Chapter 2 BUSA 3000
72) Which of the following stages comes before procurement in a firm's value chain?
A) research and development
80) The ability of a nation to govern its own affairs is known as ________.
A) sovereignty
85) 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?
A) the dominating influence of market forces on the global economy
The third phase of globalization was triggered by ________.
A) the end of World War II
68) The most direct implication of market globalization is on the firm's ________.
A) value chain
Nationalization refers to the gradual integration and growing interdependence of national economies.
Answer: FALSE
25) Globalization of production activities and services is a dimension of market globalization.
Answer: TRUE
49) The 2011 "Arab Spring" in the Middle East was facilitated in large part by social media.
Answer: TRUE
19) The initial phase of globalization was triggered by the introduction of the railroads and ocean transport.
Answer: TRUE
23) Firms often internationalize proactively in order to pursue new markets, find lower-cost inputs, or obtain other advantages.
Answer: TRUE
33) Firms are sometimes motivated to enter new markets because of unfavorable conditions in the home market, such as regulation or declining local industry sales.
Answer: TRUE
34) Falling trade barriers are facilitated by the WTO.
Answer: TRUE
47) Technological advances have helped make internationalization affordable for all sizes of firms.
Answer: TRUE
62) Governments have facilitated economic integration by lowering barriers to international trade and investment, harmonizing their monetary and fiscal policies within regional economic integration blocs.
Answer: TRUE
66) Companies strive to decrease their costs and reduce their selling prices through economies of scale and standardization of finished products, among other possibilities.
Answer: TRUE
77) Globalization results in more demanding buyers who shop for the best deals worldwide.
Answer: TRUE
93) Countries that liberalize international trade and investment enjoy faster per-capita economic growth.
Answer: TRUE
94) Environmental destruction diminishes as economies develop, at least in the long run.
Answer: TRUE
95) As the influence of the Chinese economy grows over time, it is likely that Western countries will embrace some of China's cultural attitudes and behaviors.
Answer: TRUE
69) Which of the following statements is TRUE about value chain and international business?
B) Exporting firms perform most of the upstream value chain activities in the home market.
71) Which of the following statements is TRUE about the firm-level consequences of market globalization?
B) Globalization drives firms to relocate key value-adding activities to the most advantageous locations around the world.
44) ________ are the most transformative technology in developing economies.
Mobile phones
The ________ phase of globalization began around 1900 and was associated with the rise of electricity and steel production.
second
83) An underground economy ________.
A) refers to the informal economic sector
54) Regional economic integration blocs ________.
A) reduce trade and investment barriers
45) Technological advances have contributed to manufacturing by ________.
D) reducing production costs
73) Which of the following represents the final stage in a firm's value chain?
D) sales and service
55) Which of the following is an example of a supranational institution?
D) the World Trade Organization
The fourth phase of globalization is characterized by ________.
D) the enormous growth of cross-border trade and investment
31) ________ marked the end of the 50-year Cold War and smoothed the integration of former command economies into the global economy.
Free-market reforms in China and the former Soviet Union
13) As market globalization intensifies, ________.
individual firms respond to the challenges and new advantages that it brings
Which of the following is a driver of globalization?
integration of world financial markets
88) Which of the following statements most likely to counters Juan's argument concerning the homogenization of national cultures?
A) As globalization standardizes superficial aspects of life across national cultures, people resist these forces by insisting on their national identity and taking steps to protect it.
58) ________ is transforming interactions among customers, employees, business partners and investors, by connecting locations, products, services, and data.
A) Digitization
40) Which of the following statements is TRUE of technological advances?
A) It provides a means for globalization to happen.
11) Early multinationals from the third phase of globalization originated in ________.
A) Japan
30) 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?
A) integration of world financial markets
20) The Great Depression marked the beginning of the second phase of globalization.
Answer: FALSE
21) The third phase of globalization was triggered by the development of personal computers, the Internet, and Web browsers.
Answer: FALSE
22) Firms expand abroad mainly as a reaction to market globalization.
Answer: FALSE
24) Offshoring and the flight of jobs are prime drivers of market globalization.
Answer: FALSE
35) The end of the Cold War in 1989 hindered the forces of market liberalization in Eastern Europe.
Answer: FALSE
36) Industrialization implies that emerging markets are increasing their dependence on low-cost labor.
Answer: FALSE
48) The Internet has increased the cost of transmitting voices, data, and images.
Answer: FALSE
50) While the number of containers transported internationally has decreased, the cost of transportation has increased dramatically.
Answer: FALSE
64) The globalization of capital refers to the aggregate activities of firms that gives rise to economic integration
Answer: FALSE
78) Market globalization compels firms to organize their sourcing, manufacturing, marketing, and other value-adding activities on a strictly local scale.
