MGT Study Guide - Exam 1

Drug companies are often criticized for selling their drugs at exorbitant prices. When asked, they will often say that the pricing is fair given the amount of research and development that has gone into the drug. Without this high price, they argue that other new drugs that will help millions of people around the world could not be developed. Yet, those who cannot afford the high price and may die without the drug feel unjustly discriminated against. The drug companies are practicing which approach to this ethical dilemma? A) utilitarian B) justice C) fairness D) moral idealism E) moral rights

a

The Sarbanes-Oxley Act of 2002 requires that a company's chief executive officer and chief financial officer must comply with which of the following? A) must certify financial reports B) must keep a personal line of credit open C) must hire an ethics officer D) must hire a diversity officer E) must set procedures and guidelines for the Board of Directors

a

The U.S. does not allow the import of Cuban sugar and cigars. This is an example of a(n) A) embargo. B) tariff. C) quota. D) maquiladora. E) franchise .

a

The United States implemented a complete ban on the importation of beef raised in Great Britain. This is an example of a(n) A) embargo. B) tariff. C) quota. D) foreign advantage. E) maquiladora.

a

The __________ is the rate at which one country's currency can be exchanged for another country's currency. A) exchange rate B) GATT C) CAFTA D) interest rate E) inflation rate

a

The practice of a foreign company's exporting products abroad at a lower price than the costs of production, in order to drive down the price of the domestic product, is called A) dumping. B) import quotation . C) reverse embargo. D) free trade. E) tariff setting.

a

The principal organization that provides low-interest loans to developing nations for improving their infrastructures is called the A) World Bank. B) World Trade Organization. C) International Monetary Fund. D) World Health Organization. E) GATT.

a

The religion with the most followers worldwide is A) Christianity B) Islam C) Hinduism D) Buddhism E) Judaism

a

Thomas, an assembly line worker for SoftTools Company, observes that his graveyard shift (midnight - 8 a.m.) manager removes safety guards from some machines so that the work can be done faster. Thomas sends a letter to top management reporting this. Thomas is a: A) whistleblower B) disloyal employee C) victim D) activist E) gossip

a

Unemployment rates are examples of _____________ forces in an organization's general environment. A) economic B) technological C) political-legal D) sociocultural E) demographic

a

Wal-Mart's low wage policy has forced Safeway to do which of the following? A) reduce benefits for their workers B) increase their hourly wage C) increase their product prices D) decrease their hourly wage E) increase benefits for their workers

a

When a company uses a supplier outside itself to provide goods and services, it is A) outsourcing. B) countertrading. C) franchising. D) licensing. E) privatizing.

a

Which of the following is a cultural dimension in the GLOBE project? A) institutional collectivism B) power avoidance C) age orientation D) sustainable orientation E) lifestyle

a

A nation's __________ is the shard set of beliefs, values, knowledge, and patterns of behavior common to a group of people. A) economic policies B) culture C) societal pattern D) demography E) political thought process

b

A nonprofit organization with operations in several countries is called a A) multinational corporation. B) multinational organization. C) multicontinental corporation. D) multicultural organization. E) connected organization.

b

A(n) __________ is a person or organization that helps another organization sell its goods and services to customers. A) supplier B) distributor C) strategic ally D) special interest group E) upstream company

b

ABC, an American company, produces paper products. It arranges a trade with a Russian firm for metal fasteners that the Russian firm produces. ABC then resells the metal fasteners. ABC is involved in A) outsourcing. B) countertrading. C) importing. D) exporting. E) franchising.

b

Ethnocentrism is most likely linked to A) higher performance by foreign subsidiaries. B) high turnover among employees in foreign subsidiaries. C) fewer lawsuits of foreign subsidiaries. D) better recruitment of employees in foreign subsidiaries. E) better quality products from foreign subsidiaries.

