A Global View of Operations and Supply Chains

The World Trade Organization has helped to significantly reduce tariffs around the world.

True

The World Trade Organization helps provide governments and industries around the world with protection from firms that engage in unethical conduct.

True

To attract and retain global talent, and to expand a product's life cycle, are both reasons to globalize.

True

Since the early 1990s, residents in a number of developing countries have overcome culture, religious, ethnic, and political productivity barriers. These disappearing barriers coupled with simultaneous advances in technology, reliable shipping, and cheap communication have all led to the growth of what three things?

1. World trade 2. Global capital markets 3. International movement of people

The term maquiladora is most synonymous with: A) free trade zones in Mexico. B) Chinese forced labor camps. C) home-based or cottage industry. D) areas that do not meet U.S. standards for workplace safety and pollution. E) tax breaks provided by some South American countries to other South American countries.

A

) With reference to cultural and ethical issues, the World Trade Organization has: A) eliminated bribery. B) made progress in providing equal protection of intellectual property among nations. C) phased out all trade and tariff barriers between the United States and Mexico. D) eliminated slave labor and child labor. E) played little role in addressing cultural and ethical issues among nations.

B

Production processes are being dispersed to take advantage of national differences in labor costs.

True

Which of the following is true of maquiladoras? A) They discourage foreign businesses from outsourcing. B) They assess tariffs only on the value-added work done. C) They originated in China. D) None of the above E) All of the above

B

How do global operations attract new markets?

Because international operations require interaction with foreign customers, suppliers, and other competitive businesses, international firms inevitably learn about opportunities for new products and services.

________ and ________ are two issues where significant cultural differences are large, yet progress toward global uniformity is slowly being accepted.

Bribery, protection of intellectual property

Which of the following did the authors NOT suggest as a reason for globalizing operations? A) reduce costs B) improve the supply chain C) pursue stockholder approval ratings D) understand markets E) attract and retain global talent

C

Which of the following does NOT represent a valid reason for globalizing operations? A) reduce costs B) improve the supply chain C) reduce responsiveness D) attract and retain global talent E) understand markets

C

Boeing's new 787 Dreamliner: A) is assembled in Washington, D.C. B) uses engines from Japan. C) has its fuselage sections built in Australia. D) has increased efficiency from new engine technology. E) results from a partnership of about a dozen companies.

D

The purpose of NAFTA is to: A) substitute cheap labor in Mexico for expensive labor in the United States. B) curb illegal immigration from Mexico to the United States. C) phase out all trade and tariff barriers between North America and South America. D) phase out all trade and tariff barriers between the United States, Canada, and Mexico. E) provide fair and equitable tariff rates for trade between the United States, Canada, and Mexico.

D

Cost cutting in international operations can take place because of: A) lower taxes and tariffs. B) lower wage scales. C) lower indirect costs. D) less stringent regulations. E) all of the above.

E

Multinational organizations can shop from country to country and cut costs through: A) lower wage scales. B) lower indirect costs. C) less stringent regulations. D) lower taxes and tariffs. E) all of the above.

E

Which of the following represents a reason for globalizing operations? A) to improve the supply chain B) to improve operations C) to expand a product's life cycle D) to attract and retain global talent E) all of the above

E

Which of the following statements regarding the Dreamliner 787 is true? A) Boeing has found partners in over a dozen countries. B) The new aircraft incorporates a wide range of aerospace technologies. C) The new aircraft uses engines from not one, but two manufacturers. D) Boeing will add only 20 to 30 percent of the aircraft's value. E) All of the above are true.

E

A product will always be in the same stage of its product life cycle regardless of the country.

False

NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia.

False

Identify five countries from which Boeing's 787 Dreamliner has suppliers.

France, Germany, UK, Italy, Japan, China, South Korea, Sweden, and the United States

________ are areas located along the United States-Mexico border in which factories receive preferential tariff treatment.

Maquiladoras

Identify four trade agreements that are facilitating the growth of world.

NAFTA, SEATO, MERCOSUR, CAFTA

________ is a free trade agreement among Canada, Mexico, and the United States.

NAFTA—North American Free Trade Agreement

State two examples of cultural and ethical issues that face operations managers in a global environment.

Student responses will vary, but there are several issues on which there are wide differences from country to country, culture to culture. Among those listed in the text are bribery, child labor, the environment, and intellectual property rights. Students may bring forward from an earlier chapter issues such as environmental regulation or safe work environment, and may raise issues such as product safety

How can global operations improve the supply chain?

The supply chain can often be improved by locating facilities in countries where unique resources are available.

Boeing's development of the 787 Dreamliner is an example of a company obtaining a competitive advantage through product differentiation/innovation.

True

NAFTA seeks to phase out all trade and tariff barriers among Canada, Mexico, and the United States.

True

One reason for global operations is to gain improvements in the supply chain.

True

One reason to globalize is to learn to improve operations.

True

An organization that has worked to achieve global uniformity in cultural and ethical issues such as bribery, child labor, and environmental regulations is ________.

the World Trade Organization