Management Lesson 4 (Ch 6) - International Management

T

(T/F)A drawback of exporting is that high transportation costs can make it uneconomical, particularly in the case of bulk products.

F

(T/F)According to Geert Hofstede's model, the U.S. is labeled as a large power distance, collectivist culture.

T

(T/F)Companies that adopt the global model tend to those pursuing a cost focus as a competitive strategy.

T

(T/F)Cross-cultural management extends beyond U.S. employees going abroad.

F

(T/F)Cultural shock is an example of an executive coping strategy for international assignments.

F

(T/F)Ethical behavior and decision making is (surprisingly) harder in a purely domestic situation than in the international arena.

T

(T/F)Ethnocentrism is the tendency for people to judge foreign peoples or groups by the standard's of their home county.

F

(T/F)Foreign direct investment flows to less-developed countries by firms in developed countries has dropped substantially.

T

(T/F)Japan is America's third largest export market and the fourth largest source of American imports.

T

(T/F)Licensing is primarily utilized by manufacturing industries while franchising is used more often in service industries.

F

(T/F)Members of APEC include South Korea, the United States, Australia and India.

T

(T/F)NAFTA created one of the world's largest trading blocs.

F

(T/F)NAFTA has had an immediate and negative effect on the U.S. automobile industry.

F

(T/F)North America, South America and Africa are the three spheres of economic influence that are most dominant in the global environment.

F

(T/F)Off shoring occurs when the organization contracts with an outside provider to produce one or more of an organization's products or services.

T

(T/F)One consequence of an increasingly integrated global economy is imports that are penetrating deeper into the world's largest economies.

T

(T/F)Parent-company nationals who are sent to work at a foreign subsidiary are known as expatriates.

F

(T/F)The Maastricht Treaty formally established the trade area in North America

F

(T/F)The advantages of franchising as an entry mode to global expansion are similar to the disadvantages of licensing.

T

(T/F)The goal of the unified Europe is to strengthen Europe's economic position vis-à-vis the United States.

F

(T/F)The least preferred strategy when a company's competitive advantage is based on technology is the wholly owned subsidiary.

F

(T/F)The major reason human resource managers cite for failure rate among expatriates is family issues.

F

(T/F)The national organization model is designed to help companies exploit their existing core capabilities to expand into foreign markets.

T

(T/F)To maintain its strong growth for the foreseeable future, Starbucks has been expanding aggressively overseas.

F

(T/F)Transnational companies are companies that produce products in one country and export these products to many overseas countries.

T

(T/F)Universal needs exist when the tastes and preferences of consumers in different countries, with regard to a product, are similar.

T

(T/F)When there are differences in traditional practices among countries, pressures for local responsiveness emerges.

C

Colin McKay has been assigned to manage an operation in Venezuela. Upon his arrival he encouraged all of his employees (native Venezuelans) to feel free to individually approach him with ideas on improving operations. After many months, no employees had offered suggestions. Colin should have realized that Venezuelan culture has not only a _____ degree of collectivism but accepts a ______ power distance. A. Low, small B. Low, large C. High, large D. High, small

C

Companies that decentralize their operations throughout the globe in order to appeal to the varying tastes and preferences of global consumers are utilizing a _____________ model. A. Domestic B. International C. Multinational D. Transnational E. Global

A

Companies that may use global-scale production plants for labor-intensive products in low-wage countries such as Mexico or Singapore would be an example of the _______________. A. Transnational organization model B. Ethnocentric organization model C. World assembly organization model D. Domestic organization model E. Regional organization model

C

Competing globally under the assumption that consumer tastes and preferences in varying countries differ is referred to as a ____________ model. A. Consumer-focused B. Transnational C. Multinational D. Global E. Domestic

D

Consequences of global integration include all of the following EXCEPT: A. World output and trade have grown at a dramatic pace B. Many companies find their home markets under attack from foreign competition C. Companies are making foreign investments in overseas operations D. Imports are failing to penetrate deeper into the world's largest economies E. All of the above are consequences of global integration

D

Hillary has just agreed to participate in her first expatriate experience. The first thing her employer should do is: A. Seek advice from locals and expatriate network B. Encourage support-seeking behavior C. Clarify expectations D. Encourage self-and family evaluation E. Punish dual identification

D

In order to achieve cost economies, Tull and Ward Company bases production plants for labor-intensive products in low-wage countries such as Mexico and locates production plants that require skilled workers in high-skill countries like Japan. This illustrates the: A. International model B. Multinational model C. Global model D. Transnational model E. Intranational model

C

In which models of organization structure are manufacturing costs relatively high? A. Global and transnational B. International and transnational C. Multinational and international D. Global and international E. Multinational and transnational

D

Individuals sent from a company's parent country to work in overseas operations are referred to as: A. Third-country nationals B. Host-country nationals C. Globalite executives D. Expatriates E. None of the above