Answer: FALSE
89) In international economics, codetermination refers to the tendency for a financial or monetary crisis in one country to spread rapidly to other countries, due to integrated national economies.
Answer: FALSE
90) Large multinationals are not constrained by market forces because they can exert considerable influence on governments through lobbying.
Answer: FALSE
91) To minimize globalization's harm and reap its benefits, governments should strive for nationalized economic regimes.
Answer: FALSE
92) The first wave of offshoring began in the 1990s with the exodus of service-sector jobs in credit card processing, software code writing, accounting, health care, and banking services.
Answer: FALSE
75) Which of the following would be most important for the consulting group to consider when deciding whether to recommend that Acme internationalize its sales efforts to Germany?
B) How intense is the competition from German companies offering similar products?
82) Which of the following is an example of offshoring?
B) The IT support services for customers of Mayfair Inc., a U.S. based consumer electronics manufacturer, are based in India.
86) Which of the following most likely supports Rina's argument over Juan's concerning wages and working conditions in developing countries?
B) Vietnam has experienced a fivefold increase in wages as a result of the growth of the footwear industry there.
46) Stella manages the production team at Camden Inc., a manufacturer of heavy industry machinery in the United States. She needs to decide if her firm should export finished products or manufacture abroad. Which of the following would most likely help her evaluate the best alternative in this instance?
B) What are the costs of transporting raw materials, components, and finished products?
59) Companies strive to drive down prices ________, among other strategies.
B) by standardizing what they sell
32) The globalization of finance ________.
B) contributes to firms' abilities to develop and operate world-scale production and marketing
56) Governments have facilitated economic integration by ________.
B) creating supranational institutions to further reduce trade barriers
42) The science and process of creating and using information resources is known as ________.
B) information technology
61) Reduction in trade barriers is associated with the emergence of ________.
B) regional economic integration blocs
The representative from Business C is most likely from ________.
Brazil
87) Rina is most likely to counter Juan's claim regarding environmental effects by pointing out which of the following?
C) Environmental destruction tends to diminish in the long run, as economies develop.
Over time, the GATT evolved into the ________.
C) World Trade Organization
76) Which of the following would be most important for Acme to determine before outsourcing its programming services to India?
C) Would the lower cost of outsourcing allow Acme to sustain a competitive advantage in its business operations?
41) Technological leapfrogging is defined as ________.
C) bypassing certain stages of technology to come up with a radical innovation when upgrading to new products
52) In terms of international business, market globalization can be viewed as a ________.
C) driver and consequence of firm-level internationalization
70) In a typical value chain, the firm ________.
C) performs marketing activities such as pricing, promotion, and selling
29) In describing the main driver behind Pax's expansion to China, Rashid is most likely to emphasize ________.
C) reduction of barriers to trade
57) The free movement of capital around the world is also known as ________.
C) the globalization of capital
60) Convergence of consumer preferences has led to an enhanced emphasis on standardization, which implies that ________.
C) the raw materials, parts, and components sourced by professional buyers are very similar in design and structure
43) Which of the following benefits of IT is specific to smaller firms?
D) It allows firms to design and produce customized products they can target to narrow, cross-national market niches.
28) Financial market integration makes it easier for internationally active firms to ________.
D) engage in foreign currency transactions
12) The fourth phase of globalization ________.
D) facilitated the globalization of the service sector in such areas as banking and retailing
84) While a degree of cultural imperialism may be at work, it is offset by the countertrend of ________.
D) local nationalism
81) The relocation of manufacturing and other value-chain activities to cost-effective locations abroad is known as ________.
D) offshoring
74) Which of the following activities in Acme's value chain would be internationalized if Acme decides to establish a development contract with one of the Indian software firms?
D) procurement
79) ________ refers to the tendency of a financial or monetary crisis in one country to spread rapidly to other countries, due to the ongoing integration of national economies.
D) procurement
53) A value chain is ________.
D) the sequence of value-adding activities performed by a firm in the course of developing, producing, marketing, and servicing a product
Which of the following reflects the major contribution of GATT to globalization?
It reduced barriers to international trade and investment.
The representative from Business B is most likely from ________.
Japan
The representative from Business A is most likely from ________.
United Kingdom
16) Firms that are more successful at global competition display each of the following qualities EXCEPT ________.
approaching internationalization from a reactive standpoint
Which of the following is characteristic of globalization of markets?
declining trade barriers
The first phase of globalization was characterized by the ________.
growth of railroads
To which of the following drivers of market globalization is Markus most likely to attribute his company's expansion to Eastern Europe?
market liberalization
Which of the following is a societal consequence of market globalization?
offshoring and the flight of jobs