Final Exam

The most common inducement that companies offer managers to accept international postings is _________ A) a financial bonus B) free housing C) fringe benefits D) a vacation

A) a financial bonus

The export of industrial equipment in return for products produced by that equipment is called ________. A) buyback B) barter C) franchising D) offset

A) buyback

Scenario: Wang's Techno Toys Ann Wang has been successfully running Wang's Techno Toys that sells high-tech toys in the domestic market. Continually increasing and stiff competition at home has now forced Wang's Techno Toys to enter international markets through direct exports. Which of the following methods of export/import financing is Techno Toys' bank using if it acts as an intermediary without accepting financial risk? A) documentary collection B) buyback C) letter of credit D) advance payment

A) documentary collection

________ is the process of staffing a company and ensuring that employees are as productive as possible. A) human resource management B) industrial relations C) organizational diagnostics D) business process reengineering

A) human resource management

Which of the following steps of the strategy development process for exports involves performing market research and interpreting results obtained from the research? A) identification of a potential market B) match needs of the market to the company's abilities C) initiation of meetings D) commitment of resources

A) identification of a potential market

Scenario: Herb Graham is vice president of Sports Stuff Inc., a business that develops, manufactures, and markets sports products. The company is looking to expand its operations into the European market. Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe, the company will achieve success there. The board of directors of Sports Stuff is concerned with the firm's lack of experience in foreign markets. To minimize this problem, Herb recommends that the firm create a ________ with a local partner. A) joint venture B) turnkey project C) wholly owned subsidiary D) franchise

A) joint venture

Which of the following phases of HR planning involves decruitment? A) normally occurs when a company decides to discontinue manufacturing or selling in a market B) estimating the company's future HR needs C) promoting employees to positions of greater responsibility D) taking an inventory of the company's current HR

A) normally occurs when a company decides to discontinue manufacturing or selling in a market

Based in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's production activities. The senior manager argues that Hafstrom could reduce its costs significantly by purchasing parts from companies located overseas rather than producing its own parts. Which of the following is the senior manager advocating? A) outsourcing B) a greenfield investment C) lean production D) vertical integration

A) outsourcing

Scenario: Gro-Tru Grows to Europe Gro-Tru, a maker of chemical fertilizers and pesticides, sees enormous growth potential in Central Europe. The company has received several inquiries from potential importers in the region, but in most cases, the potential importers have expressed difficulty in obtaining the hard currency to pay for Gro-Tru's products. Alistair Green, vice-president for business development, is exploring how Gro-Tru can meet the needs of the potential market. One option that intrigues Alistair is the process in which one company sells to another its obligation to make a purchase in a given country. This arrangement is known as __________. A) switch trading B) barter C) buyback D) offset

A) switch trading

_____ is the financing obtained from investors who believe the borrower will experience rapid growth and who receive equity in return for their investment A) venture capital B) credit derivative C) mortgage loan D) internal funding

A) venture capital

Scenario: Audio Component Outsourcing Echo Corporation manufactures high-quality audio components, such as speakers, amplifiers, and receivers, for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in outsourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that outsourcing would enable the firm to be more competitive without sacrificing quality. Which of the following most likely supports the argument of Echo managers to outsource some of the firm's manufacturing activities? A) Echo managers could reduce the wages of U.S. based employees and sub-contractors. B) Echo could save money by reducing the costs incurred in manufacturing the component parts. C) Echo managers could implement a marketing campaign for foreign markets that is identical to the outsourced firm's marketing campaign. D) Echo could merge with one of its U.S.-based competitors to gain a larger market share.

B) Echo could save money by reducing the costs incurred in manufacturing the component parts.