b

Governments are part of the __________ environment of organizations. A) unplanned B) task C) general D) internal E) sociocultural

b

Which of the following refers to the "shrinking" of time and space as air travel and the electronic media have made it easier for people of the globe to communicate with one another? A) Pony Express B) Global Village C) The Internet D) World Wide Web E) Free Trade Agreements

b

__________ is the practice of a foreign company's exporting products abroad at a lower price than the price in the home market—or even below the costs of production—in order to drive down the price of the domestic product. A) Lifting B) Dumping C) Predatory selling D) Low cost production E) Foreign advantage

b

A business firm with operations in several countries is called a A) megamerger. B) multinational organization. C) multinational corporation. D) global corporation. E) multiregional corporation.

c

A company that is buying goods outside the country and reselling them domestically is involved in A) outsourcing. B) countertrading. C) importing. D) exporting. E) franchising.

c

A limit on the numbers of a product that can be imported is called a(n) A) embargo. B) tariff. C) quota. D) GATT. E) boycott.

c

A number of years ago, the U.S. charged a duty of 18% - 67% on imported Japanese steel. This is an example of a(n) A) revenue tariff. B) embargo. C) protective tariff. D) boycott. E) quota.

c

A number of years ago, the U.S. limited the amount of steel that was imported. This is an example of a(n) A) embargo. B) tariff. C) import quota. D) franchise. E) boycott.

c

ABC Company operated as a Polish independent business in Poland until it was purchased by the American XYZ Corporation. ABC is now a __________ of XYZ Corporation. A) maquiladora B) strategic ally C) wholly owned subsidiary D) greenfield venture E) franchiser

c

Alvin is a manager who accepts that differences and similarities exist between home and foreign personnel and practices, and that the company should use whatever techniques are most effective. Alvin can be described as a(n) __________ manager. A) ethnocentric B) polycentric C) geocentric D) expatriate E) global

c

Demographic forces are part of the __________ environment of organizations. A) legal B) task C) general D) internal E) sociocultural

c

DuPont Corporation allows a firm in Brazil to make Teflon. This is an example of A) outsourcing. B) countertrading. C) licensing. D) a strategic alliance. E) franchising.

c

Managers trying to understand other cultures need to understand basic cultural perceptions embodied in which of the following? A) child psychology B) anthropology C) religion D) infrastructure E) personal housing arrangements

c

New MBAs sometimes expect the employees they supervise to be obedient for obedience's sake. The level of personal moral development for which this statement is an example is the __________ level according to Kohlberg. A) conventional B) unconventional C) preconventional D) postconventional E) anti-conventional

c

People of different cultures have different ideas of what is an acceptable distance between people when having a business discussion. This nonverbal element is called A) monochronic time. B) polychronic distance. C) interpersonal space. D) Type A behavior. E) touch intensity.

c

The Environmental Protection Agency (EPA) administers environmental standards in the U.S. The EPA represents __________, part of an organizations' __________. A) local communities; task environment B) financial institutions; internal environment C) government regulators; task environment D) special interest groups; external environment E) political-legal forces; general environment

c

The principal organization that was designed to assist in smoothing the flow of money between nations is called the A) World Bank. B) WTO. C) IMF. D) GATT. E) EU.

c

The trend of the world economy toward becoming a more interdependent system is called A) glocalization. B) global visioning. C) globalization. D) economic fragmentation. E) national devaluation.

c

United Airlines is 55% employee owned through a mechanism called A) participative management. B) bond sharing. C) employee stock ownership. D) profit sharing. E) the Callaway plan.

c

Which of the following is an advantage of small companies? A) Small companies are difficult to shut down. B) Small companies are unable to use the Internet to compete with large companies. C) Small companies can change directions quicker. D) Small companies have a higher start-up cost . E) Small companies have an overwhelming bureaucratic system.

c

Which of the following statements about the mass media is true? A) Exxon had an excellent media strategy in dealing with the Valdez incident. B) The mass media has very little power. C) No manager can afford to ignore the power of the mass media. D) Only rare companies have public-relations people to communicate with the press. E) Thankfully, it is not necessary for top-level executives to deal with the media.

