D270 Chapter 1 review

5)) Which of the following best describes a result of cultural collision in international business? A) A company implements practices that are less effective than intended. B) Local employees are overlooked for promotions by home country managers. C) Expatriate managers rely too heavily on local employees for negotiating business deals. D) Foreign and domestic companies make adjustments for the local culture and legal environment.

A) A company implements practices that are less effective than intended.

27) Which of the following statements would most likely be made by a supporter of globalization? A) Globalization encourages the adoption of uniform and superior standards for combating environmental problems. B) Economic growth created by globalization is largely in services, which involves the use of few nonrenewable resources. C) Global competition discourages resource-saving technologies, which are costly. D) Air pollution and toxic runoff problems increase with global economic growth.

A) Globalization encourages the adoption of uniform and superior standards for combating environmental problems.

22))) In which of the following countries would business activity, given its status as a "not free" marketplace, be under the greatest government control? A) Vietnam B) Pakistan C) India D) Brazil

A) Vietnam

23) Governments have signed treaties to protect foreign-owned property rights, such as investments and patents. A primary reason for doing so is to ________. A) gain reciprocal advantages B) reduce the domestic effects of other countries' economic policies C) deal with areas of concern outside the territory of any one country D) reduce national conflicts leading to violent political demonstrations

A) gain reciprocal advantages

45) Ellen, a U.S. citizen, worked for a U.S. firm in Germany for four years and was transferred back to the firm's home office in Chicago two months ago. Ellen feels significant dissatisfaction with her job and life in Chicago, which is most likely a result of ________. A) reverse culture shock B) polycentrism C) culture shock D) ethnocentrism

A) reverse culture shock

35) Raj, an engineer, works long hours and takes full responsibility for both his good and bad work performance. Raj most likely believes in ________. A) self-determination B) low power distance C) collectivism D) fatalism

A) self-determination

46) Politics, law, culture, and economy are all examples of ________ factors that can affect the ways in which companies produce and sell their products in foreign markets. A) social B) physical C) competitive D) political

A) social

13) Which of the following best explains why international business has grown rapidly in the past few decades? A) the end of the political schism between the Communist and non-Communist blocs B) greater income equality in most countries C) growing concern about climate change D) increased concerns about terrorism

A) the end of the political schism between the Communist and non-Communist blocs

45))) Premium Manufacturing is planning to expand operations overseas. Executives at the firm are considering a number of different countries. Which of the following countries would most likely have the lowest start-up costs? A) India B) China C) Japan D) Guatemala

B) China

31) Safe work environments motivate ________; challenges motivate ________. A) individualists; collectivists B) collectivists; individualists C) non-fatalists; fatalists D) materialists; non-materialists

B) collectivists; individualists

38))) A ________ law system is based on tradition, judge-made precedent, and usage and assigns a preeminent position to existing case law as a guide to dispute resolution. A) theocratic B) common C) customary D) civil

B) common

46))) Countries with a ________ legal system tend to encourage precise, detailed contracts, whereas countries with a ________ legal system tend to encourage shorter and less specific contracts. A) theocratic; mixed B) common; civil C) civil; customary D) customary; common

B) common; civil

34))) A system of ________ law sets the framework for the system of government and defines the authority and procedure of political bodies to establish laws and regulations. A) criminal B) constitutional C) civil D) commercial

B) constitutional

48))) Local content regulations are primarily intended to ________. A) address cultural differences between local employees and expatriates B) encourage MNEs to increase production activities in a country C) address contract negotiation difficulties D) assess local tax rates on MNEs

B) encourage MNEs to increase production activities in a country

32) A major criticism of offshoring is that it ________. A) increases production costs B) exchanges good jobs for bad jobs C) threatens the sovereignty of larger countries D) allows companies to avoid payment of any taxes

B) exchanges good jobs for bad jobs

1)) ________ consists of specific learned norms based on attitudes, values, and beliefs of a group of people. A) Ethnology B) Civilization C) Culture D) Doctrine

C) Culture

34) Assume that company executives at the firm would like to increase sales by expanding into an international market. Which of the following factors, if true, best supports a decision to expand sales globally? A) It can offshore most of its production. B) It can obtain all of its resources for the same price overseas. C) Its costs of making additional sales would not increase disproportionately. D) The foreign market has higher real interest rates.

C) Its costs of making additional sales would not increase disproportionately.

56))) Garnet Footwear suffered significant financial losses and had to close its foreign operations. The dissolution process took six months and cost four percent of the firm's estate. Where was Garnet's foreign operations most likely located? A) Ecuador B) France C) Japan D) China

C) Japan

8))) Which of the following countries has a collectivist orientation? A) Canada B) Australia C) Japan D) Netherlands

C) Japan

38) An example of a U.S. merchandise import is an automobile made in ________ and sold ________. A) the United States by a Japanese company; in the United States B) the United States by a Japanese company; outside the United States C) Japan by a Japanese company; in the United States D) Japan by a U.S. company; outside the United States

C) Japan by a Japanese company; in the United States

8) Which of the following is a common shortcoming of studies examining culture in different countries and regions? A) Cultures are static, which leads researchers to draw false conclusions from old data. B) It is impossible to compare countries because of differences in data. C) Responses are reported in averages, which can lead to a belief in unrealistic stereotypes. D) People are reluctant to complain about their own cultures, so they present only positive opinions to researchers.

C) Responses are reported in averages, which can lead to a belief in unrealistic stereotypes.

47))) Elite Manufacturing seeks a foreign location with a highly favorable business environment and a comprehensive legal code. Which of the following countries would be most suitable for Elite? A) Japan B) Canada C) Singapore D) United Kingdom

C) Singapore

20))) All of the following countries have a totalitarian political system EXCEPT ________. A) China B) Russia C) South Korea D) Saudi Arabia

C) South Korea

1))) Which of the following is a true statement about China? A) The Chinese government's shift from communism to capitalism has led to an increase in FDI. B) China attracts FDI because the government has eliminated elaborate bureaucracies. C) The Chinese government manipulates market activities for political purposes. D) China lacks an educated pool of employees due to slowly developing industrialization.

