IBA 350 Exam 2

A firm can reduce its marketing and advertising costs substantially by focusing on numerous national brands instead of a single global brand. True or False?

False

Obtaining economic development incentives from​ host-or home-country governments increases the cost of trade and investment barriers. True or False?

False

Firms that want to become globally competitive must seek simultaneously three strategic​ objectives-efficiency, flexibility, and learning. True or False?

True

​________ is the seizure of company assets with compensation. A. Arbitration B. Confiscation C. Expropriation D. Conciliation E. Nationalization

C. Expropriation

Buyer receptiveness differs as a function of​ ________. A. product quality B. media expenses C. culture and language D. lobbying

C. culture and language

Which of the following characterizes​ extraterritoriality? A. Applying​ home-country laws to persons outside national borders B. Revealing significant information about a​ firm's financial condition C. Restricting the amount of net income firms can remit to home countries D. Limiting foreign investment that may affect national security E. Requiring foreign investors to seek joint ventures with local firms

A. Applying home-country laws to persons outside national borders

Which legal system is based on a comprehensive structure where laws are clearly​ written, accessible, and divided into three​ categories: commercial,​ civil, and​ criminal? A. Civil law B. Mixed system C. Rule of law D. Religious law E. Common law

A. Civil law

Which one of the following involves reducing or removing barriers to​ trade, establishing shared external​ barriers, and permitting the unrestricted movement of​ goods, services, and factors of production within participating​ countries? A. Common market B. Unrestricted trade location C. Customs union D. Economic union E. Foreign trade zone

A. Common market

Which of the following comprise the largest group of countries and include Bangladesh and​ Zaire? A. Developing economies B. Transition economies C. Centrally planned economies D. Advanced economies E. Emerging economies

A. Developing economies

In which of the following does a firm sell its products directly to customers to avoid the use of​ intermediaries? A. Direct marketing B. Outsourcing C. Franchising D. Indirect marketing E. Licensing

A. Direct marketing

In order to become globally​ competitive, your company is making changes in its manufacturing process to make it more standardized and significantly cheaper. For which of Bartlett and​ Ghoshal's objectives is your company striving with these​ changes? A. Efficiency B. Flexibility C. Decentralization D. Local responsiveness E. Learning

A. Efficiency

What kind of government seizure compensates​ foreign-owned businesses? A. Expropriation B. Boycott C. Destabilization D. Confiscation E. Embargo

A. Expropriation

Which type of government intervention encourages foreign companies to enter a​ host-country market? A. Investment incentives B. Countervailing duties C. Dumping D. Tariffs E. Currency controls

A. Investment incentives

Which of the following is a strategy managers can employ to manage country​ risk? A. Maintaining a strict adherence to ethical behavior B. Engaging in questionable practices that are not specifically outlawed C. Using a SIG to lobby for special favors D. Seeking a loan from the World Bank E. Using bribes to develop international business

A. Maintaining a strict adherence to ethical behavior

Which of the following BEST describes the role of an​ intermediary? A. Moving products through a distribution channel to a retailer B. Creating a sales outlet in a domestic market C. Establishing marketing subsidiaries in target markets D. Establishing business overseas using FDI E. Exporting products abroad

A. Moving products through a distribution channel to a retailer

Which challenge of emerging markets is associated with corruption and weak legal frameworks that discourage business​ investments? A. Political instability B. Lack of physical infrastructure C. Lack of qualified local partners D. Dominance of family conglomerates E. Excessive bureaucracy

A. Political instability

Which one of the following is a collection of official organizations that create a​ government, including legislative​ groups, political​ parties, lobbying​ groups, and trade​ unions? A. Political system B. Mixed system C. Legal system D. Civil law E. Common law

A. Political system

​________ pertains to national economic policies that restrict free trade and protect domestic industries from foreign competition. A. Protectionism B. A quota C. A tariff D. A custom E. A nontariff trade barrier

A. Protectionism

​________ involves countries establishing agreements with one another for the purpose of minimizing obstacles concerning trade and business ventures. A. Regional economic integration B. Centralized economic planning C. Investment motivation D. The General Agreement on Tariffs and Trade E. A foreign trade zone

A. Regional economic integration

​________ is a quality of executive management that provides inspirational guidance and motivation to​ personnel, leading the firm to a better future. A. Visionary leadership B. Organizational structure C. Strategy D. Organizational culture E. Organizational process

A. visionary leadership

Which of the following coordinates​ economic, social, and cultural affairs among​ Bahrain, Kuwait,​ Oman, Qatar, Saudi​ Arabia, and the United Arab​ Emirates? A. The Gulf Cooperation Council​ (GCC) B. European Free Trade Association C. Asia Pacific Economic Cooperation​ (APEC) D. The Australia and New Zealand Closer Economic Relations Agreement​ (CER) E. Association of Southeast Asian Nations​ (ASEAN)

A. The Gulf Cooperation Council (GCC)

If you are a business looking for a foreign market in which to sell​ goods, what does economic freedom in a country mean to your​ business? A. The government will support foreign business by enacting laws that decrease import quotas. B. The government will increase tariffs. C. The government will support foreign business by enacting laws that increase export controls. D. The government will enact laws that limit the amount of currency that can be taken out of the country. E. The government will pass legislation that increases protectionism.

A. The government will support foreign business by enacting laws that decrease import quotas.

Which of the following is TRUE about global​ teams? A. To develop global​ strategies, the team should include culturally diverse managers whose business activities span the globe. B. Operational global teams identify or implement initiatives that enhance the​ long-term direction of the firm in its global industry. C. Strategic global teams focus on the efficient and effective operation of the business across the whole network. D. It is a locally distributed group of employees charged with specific problem solving that affects company operations at the domestic scale.