c

The beginning of the global economy can be traced to A) the industrial revolution. B) the scientific revolution. C) the Renaissance. D) the fall of the Berlin Wall. E) the end of WWII.

d

The group responsible for setting the organization's overall strategic goals and for approving decisions and salaries of top management is known as the A) Board of stockholders. B) Board of shareholders. C) Board of Investors. D) Board of Directors. E) Board of intrapreneurs.

d

Which of the following is a major trading bloc? A) GATT B) OPEC C) IMF D) MFO E) APEC

e

Which of the following is an effect of global economic interdependency? A) increased economic activity B) the easy flow of money throughout the world C) outsourcing D) the tremendous emphasis on speed, flexibility, versatility, and permanent change. E) All of the above are effects of global economic interdependency.

e

Which of the following is an example of an external stakeholder of an organization? A) the barista at Starbucks B) the Starbucks district manager C) the President and CEO of Starbucks D) owners of Starbucks stock E) customers who go to Starbucks for a latte

e

A(n) __________ is a person or organization that provides raw materials, services, equipment, labor, or energy to other organizations. A) supplier B) distributor C) strategic ally D) special interest group E) ESOP

a

Nike agrees with a Pakistani company that the Pakistani company can manufacture Nike running shoes and pay Nike a fee to distribute them in Pakistan. Nike has engaged in A) licensing. B) franchising. C) countertrading. D) a strategic alliance. E) a greenfield venture.

a

Standards of right and wrong that influence behavior are known as A) ethics. B) ethical behavior. C) morals. D) a value system. E) values.

a

Which of the following statements about a code of ethics is most true? A) Most codes of ethics offer guidance on how to treat stakeholders. B) The purpose of a code of ethics is to keep top management out of jail. C) Most codes of ethics prohibit bribes unless it is the accepted way of doing business in a foreign country. C) Workforce diversity is never covered in a code of ethics; instead it is covered in its own diversity code. E) A code of ethics is almost always an informal understanding between people who work for a particular organization.

a

Which of these might also be called parochialism? A) ethnocentrism B) polycentrism C) geocentrism D) expatriatism E) globalism

a

Whistleblowers are most likely presented with which of the following? A) an ethical dilemma B) an idealistic situation C) a professional behavior by their boss D) coworkers that enjoy their company E) sociocultural trends

a

XYZ, an American corporation, builds a manufacturing plant in Mexico, employs Mexican citizens and receives favorable tax treatment by the Mexican government. XYZ is A) using a maquiladora. B) countertrading. C) insourcing. D) franchising. E) licensing.

a

__________ is a trading status describes a condition in which a country grants other countries favorable trading treatment such as a reduction of import duties. A) Most favored nation B) MERCOSUR C) Free trading status D) The freedom status E) The Jamaican status

a

__________ is when people feel uncomfortable with uncertainty and support beliefs that promise certainty and conformity. A) High uncertainty avoidance B) High power distance C) Low uncertainty avoidance D) Low power distance E) Collectivism

a

__________ managers accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective. A) Geocentric B) Polycentric C) Expatriate D) Ethnocentric E) Global

a

A "polycentric" manager believes that A) her country and culture are superior. B) native managers in foreign offices best understand native personnel and practices. C) managers in foreign countries should follow corporate procedures. D) managers in foreign countries should use whatever techniques are most effective. E) organizations should use only native managers in foreign operations.

b

A U.S. company agrees with a foreign company to start a new enterprise together in a foreign country, sharing the risks and the rewards. This is called a A) countertrade . B) joint venture. C) maquiladora. D) greenfield venture. E) wholly owned subsidiary.

b

A company allows a foreign firm to pay it a fee and a share of the profits for using the first company's brand name and a package of materials and services. This is called A) outsourcing. B) franchising. C) licensing. D) countertrading. E) a joint venture.

