IBA EXAM 1
Which term refers to the continuing economic assimilation and interdependency of countries across the globe?
Globalization of markets
Which one of the following is considered an important measure of economic development of a country that often characterizes lower levels ofglobalization?
Gross national income per person (GNI)
________ is a religion that is not associated with one particular prophet. It is an open-hearted faith that fully accepts other faiths and is inspired by central concepts called dharma and karma.
Hinduism
Based on her studies of international business, Yolanda Sanchez decides to buy paper for her office supply store from wood grown in sustainable forests inCanada, even though the sustainable paper costs more than other paper. Considering the reasons to study international business, which of the following best explains Yolanda decision?
Implementing corporate citizenship efforts
________ refer(s) to a collection of businesses, suppliers, and supporting firms in the same industry at a specific geographic position, characterized by a critical mass of human talent, capital, or other factor endowments.
Industrial cluster
Which one of these factors is driving global economic transformation?
Industrialization in fast-growth developing economies
Which term describes the knowledge and process of creating and utilizing informational resources?
Information technology
Which of the following statements regarding information technology is accurate?
Information technology has created a competitive advantage for firms by allowing them more opportunities to outdo their competitors.
Which dimension of globalization involves the unrestricted movement of capital and the expanded networks of economies throughout the world?
Progression of international investments and financial activities
Cross-cultural differences can impact a firm's activities. A firm that ________ primarily faces language and cross-cultural difficulties due to significant interaction with customers.
Provides services
A U.S. manufacturer of automatic car wash equipment has seen its U.S. sales decline. The manufacturer decides to expand into Mexico and Canada. This is an example of which one of the following motivations for international expansion?
Pursuing prospects for growth through market diversification.
Which one of the following is an upstream value-chain activity?
Research and development
Which one of the following is an example of globalizing manufacturing? A Swiss watch maker signs distribution contracts with retail stores around the world. B. An Indian apparel company sets up a factory in Madagascar. Your answer is correct. C. A Mexican software company opens a Research and Development department in China. D. A U.S. paper manufacturer opens sales offices in Germany and Kazakhstan. E. A British bank opens loan offices in the United States, Sri Lanka, and Guatemala.
An Indian apparel company sets up a factory in Madagascar.
What has been the result of making improvements to Nigeria's cell phone infrastructure?
Enhancing economic growth and productivity.
________ orientation describes using one's own culture as a basis for judging other cultures.
Ethnocentric
Which element in Porter's diamond model describes a nation's position in terms of labor, natural resources, wealth, technology, entrepreneurship, and know-how?
Factor conditions
Assets such as technology, capital, and managerial talent are known as ________.
Factors of production
Which one of the following best explains the globalization of production?
Firms reduce manufacturing costs and retail prices by moving manufacturing activities to nations with lower costs of labor.
Which one of the following motivations for international expansion involves expanding overseas in order to grow the customer base and increase the number of products being manufactured?
Developing economies of scale
A newly established corporation that begins international business activity very early in its development, allowing it to move promptly into overseas markets, is called a ________.
born global firm
For the U.S. economy, international trade is a critical element that generates one of every seven dollars of U.S. sales. This fact supports the idea that studying international business ________.
contributes to the health of the U.S. economy
For some jobs, traveling the world and meeting people from various cultures and backgrounds facilitates career growth. In such cases, studying international business is most likely ________.
creating a competitive advantage for an individual
Geocentric orientation
described as having a global mindset without regard to country boundaries as well as openness to diversity among cultures.
What is the first stage in the internationalization process of a firm, where the firm is primarily preoocupied with business at home?
domestic focus
Which term refers to the trend of corporations to methodically expand their worldwide business activities?
internationalization
Cross-cultural risk
is a situation or event in which a cultural misunderstanding puts some human value at stake.
born global firm
is a young entrepreneurial company that initiates international business activity very early in its evolution, moving rapidly into foreign markets.
idiom
is an expression whose symbolic meaning is different from its actual or literal meaning.
Culture
is composed of values, beliefs, customs, arts, and other products of human thought and work that characterize the people of a given society.
Customer service (along with marketing)
is considered a downstream activity.
Offshoring
is the relocation of manufacturing and other value-chain activities to cost-effective locations abroad.