A. To develop global​ strategies, the team should include culturally diverse managers whose business activities span the globe.

Which of the following best characterizes the purpose of a global marketing​ strategy? A. a plan of action the firm develops for foreign markets that guides managerial decision making​ on: how to position itself and its offerings and which customer segments to target. B. helps managers check high employee turnover C. provides managers with demographic data D. guides firms on hiring highly skilled resources

A. a plan of action the firm develops for foreign markets that guides managerial decision making​ on: how to position itself and its offerings and which customer segments to target.

Strategy is​ ________. A. a planned set of actions that managers employ to make the best use of the​ firm's resources and core competencies to gain competitive advantage and accomplish organizational objectives B. the pattern of shared​ values, behavioral​ norms, systems,​ policies, and procedures that employees learn and adopt C. a quality of executive management that provides inspirational guidance and motivation to​ personnel, leading the firm to a better future D. the procurement of selected​ value-chain activities, including production of intermediate goods or finished​ products, from independent suppliers

A. a planned set of actions that managers employ to make the best use of the​ firm's resources and core competencies to gain competitive advantage and accomplish organizational objectives

​Purevelon, a manufacturer of soaps and beauty​ products, controls all business decisions globally from its headquarters in Kansas​ City, Missouri. Purevelon has​ a__________. A. centralized structure B. geographic area structure C. transnational strategy D. multidomestic approach E. decentralized structure

A. centralized structure

Companies help address poverty around the world in many ways. If a foreign firm in an emerging market modernizes local roads and bridges and creates jobs for workers in the​ community, the firm is​ ________. A. encouraging economic growth B. engaging in global sourcing C. engaging in microfinancing activities D. partnering with family conglomerates E. customizing products to meet local needs

A. encouraging economic growth

Regional integration enables member countries to gain bargaining power in world affairs by​ ________. A. establishing a stronger political position as a united bloc B. attracting direct investment from outside the bloc C. enhancing the productivity of member countries D. helping member country firms to achieve economies of scale E. expanding the market size of member country firms

A. establishing a stronger political position as a united bloc

Which one of the following provides the most control over foreign​ operations? A. Foreign direct investment B. Franchising C. Exporting D. Countertrade E. Licensing

A. foreign direct investment

​A(n) ________ is an arrangement in which management of the​ firm's international operations is organized by​ activity, such as production and marketing. A. functional structure B. product structure C. geographical area structure D. international division structure E. global matrix structure

A. functional structure

The​ ________ refers to an approach in which a firm views international business as separate​ from, and secondary​ to, its domestic business. A. home replication strategy B. multinational strategy C. transnational strategy D. global strategy E. multidomestic strategy

A. home replication strategy

Which of the following is an advantage of a multidomestic​ strategy? A. minimal pressure on headquarters staff B. low operating costs C. minimum redundancy D. standardized organizational culture

A. minimal pressure on headquarters staff

The managerial​ routines, behaviors, and mechanisms that allow a firm to function as intended are known as​ ________. A. organizational processes B. organizational structure C. organizational culture D. organizational designs

A. organizational processes

Pricing of products exchanged among different parts of the same corporate​ business, located in different​ countries, is called​ ________. A. transfer pricing B. gray market activity C. international price escalation D. rigid​ cost-plus pricing E. ​value-added tax

A. transfer pricing

Which of the following observations would stimulate investment in an emerging​ market? A. ​Africa's cell phone market has opened the door to many related industries. B. Foreign firms must deal with significant corruption in Russia. C. Weak patent laws and counterfeiting characterize the Chinese market. D. Political instability is often found in emerging markets. E. Government intervention in the business environment is common in emerging markets.

A. ​Africa's cell phone market has opened the door to many related industries.

How does a foreign firm benefit from partnering with a family​ conglomerate? A. A firm can seek out local lobby groups to deal with infrastructure issues. B. A foreign firm can form close relationships with the local government. C. A foreign firm can increase the capital requirements needed for international transactions. D. A foreign firm can use standardized products. E. A foreign firm can achieve economies of scale and avoid customizing products.

B. A foreign firm can form close relationships with the local government.

Which of the following is TRUE with regard to a global positioning​ strategy? A. Internationalizing firms rarely aim for a global positioning strategy. B. A global positioning strategy reduces international marketing costs. C. More often than​ not, global positioning dilutes brand equity in the international market. D. A global positioning strategy does not address the shared expectations of a global customer market segment.

B. A global positioning strategy reduces international marketing costs.

Which of the following statements about the General Agreement on Tariffs and Trade​ (GATT) is​ FALSE? A. The GATT introduced the concept of normal trade relations with trading partners. B. According to the​ GATT, a trade concession to one country did not become a concession to all countries. C. The GATT was the first attempt to reduce trade barriers globally. D. The GATT was succeeded by the World Trade Organization​ (WTO). E. Under​ GATT, nations agreed to extend tariff reductions outlined in a treaty with a trading partner to all other countries.