b

A company that barters goods for other goods is involved in A) outsourcing. B) countertrading. C) importing. D) exporting. E) franchising.

b

A manager, attempting to decide what decision will result in the individual's best long-term interests, is engaged in the __________ approach to deciding an ethical dilemma. A) utilitarian B) individual C) moral-rights D) justice E) environmental `

b

Based on technology philosopher Negroponte's reasoning, we are likely to see A) fewer mergers of large companies and fewer small start-up companies. B) more small, fast-moving startup companies and more megamergers. C) a trend toward larger businesses and away from smaller firms. D) an increase in medium-sized organizations. E) a decrease in technology.

b

Burger King provides the use of its name plus operating know-how to companies in Canada in return for a fee plus a percentage of profits. Burger King is A) licensing. B) franchising. C) countertrading. D) involved in a strategic alliance. E) involved in a greenfield venture.

b

ChemTech International is being picketed by a group of people who live by its biggest plant. The group is concerned about ChemTech's disposal of waste products into nearby waterways. In this instance, ChemTech is most likely dealing with __________ part of its __________ environment. A) special-interest groups; task B) local communities; task C) sociocultural; general D) sociocultural; task E) local communities; general

b

In the insurance industry, claims files previously maintained as paper documents are now stored on computers. This is an example of __________ forces in an organization's _________ environment. A) economic; general B) technological; general C) sociocultural; general D) economic; task E) technological; task

b

Issues of equity and fairness are usually tied to which of the following approaches to deciding ethical dilemmas? A) utilitarian B) justice C) individual D) moral idealism E) moral rights

b

Japan has increased the price of rice imported from the United States through a tax on American rice. This is a form of A) embargo. B) tariff. C) quota. D) predatory selling. E) GATT.

b

Namibia has a law that prohibits foreign companies from ownership of firms within the country. In order to have a presence in that country a company may engage in a ___________ with an existing company in Namibia. A) countertrade B) strategic alliance C) maquiladora D) greenfield venture E) stock trade

b

People who can claim an organization as their legal property are called A) employees. B) owners. C) the Board of Directors. D) customers. E) financial institutions.

b

The Church of Latter Day Saints is an example of a A) multinational corporation. B) multinational organization. C) multicontinental corporation. D) multicultural organization. E) connected organization.

b

The __________ is designed to monitor and enforce trade agreements. A) World Bank B) WTO C) IMF D) GATT E) EU

b

The degree to which people accept inequality in social situations is known as A) individualism/collectivism. B) power distance. C) acceptance tolerance. D) masculinity/femininity. E) uncertainty avoidance.

b

The economic community that includes Italy and Holland is the A) NAFTA. B) EU. C) ASEAN. D) Mercosur. E) IMF.

b

The general environment of an organization is also known as its A) microenvironment. B) macroenvironment. C) internal environment. D) task environment. E) climate.

b

The movement of goods and services among nations without political or economic obstruction is called A) trade policy. B) free trade. C) trade protectionism. D) privatization. E) trade embargo.

b

The pattern of values within an organization is known as its A) code of ethics. B) value system. C) moral code. D) moral rights. E) code of conduct.

b

The term "global economy" refers to the ___________ tendency of the economies of the world to interact with one another as ______ market instead of ______ national markets. A) decreasing; one; many B) increasing; one; many C) decreasing; many; one D) increasing; many; one E) increasing; different; similar

b

Two drug companies agree to work together to pool their research and development funds to develop a new drug for arthritis. In doing so, these two organizations can best be described as A) a union. B) strategic allies. C) having analyzed their internal environment. D) having influenced the mass media. E) having empowered their employees.

