Final Exam
A company wants to see a very complex industrial product in Brazil. It will take a lot of technical knowledge even to explain how the new product works and only a few highly trained engineers will be able to appreciate the value of this new innovation. What sort of marketing method would be most appropriate?
Push marketing
What is a true statement about the Structuralist perspective? Correct!
Structuralists believe that in capitalist economies, governments do what corporate business interests want them to do
Which of the following was a practice that Newmont Mining Corporation engaged in that put at risk its ability to continue its mining operations in the country?
Poor transportation safety resulting in the largest mercury spill in history Not communicating clearly to workers and others the dangers of exposure to mercury
A company uses TV commercials to get the word out about its new brand of shoes, and bring people into the stores. What kind of marketing method is this company using?
Pull marketing
The main purpose of the International Monetary Fund (IMF) is
to help countries maintain stable exchange rates
A country will experience a "Balance of Payments crisis" when it is unable to finance a current account deficit by selling government bonds, or when foreign investors get so nervous about investing in a country that they sell their bonds and other assets and take their money out of the country. When that happens, the country can potentially experience a massive devaluation of its currency. true/false
true
As mentioned in the mini-case on Boeing, there might be reasons beyond reducing costs for a company like Boeing to outsource manufacturing of aircraft to specific countries. In some cases, Boeing might do this because the governments of those countries are big customers and would be more likely to buy planes made in that country. t/f
true
As the term is used in this course, a "Liberal" would most likely approve of a Walmart manager who saved money by encouraging U.S. suppliers to move their production facilities to lower cost locations in China. t/f
true
Economic Nationalists in the United States would most likely not approve of having U.S. healthcare provides outsource certain well-defined tasks such as interpreting an MRI scan to foreign providers in countries such as India, but a Liberal manager in a U.S. health care provide might well approve of this practice as a way to keep his or her costs down and keep the U.S. health care provider profitable and competitive. t/f
true
From the Hill & Hult Textbook Chapter 1, Uber's Global Strategy is somewhat confrontational. The company just starts doing business in a country, even if the local government's regulations do not allow this, and then it gets riders to use social networks such as Twitter to pressure the government to allow Uber to operate in that country. T/F?
true
If a country has a Current Account deficit, that would tend to make that country's currency weaker. However, the government of the country can "finance" the Current Account deficit by bringing in a Capital Account surplus - either by attracting foreign direct investment (FDI) or by attracting portfolio capital investment (for example, by selling government bonds to foreign investors). This will ensure that the country's currency remains stable. t/f
true
In Brazil, Avon has its representatives go door-to-door selling cosmetics. This form of selling is very effective in Brazil, and is known as "direct selling." Correct!
true
The Balance of Payments measures the amount of money that flows in and out of a country's economy. The Current Account measures the flow of money that results from trade (plus remittances - money sent in or out of the country's economy). The Capital Account measures the flow of money that results from investment flows (the flows of both portfolio capital and foreign direct investment, or FDI). t/f
true
In the "Values in Tension" article, which phrase best describes what the author, Donaldson, means by "ethical imperialism"?
"My way or the highway" (this describes a situation in which managers handle ethical issues the same way they handle them in the home country, without adapting in any way to local circumstances)
In the "Values in Tension" article, which phrase best describes what the author means by "cultural relativism"?
"When in Rome, do as the Romans do" (this means, do things however they are done in the local country, even if that might not be considered appropriate somewhere else)
what statements would be an accurate characterization of the Economic Nationalist worldview?
-Economic nationalists would favor more government intervention in the economy, but they would not be in favor of eliminating the capitalist system itself. Economic nationalists would argue that the right kind of government intervention can improve the economic situation for a developing country - even within a capitalist context. Economic Nationalists would argue that trade is a zero-sum game, with winners and losers, and every country's government should work to promote the overall national interests of that country
Thomas Donaldson proposes some guidelines for managers to follow. One of these, "respect for core human values," says that managers should never endanger the health or safety of workers under any circumstances, or prevent children below the age of 14 from getting an education. You are hired by a ship manufacturing company and told that you must find a way to remove asbestos, a harmful substance, from a ship. If you follow Donaldson's guidelines - remembering that reducing costs can increase your company's profits - which option should you choose?