B. According to the​ GATT, a trade concession to one country did not become a concession to all countries.

What is the benefit of environmental​ scanning? A. Reducing research and development costs B. Assessing potential threats to the firm C. Evaluating accounting practices D. Improving intellectual property protection E. Forming a regional trading bloc

B. Assessing potential threats to the firm

​________ refers to an international business transaction in which full or partial payments are made in kind rather than in cash. A. Global sourcing B. Countertrade C. Importing D. Global procurement E. Exporting

B. Countertrade

Which of the following are environmental conditions that influence a​ firm's product​ development? A. Internal distribution factors B. Cultural and financial factors C. International marketing communication factors D. Global branding factors E. Target customer segments and positioning factors

B. Cultural and financial factors

A firm most likely opts for global integration in order to take advantage of which of the following​ factors? A. Responsiveness to local competitors B. Economies of scale C. Leveraged natural resources D. Adaptation to different distribution channels E. Customized products

B. Economies of scale

Which of the following refers to reducing the cost of a​ firm's global​ activities? A. Strategy B. Efficiency C. Functional structure D. Visionary leadership E. Transnational strategy

B. Efficiency

Which one of the following officially bans imports from and exports to a specific country in an attempt to impose a political​ punishment? A. Confiscation B. Embargo C. Sanction D. Nationalization E. Boycott

B. Embargo

​________ include countries that have attained significant​ modernization, industrialization, and rapid economic growth since the 1980s. A. Developed economies B. Emerging economies C. Developing markets D. Advanced economies E. Centrally planned economies

B. Emerging economies

Which of the following statements about local responsiveness is​ FALSE? A. Businesses take the local culture into consideration for transactions. B. Firms prefer to pay for many product variations for individual markets despite the sharp increase in costs. C. Companies adhere to local customer preferences. D. Firms adjust their practices to meet the specific needs of each country. E. Firms adjust to the local competitive environment.

B. Firms prefer to pay for many product variations for individual markets despite the sharp increase in costs.

Which statement about free trade zones​ (FTZs) is​ TRUE? A. FTZs can impose import tariffs on​ parts, components, or finished products. B. Firms use FTZs to manage inventory of​ parts, components, or finished products. C. Firms cannot use FTZs to manage inventory of​ parts, components, or finished products. D. Products in a FTZ are subject to​ duties, taxes, or quotas until they enter​ non-FTZ commercial territory. E. FTZs exist in fewer than 75 countries in the world.

B. Firms use FTZs to manage inventory of​ parts, components, or finished products.

Which of the following primarily focuses on ensuring the reduction of tariffs among certain countries and settling trade​ disagreements? A. European Union B. General Agreement on Tariffs and Trade C. United Nations D. ​Smoot-Hawley Tariff Act E. World Bank

B. General Agreement on Tariffs and Trade

​________ is the process of bringing together an​ organization's value-chain activities across different countries to realize global efficiency and synergy to benefit from similarities between countries. A. Global sourcing B. Global integration C. Visionary leadership D. Countertrade E. Local responsiveness

B. Global integration

Why is the middle class used to determine market​ potential? A. ​Middle-class households in emerging markets buy only simple necessities. B. ​Middle-class individuals are politically and environmentally active. C. ​Middle-class households in emerging markets have little disposable income. D. The middle class makes up a very small proportion of households in advanced economies. E. ​Middle-class consumers cannot find professional jobs.

B. Middle-class individuals are politically and environmentally active

Many Middle Eastern countries practice both civil law and Islamic law. In this​ case, under which legal system are these countries ultimately​ categorized? A. Religious law B. Mixed system C. Rule of law D. Common law E. Mixed economy

B. Mixed system

Which of the following statements about NAFTA is​ TRUE? A. NAFTA does not offer dispute settlement in areas of​ investment, unfair​ pricing, labor​ issues, and the environment. B. NAFTA allowed​ member-country firms to submit bids for government contracts in the three signing countries​ (Canada, Mexico, and the United​ States). C. NAFTA implemented tariffs for products and services traded in the bloc. D. NAFTA decreased market access among​ Canada, Mexico, and the United States. E. NAFTA caused a reduction in U.S. exports to Canada and Mexico.

B. NAFTA allowed​ member-country firms to submit bids for government contracts in the three signing countries​ (Canada, Mexico, and the United​ States).

Which of the following is a risk associated with emerging​ markets? A. Political stability that is associated with transparency B. Political instability that is associated with weak legal frameworks C. National laws that protect intellectual property D. Administrative rules that facilitate business activities E. Tax incentives that attract foreign investment

B. Political instability that is associated with weak legal frameworks

Which of the following describes a legal system with clear rules that are publicly​ disclosed, enforced​ fairly, and respected by​ individuals, organizations, and the​ government? A. Religious law B. Rule of law C. Common law D. Civil law E. Mixed system

B. Rule of law

In emerging​ markets, why do successful firms develop close community​ relationships? A. To collaborate with family conglomerates B. To better understand local​ conditions, and earn customer respect and loyalty C. To challenge developing market rivals D. To target political systems in developing markets E. To locate quality and accessible business partners

B. To better understand local​ conditions, and earn customer respect and loyalty

The strength of a global brand is measured by​ ________. A. brand standardization B. brand equity C. a global marketing strategy D. global positioning E. market segmentation

B. brand equity

In​ a(n) ________, the headquarters of a company has significant authority and control over the​ company's global activities. A. export department B. centralized approach C. global approach D. international division structure E. decentralized approach

B. centralized approach

Global branding increases a​ firm's ________ in international markets. A. global sourcing B. competitive advantage C. product quality D. adaptation E. ​low-cost strategy

B. competitive advantage

Which of the following trends supports improving economic conditions in​ Africa? A. the growing importance of the public sector in Africa B. direct investment from abroad C. the rising cultural affinity toward goods manufactured in the West D. the gradual liquidation of the mining industry

B. direct investment from abroad

Contractual relations usually take the form of​ ______, in which an organization allows an international partner to use its intellectual property in return for royalties. A. countertrade B. licensing or franchising C. exporting D. wholly owned subsidiaries E. equity joint venture

B. licensing or franchising

Which type of country risk produced by a governmental system involves threats or use of force or violence in order to attain some kind of political​ goal? A. Sanctions B. Government seizure of company assets C. Terrorism D. Boycott against a business E. Embargo