C) The Chinese government manipulates market activities for political purposes.

15) Imported flowers are now a stronger competitor to U.S. grown flowers in the U.S. market. Which of the following is likely the MOST important factor for this increase in imports? A) more effective production techniques B) advances in communication systems C) advances in transportation D) cross-national cooperation

C) advances in transportation

52) If an MNE convinced a popular priest that its vitamin-enriched soft drink would benefit parishioners' health, the MNE would be using ________ to help bring about change. A) participation B) reward sharing C) an opinion leader D) materialistic motivation

C) an opinion leader

47) Ethnocentrism in international business refers to the ________. A) study of group ethics and approaches to corporate social responsibility B) comparison of the Protestant ethic with other religious views C) belief that what works best at home should work best everywhere D) ethnic segmentation of marketing programs within countries

C) belief that what works best at home should work best everywhere

28))) Which of the following types of political risks often is caused by ethnic conflict or civil disorder and includes those random political developments that adversely affect the operations of all companies in a country? A) systemic political risk B) procedural political risk C) catastrophic political risk D) distributive political risk

C) catastrophic political risk

36))) Ian, a financial manager, is preparing to transfer to Germany where he will serve as an expatriate manager of his employer's European office. With which type of legal system will Ian most likely have to deal with in Germany? A) mixed B) common C) civil D) theocratic

C) civil

37))) A(n) ________ law system is based on a systematic and extensive codification of laws and puts political officials in charge of specifying accessible, detailed, and written law that applies to all citizens. A) customary B) common C) civil D) theocratic

C) civil

19) In a strategy known as ________, many new companies locate themselves near competitors and suppliers. A) offshoring B) franchising C) clustering D) exporting

C) clustering

6))) Proponents of ________ argue that individual interests are not as important as the welfare of the group. A) pluralism B) capitalism C) collectivism D) individualism

C) collectivism

50) Some key ________ factors in a company's international business external environment are its product strategy and access to resources. A) geographic B) political C) competitive D) behavioral

C) competitive

4)) When divergent cultures come in contact, ________ occurs. A) power distance B) culture shock C) cultural collision D) group membership

C) cultural collision

14) Contact among countries brings about cultural change, which is a process called ________. A) cultural collision B) cultural imperialism C) cultural diffusion D) polycentrism

C) cultural diffusion

44) The term "cultural distance" refers to the ________. A) physical space between people during communication B) time it takes people to adjust to the language, traditions, and norms of a foreign culture C) degree to which countries differ on cultural dimensions D) preferred relationship between superiors and subordinates in a given culture

C) degree to which countries differ on cultural dimensions

12))) The distinguishing feature of political ideologies along the political spectrum is ________, with some emphasizing its primacy and others opposing it. A) capitalism B) socialism C) freedom D) liberalism

C) freedom

29) Which of the following is characterized by low dependence on an organization and a desire for personal time, freedom, and challenges? A) collectivism B) democracy C) individualism D) anarchy

C) individualism

18))) Which of the following would most likely be used in a totalitarian system to promote unconditional support for the official ideology? A) privately owned media outlets B) a parliamentary system C) state control of the education system D) a representative legislative body

C) state control of the education system

60) A flag of convenience is ________. A) the declaration that a product is made in a country that has easier legal access to a given foreign market B) a designation for products originating within a particular trading group C) the registration of a shipping company in a country that charges low taxes D) the indication that a shipping organization can sail in international waters

C) the registration of a shipping company in a country that charges low taxes

30))) Select the correct order, going from low to high total impact on an MNE, of the following types of political risk: (1) procedural political risks, (2) systemic political risks, (3) distributive political risks, (4) catastrophic political risks. A) 3, 2, 1, 4 B) 1, 2, 3, 4 C) 2, 3, 4, 1 D) 2, 1, 3, 4

D) 2, 1, 3, 4

26) Which of the following is the LEAST likely reason that small countries worry about overdependence caused by globalization? A) A large country on whom they depend may pressure them on political matters. B) A large international firm may dictate its terms of operations in a small country. C) A large company may exploit legal loopholes to avoid tax payments. D) A large country may substantially increase its demand for the small country's production.

D) A large country may substantially increase its demand for the small country's production.

44))) Rockwall Enterprises is planning to expand the firm by establishing operations outside of the U.S. In which of the following countries would Rockwall most likely be able to establish operations most quickly? A) Japan B) Brazil C) Germany D) Australia

D) Australia

3))) Which of the following countries has an individualistic orientation? A) Venezuela B) Japan C) Egypt D) Canada

D) Canada

26))) Which of the following is a condition that powered the worldwide spread of democracy from 1970 onward? A) Totalitarian regimes delivered acceptable economic progress to their populations. B) Economic advances caused contentment among the working class and minimized the need to push for democratic reforms. C) Many groups were able to successfully challenge the legitimacy of democratic systems. D) Information and communications technologies broke down the ability of the state to control access to uncensored information, especially that from foreign sources.

D) Information and communications technologies broke down the ability of the state to control access to uncensored information, especially that from foreign sources.