A

Insourcing occurs when jobs are: A. Brought to the United States by foreign companies B. Taken out of the United States by foreign companies C. Taken to a third country D. Restructured to keep them in their home country E. None of the above is correct

C

It is estimated that nearly ___ percent of all employee transfers are to an international location. A. 75 B. 50 C. 15 D. 25 E. 40

B

Jeanette Thompson, a native Texan is being sent by her company, Nestle of Switzerland, to head up a new facility in Hong Kong. Jeannette would be considered a(n): A. Host-country national B. Third-country national C. Global trotter D. Globalite executive E. Expatriate

D

Models of organizational structure identified in the text's chapter on international management include all of the following EXCEPT: A. Global structure B. Multinational structure C. Transnational structure D. Worldwide structure E. International structure

A

Most manufacturing companies begin global expansion through which entry mode? A. Exporting B. Wholly-owned subsidiary C. Franchising D. Licensing E. Joint venture

A

NAFTA combined the economies of: A. The U.S., Canada and Mexico B. Canada, Mexico and South America C. South America, the U.S. and Latin America D. Latin America, Pacific Rim and the E.U E. The U.S., the E.U. and North America

C

One study found that manufacturing labor costs about ___ an hour in China, compared to ____ dollars in the United States. A. Less than $1; about 15 B. About $2; about 15 C. Less than $1; about 25 D. $2; about 25 E. Less than $1; about 40

D

Operating in a global marketplace is considered more complex because: A. Managers must compete with cost-efficient overseas competitors B. The lessening of trade barriers has presented many opportunities in previously protected markets C. Many overseas competitors operate with greater economies of scale D. Of varying cultures and coordination of globally dispersed operations E. International management is relatively risk-free as compared to domestic management

A

The areas described in the text as the most dominant in the global economy include: A. North America, Western Europe and Asia B. North America, Mexico and Asia C. North America, South America and Western Europe D. North America, Asia and Africa E. Western Europe, Asia and Africa

E

The biggest cause of failure of overseas managers is: A. A lack of technical capability B. Problems with a families' ability to adjust C. Problems with the manager's ability to adjust D. All of the above E. None of the above

B

To be competitive in a global economy, Europeans must increase their level of: A. Population density B. Productivity C. Espionage activity D. Philanthropic contributions E. Financial subsidy

C

Today's managers operate in an environment that is _______ complex and competitive and offers more ______________. A. More, profit B. Less, profit C. More, opportunities D. Less, opportunities E. None of the above

E

Transnational companies: A. Require effective communication and coordination networks B. Realize pressures for local responsiveness and cost economies C. May centralize production facilities in one location and marketing functions in separate locations D. Must effectively transfer core skills or know-how E. All of the above

B

Under (the) ___________ member countries have agreed to adopt a common European currency called the euro. A. NAFTA B. Maastricht Treaty C. GATT Agreement D. APEC Treaty E. None of the above

B

____________ occurs when the organization contracts with an outside provider to produce one or more of an organization's products or services. A. International development B. Outsourcing C. Offshoring D. Expatriation E. None of the above

C

____________ occurs when the outside provider of an organization's goods or services is located abroad. A. International development B. Outsourcing C. Offshoring D. Expatriation E. None of the above

C

_______________ includes threats of protectionism, economic nationalism and local rules. A. Differences in distribution channels B. Differences in traditional practices C. Economic and political demands D. Differences in consumer tastes E. Global market integration

B

The Disney Corporation has marketed its facility in France somewhat differently than its United States facilities in order to appeal to the European consumer. This type of strategy is known as __________ model. A. Domestic B. International C. Multinational D. Transnational E. Global

B

The Red Fox Corporation manufactures engines for its trucks in a central location in order to attain cost economies and then sends these engines to various subsidiaries for final assembly to the truck bodies in order to meet local safety specifications. This type of organizational structure is referred to as: A. Global B. Transnational C. International D. World assembly E. Worldwide

D

A disadvantage of a multinational model is that: A. Problems in transferring core skills are created B. Each subsidiary must respond to specific consumer needs C. Transfer pricing presents difficulties D. Manufacturing costs are generally higher E. Coordination of efforts between countries is simpler

C

A disadvantage of entering global competition through a joint venture is: A. That it may present political roadblocks B. The partner's knowledge of local tastes and preferences may interfere with standardized operations C. Your partner and you may disagree on which of you controls various aspects of the venture D. It is a seldom used strategy, offering many unknowns E. All of the above are disadvantages of joint ventures

B

A disadvantage of exporting is that: A. It is quite risky B. You may not be realizing the lowest production costs possible C. It is the most expensive method of expanding globally D. It usually lowers trade barriers E. It is inconsistent with a pure global strategy

