Exam 3
Which of the following are benefits of a virtual corporation? (Check all that apply.)
reduced start-up costs dynamic relationships with other companies greater flexibility
Once the production process has been standardized by a manufacturer, a product will be sent to an affiliate where it might be adapted to meet local needs in the (primary/secondary) market.
secondary
The GLED model of global leadership development assumes that outcomes are influenced by a
transformational process
A firm facing strong pressure for local adaptation and strong pressure for cost reduction should pursue a ________ strategy.
transnational
The currency exchange arrangement known as the conventional fixed-peg arrangement allows for a fluctuation in fixed rates within (1% or 10%).
1%
Typically, the time frame for short-range plans is ____________.
1-3 years
________ is a result of the increased number of players in the game.
Multiplicity
True or false: In a floating exchange rate system, currency values are based on supply and demand in the foreign exchange markets.
True
True or false: It is common for a large global manufacturer like Colgate to develop standardized products to send to its affiliates.
True
Which of the following has been the most used central reserve asset in the world following World War II?
U.S. dollar
The Triffin paradox refers to what occurs when
a national currency that is also a reserve currency runs a deficit
What would global leaders tend to conclude about organizational change after applying either Lewin's or Kotter's change models?
Change rests on learning and human behavior.
Acquiring a baseline of necessary global knowledge is the apex of the pyramid model of global leadership.
F
Research indicates that global leaders are born, not developed through experience or training.
F
The global teams approach is decreasing for international work because transportation cost reductions have been implemented in many corporations.
F
Which of the following is a 360-degree feedback assessment for identifying leadership competencies and gaps?
Global Executive Leadership Inventory
Under the ___ ___ , each country set a number of units of its currency equal to an ounce of gold, and the ratios of these units of gold equivalence established the exchange rate between any two currencies.
Gold Standard
Scholars have identified four overlapping dimensions of complexity that are relevant to global leadership. What are those four areas?
ambiguity multiplicity dynamism interdependence
To be effective, a company's international strategy must be
consistent among all the functions and activities of the company.
What is an essential element of a global mind-set?
open to understanding others from different backgrounds
After acquiring two new foreign affiliates, Henson Manufacturing created a new organizational chart to indicate where formal authority would lie within the organization. This organizational chart is an indication of
organizational structure.
According to the Project GLOBE study, a leader who is status-conscious and procedure-oriented has which type of leadership style?
self-protective
A global mind-set is built on a thorough knowledge of geography.
F
Managers who have a (national/global) mind-set demonstrate an attitude that combines an openness to and awareness of diversity across markets and cultures with a propensity and ability to synthesize across this diversity.
Global
What does research suggest is a preferred communication strategy for geographically dispersed global teams?
Meet occasionally face-to-face, especially at launch and during crises.
The international product structure is characterized by which of the following? (Check all that apply.)
Product divisions are responsible for worldwide operations. Each division has regional experts. The structure avoids the duplication of product experts.
Which one of the following countries imposes some sort of exchange control on its currency?
Ukraine
Under the Bretton Woods system, par value was based on gold and the currency of which country?
United States
Which country is most likely to be change-friendly?
United States
Some ways that an IC can exercise control over a subsidiary's activities include all of the following EXCEPT
Using its ownership to outvote its partner.
Companies often initially enter foreign markets by _______.
exporting
The adoption of the U.S. dollar in El Salvador, Panama, and Ecuador is an example of which currency exchange arrangement?
exchange arrangement with no separate legal tender
Which currency exchange arrangement is in use when a group of countries adopt a common currency, such as the euro?
exchange arrangement with no separate legal tender
Companies rely on a mission statement to determine where it is going in the future, how it will get there, and whether or not goals are achieved.
false
Connor works at the headquarters of FiberNet Corp. He receives bimonthly reports that reveal if surplus funds are available. It is then Connor's job to determine how those funds should be allocated. What type of report would provide Connor with this information?
financial
The Bretton Woods system is also called the _________. (Check all that apply.)
fixed-rate system gold exchange standard
A ___ exchange rate system allows currency values to fluctuate against one another based on supply and demand.
floating
A company structure that is organized by more than one division at the top level is known as a(n) organization.
hybrid
A regionally organized company that introduces a different product line that is best handled by a worldwide product division is an example of a(n) __________ organization.