42) Jack, an American accounts manager, is preparing a presentation for a group of Japanese businesspeople. Jack's presentation would be most effective if he ________. A) told an opening joke to put everyone at ease B) used slang to create an informal atmosphere C) used long words to impress his counterparts D) budgeted extra time for translation and clarification

D) budgeted extra time for translation and clarification

55) American hamburgers, Japanese sushi, Italian pizza, Mexican tacos, and Middle Eastern pita bread are now commonly found in most countries. This best supports the argument that ________. A) although visible expressions of culture are becoming homogenized, basic differences in societal values remain strong B) globalization fulfills lower order needs in Maslow's hierarchy C) cultural imperialism is increasingly widespread D) cultural hybridization is occurring

D) cultural hybridization is occurring

53) U.S. companies monopolize much of the international entertainment media, which largely portrays U.S. products and lifestyles as glamorous and appealing. This situation would most likely be used as an example of ________. A) the stronger work ethic typical of developed countries B) the spread of high-context cultures C) cultural fragmentation D) cultural imperialism

D) cultural imperialism

49) In addition to understanding the laws affecting business in countries where their companies operate, it is most important for managers to understand the ________. A) methods for appointing local judges B) ethical rationale behind the laws C) history of the local legal system D) degree of law enforcement

D) degree of law enforcement

48) The approach a company takes when it bases foreign operations on an informed knowledge of its organizational culture along with home- and host-country needs, capabilities, and constraints is called ________. A) polycentrism B) ethnocentrism C) neocentrism D) geocentrism

D) geocentrism

30) Assume a firm has operations in Tokyo, where there is a collectivist culture. Which of the following would most likely motivate the firm's Japanese employees? A) "employee-of-the-month" programs B) extensive vacation time C) on-the-job challenges D) good health benefits

D) good health benefits

36) In a(n) ________ culture, people tend to regard seemingly peripheral information as pertinent to decision making and infer meanings from things that people say either indirectly or casually. A) pragmatic B) idealistic C) fatalistic D) high-context

D) high-context

28) Curtailment of logging in the Amazon region is generally viewed as environmentally beneficial for the planet as a whole. However, unemployed Brazilian workers have felt that job creation inside Brazil is more important than climate protection outside Brazil. This example best illustrates which of the following? A) why smaller countries are concerned that large international companies are powerful enough to dictate operating terms B) why globalization is needed to foster uniform standards for combating environmental problems C) how cultural homogeneity threatens the cultural foundation of smaller nations D) how global interests can conflict with a country's local interests

D) how global interests can conflict with a country's local interests

50) Organizing work differently to improve productivity will likely fail ________. A) if the work force has a low tolerance for authoritarianism B) if workers participate in planning the improvement C) unless changes are compatible to competitor's practices D) if changes interfere with strongly held value systems

D) if changes interfere with strongly held value systems

6) The shifting of national borders has most likely created which of the following situations for international business?

It has increased physical barriers to exporting.

2) Which of the following best defines international business?

It includes all business transactions involving two or more countries.

9) According to the A.T. Kearny/Foreign Policy Globalization Index, countries ________. A) tend to be ranked similarly on all four dimensions B) are more globalized on the political dimension than on personal contact C) that are large in land mass and population are less globalized than small countries D) sometimes rank high on one dimension and low on another

sometimes rank high on one dimension and low on another

23))) Which of the following was a notable trend in political systems during the second half of the 20th century and beginning of the 21st century? A) A wave of democratic transformations occurred as countries around the world moved away from totalitarian systems. B) A wave of theocratic revolutions occurred as people around the world looked to spirituality to guide them. C) Socialistic revolutions swept the world as countries aspired toward greater social justice. D) A totalitarian revolution swept the world as people looked to strong state leadership in uncertain times.

A) A wave of democratic transformations occurred as countries around the world moved away from totalitarian systems.

40) All of the following are international business translation problems EXCEPT which of the following? A) All written work requires back translation in order to be understood in a second language. B) Because languages and the common meaning of words are constantly evolving, the intended meaning of a word may be different from what the listener or reader understands. C) Some words in one language simply don't have a direct translation into another language. D) Words mean different things in different contexts, thus the wrong context may be translated.

A) All written work requires back translation in order to be understood in a second language.

42))) The largest percentage of nations, within a contiguous geographic region, that adhere to the rule of man are located in ________. A) Central Africa B) Northern Africa C) Eastern Europe D) Central America

A) Central Africa

18) ________ peoples account for the largest percentage of global production. A) English-speaking B) Mandarin-speaking C) French-speaking D) Spanish-speaking

A) English-speaking

59))) Wharton Enterprises, a U.S. firm, manufactures small kitchen appliances. The firm has recently developed an innovative blender design that Wharton executives anticipate being very profitable. Currently, Wharton has production facilities in the U.S. and China. Wharton executives are trying to determine where the new product should be manufactured. Which of the following best supports a decision to manufacture the new product in the U.S. instead of China? A) Intellectual property rights are strongly protected by U.S. patent laws. B) A strategic marketing plan can be quickly developed in the U.S. C) Contract enforcement is a simple process in the U.S. D) The U.S. is experiencing an economic recession.

A) Intellectual property rights are strongly protected by U.S. patent laws.

31))) Which of the following statements about approaches to political risk management is NOT true? A) Passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards. B) Passive political risk management assumes that it is difficult, if not impossible, to systematically model political risk. C) Active political risk management assumes that positive and negative political events in any country are neither independent nor random events. D) Active political risk management assumes that political events unfold in observable patterns that statistical methods can detect.

A) Passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards.

16))) In a democracy, ________. A) citizens have the right to participate in the decision-making process B) the opportunity to truly participate in the political process is restricted to a select few C) the court system is directly supervised by the political system D) the rights of the individual are merged with the state

A) citizens have the right to participate in the decision-making process

54) The fact that an English word such as blue-jeans has entered the Spanish language, while a Spanish word such as macho has come into American English illustrates that ________. A) cultural diffusion is a two-way process B) cultural trends come from emerging nations C) existing national borders are shifting D) material cultures are becoming universal

A) cultural diffusion is a two-way process

55))) The vigor of IPR protection is highly related to a country's stage of ________. A) economic development B) cultural heterogeneity C) natural resource development D) standardization of patent regulations

A) economic development

14) Advanced communication systems have contributed to growth in international business by ________. A) enabling better oversight of global operations B) reducing the effects of global competition C) decreasing the cost of cargo transportation D) reducing export regulations

A) enabling better oversight of global operations

57) Some observers feel that international institutions and the people working in them cannot adequately handle the complexities of an interconnected world. Based on this, these observers believe that ________. A) globalization will slow in the future B) globalization is nevertheless inevitable C) international business will grow primarily on a regional basis D) private companies will replace international organizations in running the world's economy