A

A disadvantage of franchising is that A. Loss of control over quality levels may affect an organization worldwide B. Loss of control over technology may affect future profits C. Loss of control over technology may affect an organization's ability to gain a worldwide reputation D. Development costs are greater presenting a higher level of risk in worldwide operations E. Loss of control over technology and quality may erode a company's ability to develop local markets

A

A disadvantage of licensing is that: A. The licensing company may lose control over its technology B. The licensing company takes on greater political risk C. The licensing company takes on greater development costs D. The licensing company realizes higher profit margins E. All of the above

A

Advantages of exporting as a global expansion entry mode are that: A. Economies of scale may be realized B. The target site may have lower production costs C. Transportation costs are generally lower D. It is considered responsive to local needs E. Trade barriers may be imposed

E

Advantages of operating a wholly owned subsidiary overseas include all of the following EXCEPT: A. Companies may share the control of the use of their technology B. Companies share the costs of operating overseas C. Companies can realize higher production costs by relocating D. Companies singularly control the risks of overseas operations E. None of the above are advantages of wholly owned subsidiaries

B

Although the U.S. has had a longstanding agreement with ___________ after the passage of NAFTA, _________ became the United States' second largest trading partner. A. Canada, Venezuela B. Canada, Mexico C. Mexico, Canada D. Mexico, Venezuela E. Great Britain, Paraguay

E

An advantage of joint ventures in the international marketplace is: A. The local partner may have a greater knowledge of local consumer tastes and preferences B. The local partner may have a greater understanding of local business practices and regulations C. Costs of developing the new market are shared with the joint venture partner D. The risks of entering the new market are shared with the joint venture partner E. All of the above are advantages of joint ventures

A

An advantage of licensing as a method of entering global competition is: A. That the licensing company takes on less risk and expense B. That the licensing company has control over its technology C. That the licensing company has control over quality levels D. That the licensing company utilizes lower production costs E. None of the above

B

Evans Manufacturing has subsidiaries in each country in which it does business and provides a great deal of discretion to those subsidiaries to respond to local conditions. Each subsidiary has its own manufacturing, marketing, research and human resource functions. This illustrates the: A. International model B. Multinational model C. Global model D. Transnational model E. Intranational model

E

Exporting is: A. A common entry strategy for global expansion B. Manufacturing a product in one location and exporting to consumers in global markets C. Consistent with a pure global strategy D. Expensive E. All of the above

C

Exporting, licensing, franchising, joint ventures and wholly owned subsidiaries are all methods of: A. Extracting consumers on a global scale B. Operating transnationally C. Entering overseas markets D. Optimizing global profit E. None of the above

A

Pressure for global integration includes: A. Pressures to reduce costs B. Variances in traditional practices C. Political demands imposed by host countries D. Consumer preferences E. All of the above

E

Pressure for local responsiveness includes: A. Varying consumer preferences B. Varying sales and distribution patterns C. Varying traditions D. Varying political demands E. All of the above

A

Schacter Corporation has subsidiaries in each country in which it does business. As the parent company, Schacter transfers its core skills in technology and R&D overseas so that each subsidiary remains dependent on it for new products, processes and ideas. This illustrates the: A. International model B. Multinational model C. Global model D. Transnational model E. Intranational model

B

Selling the rights to manufacture your company's product to an overseas company for a negotiated fee is: A. Franchising B. Licensing C. Entering a joint venture D. Exporting E. Royalty facilitation

A

Selling the rights to use your company's brand name in return for a lump-sum payment and a share of the profits generated is referred to as: A. Franchising B. Licensing C. Entering a joint venture D. Exporting E. Royalty facilitation

C

Sensor, Inc. is a company that views the entire world as one market and assumes that there are no tangible differences among countries with regard to consumer tastes and preferences. Sensor, Inc. illustrates the: A. International model B. Multinational model C. Global model D. Transnational model E. Intranational model

A

The choice of whether to follow a global model or a multinational model is decided by comparing the A. Pressures for global integration to the pressures for local responsiveness B. Success of global competitors in each strategy C. Costs of producing in separate facilities to the costs of producing in a single facility D. Tastes and preferences of consumers in varying countries where you intend to compete E. Need for product differentiation across international borders

C

The disorientation and stress associated with being in a foreign environment is termed: A. Foreign mores B. Homesickness C. Culture shock D. Out-of-country experience E. Uncertainty distance

D

The global strategy that enables managers to "think globally but act locally" is called the: A. International model B. Multinational model C. Global model D. Transnational model E. All of the above

C

The greatest disadvantage of operating a wholly owned subsidiary is: A. That a loss of technology is likely to occur B. Quality levels are difficult to monitor overseas C. High costs and risk are associated with this type of operation D. That overseas consumers are often resentful of foreigners E. All of the above are disadvantages of wholly owned subsidiaries

