Chapter 1 Quiz

When nations and corporations were ranked by GNI and total sales, respectively, for 2016, how many had GNI greater than the total annual sales of Walmart Stores?

24

According to the text, personnel working in a foreign subsidiary are working in the international environment

if they are responsible for the subsidiary's exports.

________ refers to the transportation of any domestic good or service to a destination inside a country or region, from a foreign origination point.

Importing

Many opponents of globalization believe that the gap between rich and poor has

increased.

The construction industry has joined the ranks of other industries and now carries out business across national borders. In other words, the construction industry has become a(n)

international business.

Data have shown a clear and definitive link between

liberalization of trade and economic growth.

Harman Advertising Agency, based in Toronto, decided to establish an operation in France because it was concerned that its competition would try to take over their clients in Europe, which represents 65 percent of their business. Which type of driver is responsible for this decision to go international?

market

When a supplier to an original equipment manufacturer (e.g., a battery manufacturer supplying an automobile producer) follows its major customer to a new country, it is an example of a ________ driver of international business activity.

market

The increased internationalization of business requires ________ to have a basic knowledge of international business.

all managers

An international business is defined as a(n)

business whose activities involve crossing national borders

Environment as used in the textbook involves the forces surrounding and influencing the life and development of the firm and is classified as

controllable and uncontrollable.

Unconscious reference to one's own cultural values when judging behavioral actions of others in a new and different environment is called the self-reference

criterion.

When gross national income rates drop significantly, it affects a company's environment. Which type of external force does this represent?

economic

The tendency toward an international integration of goods, technology, information, labor, and capital, or the process of making this integration happen, is called

economic globalization.

Harrison Manufacturing, based in Toledo, recently purchased a new manufacturing facility and production equipment in Germany that it will use to produce component parts. This purchase is an example of

foreign direct investment.

According to opponents of the globalization of trade and investment,

globalization has contributed to a decline in environmental and health conditions.

An opponent of globalization would agree that

globalization has had harmful effects on labor and labor standards.

Decision making in the international environment is considered ________ it is in a purely domestic environment.

more complex than

Due to the expanding importance of foreign-owned firms in local economies, host governments have made their policies toward these companies

more liberal.

The level of merchandise exports worldwide were ________ larger in 2017 than they were in 1980.

nine times

The forces in the foreign environment differ from the domestic environment in that they originate

outside the firm's home country.

What is one of the five major drivers of globalization?

political

When a government sees that local industry is threatened by imports, it can threaten to erect import barriers to stop or reduce these imports. This is an example of a ________ driver of international business activity.

political

What was Theodore Levitt referring to when he said that the future belonged to corporations that operated "as if the entire world were a single entity; [such an organization] sells the same things in the same way everywhere"?

standardization

Relatively inexpensive international communication enables firms to "body shop," that is, transmit computer-oriented tasks worldwide to a cheap but skilled labor force. This is an example of a ________ driver of international business activity.

technological

Sanjay is the director of operations for Fresh Farm Produce Corp. and is now able to sell his product to the international market thanks to a new computer system that is specifically designed for businesses in the fresh food industry. Which driver helped Sanjay's company internationalize?

technological

Rapid urbanization of populations combined with industrialization in the emerging markets is quickly shifting the world's economic center of gravity from

the Americas and Europe to Asia.

What is an example of an external force that represents financial factors affecting a business?

Interest rates

What is an example of an external force that can affect a company's environment?

The newly-elected governor decides to raise property taxes.

Who is credited with being the first person to coin the term "globalization?"

Theodore Levitt

What is an example of the competitive driver of international business activity?

a company that enters a foreign market to distract companies with similar products or services

The argument that free trade is the best strategy for advancing the world's economic development is considered

a proposition with which almost all economists agree.

The rise of the Ottoman Empire before 1300 influenced trade as it

promoted a search for sea routes from Europe to Asia.

Foreign environmental forces often operate differently than domestic environmental forces because

the forces are interrelated.