A) globalization will slow in the future

26) The term "________ culture" describes a country in which the norm is a money-and-things orientation and a belief that it's better to "live to work" than to "work to live." A) high masculinity B) physiological C) non-fatalistic D) high-femininity

A) high masculinity

59) Carnival Cruise Lines lowers its taxes by all of the following EXCEPT ________. A) hiring host-country nationals who pay no taxes B) taking advantage of taxation laws in foreign countries C) sailing in international waters outside countries' tax jurisdiction D) paying substantial port fees instead of taxes during stopovers

A) hiring host-country nationals who pay no taxes

38) A culture that prefers to first settle general principles rather than small issues is most accurately characterized as ________. A) idealist B) polychronic C) high-context D) pragmatist

A) idealist

10))) Although there are different views about the purpose of a political system, most analysts agree that an essential task of a political system is to ________. A) integrate the different elements of a society into a functioning unit B) allocate scarce resources among competing users C) develop reasonable attitudes and outlooks within the population D) protect individuals within the country from foreign threats

A) integrate the different elements of a society into a functioning unit

51))) ION Software is the registered owner of a program designed to help sort and organize incoming and outgoing e-mail. Which of the following legal conventions does ION most likely have? A) intellectual property right B) trademark credential C) patent certificate D) TRIPS permit

A) intellectual property right

2))) Which of the following problems in China is blamed for the annual loss of $250 billion by American MNEs? A) intellectual property violations B) environmental hazards C) child labor violations D) embezzlement

A) intellectual property violations

39) Visible exports and imports are ________. A) merchandise imports and exports B) the sum total of goods and services traded C) international transactions paid for in money rather than barter D) typically a country's least common international economic transactions

A) merchandise imports and exports

7)) Businesspeople seeking to understand more about another culture in order to successfully conduct business within that culture would be best advised to do which of the following? A) observing the behavior of people who have gained respect within that cultural environment B) relying on stereotypes, which are based on averages, to gain an understanding of the culture C) avoiding cultural research studies because they perpetuate unjustified stereotypes and behaviors D) memorizing the cultural variations that are typically encountered in a specific cultural environment

A) observing the behavior of people who have gained respect within that cultural environment

30) The process of shifting production from a domestic to a foreign location is best known as ________. A) offshoring B) outsourcing C) licensing D) joint venturing

A) offshoring

21) When a company successfully responds to foreign production and market opportunities, ________. A) other companies will likely emulate its successful practices B) it likely has a long-term advantage over competitors C) it will downsize its domestic operations D) its home government likely raises taxes on the company

A) other companies will likely emulate its successful practices

57) In the opening case on the Java Lounge in Saudi Arabia, people in the port city of Jeddah were less culturally conservative than people in the interior of the country. The most likely reason for this is that ________. A) people in the port cities have more contact with foreigners B) the coastal area has to trade with countries using different religious holidays C) the coastal area has a culture with a higher uncertainty avoidance D) the coastal area is secular, whereas the interior of Saudi Arabia has a state religion

A) people in the port cities have more contact with foreigners

28) People generally prefer little consultation between superiors and subordinates in cultures where ________ is high. A) power distance B) fatalism C) individualism D) self-actualization

A) power distance

16) Because consumers want a greater variety of goods and services at lower prices, many governments have ________. A) reduced their restrictions on the international movement of goods and services B) acted to tax most imports at a lower rate than domestic products C) sought to eliminate reciprocal advantages negotiated through international organizations and treaties D) increased their participation in multinational problem-solving efforts

A) reduced their restrictions on the international movement of goods and services

55) Critics of the view that regionalization will prevail over globalization most likely base their argument on the belief that ________. A) regionalization is a transition stage toward globalization B) neighboring countries are more apt to disagree politically than distant countries C) neighboring countries are too geographically similar to benefit from trade D) business in non-territorial areas is not regional

A) regionalization is a transition stage toward globalization

37) Which of the following BEST explains how a firm reduces risk by operating internationally? A) taking advantage of business-cycle differences among countries B) buying competitive risk insurance unavailable domestically C) preventing competitors from operating in the countries it has entered D) operating in less competitive environments than those at home

A) taking advantage of business-cycle differences among countries

52))) Most counterfeit goods are made in markets in which ________ is the basis of the legal system. A) the rule of man B) the rule of law C) religious doctrine D) corporate precedent

A) the rule of man

43))) Skinner Electronics plans to expand into foreign markets. Top executives want the firm to focus only on locations where the rule of law prevails. Which of the following should most likely be considered by Skinner? A) wealthier, westernized countries B) developing, non-Western countries C) emerging economies experiencing rapid growth D) countries inclined toward totalitarian-style government

A) wealthier, westernized countries

53) When companies face the same competitors in almost all countries where they operate, ________. A) what they learn about each other in one country is useful in predicting the other's strategies and actions elsewhere B) the market leader is the same everywhere C) there is less need to understand the physical and societal factors of each country D) they are less likely to enter joint ventures with other companies

A) what they learn about each other in one country is useful in predicting the other's strategies and actions elsewhere

6) Which of the following is the most accurate statement about culture? A) Cultural variables can easily be isolated from other factors such as economic and political conditions. B) Although most cultural variables are universal, the forms these variables take differ from culture to culture. C) Most cultural variables are superficial and can easily be influenced by environmental factors. D) Within a culture, everyone responds to particular cultural variables the same way.

B) Although most cultural variables are universal, the forms these variables take differ from culture to culture.

53))) Which of the following statements referring to intellectual property rights and violations is INCORRECT? A) Richer countries claim looser regulation of intellectual property rights will hinder innovation. B) Companies can register a global patent, trademark, or copyright through the World Trade Organization (WTO). C) The International Anti-Counterfeiting Coalition estimates international trade in counterfeit products at $600 billion a year. D) Developing markets claim tougher regulation of IPRs will slow, if not halt, their economic development.

B) Companies can register a global patent, trademark, or copyright through the World Trade Organization (WTO).