hybrid
Madison Enterprises is an international corporation that sells sporting equipment and has had regional units for the past ten years. Recently, the company acquired an international business that specializes in skincare products for athletes. Madison Enterprises has brought that company in and retained its product division setup. What type of structure does Madison Enterprises now use?
hybrid
According to Henry Mintzberg, a global leader who takes initiative and seizes market opportunities is a(n) _________.
innovator
While leadership and management are related, they are not the same thing. For example, a leader ________, while a manager ________.
inspires; controls
A manager who is successful at adapting to local practices and questioning the status quo has the ability to __________.
integrate
The two key components of a global mind-set are global emotional intelligence and ___________.
intellectual intelligence
Changes in the way corporate planning is done today include
interaction with important customers, distributors, and suppliers.
What system is made up of institutions and processes that allow for the cross-border movements of capital required for international transactions?
international monetary system
Which international structure gives responsibility for global line and staff operations to the domestic product division?
international product structure
Confusion often characterizes the _________ stage of Lewin's model of change.
moving
Global leaders confront increased ambiguity because
much of the information they receive is difficult to give meaning to
When pressure to reduce costs is low and pressure for local adaptation is high, firms should pursue which strategy to compete internationally?
multidomestic
A value-added tax is actually a sales tax that is
paid in stages along the process from raw materials to consumer.
A Triffin occurs when a national currency that is also a reserve currency runs a deficit that leads to a lack of confidence in the reserve currency.
paradox
Guides that specify the way that certain tasks or activities are carried out are called _________.
procedures
Along with interest rate parity, what is the other parity relationship that is fundamental in understanding fluctuations in exchange rates?
purchasing power parity
Which of the following parity relationships have been identified by economists as influencing fluctuations in exchange rates? (Check all that apply.)
purchasing power parity interest rate parity
Which of the following are disadvantages of a virtual corporation? (Check all that apply.)
reduced management control vulnerability to opportunistic actions of partners unintended "borrowing" of knowledge
New behaviors are either accepted and institutionalized or rejected in the __________ stage of Lewin's model of change.
refreezing
Match each term with the correct definition. Bid Price Ask Price
highest-priced buy order currently in the FX market lowest-priced sell order currently in the FX market
A firm facing relatively weak pressures for local responsiveness and cost reduction should pursue a _______ strategy.
home replication
Which organizational form substitutes cooperation and coordination for control and supervision?
horizontal corporation
Peter Schwartz's book The Art of the Long View is a demonstration of the importance of __ planning within a business.
scenario
Multiple, plausible stories about how decisions might affect a company's future are known as
scenarios
Which strategy can be effective when a firm faces strong pressure for cost effectiveness and local adaptation?
transnational
An evolving structure for an international organization over time is normal, as the company's involvement in foreign markets increases over time.
true
Sir Isaac Newton established the price of gold in 1717 in terms of British currency.
true
In which stage of Kurt Lewin's change model does a company prepare employees for change?
unfreezing
An assessment conducted on the chain of interlinked activities of an organization or set of interconnected organizations, intended to determine where and to what extent value is added to the final product or service is known as
value chain analysis.
A company's (vision/values) statement provides a guideline for how employees should interact with customers.
values
Multicultural team, virtual group, and global scope are all part of the _________ category in the Global Leadership Expertise Development Model.
Project Novelty
Leadership is synonymous with management.
F
What is known to be the most discreet financial institution in the world?
Bank for International Settlements
True or false: As international activities change, the international company's structure typically remains the same.
False
True or false: In any type of business, long-range planning constitutes any plan over 5 years.
False
True or false: Research has shown that teams made up of diverse cultures tend to embrace differences and focus on what is best for each individual member.
False
True or false: The matrix organization is the result of domestic companies hoping to join forces in order to gain power in the international market.
False
Why do international companies facing high levels of change and uncertainty use scenario planning?
It allows them to anticipate and prepare for opportunities and threats that cannot be fully predicted or controlled.
What is a disadvantage of top-down planning?
It restricts initiative at lower levels of the organization.
___________ refers to the behaviors and processes required for organizing a group of people in order to achieve a common purpose or goal.
Leadership
Which of the following steps are included in The Art of the Long View by Peter Schwartz? (Check all that apply.)