C. terrorism

Purchasing power parity​ (PPP) adjusts prices to​ ________. A. help procure products and services from suppliers or subsidiaries that operate abroad B. reflect the goods consumers can​ buy, as well as account for their currency and standard of living C. take into account emerging markets that have recently doubled in share of world imports D. demonstrate how much of a good one can buy in a particular​ currency, such as the U.S. dollar E. show how much income is held by an​ economy's middle class compared with its size

B. reflect the goods consumers can​ buy, as well as account for their currency and standard of living

Products that have universal specifications are the best candidates for​ __________ of its marketing program. A. outsourcing B. standardization C. global sourcing D. adaption E. customization

B. standardization

An international supermarket chain is opening stores in foreign markets. Which adaptation could be made to accommodate national​ preferences? A. Adjusting the distribution chain B. Stocking local produce C. Using standardized promotions D. Using advertisements written in English E. Adjusting prices for living standards

B. stocking local produce

Financing or other resources that a government grants to a firm or group of​ firms, to ensure their survival or success is referred to as a​ ___________. A. quota B. subsidy C. premium D. grant

B. subsidy

Adaptation is defined as​ ________. A. the​ firm's efforts to minimize employee attrition by rewarding performance B. the​ firm's efforts to modify one or more elements of its international marketing program to accommodate specific customer requirements in a particular market C. the​ firm's efforts to make its marketing program elements​ uniform, with a view to targeting entire​ regions, or even the global​ marketplace, with the same product or service D. the​ firm's attempt at altering its organizational structure to facilitate internationalization

B. the​ firm's efforts to modify one or more elements of its international marketing program to accommodate specific customer requirements in a particular market

Outsourcing occurs when companies​ ________. A. develop from emerging markets into global competitors B. use independent suppliers to complete​ value-chain activities C. target the​ fast-growing middle class of emerging markets D. transfer​ state-owned holdings to private concerns E. procure products or services from suppliers located abroad

B. use independent suppliers to complete value-chain activities

Which of the following characterizes​ extraterritoriality? A. Limiting foreign investment that may affect national security B. Revealing significant information about a​ firm's financial condition C. Applying​ home-country laws to persons outside national borders D. Requiring foreign investors to seek joint ventures with local firms E. Restricting the amount of net income firms can remit to home countries

C. Applying home-country laws to persons outside national borders

​________ is a governmental system that attempts to control most aspects of its​ citizens' conduct both publicly and​ privately, including their values and beliefs. A. Democracy B. A market economy C. Authoritarianism D. Socialism E. A mixed system

C. Authoritarism

Which of the following refers to the number of distributors and other intermediaries involved in getting the product from the manufacture to the​ customer? A. Global sourcing B. Global account management C. Channel length D. Positioning E. Standardization

C. Channel length

Which term refers to exported goods being priced lower than their typical value whether in​ home-country markets or foreign​ markets? A. Nontariff trade barriers B. Subsidizing C. Dumping D. Export controls E. Countervailing duties

C. Dumping

Which of the following is a regional trade​ organization? A. World Bank B. Stockholm Chamber of Commerce C. European Union​ (EU) D. International Monetary Fund E. United Nations Conference on Trade and Development​ (UNCTAD)

C. European Union (EU)

Which of the following describes the Foreign Corrupt Practices Act​ (FCPA)? A. Companies with securities listed in the United States are exempt from U.S. accounting provisions. B. Foreign firms can make payments to American firms while doing business in the United States. C. Firms are prohibited from offering bribes to foreign firms to obtain business. D. Bribes are an accepted way of doing business overseas. E. FCPA criminal and civil penalties are minimal.

C. Firms are prohibited from offering bribes to foreign firms to obtain business.

Which of the following primarily focuses on ensuring the reduction of tariffs among certain countries and settling trade​ disagreements? A. European Union B. United Nations C. General Agreement on Tariffs and Trade D. ​Smoot-Hawley Tariff Act E. World Bank

C. General Agreement on Tariffs and Trade

​________ is defined as the coordination of a​ firm's worldwide​ value-chain activities to obtain​ synergy, efficiency, and​ cross-fertilization. A. Global sourcing B. Globalization C. Global integration D. Local responsiveness E. Collaboration

C. Global integration

​________ refers to the procurement of products or services from independent suppliers or​ company-owned subsidiaries located abroad for consumption in the home country or a third country. A. A new global challenger B. Privatization C. Global sourcing D. A developing economy E. Outsourcing

C. Global sourcing

​________ refer(s) to the legal importation of genuine products into a country by intermediaries other than authorized distributors​ (also known​ as parallel imports). A. Market segmentation B. International price escalation C. Gray market activity D. Tariffs E. Adaptation

C. Gray market activity

A large cosmetics company is looking to break into international markets. What strategy should the company pursue to achieve this​ goal? A. It should establish an inexpensive distribution chain. B. It should spend as much on advertising as possible. C. It should develop a global brand. D. It should imitate its​ competitors' strategy. E. It should have various national brands.

C. It should develop a global brand

​________ occurs when one party files a lawsuit against another. A. Arbitration B. Mediation C. Litigation D. Conciliation E. Reconciliation

C. Litigation

Which of the following​ determine(s) the nature of international marketing​ communications? A. Distribution chains B. Gray market activity C. Media availability and quality D. Transfer pricing E. Promotional activity

C. Media availability and quality

In which of the following approaches does an organization give a lot of autonomy to its subsidiaries to manage the​ business? A. Home replication strategy B. Transnational strategy C. Multidomestic strategy D. Global strategy E. Countertrade strategy

C. Multidomestic strategy

Members of​ ________ benefited the most from the maquiladora program. A. EFTA B. MERCOSUR C. NAFTA D. EU

C. NAFTA

Which one of the following is true of political and legal environments in international​ business? A. Gradual change in a​ country's political and legal environments poses a greater risk to firms than does sudden change. B. In disputes between local and foreign​ firms, governments protect foreign interests. C. Political and legal systems are interdependent. D. Country risk is present only in some countries and only during times of political change and upheaval. E. The political and legal systems in a country are usually fixed and unchanging.