12) Which of the following has MOST influenced consumers to demand access to foreign-made products? A) Declining global affluence has caused consumers to seek out lower-priced products from abroad. B) Consumers have become more efficient in using media and technologies to compare prices worldwide. C) Fearing that their governments will enact restrictive policies on imports, consumers are stocking up on foreign products before restrictions are put in place. D) Expectations of rising prices of foreign products have caused consumers to seek foreign products before their prices become prohibitive.

B) Consumers have become more efficient in using media and technologies to compare prices worldwide.

2)) Which of the following is NOT true about cultural diversity? A) Companies may gain competitive advantages by bringing together people of diverse backgrounds. B) Cultural diversity is most successful when domestic and foreign firms establish joint ventures. C) Cultural diversity may help a company gain deeper knowledge about products and services. D) The process of bringing people of different national cultures together is often difficult.

B) Cultural diversity is most successful when domestic and foreign firms establish joint ventures.

51) The same automobile company produces Fiats and Ferraris. The company builds an engine plant in China with low production costs for Fiats but not Ferraris. The probable reason is that ________. A) Fiat competes mainly on a focus strategy, whereas Ferrari competes mainly on a mass-market strategy B) Fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy C) Ferrari faces global competitors in China, whereas Fiat competes in China mainly against Chinese competitors D) although Ferrari did not build an engine plant, it will use the same Fiat engines in its models

B) Fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy

20) Assume an enterprise is considering establishment of a foreign production facility. Which of the following best supports this decision? A) Its foreign competitors have higher production costs than it has. B) Its main competitor successfully opened a foreign plant. C) Its suppliers follow an agglomeration strategy. D) None of its competitors have foreign production facilities.

B) Its main competitor successfully opened a foreign plant.

17) Which of the following languages has the most native speakers? A) English B) Mandarin C) Spanish D) Hindi

B) Mandarin

31) Which of the following statements would most likely NOT be supported by an advocate of offshoring? A) Offshoring increases the number of high-value jobs in the home countries of offshoring companies. B) Offshoring is fundamentally better for workers than the introduction of labor-saving technologies. C) Workers displaced due to offshoring are able to find new jobs as easily as those displaced by technology. D) There are upper limits to offshoring because of the lack of skilled workers willing to work permanently for low wages.

B) Offshoring is fundamentally better for workers than the introduction of labor-saving technologies.

33) Critics of offshoring claim all EXCEPT which of the following? A) Cost savings are seldom passed on to final consumers. B) Offshoring reduces the incomes of people in low-wage countries. C) Incomes of workers in countries whose companies offshored production have gone down as a percentage of national income. D) Many workers who have been displaced by offshoring do not have the skills needed for higher-value jobs.

B) Offshoring reduces the incomes of people in low-wage countries.

29))) ________ political risks arise from political actions, such as public corruption or a partisan judicial system, that interfere with transactions between sellers and buyers and that can significantly raise the costs of getting things done. A) Systemic B) Procedural C) Catastrophic D) Distributive

B) Procedural

42) A foreign direct investment occurs when ________. A) a company owns at least 25% of a foreign firm B) a company has a controlling interest in a foreign company C) foreign ownership is in private rather than government securities D) a foreign firm agrees to a licensing agreement with a large conglomerate

B) a company has a controlling interest in a foreign company

41))) Which of the following is most likely a true statement regarding the rule of law? The rule of law is a hallmark of ________. A) a totalitarian government B) a democratic government C) societies that place ultimate power in the hands of one person D) countries that are considered "partly free"

B) a democratic government

24) Studies indicate a strong correlation between the intensity of religious belief and ________. A) a desire to convert productivity gains into more leisure time B) an adherence to some attributes that lead to economic growth C) the belief that material success is related to salvation D) the degree of ethnocentrism exhibited in a culture

B) an adherence to some attributes that lead to economic growth

33) In societies where trust is high, ________. A) people tend to be more future-oriented B) business costs are typically lower C) people tend to be more fatalistic D) family businesses are dominant

B) business costs are typically lower

9))) Political systems based on the ________ paradigm, such as those of Japan and China, accept the principle that government may intervene to ensure that business practices benefit society. A) individualistic B) collectivistic C) pluralistic D) laissez-faire

B) collectivistic

11) Certain attitudes can link groups, such as managers, from different nations more closely than managers with labor within a given nation. As a result, international businesspeople should most likely ________. A) assume that there are few significant cultural differences among nations B) examine relevant groups when comparing nations C) adopt universal operating methods D) avoid cultural imperialism

B) examine relevant groups when comparing nations

51) When a company wishes to introduce change in a foreign country, its likelihood of success can most likely be improved by ________. A) introducing many changes simultaneously B) gaining the support of local opinion leaders C) agreeing to make some home-country changes in return D) employing expatriate managers to supervise local workers

B) gaining the support of local opinion leaders

47) Managers who are knowledgeable about ________ are better able to identify the location, quantity, quality, and availability of the world's natural resources. A) political factors B) geographic factors C) competitive factors D) cultural factors

B) geographic factors

34) Expatriate managers located in cultures characterized by ________ have noticed that local employees are highly motivated by retirement programs. A) low uncertainty avoidance B) high future orientation C) low masculinity D) high power distance

B) high future orientation

8) Most of the world's goods and services are sold ________.

