports of exit and entry, is called the
pro forma invoice.
Amity Electronics has a detailed guideline that specifies how each subsidiary must prepare, format, and submit quarterly reports. This guideline is an example of a
procedure.
For international marketing managers, what is the central focus of the marketing mix?
product
Paul prefers wine from the Marlborough region of New Zealand because he feels it has a nicer taste and finish than those from the United States. This demonstrates how wineries use ________ to build a market for their products.
product differentiation
What had the greatest impact in the formation of trading groups such as the European Union?
proximity
A motorcycle manufacturer is assessing two potential markets for international expansion: Pakistan and Vietnam. While both countries have some hallmarks of emerging market economies, management can most accurately compare their economic health by analyzing
purchasing power parity.
The Big Mac index shows the cost of purchasing a Big Mac in various currencies equivalent to its cost in U.S. dollars. This index demonstrates the concept of
purchasing power parity.
Which of these would be considered a goods import?
raw materials
Which strategy does enable an IC with less than 50 percent of the voting stock to retain some control over a subsidiary?
retaining control of the finances drawing up a management contract retaining control of the technology
As companies open up their businesses to outside suppliers and other resources, they may encounter a problem with ________, by exposing company secrets and risking the loss of brand equity and margin to competitors.
security
Flexibility, resilience, character, and inquisitiveness are examples of ________ associated with global leadership.
self-competencies
What is the typical reason that hiring third-country nationals has become prevalent in developing countries?
shortage of skilled local employees
Nearly 90 percent of all exporters in the United States are
small and medium-size companies.
What is the fastest growing renewable energy source worldwide, used now by over 120 countries?
solar photovoltaic power
Which factor tends to increase control of a wholly owned subsidiary by the parent company?
standardization of company products and equipment
Before beginning a long-term assignment overseas, it is advantageous for workers to
study the language and culture of the host country.
A difficulty caused by NAFTA and the maquiladora program that began before NAFTA was
substantial increases in water and air pollution at the border
Under the floating exchange rate system spelled out under the Jamaica Agreement, what determines the value of IMF members' currency?
supply and demand
AbbVie pharmaceutical company conducts product research all over the world. Communication is facilitated between sites with use of the Internet and communication tools like videoconferencing. Which driver is most impacting the way AbbVie does business in this example?
technological
The eventual dangers of using one currency as a reserve currency under the Bretton Woods system was experienced by the United States in the late 1960s and early 1970s. This phenomenon is expressed as
the Triffin paradox.
Under Bretton Woods, the par value of participating currencies was tied to
the U.S. dollar.
The supply chain ends with
the customer.
Which two exchange rate forecasting models are related, and seem to outperform all other models?
the random walk hypothesis and the efficient market approach
How is the map-bridge-integrate (MBI) model used in global team management?
to identify and manage cultural differences
What is the most important purpose of a trade mission?
to learn firsthand about the market
Why do companies practice profit shifting and tax inversion?
to reduce tax payments
When the U.S. government assumed a controlling interest in General Motors after the financial crisis of 2008-2009, what was its primary goal?
to save jobs and support its recovery
The McDonald's "golden arches" which appear on its restaurants, food packaging, and advertising is an example of which type of intellectual property?
trademark
Information that firms need in order to accurately assess a country's risks varies according to what two major factors?
type of business and time needed to gain a satisfactory return on investment
Trevor has worked for the same company for the past 15 years. During that time, the organization has stayed basically the same as when he started, and he has been told by others that management likes to keep things as they are and prefers to maintain the status quo. Which of Hofstede's dimensions does this choice reflect?
uncertainty avoidance
An important tenet of stakeholder theory is its focus on
underlying values and principles.
What strategy supports flexibility and organizational fit in the modern global business environment?
use of virtual corporations
Four essential elements needing consideration when designing the IC structure are product and technical expertise, geographic expertise, customer expertise, and functional expertise in the company's
value chain activities.
The diamond market conducts all its dealings in U.S. dollars, even when the transactions occur between firms in other countries. In this situation, the dollar acts as a(n)
vehicle currency.
The Japanese government limits its automobile exports to the United States at 2.3 million annually. This is an example of which type of barrier to trade?
voluntary export restraints