Monitor developments so as to trigger your early response system. Play out the impact of possible futures. Research existing conditions and trends in a wide variety of areas.
According to the Triffin paradox, the more _________ currency that foreign countries hold, the less confidence they have in the currency.
Reserve
An important competency for effective global leadership is the ability to develop local talent.
T
Which one of the following statements is NOT true of a manager with a global mind-set?
The manager takes an ethnocentric approach to decision making.
A fixed peg currency arrangement means that
a country's exchange rates fluctuate around a fixed rate within a narrow band.
Companies controlled by other companies, in which less-than-majority owners may exercise control by a variety of means, both those involving stock ownership and those involving non-ownership mechanisms, are known as
affiliates
Within the FX market, the difference between the acquisition price and the selling price is known as the _________.
bid-ask spread
Upstream value chain activities in a firm following a transnational strategy are _________ and downstream activities are _________.
centralized, decentralized
In which type of currency arrangement would a currency be readjusted periodically at a fixed, preannounced rate?
crawling peg
Which currency exchange arrangement commits the country's government to holding foreign reserves of a specific currency in an amount equal to its domestic currency supply and to exchanging the two at a fixed rate?
currency board arrangement
Match each term with the appropriate definition: Reciprocal Currency Spot Rate Forward Currency Market Forward Rate
currency quoted as dollars per unit of currency exchange rate between two currencies for delivery within two business days contracts to purchase currencies at known rates for delivery in the future exchange rate between two currencies for delivery in 30, 60, 90, or 180 days
When designing the structure of an IC, the element a company considers while it assesses population groups is
customer expertise.
Melanie is known at work for being the manager with the greatest concern for the well-being of others. Which leader style does she possess?
humane
Most significantly for the international manager, the balance of payments reveals
demand for a country's currency.
Research indicates that many CEOs feel that a prerequisite for global industry dominance is
developing a company global mindset
Team-based rewards (encourage, discourage) social loafing.
encourage
Horizontal corporations can do which of the following? (Check all that apply.)
give middle managers more decision-making responsibility enhance new product development spark innovation
A firm facing high pressure to reduce costs and low pressure for local adaptation should follow a _________ strategy in order to compete internationally.
global
What is found at the base, or bottom level, of the Pyramid Model of Global Leadership?
global knowledge
Countries with which of the following are more likely to have current account deficits? (Check all that apply.)
high price levels strong exchange rates high gross national product
Judson's company decided to move its operations internationally after learning that manufacturing facilities in Indonesia will give tax breaks to international firms starting next year. This example demonstrates how Judson's company used _________ management to gain competitive advantage.
knowledge
The practices that organizations and their managers use for identifying, creating, acquiring, developing, dispersing, and exploiting competitively valuable knowledge are called .
knowledge management
Cultures with (high, low) uncertainty avoidance are more likely to be open to change.
low
Which of the following conditions in a country contribute to a current account deficit? (Check all that apply.)
low productivity excessive inflation inadequate savings
When selecting the manager for the new global team, the company wanted to find someone who understood the importance of developing relationships with co-workers, vendors, and suppliers. Which of the traits identified by Aperian Global does this represent?
make connections
Caroline works in Asia for an affiliate of Sheppard Electronics based in Oklahoma. She has learned that a large geographic sector in Asia would benefit from the company's master recharging station and shares that information with headquarters in her monthly report. Which aspect of reporting does this reflect?
market opportunities
Brendan is the marketing manager for a car company in Germany. He reports to both a manager who is responsible for business in Germany and also to a worldwide marketing manager who is based in the United States. Brendan works for a (matrix/hybrid) organization.
matrix
An organization in which top-level divisions are required to heed input from a staff composed of experts from another organizational dimension in an attempt to avoid the double-reporting difficulty of a matrix organization but still mesh two or more dimensions is known as a
matrix overlay
An international (monetary/credit) system allows for the payments, currency exchanges, and cross-border movements of capital required for international transactions.
monetary
The talks at Bretton Woods in 1944 were the basis for establishment of the international _________ system.
monetary
Compared to the home replication strategy, decision making under the transnational strategy is (more, less) complex.
more
According to Mintzberg and others, the roles of the global leader include
negotiator and change agent
Exchange rate fluctuations are best described as
not yet fully understood by economists.