b

Wayne, the American head of a mid-sized multinational corporation has sent his best U.S. managers to an African subsidiary because he wants to be sure that the "job gets done right" to use his words. Wayne is most likely a(n) __________ manager. A) global B) ethnocentric C) polycentric D) monocentric E) geocentric

b

When Thailand's currency dropped precipitously in value in the 1990s, the __________ helped by loaning money to various Asian countries. A) World Bank B) IMF C) WTO D) EU E) ASEAN

b

Which of the following countries is a member of Mercosur? A) China B) Brazil C) Dominican Republic D) Jamaica E) Bermuda

b

Which of the following is a cultural dimension of Hofstede's model? A) opportunistic behavior B) power distance C) acceptance tolerance D) gender egalitarianism E) future orientation

b

Which of the following is a reason why companies expand internationally? A) fewer select suppliers B) greater access to capital C) more diverse employees D) avoiding the gray market E) products in the introduction stage of the product life cycle

b

Which of the following is considered a demographic characteristic? A) lifestyle B) gender C) health and fitness level D) personal influences E) unemployment

b

__________ is a preference for doing one thing at a time. A) Polychronic B) Unichronic C) Monochronic D) Duchronic E) Unitary time

c

A company that is producing goods domestically and sells them outside the country is involved in A) outsourcing. B) countertrading. C) importing. D) exporting. E) franchising.

d

A human rights organization is urging consumers to boycott products made by Outbound Clothing because Outbound exploits labor in less developed countries where its manufacturing facilities are located. Outbound is dealing with __________, part of its __________ environment. A) special-interest groups; general B) sociocultural forces; general C) mass media; task D) special-interest groups; task E) sociocultural forces; task

d

A manager's duty to take actions that will benefit the interests of society as well as of the organization is known as A) philanthropy. B) ethics. C) moral rights. D) social responsibility. E) the profit motive.

d

Employees are part of the __________ environment of organizations. A) external B) task C) general D) internal E) sociocultural

d

Pat, a manager at State University, is deciding how to set up a procedure for registering on-line that gives students fair access to courses. Pat is engaged in the ________ approach. A) utilitarian B) individual C) moral-rights D) justice E) environmental

d

Quotas are designed to prevent A) embargoes. B) exports. C) tariffs. D) dumping. E) outsourcing.

d

Which of the following countries is a member of APEC? A) Venezuela B) Brazil C) Bolivia D) China E) Latvia

d

Which of the following is a form of trade protectionism? A) expropriation B) export quota C) revenue quota D) protective tariff E) All of the above are forms of trade protectionism.

d

Which of the following is a way to become a world citizen? A) Because America is a world power, show that by being assertive and loud. B) Think globally but be local. C) Speak English at all times since it is the world's language. D) Learn rituals of respect. E) Use slang especially that derived from sports.

d

Which of the following is an example of a group in an organization's task environment? A) employees B) owners C) company CEO D) mass media E) Board of Directors

d

Which of the following is an example of an internal stakeholder of an organization? A) Distributors B) Suppliers C) Unions D) Individual workers E) Media

d

Which of these is a situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal? A) ethics B) ethical behavior C) moral decision D) ethical dilemma E) idealistic situation

d

A(n) __________ is when people rely heavily on situational cues for meaning when communicating with others. A) core values system B) expatrianism lens C) societal value system D) low-context culture E) high-context culture

e

The use of government regulations to limit the import of goods and services is called A) ethnocentrism. B) free trade. C) expropriation. D) embargo. E) trade protectionism.

e

Which of the following statements about polychronic time is true? A) Most people in Latin America have a polychromic view of time. B) Multitasking is present in this view of time. C) People who view time through a polychronic lens have a preference for doing more than one thing at a time. D) Arab cultures have a polychronic view of time. E) All of the above statements are true.

e

Which of these is also referred to as a "corporation on steroids"? A) multinational corporation B) multinational organization C) multicontinental corporation D) global organization E) megamerger

e

__________ are the relatively permanent and deeply held underlying beliefs and attitudes that help determine a person's behavior. A) Ethics B) Ethical behaviors C) Morals D) Value systems E) Values

e