BAPA 5131 Midterm

In 2014,________ was the largest single source of counterfeit products imported into the U.S.

China

SMEs usually choose exporting as their main strategy for entering foreign markets.

False

The Internet has increased the cost of transmitting voices, data, and images.

False

The end of the Cold War in 1989 hindered the forces of market liberalization in Eastern Europe.

False

While the number of containers transported internationally has decreased, the cost of transportation has increased dramatically.

False

Sid Maxwell (Scenario) Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. Which of the following can extend legal protection to Hudson's proprietary software used in its toys?

a copyright

Polycentric orientation refers to ________.

a host-country mind-set in which the manager develops a strong affinity with the country in which she or he conducts business

High power-distance countries are characterized by ________.

a relative indifference toward social inequalities

Advertising themes often convey unfavorable and embarrassing interpretations. This is most likely because ________.

advertising themes often lose their original meaning in translation or give the wrong impression

In cross-border business, successful managers ________.

are empathetic to cultural differences

As market globalization intensifies, ________.

individual firms respond to the challenges and new advantages that it brings

Which of the following explains how firms can use FDI to gain and sustain competitive advantage?

monopolistic advantage theory

According to Michael Porter, a nation's factor endowments help determine its ________.

national competitive advantage

The United States restricts foreign investments that might affect ________.

national security

Which of the following best explains why India was once characterized by high country risk?

political leaders enacted laws that targeted foreign firms for harassment

Self-reference criterion is ________.

the propensity to view other cultures through the lens of one's own culture

A value chain is ________.

the sequence of value-adding activities performed by a firm in the course of developing, producing, marketing, and servicing a product

Religion-based totalitarian states are called ________.

theocratic

Which of the following situations is an example of geocentric orientation?

Derek, the VP of Banner Technologies, wants managers from the firm's India office to visit the U.S. branch to provide training to American officials visiting India.

Sustainable practices lead to ________.

cost savings from more efficient production

An individual from a country with a high degree of political risk would most likely be from ________.

Iraq

International business is performed not just by individual firms, but also governments and international agencies.

True

Which of the following is true with regard to bribery?

Bribery promotes a culture of dishonesty and immorality.

Which of the following is true with regard to corruption?

Corruption harms the poorest in societies.

Which of the following pairs of nations are on opposite ends of the political freedom scale?

Cuba and Sweden

________ refers to the values, beliefs, customs, arts, and other products of human thought and work that characterize the people of a given society.

Culture

________ is the procurement of products or services from suppliers located abroad.

Global Sourcing

Which of the following managers portrays high uncertainty avoidance?

Henry is the managing editor at Paes publications. He emphasizes careful evaluation of all options and ensuring they are consistent with company policies, which often slows down the progress.

Which of the following best characterizes the development of international business?

It has existed in some form for centuries.

Which of the following countries is considered primarily socialist?

India

________ is an explanation of the process by which firms acquire and retain one or more value-chain activities inside the firm, minimizing the disadvantages of dealing with external partners and allowing for greater control over foreign operations.

Internalization theory

Which of the following statements is true of technological advances?

It provides a means for globalization to happen.

Which of the following situations illustrate a polychronic perspective?

Latin Americans have a flexible perception of time and may not arrive exactly at the pre-determined time for appointments.

Super Sports, a large sporting goods chain based in Australia, wants to open a store in Norway. With stores around the world, Super Sports executives realize that legal systems vary from country to country. Having never opened a store in Norway, the Super Sports legal team is investigating Norwegian laws to determine how they would impact the corporation and its ability to do business in Norway. Which of the following supports a decision in favor of Super Sports opening a store in Norway?

MNEs may transfer profits back to the home country without restriction.

________ are ways of behaving and conducting oneself in public and business situations

Manners and customs

Which of the following is true about networks?

Networks are neither formal organizations with clearly defined hierarchical structures nor impersonal, decentralized markets.

________ argues that increasing returns to scale, especially economies of scale, are important for superior international performance in industries that succeed best as their production volume increases.

New trade theory

Which of the following statements would be supported by Michael Porter?

Rivalry among industry competitors spurs innovation.

Which of the following statements is true about managing country risk?

Scanning allows a firm to assess the potential country risk.

________ means meeting humanity's needs without harming the ability of future generations to meet their needs

Sustainability

________ are letters, figures, colors, or other characters that communicate a meaning

Symbols

Which of the following is a benefit of internalizing foreign-based value-chain activities?

The MNE oversees control of foreign operations and ensures product quality.

Which of the following is true about the determinants of national competitive advantage?

The presence of demanding customers pressures firms to innovate faster and produce better products.

Which of the following is true about the first stage of evolution in the international product life cycle theory?

The product enjoys a temporary monopoly at this stage.

A country's economic assets are also known as factors of production.

True

For manufacturing companies, on a per-unit-of-output basis, high volumes of production are correlated with lower per-unit cost.

True

Globalization results in more demanding buyers who shop for the best deals worldwide.

True

Japanese Supercenter (Scenario) The Tag-Mart chain of discount superstores is nearing completion of its new supercenter in Tokyo. The Tokyo store is the first foreign store for the large U.S.-based company. Tag-Mart offers a large variety of products at virtually unbeatable prices. A group of Tag-Mart representatives has traveled to Tokyo to inspect the new store and hire a store manager. The top two contenders for the position are Hisako Aoki and Takematsu Sato. Aoki has 25 years of experience managing a local department store renowned for its customer service. Sato, born and raised in Japan, earned a college degree in the U.S. before working six years as a manager at a Texas Tag-Mart. Which of the following is most important for Tag-Mart's top management to determine while making a choice between Sato and Aoki as the new store manager?