What term is given to assets held by a nation's central bank that are used to back up liabilities?
reserves
SDR refers to
special drawing rights, an international reserve asset.
Another name for the currency exchange arrangement known as a pegged exchange rate within a horizontal band is a __________.
stabilized arrangement
Exchange rate fluctuations greater than 1% are allowed in which type of currency exchange arrangement?
stabilized arrangements
Gold has long been the trusted way for governments to measure the value of money. As trade increased, it became impractical to carry and store large amounts of gold. As a result, the gold _________ was established as a system of valuing currency.
standard
The time horizon of a strategic plan will vary according to:
the age of the firm and the stability of its market.
Managers of international companies that are attempting to develop a competitive advantage face a formidable challenge because
time, talent, and money are scarce.
Which model of global leader development argues that the company's global business strategy is a major determinant of the relevant lessons and skills that the leader needs?
"Right Stuff" model
Which assessment instrument can be used to assess an individual's capability to adjust to a new culture and to design a training program to enhance success in relocating to another culture?
Cross-Cultural Adaptability Inventory
Which of the following are steps included in John Kotter's model of change? (Check all that apply.)
Develop a change vision and strategy. Generate short-term wins and reward them. Don't let up. Increase urgency.
True or false: A country would put a limitation on the convertibility of its currency when it is trying to deplete its foreign reserves.
False
True or false: The best global leaders are typically found in the United States and Europe.
False Global leaders can come from anywhere on the planet.
True or false: Traditional learning methods can be a highly effective means of developing the required skills and experiences of global leaders.
False Reason: Deeper, nuanced understanding of the complex issues of global leadership is seldom achieved solely through traditional learning methods.
True or false: Most global teams are motivated by effective reward and recognition strategies.
False Reason: One factor accounting for many of the failures of global teams is ineffective reward and recognition strategies.
Select all that apply What are the four threshold traits in the Pyramid Model of Global Leadership? (Check all that apply.)
Inquisitiveness Integrity Humanity Resilience
Which one of the following statements characterizes how women tend to view leadership?
It is an opportunity to empower subordinates.
Which U.S. president stopped the exchange of gold for the paper dollars held by foreign central banks in 1971?
Nixon
Which is NOT a characteristic of culture and change?
People from countries characterized by low power distance will want top managers to make decisions and issue directives.
Which of the following is NOT a characteristic of geographically dispersed teams?
Regular face-to-face meetings are unusual in well-functioning teams.
The __________ emphasizes developing global leaders who have the right skills and experience in terms of what they have learned and what they are able to do as leaders.
Right Stuff model
The tendency of some people to put forth less effort when they are members of a group is known as .
Social loafing
Any type of team establishment involves encouraging member identification to ensure enhanced performance.
T
Cultures with hierarchical values, such as most Asian and Latin American cultures, often have a single leader with decision-making power.
T
International companies need a new kind of leader for the international environment to handle its increased complexity.
T
Multiplicity and interdependence are among the four dimensions of complexity relevant to globalization identified by scholars.
T
People from cultures with high power distance will feel most comfortable with top managers who make the decisions and issue directives.
T
Some of the culture dimensions that are involved in change are tolerance of ambiguity and power distance.
T
Transformational experiences are a recommended part of preparation for global leadership.
T
True or false: Leading organizational change is difficult because it requires individuals to change their behavior.
True
True or false: When team members are from individualistic countries, individual-based rewards are appropriate.
True Reason: When team members are from individualistic countries, individual-based rewards are appropriate.
Select all that apply According to the Center for Creative Leadership studies, in which areas are global leaders more challenged as a result of cultural differences? (Check all that apply.)
ability to learn emotional stability negotiating
Research identifies what essential global leadership competency as a prerequisite for getting things done?
ability to make connections
Which of the following is a behavior of a manager, not a leader?
administrates
In 2018, women accounted for _____ of CEOs of S&P 500 companies.
almost 5%
Which dimension of complexity faced by global leaders refers to the challenge of dealing with information that lacks clarity?
ambiguity
In which step of the MBI model do team members communicate with one another about cultural differences and establish how they will work together?
bridging
What are the three main activities involved in leading a global team? (Check all that apply.)
coaching team members establishing the team setting team norms
The two areas that team norms greatly influence are consideration and
cooperation
The Project GLOBE study found the largest number of leadership traits found across nations were based on (political/cultural) context.