C. Political and legal systems are interdependent.

Which of the following includes organizations like​ NAFTA, the​ EU, and​ ASEAN? A. Competing firms B. Governments C. Regional trade organizations D. Special interest groups E. International organizations

C. Regional trade organizations

Which of the following statements BEST describes the European Union​ (EU)? A. Multiple currencies make trade easier for firms doing business within the EU. B. Labor and capital are unable to move freely among the EU members. C. Trade among the EU members takes place unobstructed. D. The EU is a political union with the same laws throughout. E. Eleven EU countries belong to a monetary union that uses the pound.

C. Trade among the EU members takes place unobstructed.

Which of the following is a key risk associated with global​ branding? A. Decreasing​ first-mover advantages in marketing new products B. Decreasing the efficiency of marketing campaigns C. Violating​ host-country laws and regulations D. Increasing global advertising costs E. Reducing international recognition

C. Violating host-country laws and regulations

A global brand can best be defined as​ ________. A. a brand that uses a variety of marketing campaigns in different markets B. a brand that focuses on a single generational group within a country C. a brand whose​ positioning, advertising​ strategy, look, and personality are standardized worldwide D. a brand with a complicated​ value-chain

C. a brand whose​ positioning, advertising​ strategy, look, and personality are standardized worldwide

Due to the larger market size of an economic​ bloc, member country firms are able to reduce their product prices because they can​ ________. A. gain political support B. implement a different organizational structure C. attain economies of scale D. seek investments from external sources E. impose duties on block members

C. attain economies of scale

Which of the following activities would be considered last by a manager while developing​ strategies? A. analyzing the particular challenges that confront the firm B. examining the​ firm's specific strengths and weaknesses C. deciding how best to contend with competitors D. analyzing the particular opportunities for the firm

C. deciding how best to contend with competitors

​Low-income countries like Bangladesh and Nicaragua are categorized as​ ________ because they have limited industrialization and stagnant economies. A. advanced economies B. transition economies C. developing economies D. centrally planned economies E. emerging economies

C. developing economies

A large and highly diversified company that is privately owned is known as​ a(n) ________. A. emerging competitor B. global sourcing company C. family conglomerate D. new global challenger E. outsourcing company

C. family conglomerate

​________ enables an MNE to accommodate various​ country-specific challenges and opportunities. A. Technical​ know-how B. Efficiency C. Flexibility D. A home replication strategy E. A strong organizational culture

C. flexibility

​________ means serving a key international customer in a consistent and standardized​ manner, regardless of where in the world it operates. A. Positioning B. Marketing promotion C. Global account management D. Global retailing E. Product adaptation

C. global account management

The World​ Bank, the World Trade​ Organization, and the United Nations Conference on Trade and Development are examples of​ ________. A. regional trade organizations B. governments C. international organizations D. competing firms E. special interest groups

C. international organizations

A​ ________ depends on the interactions of supply and demand in order to determine prices for products and services. A. socialist society B. totalitarian economy C. market economy D. command economy E. mixed economy

C. market economy

A company that breaks down its customer population based on variables such as level of economic​ development, common​ language, and geography to best serve customer needs is performing​ ________. A. market positioning B. product standardization C. market segmentation D. product adaptation E. branding

C. market segmentation

The new global challengers have become formidable competitors primarily because​ ________. A. of instant brand recognition B. of superior market research and customer service C. of the easy availability of​ low-cost labor, skilled​ workforces, government​ support, and family conglomerates D. of substantial government​ funding, high​ wages, and​ value-chain diversification

C. of the easy availability of​ low-cost labor, skilled​ workforces, government​ support, and family conglomerates

​A(n) ________ is a group of official organizations that create a government. A. market economy B. common law C. political system D. legal system E. extraterritoriality

C. political system

The advantage of standardized advertising worldwide is that it​ ________. A. encourages consumers to request product samples B. increases cultural sensitivity C. reduces promotional costs for firms D. increases direct marketing sales E. utilizes local writers and actors

C. reduces promotional costs for firms

What causes international prices to​ rise? A. Factories located near markets B. A lack of significant disposable income C. ​Tariffs, taxes, and markups by foreign intermediaries D. ​Low-cost labor E. Local regulations

C. tariffs, taxes, and markups by foreign intermediaries

​________ have high​ per-capita revenues, very competitive​ businesses, and strong infrastructures. They include​ Australia, Canada, and New Zealand. A. Transition economies B. Developing economies C. Emerging economies D. Advanced economies E. Centrally planned economies

D. Advanced economies

​________ is a governmental system that attempts to control most aspects of its​ citizens' conduct both publicly and​ privately, including their values and beliefs. A. A mixed system B. A market economy C. Democracy D. Authoritarianism E. Socialism

D. Authoritarianism

Which of the following statements BEST describes​ socialism? A. Capital and wealth should be vested in the hands of individuals. B. Wealth should be used primarily for profit rather than as a means of production. C. The government controls the​ attitudes, values, and beliefs of the citizens. D. Collective welfare outweighs individual welfare. E. Emphasis is placed on individual accomplishment and innovations.