A

The grid used for identifying the best strategy for competing in a global marketplace measures what two dimensions? A. Pressures for global integration and pressures for local responsiveness B. Pressure for local interaction and pressures for global responsiveness C. Financial viability and employee satisfaction D. Employee satisfaction and management credibility E. Pressures for global systems capacity and pressures for local financial success

B

The international model of organizational structure consists of: A. Large low-cost manufacturing facilities located in selected locations with products exported to various subsidiaries B. Subsidiaries located in countries where the company does business with much of the control exercised by the parent company C. Subsidiaries located in countries where the company does business with much of the control exercised by the subsidiaries D. Manufacturing various components at appropriate sites and assembling the components at national subsidiaries E. None of the above

C

The model designed to enable a company to market a standardized product in the global marketplace and to manufacture the product in a limited number of locations is called the: A. International model B. Multinational model C. Global model D. Transnational model E. All of the above are appropriate models

A

The model in which managers use their organization's existing core capabilities to expand into foreign markets is called: A. International model B. Multinational model C. Global model D. Transnational model E. All of the above

B

The model which is appropriate where global efficiency is not required but adapting to local conditions offers advantages is: A. International model B. Multinational model C. Global model D. Transnational model E. All of the above

C

The multinational model of organization structure consists of: A. Large low-cost manufacturing facilities located in selected locations with products exported to various subsidiaries B. Subsidiaries located in countries where the company does business with much of the control exercised by the parent company C. Subsidiaries located in countries where the company does business with much of the control exercised by the subsidiaries D. Manufacturing various components at appropriate sites and assembling the components at national subsidiaries E. None of the above

E

The passage of NAFTA has provided short-term benefits to all of the following industries EXCEPT: A. The auto industry B. Grain producers C. The financial industry D. Capital-goods suppliers E. All of the above have benefited

D

The transnational model of organizational structure consists of: A. Large low-cost manufacturing facilities located in selected locations with products exported to various subsidiaries B. Subsidiaries located in countries where the company does business with much of the control exercised by the parent company C. Subsidiaries located in countries where the company does business with much of the control exercised by the subsidiaries D. Manufacturing various components at appropriate sites and assembling the components at national subsidiaries E. None of the above

A

The trend away from using expatriates in top management positions is especially apparent in companies trying to create a __________ culture. A. Multinational B. Transnational C. International D. Global E. Equally evident in all of the above

C

When a company sets up overseas operations, independent of foreign partners or governments, they have established: A. A purely global strategy B. Unfavorable relations with local parties C. A wholly owned subsidiary D. An independent venture E. Multinational proportions

E

When considering whether to offshore, managers should consider all of the following EXCEPT: A. What is the competitive advantage of the products offered? B. Is the business in its early stages? C. Can production savings be achieved locally? D. Can the entire supply chain be improved? E. All of the above are correct

C

When identifying the best strategy for competing in a global marketplace, it is helpful to plot a company's position on a(n): A. Leadership grid B. Force field analysis grid C. Integration-responsiveness grid D. Cost-benefit grid E. None of the above

D

Which country does the text describe as becoming the largest producer and consumer of many of the world's goods? A. Japan B. Canady C. Mexico D. China E. Ecuador

C

Which country does the text describe as having become an important provider of online computer and software support for the U.S.? A. Egypt B. Great Britain C. India D. Mexico E. Taiwan

D

Which of the following companies is NOT included in the "Fortune Global 500 2006" Top 25? A. Wal-Mart B. Chevron C. Ford Motor Company D. Microsoft E. Conoco Phillips

D

Which of the following companies is an example of a transnational company? A. Sony B. IBM C. Coca Cola D. Caterpillar E. Unilever

B

Which of the following existing agreements includes Guatemala, Honduras and the United States? A. NAFTA B. CAFTA-DR C. FTAA D. APEC E. ASEAN

E

Which of the following is NOT a goal of the European Union? A. Eliminate trade barriers with the European Union B. Create a more competitive Europe C. Become an economic superpower D. Establish the euro as a common currency E. All of the above

C

Which of the following is NOT a reason to pursue a global strategy? A. Pressure to reduce costs through coordination of purchasing B. Universal needs C. Simplicity and ease of management D. Pressures to reduce costs in manufacturing E. All of the above are valid reasons

E

Which of the following is NOT one of the global strategies discussed in the text? A. International model B. Multinational model C. Global model D. Transnational model E. All of the above

B

Which of the models of organization structure depends most heavily on communication and coordination between subsidiaries? A. The global model B. The transnational model C. The international model D. The worldwide model E. The multinational model

E

Which organizational structure realizes the advantage of local responsiveness but the disadvantage of high manufacturing costs? A. Transnational B. Global C. Worldwide D. International E. Multinational