cultural
Which of the following is NOT a quality that today's leaders need in order to compete in a complex and dynamic environment?
cultural ethnocentrism
Accordjng to Paula Caliguri, one way to build responsible global leadership skills is to understand and share the feelings of others. This ability is known as
empathy
Select all that apply According to the Project GLOBE study, which of the following leadership traits are contingent on cultural context? (Check all that apply.)
enthusiasm ambition sensitivity
In which team leadership activity is strong member identification encouraged because it will lead to better performance?
establishing the team
A team characterized by a high level of diversity, geographic dispersions, and virtual rather than face-to-face interaction is a(n) ________ team.
global
What is at the base of the Pyramid Model of Global Leadership?
global knowledge
All of the following are behaviors of leaders except ___________.
has a short-range perspective
A global team has (high, low) levels of diversity, geographic dispersion, and virtual interaction.
high
In cultures with _____ , team members will expect a clear hierarchy and a single leader with decision-making power.
high power distance
In a global team, the _________ the task interdependence, the _________ the portion of team-based rewards should be.
higher, higher
A leader who displays compassion, generosity, and patience is which type of Project Globe leader?
humane
To encourage cooperation in a global team, managers should (increase, decrease) the level at which team members see one another as members of their in-group.
increase
Globalization (increases, decreases) complexity for firms.
increases
Rewards in virtual global teams are usually based on the (individual, group).
individual
In (individualist/collectivist) countries, task roles are clearly defined and responsibility is allocated.
individualist
What types of intelligence are associated with a global mind-set? (Check the two that apply.)
intellectual emotional
In John Kotter's approach to change, organizational change (is, isn't) an orderly, sequential process.
isn't
Compared to face-to-face communication, virtual communication with video content is (less/more) rich.
less
The ability to ___________ is important for developing local talent.
localize
A (manager or leader?) asks "how?" and "when?" and a (manager or leader?) asks "what?" and "why?".
manager leader
Team members initially discuss their relevant cultural characteristics in the __________ stage of the MBI model.
mapping
As research from the Corporate Executive Board shows, global leaders tend to work with (fewer/more) stakeholders than leadership in a domestic setting.
more
Compared to leaders who operate in single markets, global leaders have (more, fewer) responsibilities.
more
Compared to men, women have a leadership style that is (more, less) participative, interactional, and relational.
more
Leading organizational change in a global situation is (more, less) difficult than leading organizational change in a domestic situation.
more
Compared to men, women have a leadership style that is _________ participative and democratic and _________ directive and autocratic.
more, less
According to Henry Mintzberg, a global leader who can make deals and manage conflict plays the role of a(n) _________.
negotiator
According to findings by Project GLOBE, which leadership trait is universally unacceptable?
nonexplicitness
Developing the required skills and experiences of global leaders is a (linear, nonlinear) process.
nonlinear
Select all that apply The GLED Model is used for the development of global leaders and their expertise. It is based on which of these four categories? (Check all that apply.)
project novelty cultural exposure global education individual characteristics
Select all that apply According to Paula Caliguri, what are the five key features necessary to build global leadership skills through volunteer assignments? (Check all that apply.)
reinforcing corporate social responsibility behaviors a cultural stretch of your functional skills meaningful collaboration with peers across cultures encouraging empathy practicing cultural humility
Alan Bird's research on global leadership divided business competencies into three categories: (1) those needed to manage the business, (2) those needed to manage people and relationships, and (3) those needed to manage the
self
Flexibility, resilience, character, and inquisitiveness are examples of ________ associated with global leadership.
self-competencies
The influence of national culture on change efforts is (stronger, weaker) than the influence of organizational culture.
stronger
When a corporation buys a foreign company in a lower-taxed location and then uses that company as the legal location for the corporation, the corporation is using a _________ strategy.
tax inversion
Which of the following are two basic strategies that corporations use to minimize their tax burden? (Check all that apply.)
tax inversion profit shifting
The _________ approach to exchange rate forecasting relies on trends that have occurred in the past to predict the future.
technical analysis
Which approach to exchange rate forecasting analyzes history and projects trends forward?
technical analysis
In which stage of Lewin's model of change are stress and tension likely to be high?
unfreezing