D. Collective welfare outweighs individual welfare.

Which of the following represents a method of negotiation in which the objective is to settle any disagreements in a pleasant​ manner? A. Confiscation B. Arbitration C. Litigation D. Conciliation E. Nationalization

D. Conciliation

Which of the following represents a method of negotiation in which the objective is to settle any disagreements in a pleasant​ manner? A. Confiscation B. Arbitration C. Nationalization D. Conciliation E. Litigation

D. Concilition

Which term defines the business transactions where payments are made in kind instead of in​ cash? A. Global sourcing B. Home replication C. Exporting D. Countertrade E. Importing

D. Countertrade

​________ imposes limitations on the expenditure or outflow of tangible currency from a certain nation or on the influx​ of foreign currencies. A. A quota B. A nontariff trade barrier C. A countervailing duty D. Currency control E. Export control

D. Currency control

Which term refers to a​ company's ability to lower the cost of operation throughout its value​ chain? A. Organizational culture B. Learning C. Flexibility D. Efficiency E. Strategy

D. Efficiency

​________ include countries that have attained significant​ modernization, industrialization, and rapid economic growth since the 1980s. A. Centrally planned economies B. Developed economies C. Developing markets D. Emerging economies E. Advanced economies

D. Emerging economies

Which of the following represents a​ low-control strategy? A. Licensing B. Equity joint ventures C. Franchising D. Exporting E. Foreign direct investment

D. Exporting

A specific region that is located within a nation is treated as if it were outside the​ nation's borders. This region is designated to receive imported products that are not subject to tariffs and that are intended for assembly and subsequent​ re-export. Which term best describes this​ region? A. Free trade area B. Economic union C. Common market D. Foreign trade zone E. Regional economic integration

D. Foreign trade zone

Which of the following is a stage of regional integration in which member countries decide to remove tariffs and other barriers to trade within the​ bloc, but maintain trade barriers with nonmember​ countries? A. Customs union B. Common market C. Foreign trade zone D. Free trade area E. Economic union

D. Free trade area

Raul works for an Argentinian company that buys goods from China and sells them in Argentina. What internationalization strategy is​ Raul's company​ using? A. Global strategy B. Exporting C. Licensing D. Global sourcing E. Franchising

D. Global sourcing

An international technology company is deciding how to utilize its advertising budget for the year. Which of the following is the best​ option? A. Spend the budget on television and print ads B. Use the same campaign as in their home country C. Focus on Internet and radio ads D. Hire a global advertising agency E. Spend the budget on transit ads

D. Hire a global advertising agency

In which of the following industries have​ Brazil's manufacturing firms enjoyed considerable success producing for foreign​ clients? A. Personal computers B. Diamonds and mining C. Textile machinery D. Iron ore and processed food E. Cars and consumer electronics

D. Iron ore and processed food

Why would a nation choose to be a member of an economic​ bloc? A. An economic bloc imposes restrictions on labor. B. An economic bloc imposes restrictions on the​ cross-border flow of products. C. Nations can pursue economic integration by reducing tariffs. D. It is easier to reach an agreement on free trade with a few nations rather than with numerous countries. E. A nation can then become part of the World Trade Organization.

D. It is easier to reach an agreement on free trade with a few nations rather than with numerous countries.

A huge MNE was the victim of creeping expropriation from a foreign government. Why is creeping expropriation ethically​ wrong? A. It takes effect after the MNE improves product distribution throughout the country. B. It takes place when MNEs decide to invest. C. It goes into effect while the MNE is planning to expand its operations in a country. D. It occurs after an MNE makes large investments in a​ country's property and facilities. E. It occurs before the MNE agrees to move its operations overseas.

D. It occurs after an MNE makes large investments in a​ country's property and facilities.

Which term refers to understanding and administering​ laws, regulations, and rules that are used to establish standards for​ conduct? A. Totalitarianism B. Democracy C. Mixed economy D. Legal system E. Political system

D. Legal system

Which of the following identifies the reporting relationships in an​ organization? A. Organizational culture B. Home replication strategy C. Visionary leadership D. Organizational structure E. Local responsiveness

D. Organizational structure

Which term refers to acquiring certain​ value-chain activities, including the production of finished products from independent​ suppliers? A. Privatization B. Purchasing power C. Conglomeration D. Outsourcing E. Microfinancing

D. Outsourcing

​________ is the transfer of industries from state ownership to​ non-public entities. A. Modernization B. Outsourcing C. Targeting D. Privatization E. Global sourcing

D. Privatization

Which term refers to cost alterations that indicate the amount of products that customers are able to purchase in their own​ country, using their own monetary​ system, in accordance with their own standard of​ living? A. Outsourcing B. Tenders C. Disposable income D. Purchasing power parity E. Gross domestic product

D. Purchasing power parity

​________ refers to a legal system where rules are​ clarified, publicly​ revealed, justly​ applied, and valued by all. A. Civil law B. Common law C. A mixed system D. Rule of law E. Religious law

D. Rule of law

What does a multidomestic industry have in common with local​ responsiveness? A. They both focus solely on domestic sales. B. They both utilize centralized decision making. C. They both incorporate all of the elements of a​ firm's value-chain activities. D. They both make decisions on a​ country-to-country basis. E. They both deal with product competition.