Which of the following financing methods entails the greatest risk for importers? A) documentary collection B) advance payment C) letter of credit D) open account

B) advance payment

A company proposes that in exchange for a hard-currency sale, it will make a hard-currency purchase of an unspecified product from the buyer nation in the future. Which of the following is the company proposing? A) a counterpurchase B) an offset C) a buyback D) a barter

B) an offset

An Asian jewelry company maintains production facilities in South Korea, Vietnam, and Malaysia. Which of the following is the company exemplifying? A) lean production B) decentralized production C) vertical integration D) continuous production

B) decentralized production

Citizens of one country who are living and working in another are called __________. A) local employees B) expatriates C) repatriates D) domicile residents

B) expatriates

Which of the following training approaches involve employees visiting another culture, walking the streets of its cities and villages, and becoming absorbed by the culture for a short time? A) sensitivity training B) field experience C) language training D) cultural orientation

B) field experience

A ________ is a separate company created and owned by two or more independent entities to achieve a common business objective. A) wholly owned subsidiary B) joint venture C) strategic alliance D) turnkey project

B) joint venture

The suppliers used by Thanos Industries deliver components directly to Thanos manufacturing center as the inputs are needed for production to minimize Thanos inventory costs. Thanos most likely uses __________. A) materials management B) just-in-time system C) customized logistics process D) one-stop shipping

B) just-in-time system

Scenario: Gro-Tru, a maker of chemical fertilizers and pesticides, sees enormous growth potential in Central Europe. The company has received several inquiries from potential importers in the region, but in most cases, the potential importers have expressed difficulty in obtaining the hard currency to pay for Gro-Tru's products. Alistair Green, vice-president for business development, is exploring how Gro-Tru can meet the needs of the potential market. Gro-Tru would be engaging in ________, if it decides that in exchange for a hard-currency sale it would make a hard-currency purchase of an unspecified product from the importing nation in the future. A) barter B) offset C) switch trading D) buyback

B) offset

A company using just-in-time (JIT) manufacturing involves ________. A) increased availability of components in large inventories B) quicker detection of defective materials and components C) easier training of sales staff regarding product descriptions D) benefits stemming from combining several Japanese technologies

B) quicker detection of defective materials and components

The decentralization of production facilities is a typical policy for companies that pursue ________. A) a global strategy B) mass customization C) a multinational strategy D) vertical integration

C) a multinational strategy

Scenario: You're Hired! Erica Els has just been promoted as Vice President of HR for Hudson Foods, a U.S. based international frozen food corporation. Erica's first task is to staff the company's European subsidiary. One lower-level position Erica must fill requires the employee to be familiar with the new market and its customs, traditions, and language. Also, the new hire must be comfortable with Hudson Food's organizational culture and business traditions. Who among the following will Erica most likely recruit for this position? A) a local fresher with strong government contacts B) an existing Hudson Foods employee from the United States C) a native of the target market who has completed a one-year internship at Hudson Foods D) an individual from the U.S. who has experience in the frozen food industry

C) a native of the target market who has completed a one-year internship at Hudson Foods

Scenario: Owen's HomeCare Products Owen McCain, owner of Owen's HomeCare Products, is considering going international. He feels that the products he manufactures will be well-received, especially in developing countries. He wants to understand the exporting process and then scale his exporting activities accordingly. Which of the following steps would Owen implement toward the end while developing a successful export strategy? A) initiation of meetings with intermediaries B) identification of a potential market C) commitment of resources D) matching of market needs to company abilities

C) commitment of resources

Which of the following methods of cultural training involves the use of guerilla linguistics? A) cultural orientation B) cultural assimilation C) language training D) cultural narcissism

C) cultural assimilation

Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations. If Wilson Industries selects a new area for its production units, the company will be implementing ________. A) capacity planning B) process planning C) facilities location planning D) product structure modeling

C) facilities location planning

Scenario: Mr. Yoshimura, vice president of quality control at Oshimura Yarn, has recently been assigned to a three-year project at the company's Tennessee plant. Mr. Yoshimura has brought his wife and his three daughters with him from Yokohama to Tennessee. Mr. Yoshimura's daughters are extremely unhappy and have been complaining every night about their lifestyle in the United States. They insist on returning to Japan. If Mr. Yoshimura gives in to his family members' pleas and decides to return home, which of the following will most likely be true about his experience? A) he will leave the company within one year of returning home B) he and his family will experience reverse culture shock C) his case will represent an instance of expatriate failure D) he will be terminated from employment for failing to complete his assignment