B) in the countries where they are produced

4))) Which of the following ideas holds that a government should NOT interfere in business affairs? A) collectivism B) laissez-faire C) the rule of man D) pluralism

B) laissez-faire

41) Reebok pays a royalty to the German Soccer League to use the team's logo on t-shirts that it sells. Reebok and the German Soccer League most likely have a ________. A) turnkey operation contract B) licensing agreement C) portfolio investment D) joint venture

B) licensing agreement

37) A culture in which people prefer to finish one task before starting another is most accurately characterized as which of the following? A) low-context B) monochronic C) pragmatic D) high power-distance

B) monochronic

24))) Recently, the Economist Intelligence Unit investigated the status of democracies around the globe. Relying on 60 indicators that focus on the performance of free elections, civil liberties, government functioning, political participation, and political culture in a country, the study found that ________. A) almost all of the world's democracies are full democracies B) nearly half of the world's democracies qualify as "full" or "flawed" democracies C) less than a quarter of the countries studied are outright authoritarian regimes D) most democracies are hybrid political systems that share theocratic and totalitarian characteristics

B) nearly half of the world's democracies qualify as "full" or "flawed" democracies

57))) Logan Electronics has a production facility in Bolivia. Recently, the firm was taxed at a significantly higher rate than a local electronics company. Which type of political risk is Logan most likely experiencing? A) systemic B) procedural C) distributive D) catastrophic

B) procedural

22) Which of the following is an example of an acquired group membership? A) national origin B) religion C) gender D) race

B) religion

43) Evaluating the importance of potential clients or partners by the way they dress is an example of using ________. A) pragmatism B) silent language C) polychronism D) fatalism

B) silent language

9) The nation offers a workable reference for studying cultural differences because ________. A) a nation contains only one distinct culture B) similarity among people is both a cause and effect of national boundaries C) the commonality of language within a nation eases the process of conducting surveys D) different groups within the same country always have more in common with each other than with groups in other countries

B) similarity among people is both a cause and effect of national boundaries

21) International businesspeople need to understand social stratification systems where they do business because ________. A) such systems reflect a culture's willingness to accept new products B) such systems indicate who people in a given culture will likely respect more C) the high similarity among countries lets firms effectively use global hiring practices D) what is an ascribed group membership in one country is an acquired one in another

B) such systems indicate who people in a given culture will likely respect more

24) All of the following are areas in which commercial activities take place outside the territory of any nation EXCEPT ________. A) noncoastal areas of the oceans B) the Panama and Suez Canals C) outer space D) Antarctica

B) the Panama and Suez Canals

29) Although globalization may bring economic growth, critics nevertheless contend that ________. A) the growth is too fast B) the inequality of gains puts some people in a relatively worse economic situation C) this growth is mainly for the future, thus ignoring present economic growth needs D) the cultural foundations of sovereignty are supported by globalization

B) the inequality of gains puts some people in a relatively worse economic situation

25))) The march toward greater political freedoms and more expansive civil liberties, beginning in the 1970s, strongly fueled a sense of ________. A) less predictable operating conditions for companies B) the inevitability of democracy C) different rules for domestic versus international competition D) weaker property rights

B) the inevitability of democracy

15) Creolization refers to ________. A) government efforts to maintain a distinct cultural identity through legislation and language B) the process of mixing elements of an outside culture with those of a national culture C) the use of stereotypes to describe a culture D) changes as cultures evolve over time

B) the process of mixing elements of an outside culture with those of a national culture

45) The term used by the United Nations as a synonym for multinational enterprise is ________. A) multinational corporation B) transnational company C) international firm D) born-global

B) transnational company

11))) In a practical sense, the term political system is meant to signify the ________. A) organization of military power in a country B) working government in a country C) philosophical orientations in a country D) cultural values in a country

B) working government in a country

3) Which of the following is NOT a likely reason to study international business?

Business conducted outside the confines of any one country is inexplicably on the decline.

14))) Which of the following statements best describes a pluralistic society? A) Multiple segments of society adhere to the same political philosophy. B) Two dominant political parties rule local and federal governments. C) Different ideologies are held by different segments of society. D) Various ethnic groups belong to the official political party.

C) Different ideologies are held by different segments of society.

19) Which of the following statements about the English language is most likely NOT true? A) The largest portion of global output is in English-speaking countries. B) A large portion of MNEs are headquartered in English-speaking countries. C) English is the official national language in most countries where FDI is encouraged. D) Many MNEs from non-English speaking countries use English as their operating language.

C) English is the official national language in most countries where FDI is encouraged.

60) Wharton Enterprises, a U.S. firm, manufactures small kitchen appliances. The firm has recently developed an innovative blender design that Wharton executives anticipate being very profitable. Currently, Wharton has production facilities in the U.S. and China. Wharton executives are trying to determine where the new product should be manufactured. Which of the following questions is most relevant to the decision? A) What selection procedures would be best in China? B) Should expatriates or locals manage the Chinese facility? C) How can the firm guard against counterfeiting in China? D) How would China's individualistic system affect the firm?

C) How can the firm guard against counterfeiting in China?

48) Although the U.S. film industry depends heavily on revenue in foreign countries, revenue from international markets is usually low for a sports-themed film. This is most likely due to ________ factors. A) political B) geographic C) behavioral D) legal

C) behavioral

49))) Countries often use local content regulations to determine the proportion of the product that must be made in the local market versus made outside of the local market in order to ________. A) maximize product safety B) ensure a cultural fit C) favor domestic companies D) relieve production pressures on local companies

C) favor domestic companies

36) A firm is currently seeking resources from foreign countries. Which of the following is the LEAST likely reason for doing so? A) manufacturing products at a lower cost B) gaining knowledge about a specific market C) following a customer into the global market D) differentiating its products from the competition

C) following a customer into the global market

35) Kevin, marketing manager of the North American Bowling League, has decided to televise major bowling competitions to viewers in multiple countries rather than only in Canada and the U.S. Which of the following goals would this most likely help Kevin accomplish? A) acquiring new resources B) minimizing corporate risks C) increasing sales and profits D) obtaining competitive advantages

C) increasing sales and profits

5))) The principle that an individual has the freedom to pursue his or her interests is called ________. A) socialism B) totalitarianism C) individualism D) collectivism

C) individualism

25) According to the theory of success and reward expectation, the greatest enthusiasm for work generally occurs when there is a ________ certainty of success combined with a ________ reward for success compared to the reward for failure. A) high; high B) high; low C) low; high D) low; low

C) low; high

39) The attempt to resolve small issues before principles is a characteristic of which of the following? A) relativism B) monochronic behavior C) pragmatism D) uncertainty avoidance