D. They both make decisions on a country-to-country basis

The root cause of gray market activity is​ ________. A. a​ firm's ability to control production and distribution costs B. a difference in price between national distributors C. the dominance of substandard products in local markets D. a significant difference in price of the same product between two countries

D. a significant difference in price of the same product between two countries

Governments impose defensive barriers to​ ________. A. promote national security B. protect workers C. safeguard industries D. all of the above

D. all of the above

In​ a(n) ________, barriers to trade within a participating country are reduced or​ eliminated, shared external barriers are​ established, and unrestricted movement of​ goods, services, and factors of production is permitted. A. unrestricted trade location B. overseas trade region C. free trade area D. common market E. customs union

D. common market

In international​ advertising, the receptiveness of the buyer to advertising changes is a function of​ ________. A. laws B. positioning C. market segmentation D. culture E. media availability

D. culture

Under which one of the following organizational structures are management and control highly decentralized to the level of individual​ regions? A. Product structure B. Functional structure C. International division structure D. Geographic area structure E. Global matrix structure

D. geographic area structure

Which type of strategy involves centralized coordination and control of different international​ operations? A. Countertrade strategy B. Home replication strategy C. Multidomestic strategy D. Global strategy E. Transnational strategy

D. global strategy

Emerging markets have become target markets because​ ________. A. in some product​ categories, there is little demand in emerging markets B. the shrinking middle class in emerging markets implies a lower demand for consumer products C. the largest emerging markets have reduced their share of world imports in the last few years D. governments in emerging economies attract sales of​ infrastructure-related products E. the majority of individuals in emerging economies live in poverty

D. governments in emerging economies attract sales of​ infrastructure-related products

Which of the following situations will discourage business activities of foreign firms in an emerging​ market? A. allowing foreign firms to access the​ country's energy resources B. using a strong legal framework and patent laws C. investing in a strong Internet infrastructure D. increasing the requirements for​ licenses, approvals, and paperwork

D. increasing the requirements for licenses, approvals, and paperwork

Regional integration leads to increased​ ________ by firms inside their economic bloc. A. isolation B. costs C. dumping D. internationalization E. localization

D. internationalization

Adaptation refers to​ ________ one or more elements of the​ firm's international marketing program. A. standardizing B. omitting C. enlarging D. modifying E. duplicating

D. modifying

A government policy or procedure that restricts trade through means such as quotas is known as​ a(n) ________. A. export control B. currency control C. import license D. nontariff trade barrier E. import control

D. nontariff trade barrier

Which of the following identifies the reporting relationships in an​ organization? A. Home replication strategy B. Local responsiveness C. Organizational culture D. Organizational structure E. Visionary leadership

D. organizational structure

​________ represents cost alterations that indicate the amount of products that customers are able to purchase in their own​ country, using their own monetary​ system, in accordance with their standard of living. A. Privatization B. Outsourcing C. Tenders D. Purchasing power parity E. Offshoring

D. purchasing power parity

In​ Iran, systems are based on spiritual​ beliefs, ethical​ codes, and moral standards that are directed by a supreme being. Iran operates under​ ________. A. the rule of law B. a mixed system C. common law D. religious law E. civil law

D. religious law

Products that have universal specifications are the best candidates for​ __________ of its marketing program. A. outsourcing B. global sourcing C. customization D. standardization E. adaption

D. standardization

​________ are taxes placed on imported goods that increase the final purchase price for consumers. A. Export controls B. Nontariff trade barriers C. Quotas D. Tariffs E. Subsidies

D. tariffs

Top managers who provide inspirational direction and motivation to employees in an attempt to take a company to a better future are exhibiting​ ________. A. flexibility B. discipline C. efficiency D. visionary leadership E. technical skills

D. visionary leadership

You work at an international company that is headquartered in California. Your​ company's R&D and manufacturing activities take place near the company headquarters. The managers at the California location are responsible for company operations​ worldwide, and they view the entire world as one large marketplace. As a​ result, your company sells the same products on six continents. Which of the following strategies is being used by your​ company? A. A home replication strategy B. A countertrade strategy C. A multidomestic strategy D. A transnational strategy E. A global strategy

E. A global strategy

Which of the following BEST describes a transition​ economy? A. A​ post-industrial country that has a high GDP. B. A​ post-industrial country that has a high​ per-capita income. C. ​State-owned industries that have shifted to private entities. D. A​ low-income country that has limited industrialization and low growth. E. A market that has evolved from being centrally planned to being more liberalized.

E. A market that has evolved from being centrally planned to being more liberalized.

​________ is a process in which an unbiased third party listens to both sides of a case and makes a decision in favor of one party or the​ other, based on an impartial analysis of facts. A. Nationalization B. Conciliation C. Confiscation D. Litigation E. Arbitration

E. Arbitration

An American company that does business overseas has to be concerned about local events. Why should a company be concerned about political events and the legal environment in the country in which it does​ business? A. Initiatives developed by special interest groups could lead to the company experiencing supply chain issues. B. Changes in the legal environment might influence the government to encourage​ cross-border collaborations. C. Shifting priorities in political parties might cause unfavorable government interference with domestic firms. D. Unfavorable developments could lead to new conditions that require the company to protect its intellectual property. E. Changes in the political climate might influence government interference in business​ practices, putting the safety of the​ company's employees in jeopardy.

E. Changes in the political climate might influence government interference in business​ practices, putting the safety of the​ company's employees in jeopardy.