C) his case will represent an instance of expatriate failure

Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors? A) identification of a potential market B) match market needs to the company's abilities C) initiation of meetings D) commitment of resources

C) initiation of meetings

Scenario: Swingset International Jerome Johnston, the human resource manager at the U.S.-based Swingset International, is developing an international staffing policy for the company. Jerome personally believes Swingset should send managers from the United States to manage each subsidiary. But the CEO of the company, Valerie Vermont, believes subsidiary operations ought to be managed by individuals from the host country. The approach recommended by Valerie is called _________. A) horizontal integration B) ethnocentric staffing C) polycentric staffing D) vertical integration

C) polycentric staffing

Companies typically recruit _________ to train individuals placed in more demanding non-managerial positions at foreign branches A) workers from the local market B) qualified third-party nationals C) specialists from the home country D) recent college graduates from the host country

C) specialists from the home country

________ in the computer industry is the outsourcing of the actual assembly of computers plus the job of shipping them to distributors and other intermediaries. A) Agile manufacturing B) Just in time manufacturing C) Lean manufacturing D) Stealth manufacturing

D) Stealth manufacturing

A ________ joint venture is formed when each partner requires the same component in its production process. A) backward B) multistage C) forward D) buyback

D) buyback

A company that hires the best-qualified individuals, regardless of nationality, to manage foreign operations is utilizing a(n) _________ approach. A) horizontal integration B) ethnocentric staffing C) vertical integration D) geocentric staffing

D) geocentric staffing

Scenario: Gem Jewels Gem Jewels recently established a number of subsidiaries in various foreign countries aiming to build high levels of international business involvement in the coming years. Cultural training has to be given by the company to home-country managers assigned to work in the new subsidiaries.If Gem Jewels wants its employees to get "into the minds" of the local people, it should provide ________. A) sensitivity training B) environmental briefings C) cultural orientation D) language training

D) language training

Scenario: Based in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's production activities. The senior manager recommends that Hafstrom obtain auto parts from a country where production activities would generate more value than it would generate elsewhere. He wants to take advantage of ________. A) just-in-time manufacturing B) facilities layout planning C) process planning D) location economies

D) location economies

Hyundai tends to follow an ethnocentric staffing model. From which group will it most likely hire for upper-level management positions? A) primary country nationals B) host country nationals C) third country nationals D) parent country nationals

D) parent country nationals

True or False: Agency relationships are popular among exporters because they are easy to terminate should difficulties arise.

FALSE

True or False: JIT manufacturing drastically increases the costs associated with large inventories in the production process

FALSE

True or False: Venture Capital is a source of debt financing for successful multinational companies

FALSE

True of False: an ethnocentric policy can create barriers for the host-country office

TRUE

True of False: codetermination allows labor representatives to participate in high-level company meetings

TRUE

True or False: Advance payment is the most favorable method of payment collection for exporters

TRUE

True or False: Companies use ethnocentric staffing to re-create local operations in the image of home-country operations

TRUE

True or False: Debt appeals to companies because it lowers the amount of taxes that companies must pay

TRUE

True or False: Outsourcing refers to the practice of buying from another company a good or a service that is part of a company's value-added activities.

TRUE

True or False: The most common method used for buying and selling goods internationally is exporting.

TRUE

True or False: The most important disadvantage of a strategic alliance is that it can create a future local or even global competitor.

TRUE

True or False: The process by which a company extends its control over additional stages of production is called vertical integration

TRUE

True or False: The process of assessing a company's ability to produce enough output to satisfy market demand is called capacity planning

TRUE

True or False: The process of reducing the size of an organization's workforce is called decruitment

TRUE

Buyback is defined as A) the export of industrial equipment in return for products produced by that equipment B) an agreement that a company will offset a hard-currency sale to a nation by making a hard-currency purchase of an unspecified product from that nation in the future C) the sale of goods or services to a country by a company that promises to make a future purchase of a specific product from that country D) the exchange of goods or services for a certain amount of money

export of industrial equipment in return for products produced by that equipment