C) pragmatism

41) When a company does business in another country whose official language is the same as its home country's, the company should most likely ________. A) assume that communications will go smoothly B) use back-translation on all written documents C) realize that words may have different meanings D) assume that word meanings are the same despite spelling differences

C) realize that words may have different meanings

25) What is the most likely reason that governments cooperate with each other through treaties, agreements, and consultations? A) to gain an advantageous division of labor B) to be in compliance with United Nations' requirements C) to attack problems jointly that one country acting alone cannot solve D) to assure that all countries get an equitable share of taxes from multinational enterprises

C) to attack problems jointly that one country acting alone cannot solve

32) Managers should be more precise in their directions to subordinates when ________. A) the company has a philosophy of geocentrism B) the society believes age equals wisdom C) uncertainty avoidance is high D) power distance is low

C) uncertainty avoidance is high

52) A computer firm has high foreign sales in Asia and wants to expand sales into Europe. Which of the following statements provides the most appropriate advice for Elway executives? A) Although countries' market sizes differ, companies usually face about the same number of competitors in each national market. B) In most industries, companies face the same competitors in each country where they operate. C) It takes about the same amount of resources to gain national distribution in one country versus another. D) Being a leader in one country does not guarantee market leadership in another country.

D) Being a leader in one country does not guarantee market leadership in another country.

15))) ________ refers to a political system in which government is organized by and accountable to the people. A) Totalitarianism B) Fascism C) Socialism D) Democracy

D) Democracy

17) Which of the following best explains recent governmental relaxation of restrictions on cross-border trade or resource movements? A) Most countries face shortages of workers, so they seek immigrants who can help them produce more. B) Governments believe that this will decrease the need to make their own companies more innovative. C) Consumers increasingly want to buy goods and services produced in their own countries, making restrictions less necessary. D) Governments believe that domestic producers will become more efficient as a result of foreign competition.

D) Governments believe that domestic producers will become more efficient as a result of foreign competition.

50))) ________ refer(s) to the creative ideas, innovative expertise, or intangible insights that give an individual, company, or country a competitive advantage. A) Proprietary goods B) Exclusive ownership C) Restrictive goods D) Intellectual property

D) Intellectual property

27))) ________ is the chance that political forces may change a country's business environment in ways that lead investors to lose some or all of the value of their investment or be forced to accept a lower-than-projected rate of return. A) Governmental risk B) Operating risk C) Transaction risk D) Political risk

D) Political risk

56) In the opening case on the Java Lounge in Saudi Arabia, Saudi businessmen engaged in chit-chat while drinking coffee at a café during the conduct of business. Which of the following was the most likely reason for their behavior? A) They are fatalistic, believing that the business outcome was predetermined. B) Their religious convictions kept them from discussing business over alcoholic drinks. C) They come from a polychronic culture that prefers to multitask. D) They come from a high-context culture in which small talk and seemingly unrelated information is important to decision making.

D) They come from a high-context culture in which small talk and seemingly unrelated information is important to decision making.

40) An example of a Japanese service export is a visit by a ________. A) Japanese citizen to Disneyland in the United States B) Japanese citizen to the Japan Pavilion at Epcot Center in the United States C) U.S. citizen to the Japan Pavilion at Epcot Center in the United States D) U.S. citizen to Tokyo Disneyland in Japan

D) U.S. citizen to Tokyo Disneyland in Japan

13) Most people's basic value system is ________. A) modified significantly between childhood and adulthood B) altered during adulthood through imposition C) affected primarily by teenage peer pressure D) acquired mainly during early childhood

D) acquired mainly during early childhood

23) The more closed a society is, the more important ________ group membership is. A) acquired B) age-based C) education D) ascribed

D) ascribed

19))) Under the ________ form of totalitarianism, the regime confines itself to political control of the state. It does not regulate the economic and social structure of society. A) fascist B) communist C) theocratic D) authoritarian

D) authoritarian

59) Assume a U.S. firm plans to expand into either Mexico, Germany, or Japan. Its executives are traveling to each country to meet with local businesspeople in the decision-making process. Which of the following would be LEAST beneficial when the executives make a presentation? A) requesting a translator with technical vocabulary knowledge B) simplifying vocabulary and terminology for the audience C) conducting back translations for written work D) avoiding repetition to prevent boredom

D) avoiding repetition to prevent boredom

18) A company starting out with a global focus, usually because of the international experience of its founders, is called a ________. A) multinational enterprise B) transnational company C) strategically allied company D) born-global company

D) born-global company

58) The owner of a U.S. football team and the owner of a Canadian hockey team purchase a British soccer team. This is an example of a ________. A) royalty B) portfolio investment C) turnkey operation D) joint venture

D) joint venture

33))) The ________ of a country specifies the rules that regulate behavior, the processes by which laws are enforced, and the procedures used to resolve grievances. A) political system B) political philosophy C) philosophical orientation D) legal system

D) legal system

39))) A U.S. firm with manufacturing facilities in Nigeria will most likely be faced with a ________ legal system. A) civil B) common C) customary D) mixed

D) mixed

20) Although English is referred to as the "international language of business,"________. A) it is less frequently used than French in international business B) there is a growing disagreement over which version of English to use, e.g. British, American, or Australian C) companies headquartered outside English-speaking countries all use their official language as their operating language D) monolingual English speakers may experience more difficulty in the future in communicating on a worldwide basis

D) monolingual English speakers may experience more difficulty in the future in communicating on a worldwide basis

17))) In a totalitarian political system, ________. A) political power resides with the citizens of the country B) governments direct most economic activity but few social ones C) an individualistic outlook shapes political debate and policy formation D) one agent monopolizes political power

D) one agent monopolizes political power

49) A firm that concentrates on national cultural differences in terms of averages is more likely to ________. A) underestimate market demands B) increase political risks C) seek cultural collision D) overlook outliers

D) overlook outliers

3)) Because people can be grouped or classified in many ways, such as on the basis of nationality, ethnicity, religion, profession, and income level, ________. A) people live in a state of cultural collision B) cultural studies fail to understand behaviors C) identity crises make individual's lives chaotic D) people have more than one cultural group membership