What is the basis of civil​ law? A. Common law B. Rule of law C. Shariah law D. Tradition E. Codified rules

E. Codified rules

​________ refers to the possibility of loss or adverse effects on company operations and profitability as a result of changes in a​ country's political​ and/or legal environment. A. ​Cross-border risk B. Social risk C. Financial risk D. International risk E. Country risk

E. Country risk

​________ represent locations at the ports of entry in each country where government authorities inspect imported products and levy tariffs. A. Export trade zones B. Regional economic blocs C. Foreign trade zones D. Maquiladoras E. Customs

E. Customs

Which of the following is the​ world's most advanced and largest regional economic​ bloc? A. Association of Southeast Asian Nations B. North American Free Trade Agreement C. MERCOSUR D. Asia Pacific Economic Cooperation E. European Union

E. European Union

​________ formulate best practices that the firm implements in all its units worldwide. A. Local managers B. Distributors C. Supply chain managers D. ​Cross-cultural teams E. Global​ new-product planning teams

E. Global new-product planning teams

Which of the following is an internal factor that affects international​ pricing? A. Customer expectations B. Competitor prices C. Competitor pricing D. Taxes and tariffs E. ​Management's market share expectations

E. Management's market share expectations

Which one of the following characteristics is related to economic​ freedoms? A. Fair electoral rights B. The right to establish political parties C. Freedom from total control by military forces D. Unrestricted and reasonable elections E. Market forces and the ability to easily implement commercial activities

E. Market forces and the ability to easily implement commercial activities

Which of the following was formed by three countries to increase market​ entrance, remove barriers to​ trade, establish investment​ standards, and encourage bidding on government contracts within the three countries participating in​ it? A. European Union​ (EU) B. Asia Pacific Economic Cooperation C. Association of Southeast Asian Nations D. MERCOSUR E. North American Free Trade Agreement​ (NAFTA)

E. North American Free Trade Agreement​ (NAFTA)

Which challenge of emerging markets is associated with corruption and weak legal frameworks that discourage business​ investments? A. Lack of qualified local partners B. Excessive bureaucracy C. Dominance of family conglomerates D. Lack of physical infrastructure E. Political instability

E. Political instability

Which one of the following is a major factor in the growth of global commerce and in rising incomes​ worldwide? A. Reducing investment incentives B. Increasing antidumping duties C. Increasing countervailing duties D. Reducing subsidies E. Reducing trade barriers

E. Reducing trade barriers

It has recently been found that special interest groups​ (SIGs) have unprecedented access to politicians through social events. Why should companies be concerned with the​ SIGs' access to government​ officials? A. SIGs limit intellectual property protection. B. SIGs exercise control over activities to prevent terrorism. C. SIGs do not represent small businesses. D. SIGs represent only one side of the political arena. E. SIGs influence elected officials who can change policy.

E. SIGs influence elected officials who can change policy.

The United States has implemented trade sanctions on Iran and Syria. What is the purpose of​ sanctions? A. The government confiscates property with no compensation. B. Consumers may refuse to patronize firms that behave badly. C. Sanctions show a voluntary refusal to engage in commercial dealings with a nation. D. Sanctions terminate contracts and create new laws that favor local firms. E. Sanctions punish unwanted activities by foreign countries.

E. Sanctions punish unwanted activities by foreign countries.

​________ include establishments such as OPEC and OECD that work to improve the development of specific communities. A. International organizations B. Governments C. Regional trade organizations D. Competing firms E. Special interest groups

E. Special interest groups

In emerging​ markets, why do successful firms develop close community​ relationships? A. To locate quality and accessible business partners B. To target political systems in developing markets C. To challenge developing market rivals D. To collaborate with family conglomerates E. To better understand local​ conditions, and earn customer respect and loyalty

E. To better understand local​ conditions, and earn customer respect and loyalty

TDC​ Industries, a U.S.​ firm, has established operations in​ Germany, so TDC Industries has free trade access to​ ________of the EU market. A. a specific percentage B. none C. a limited part D. a large part E. all

E. all

Global branding increases a​ firm's ________ in international markets. A. product quality B. global sourcing C. adaptation D. ​low-cost strategy E. competitive advantage

E. competitive advantage

Which one of the following approaches affords significant independence and​ decision-making authority to the​ firm's subsidiaries around the​ world? A. Functional structure B. Transnational strategy C. Centralized structure D. Product structure E. Decentralized structure

E. decentralized structure

Regional integration enables member countries to gain bargaining power in world affairs by​ ________. A. helping member country firms to achieve economies of scale B. expanding the market size of member country firms C. attracting direct investment from outside the bloc D. enhancing the productivity of member countries E. establishing a stronger political position as a united bloc

E. establishing a stronger political position as a united bloc

Government intervention and trade barriers imposed by developed countries raise​ ______ for developing economies that supply them because tariffs are often disproportionately high. A. economic freedom levels B. quotas C. export controls D. subsidies E. ethical concerns

E. ethical concerns

Laetitia Luxury Bags produces high​ end, designer hand bags. The company keeps the number of distributors to a minimum to control the distribution channel. On a recent trip to​ Italy, Laetitia noticed that her hand bags were being sold in an upscale store.​ However, her company had only sold this particular hand bag in France. In this​ case, Laetitia experienced​ _____________ of her product. A. counterfeiting B. intellectual property violation C. global sourcing D. piracy E. gray market activity

E. gray market activity

A marketing strategy in which a firm creates a distinct impression in the​ customer's mind is called​ ________. A. brand equity B. global branding C. market segmentation D. a distribution strategy E. positioning

E. positioning

A coordinated approach to internationalization in which the firm strives to be relatively responsive to local needs while retaining sufficient central control of operations is a​ ________ strategy. A. multidomestic B. vision C. home replication D. global E. transnational

E. transnational

In the early stages of market​ research, managers examine three important statistics to estimate market​ potential: per-capita​ income, size of the middle​ class, and market potential indicators. True or False?

True

MNEs must set prices appropriate for local conditions. Many firms devise innovative products and packaging to keep prices low. True or False?

True

Political instability is associated with corruption and weak legal frameworks that discourage inward investment and the development of a reliable business environment. True or False?

True

Regional integration greatly increases the scale of the marketplace for firms inside the economic bloc. True or False?

True

Tariffs and most nontariff trade barriers impact importers by making products more expensive. True or False?

True

​Increasingly, mainstream banks view microfinance as a source of future growth. True or False?

True