Would customers at the Tokyo Tag-Mart prefer strong customer service or a U.S.-style shopping experience?

At a world conference to be conducted in Tokyo, representatives from nearly every country in the world will gather to discuss issues related to international trade. Representative A is from a totalitarian state. Representative B is from a socialist nation. Representative C hails from a democratic society. Which of the following countries would Representative A most likely be from?

Zimbabwe

When making decisions regarding ethical business actions, managers should ________.

balance their obligation to shareholders with explicit contributions to the broader public good

Current trends suggest that early internationalizing firms will ________.

become even more common in international business

Which of the following is subject to importing and exporting?

both finished products and intermediate goods

Which of the following legal systems is based on legal precedents and past practices set by the nation's courts through interpretation of statutes, legislation, and past rulings?

common

The Gulf nations benefit economically from rich petroleum reserves in the region. This is an example of ________.

comparative advantage

Which of the following is true with regard to competitive advantage?

competitive advantage is difficult for competitors to imitate.

Firms with high power distance are most likely to be characterized by ________.

concentrated power among executives and little autonomy for subordinates

Low-context cultures tend to ________.

conduct negotiations as efficiently as possible

In terms of CSR and sustainability, going ________ means institutionalizing appropriate behavior into the organization's culture so it becomes part and parcel of strategy.

deep

According to Porter's competitive advantage of nations, ________ refer to the nature of home-market demand for specific products and services.

demand conditions

In a world ever sensitive to social and environmental issues, more and more firms are embracing CSR and sustainability. Such firms are more likely than not to ________.

develop closer relations with foreign stakeholders to better understand their needs and work jointly toward solutions

Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. One shareholder wanted clarification about a research effort that investigated the possibility of setting up a plant in China. The CEO explained that serving China's rapidly growing middle class population would enable Sterling to increase the size of its customer base dramatically. In China, the CEO was most likely interested in ________.

developing economies of scale

The leaders of Kazmia, a small nation in the southern hemisphere, have called a meeting to discuss ways to encourage foreign firms to invest in Kazmia. The country was once a leader in diamond mining and exports; however, the diamond mines have been depleted. Meanwhile, the standard of living in Kazmia has plummeted to its lowest levels, and young people are fleeing the country. Government leaders must devise a plan to reinvigorate the once prosperous nation. In the context of national industrial policy, which of the following actions by the government of Kazmia would be the most beneficial for the long-term economic security of the country?

devoting resources to improve national infrastructure

Which of the following would most likely be considered an appropriate action for a multinational company in meeting its global corporate social responsibility obligations?

devoting substantial R&D to poor-country ailments

In which of the following stages of the internationalization process is a firm preoccupied with business in its home market?

domestic focus

Business dealings in low-context cultures are characterized by ________.

efficient negotiations

According to relativists ________.

ethical truths differ from group to group

Nations running a trade surplus ________.

export more goods than they import

Which of the following approaches to ethical standards for corporate governance reflects the view that the best action treats everyone equally and in a just manner?

fairness approach

As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with preparing a comprehensive report on the company's global operations over the past twenty years. Deva assigns three strategists to collaborate on the History portion of the report, which details the rationale behind Pax's decisions to expand operations in particular areas. Rashid Ahl focuses on early expansion to China, which occurred after China began to make its market more accessible to foreign companies. Markus Teller focuses on Pax's expansion to Eastern Europe, which was motivated by increased industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan, which happened when the company's commercial bank expanded its service network to Asia. Which of the following drivers of market globalization is Lavonne's research most likely to recognize as the factor responsible for the company's expansion to Japan?

integration of world financial markets

Which of the following is a driver of globalization?

integration of world financial markets

Sid Maxwell (Scenario) Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. The software program embedded in Hudson's signature toy, the Witty Parakeet, is an example of a(n) ________.

intellectual property

Feminine cultures tend to emphasize ________.

interdependence among people

Managers can achieve effective cross-cultural interaction by ________.

keeping an open mind and being inquisitive

An underground economy ________.

refers to the informal economic sector

Reduction in trade barriers is associated with the emergence of ________.

regional economic integration blocs

The European Union is classified as a(n) ________.

regional trade organization

The U.S. Securities and Exchange Act encourages confidence in business transactions by ________.

requiring public companies to frequently disclose their financial indicators to investors

Which of the following acts makes it illegal for U.S. firms to offer bribes to foreign parties in order to secure or retain business?

the U.S. Foreign Corrupt Practices Act

According to the virtue approach ________.

the best action emphasizes moral excellence and righteousness that provide for the full development of our humanity

In his international business class, Professor Jang organizes a debate on the societal effects of market globalization. Juan Prince takes a position that highlights the negative effects of market globalization. He emphasizes how multinational enterprises can wield so much influence that they threaten national sovereignty. He also notes the prevalence of low wages and sweatshop conditions as firms utilize low-cost labor abroad. Juan then describes the detrimental effects of corporate pollution on the environment, and he ends his argument by explaining how market globalization helps homogenize national cultures. Rina Taylor is assigned to counter Juan's position. Which of the following is Rina most likely to cite as a counter example to Juan's argument regarding the influence of MNEs on national sovereignty?

the dominating influence of market forces on the global economy

The third phase of globalization was triggered by ________.

the end of World War II

Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. The software program embedded in Hudson's signature toy, the Witty Parakeet, is an example of a(n) ________.

trade secret

Sid Maxwell (Scenario) Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. Hudson uses a distinctive sign to enable its customers to easily identify its products. This distinctive sign that the company also uses to distinguish its offerings from that of its competitors is known as a ________.

trademark

The Nike "swoosh" is an example of a ________.

trademark