A U.S. company says that it will cost $100 million dollars to remove the asbestos from the ship, given the cost of all the safety equipment workers must wear to protect them from breathing the harmful substance. U.S. regulations require this special equipment.
Which scenario is more likely to be successful at reducing costs? A company has one manufacturing plant in China that produces a large volume of products for the Chinese market. A company has manufacturing plants in multiple countries in Asia, producing products that are different for each market.
A company has one manufacturing plant in China that produces a large volume of products for the Chinese market.
As explained in the video lectures, Hegemonic Stability Theory would argue which of the following?
A hegemon will keep its own currency stable and keep its own markets open to trade with other nations, will also insist that the other nations it trades with do the same
What is a benefit to an inventor of licensing a patented product for a small percentage of royalties on the sale of each product sold - when that product might potentially be highly successful in markets around the world? The inventor can receive royalties without having to invest any money in manufacturing and marketing the product The inventor can potentially receive royalties for the product without having to be concerned about potential political risks in various countries All of the statements listed here are correct
All of the statements listed here are correct
Which of the following is a key lesson of the Intel Case? Choose country locations where the rules of the game will be stable, predictable, and transparent Bargain with different governments to maximize the incentives your company may be offeredning power and enhance the potential investment incentives that governments are willing to offer Always come to class! All of the statements listed here are correct
All of the statements listed here are correct
Why did Intel want to locate a manufacturing plant in Latin America? To diversify production geographically, since it already had manufacturing plants in Europe and Asia To be close to principal export markets (primarily the U.S.) to reduce costs All of the statements listed here are correct
All of the statements listed here are correct
As described in the case on BHP Billiton, which of the following would be consistent with the way that BHP Billiton worked with the local communities where it was engaged in mining operations?
BHP Billiton sought to understand specific issues of concern to those affected in the local community, and then took actions to address those specific concerns
A South Korean car manufacturer introduced a new luxury car, but found that it was a challenge, at first, to persuade luxury car buyers to take the new luxury brand seriously. It turned out that the reason was that many luxury car buyers tended to associate South Korean car brands with less expensive models. Which would be a marketing term to describe this phenomenon?
Country of Origin effect
According to the IMF, when it provided assistance to South Korea, it required South Korea to remove restrictions on foreign direct investment (FDI) because that would help attract more FDI to South Korea, help stabilize South Korea's balance of payments, and prevent future balance of payments crises. However, after South Korea allowed more FDI, some foreign investors, including some from the United States, entered the South Korean market and bought valuable South Korean companies very cheap (since South Korea was in a crisis). Some South Koreans believed that the IMF did this because it was promoting the national interests of the United States. Which worldview would best describe this view of the IMF?
Economic Nationalism
Which of the following is a benefit of entering a foreign market as a wholly owned subsidiary?
Helps the company protect its proprietary know-how
In the context of balance of payments crises - such as the one that affected South Korea - what is the "contagion effect"?
If one country has a financial crisis, investors may pull all of their capital out of a neighboring country, because they fear that the financial crisis could spread to that country next.
Donaldson shows that Levi-Strauss, a clothing manufacturer, found an ethical solution in a country where many young children worked in factories instead of going to school. Many families said that they needed the children to work, since this was an important source of income for the family. What was Levi-Strauss's solution?
Instead of hiring young children to work in its factory, Levi-Strauss paid the families the amount the children would have made - provided that the families sent the children to school - until the children turned 14. At that point, the families agreed that the children work in the Levi-Strauss factory (thus ensuring the company of a reliable labor supply).
From Intel's perspective, what was a disadvantage to investing in Chile? small size of the domestic market Some parts of Chile's Atacama desert had not seen recorded rainfall for over 400 years Intel could only receive tax incentives if it invested in certain locations in the country
Intel could only receive tax incentives if it invested in certain locations in the country
What are some ways that a global standardization strategy can help a transnational enterprise (TNE) increase its profits?