Material productions are ________.
items and technologies that people create to fill some purpose within their environments
A(n) ________ is a large corporation with significant resources that executes countless business activities through a system of subsidiaries and affiliates located in various countries.
multinational enterprise
Problems related to ________ relate to difficulties in building and maintaining business relationships due to differences in the cultures, interests, and goals of firms.
negotiations
When a company transfers its value-chain activities by launching a subsidiary in a foreign country, it is called ________.
offshoring
In international business, ________ primarily relates to whether a firm is centralized, decentralized, bureaucratic, or entrepreneurial.
organizational structure
Free trade
refers to the relative absence of restrictions to the flow of goods and services between nations
Contagion
refers to the tendency for a financial or monetary crisis in one country to spread rapidly to other countries, due to integrated national economies.
What should governments do to reduce the harm of globalization while also acquiring the benefits associated with globalization?
regulate financial institutions appropriatel
Leon's Luxury Clothing, located in Manhattan, designs a line of high end summer apparel for professional men and women. The company is considering opening a location in Brazil. The most likely reason for this international expansion is to __________.
seek opportunities for growth through market diversification
India has become a prominent provider of software technologies, and Brazil has become a frontrunner in commercial aircraft development. Which cause of globalization is illustrated by these examples?
Industrialization, economic growth, and innovation
________ is the tendency to view other cultures through the lens of one's own culture.
Self-reference criterion
Which of the following represents the trend of economic disaster spreading from one country to another?
Contagion
Mohammed lives in Turkey. Juan lives in Mexico. Both men were able to purchase the latest Mac book from their local retailer the day Apple released the new product. The functionality of the computer is the same with exception of the keyboard, which is customized for each language. This is an example of which of thefollowing?
Convergence of consumer lifestyles and preferences
Consumers' daily lives, partialities toward products, and spending habits all over the world are becoming increasingly similar. Popular brands now have globalfollowings, and materials are becoming more standardized. This represents which dimension of globalization?
Convergence of customer preferences and standards
A company with ________ or fewer employees is defined as an SME.
500
When an individual goes through a process of becoming acclimated to a different culture, it is called ________.
Acculturation
Which of the following is a motive for international expansion?
To stay close to supply sources.
Which principle or theory advocates that a country should produce only the goods that use the least amount of resources?
Absolute advantage principle
A ________ is a professional company that offers logistics and marketing services for focal firms as part of worldwide supply chains.
A distribution channel intermediary
A distribution channel intermediary
A specialist firm that provides various logistics and marketing services for focal firms as part of international supply chains, both in the home country and abroad.
In 2017, which region had the smallest proportion of Internet users?
Africa
Which term refers to unconscious judgments, often not based on logical facts, about what is good, acceptable, important, and normal?
Attitudes
A(n) ________ values nonverbal messages and sees communication as a way to encourage harmony in relationships.
A high-context culture
Which of the following is a motivation for international expansion?
Being closer to supply sources
Right after Natasha graduated college, she developed a software program that would allow women from all over the world to create a marketplace focused on selling new, handmade clothing, sharing fashion advice, and creating a place where women could donate their gently used clothing to women in developing parts of the world. This type of business would be considered which of the following?
Born global
Which religion is composed of the Four Noble Truths and encourages harmony, internal happiness, and peaceful interactions with others?
Buddhism
________ risks represents possible losses or failures as a result of poorly implemented business strategies, maneuvers, or processes.
Commercial risk
Which stage in the internationalization process of a firm is characterized by targeting numerous foreign markets via foreign direct investment?
Committed involvement
More of a way of thinking than a religion, ________ reflects a positive view of human nature and has a strong emphasis on ethical behavior.
Confucianism
The trend of financial crises spreading from one country to another is known as ________.
Contagion
involves possible adverse effects on operations and profitability due to developments in the political, legal, and economic environments of a foreign country.
Country risk
Which term describes how uncomfortable situations in cross-cultural interactions are examined and acted on?
Critical incident analysis
Lifestyles, customs, and religion have a potential for causing which type of international business risk?
Cross-cultural
________ refers to a situation in which a human value is at stake due to a cultural misunderstanding.
Cross-cultural risk
Which of the following terms represents unique traditions that serve as guides for interpreting attitudes, values, and behaviors?