D) people have more than one cultural group membership

13))) A(n) ________ ideology is the system of ideas that expresses the goals, theories, and aims of how society should work. A) technological B) economic C) legal D) political

D) political

32))) Barkely Enterprises, a U.S. manufacturer, received assistance from the Overseas Private Investment Corporation when it expanded operations into Saudi Arabia. Which of the following types of support did Barkely most likely receive from OPIC? A) financial capital B) cultural training C) legal guidance D) political risk insurance

D) political risk insurance

35))) Which of the following is NOT a component of modern legal systems? A) constitutional law B) criminal law C) commercial law D) private law

D) private law

58))) Harmon Clothing has a production facility located in Venezuela. Recently, Harmon has been unable to arrange for overseas loans due to the burdensome regulatory policies of the Venezuelan government. Which type of political risk is Harmon most likely experiencing? A) catastrophic B) distributive C) procedural D) systemic

D) systemic

54) The view that globalization is inevitable is most likely based on the belief that ________. A) international organizations will replace nation-states B) protesters against globalization will be persuaded to change their views C) people want more global homogeneity of cultures D) technical advances in transportation and communications are highly pervasive

D) technical advances in transportation and communications are highly pervasive

7))) In a country that emphasizes collectivism, ________. A) the interests of the individual are more important than the interests of the state B) one person or political party exercises absolute control over the political and economic systems C) the needs of society and the needs of individuals are treated as equally important D) the needs of society take precedence over individual freedoms

D) the needs of society take precedence over individual freedoms

54))) All of the following are reasons piracy has occurred EXCEPT ________. A) technology allows copyrighted material to be reproduced cheaply without much loss of quality B) some countries offer little protection for certain products C) in some cultures, people see little morally wrong in buying counterfeit goods D) the protection of intellectual property rights varies little from country to country

D) the protection of intellectual property rights varies little from country to country

22) Which of the following is NOT one of the three main reasons affecting international business for governments to cooperate with each other? A) to attack problems jointly that one country acting alone cannot solve B) to deal with issues that lie outside the territory of any nation C) to gain reciprocal advantages D) to establish a common language

D) to establish a common language

12) It is most accurate to say that within most nation's borders, people largely share such essential attributes as ________ and ________. A) work attitudes; occupations B) lifestyles; education level C) education level; ethnicity D) values; language

D) values; language

10) A problem of using the nation as a reference point for culture is that ________. A) nations fail to mediate the different interests within their boundaries B) self-stereotypes tend to fall along national lines C) such an approach tends to be polycentric D) variations tend to be great within a country

D) variations tend to be great within a country

27) Based on the hierarchy-of-needs theory, in which of the following would fulfillment of lower-order needs be the best motivator? A) wealthy countries B) Protestant countries C) high femininity countries D) very poor countries

D) very poor countries

21))) Which of the following is most likely a characteristic of a "partly free" country, such as Guatemala, Kenya, or Malaysia? A) strict religious constraints B) fair election procedures C) respect for civil liberties D) weak rule of law

D) weak rule of law

44) A multinational enterprise (MNE) is best defined as a firm ________. A) that is a member of the Fortune 500 B) with foreign business partners C) involved in global franchising D) with foreign direct investments

D) with foreign direct investments

1) The broadening set of interdependent relationships among people from different parts of the world is known as ________.

Globalization

7) Which of the following is an indication of the increased globalization of business since the end of World War II?

World trade has grown more rapidly than world production.

5) Devon, an accounts manager at a large electronics firm, does not have any direct international responsibilities. However, Devon would most likely benefit from studying international business issues so that he can ________.

better understand how foreign operations affect the company's competitive position

10) Which of the following has NOT been a major force increasing globalization in recent decades? A) liberalization of cross-border trade B) increase in and expansion of technology C) growing pressure from consumers D) decreasing prices of natural resources.

decreasing prices of natural resources.

11) Institutional development of services by business and government has aided the expansion of international business by ________. A) providing a universally agreed upon language for conducting international transactions B) removing immigration restrictions so that global firms can move personnel easily C) developing means to ease the flow of goods among countries D) spurring competition among domestic producers

developing means to ease the flow of goods among countries

4) In terms of international business, it is most accurate to say that ________.

most firms depend either on foreign markets and supplies or compete against companies that do

58) Assume a firm plans to expand internationally. If its managers wish to avoid pitfalls caused by differences in "silent language," they should consider differences in ________. A) normal proximity during conversations B) degree of detail expected in written contract C) the meaning of slang words during presentations D) importance of adherence to schedules

A) normal proximity during conversations

56) Which of the following is NOT a common argument for the slowing of future globalization? A) Antiglobalization interests have been successful in electing parties that oppose freer movement of trade or people. B) Technological, transportation, and communication advances will decline in the near future. C) Major countries have either ignored certain international treaties or have refused to sign them. D) The growing split between those who succeed in a global environment and those who do not will foster greater antiglobalization sentiments.

B) Technological, transportation, and communication advances will decline in the near future.

16) Cultural change imposed by an alien culture is called ________. A) multicultural ethnocentrism B) cultural imperialism C) collectivism D) high-context

B) cultural imperialism

40))) The pushback against democracy has powered a rise in totalitarianism, a situation that is likely to include which of the following? A) increasing adoption of the principles of the rule of law B) growing demands worldwide for greater fairness and justice in legal proceedings C) increasing adoption of the principles of the rule of man D) suppression of state-control in the direction of legal activities

C) increasing adoption of the principles of the rule of man

43) Which term refers to two or more companies that share ownership of an FDI? A) turnkey operation B) transnational firm C) joint venture D) franchise

C) joint venture

46) One of the potential problems for an MNE that practices too much polycentrism is ________. A) demanding that local communication methods be replaced with modern technology B) underestimating the complexity of introducing new management practices C) losing innovative capabilities to less-risky host-country practices D) relying too much on home-country directions and policies

C) losing innovative capabilities to less-risky host-country practices