It can help the TNE benefit from the economies of scale It can help the TNE benefit from the learning effect
One drawback of Uber's confrontational strategy in entering foreign markets is that
It might allow competitors to emerge that get along better with the local government
In some countries, what someone says depends on the person's body language and the situation in which the person is saying it - not just strictly on the words themselves. In the United States, people tend to be more blunt and someone can expect that what a person is saying is usually what he or she actually means. What term from Edward Hall would best characterize the U.S. communication style?
Low context
In which of the following situations would it be easier for an international manager to export his products, manufactured in Mexico, to the United States?
Mexico has just had a massive devaluation of its currency, the peso
In which of the following circumstances would a TNE have more bargaining power over the host country government? The TNE is proposing to invest hundreds of millions of dollars and employ thousands of local people in highly paid, highly skilled jobs. The TNE is only considering one country for this investment, which it makes very clear to the host country government. The TNE is only considering one country for its investment. Many other TNEs are interested in investing in this same country, and all are competing to get approval from the government to invest in that country.
The TNE is proposing to invest hundreds of millions of dollars and employ thousands of local people in highly paid, highly skilled jobs. The TNE is only considering one country for this investment, which it makes very clear to the host country government.
When the IMF provided financial assistance to South Korea during its financial crisis, as mentioned in the case we read for class, what impact did the IMF's conditions (including higher interest rates and major cuts in government spending) have on the South Korean economy, at least in the short run?
The economy experienced a deep recession
When the IMF provides financial assistance to a country, it requires the country to make certain changes in its economic policies as "conditions" or requirements, for receiving this assistance. Some of these conditions are designed to help the country stabilize its currency and avoid avoid a similar crisis in the future. A condition that the IMF often imposes on countries is that the Central Bank of the country increase its interest rates very significantly, in order to convince foreign investors to buy the country's government bonds - thus attracting a capital account surplus to stabilize the exchange rate. What impact do these high interest rates have on the business environment of that country? Specifically, what impact will a manager trying to sell a product in that country notice?
The high interest rates will slow down the rate of economic growth, having a negative impact on sales
When Four Seasons went to Paris, they found that many hotel employees in France were used to following rules so rigidly that it was difficult for Four Seasons to implement its anticipatory, friendly, customer-oriented corporate culture. For example, if a hotel guest asked for an extra pillow, the maids would say that this would not be possible, because it was just two pillows per room, no more! Following Hofstede's Six Dimensions of culture, what sort of cultural trait was Four Seasons encountering?
Uncertainty Avoidance
Of the following, which would fit the definition of the term, "social license", as used in the Newmont Mining case?
Winning the support of the local community to facilitate mining operations
Apple was so concerned that it would have knowledgeable sales people selling its i-phones and other Apple products, that it created its own stores. Using marketing terminology, what kind of marketing channel was Apple trying to ensure that it would have?
a high quality marketing channel
In which of the following situations would it be easier for an international manager to export her products from the United States to Mexico? a.Mexico has just had a massive devaluation of its currency, the peso b.Mexico has had a very successful year economically, and investors have poured money into the country. As a result, the Mexican peso has grown very strong
b.
When speaking about the "4 P's" of marketing, what does "placement" refer to?
distribution of the product
What product might be more suitable for a "localization" strategy?Domino's pizza intel
dominos
Trying to beat the competition, a manager sold his product at below the cost of production. In doing so, he violated a law and faced possible legal consequences. What violation did he commit?
dumping
Some companies have great difficulty getting their products into the Japanese market, because many Japanese retailers seem to have established connections with Japanese manufacturers. What would be the best way to describe this aspect of marketing channels (ways of getting the product into the market) in Japan?
exclusive
What is NOT a benefit of exporting compared to making a substantial investment in a country to open a wholly owned subsidiary?
exporting will help the company avoid tariff barriers
In the "Values in Tension" article, Donaldson believes that ethical imperialism and cultural relativism might be good ethical standards to follow - true or false?
false
What is an assumption of the economic nationalist perspective?
governments should play a leading role in directing economic development
What is something that would not be consistent with the liberal worldview?
governments should play a leading role in directing economic development
As used in this module, what is the meaning of the term "taking advantage of location economies"?
reducing costs by moving to countries that have lower costs