Cultural metaphors
The values, beliefs, and customs of a group of people are known as ________.
Culture
Which one of the following statements regarding culture is accurate? Culture is not usually affected by contemporary means of communication. B. Culture comes from social settings. C. Culture is something that is hereditary. D. Culture is usually about personal behaviors. E. Culture is the same across all nationalities.
Culture comes from social settings.
Which one of the following is a true statement about culture? Culture is not derived from the social environment. B. Culture is not relative, but rather is absolute. C. There are no examples of individual exceptions to a collective culture. D. Culture is not collective or group-based. E. Culture is not inherited.
Culture is not inherited (Culture is passed from generation to generation by parents, teachers,mentors, peers, and leaders. Transnational media, such as movies and theInternet, play a large role in transmitting culture.)
Which term refers to the risk of adverse fluctuations in exchange rates?
Currency risk
Which determinant of national competitiveness focuses on the need for certain products and services domestically?
Demand conditions
Which cause of globalization BEST explains why some emerging markets have increased their standards of living and become competitive producers and exporters of computers and software?
Economic development and industrialization
________ initiate international business activities by envisioning, crafting, and creating goods and services for global buyers.
Focal firms
Which one of these describes a strategy that involves a firm's establishing a presence overseas by acquiring productive assets such asland, plants, equipment, capital, and technology?
Foreign direct investment
Which of the following refers to the absence of restrictions to the movement of goods and services among countries?
Free trade
Which statement about masculine and feminine cultures is correct?
Gender roles typically overlap in feminine cultures.
A(n) ________ orientation has a global mindset without regard to country boundaries and is open to diversity among cultures.
Geocentric orientation
________ involves a company paying external suppliers and contractors, who are located in foreign nations, to perform value-adding activities.
Global outsourcing
________ inspires corporations to establish their sourcing, producing, and promoting activities on a worldwide scale in order to attain lower costs with higher efficiency.
Globalization
________ refers to the steady integration and increasing interdependence of economies.
Globalization markets
Many small enterprises are creating products for international markets using 3-D printers. Product plans and designs can be found simply by searching online. Using the Internet to design products is an example of which area of technological advancement?
Information technology (IT)
Which of the following explains the approach of corporations to obtain and retain one or more of its value-chain activities, thereby minimizing the difficulties of working with external partners, and allowing for increased control over operations abroad?
Internalization theory
Which one of the following attempts to explain the method by which corporations obtain and retain value-chain activities minimize the difficulties of working with external partners, and allow for increased control over operations abroad?
Internalization theory
Your roommate is uncertain about a college major. Knowing that she is passionate about social and environmental causes, you suggest that she major in international business. When she graduates and works for a large company, you assert that she will be able to influence the company's actions as they affect society and the environment. Which one of the following reasons for studying international business are you advocating?
International business supports sustainability and corporate citizenship.
________ involve corporations combining resources and capabilities in order to be able to perform some task that each would be unable to perform otherwise, while at the same time sharing the risk, which reduces vulnerability for each partner.
International collaborative ventures
________ involves the allocation of assets to another country or the attainment of assets in that particular country.
International investment
________ is inspiring quicker dispersion of consumer products and brands across the globe.
International trade
Which aspect of Dunning's eclectic paradigm focuses on the various benefits associated with adopting foreign-based manufacturing, distribution, and other value-chain activities?
Internationalization advantages
Dariya's religion is based on a holy book called the Qur'an. She participates in daily ritual prayers, fasts during certain times of the year, and gives to charities. Her religion prohibits the consumption of alcohol or wearing revealing clothing. What religion does Dariya practice?
Islam
Tamika believes that business contracts should be very exactly worded. Because of bad experiences, she does not trust agreements based onassumptions, handshakes, or unspoken understandings. Tamika trusts extensive verbal explanations and spoken words more than relationships. She is from a ________ culture.
Low-context
China, India, and Eastern Europe have become known as cost-effective places for producing goods and services, and they have attracted an increasing amount of foreign capital into their economies. Which driver of globalization best explains this occurrence?
Market liberalization and implementation of open markets
Which one of the following argues that a country's affluence is due to increasing exports and decreasing imports resulting in a positive balance oftrade?
Mercantilism
A person with a(n)________ orientation has a strong orientation to time and is dependent on strict agendas and promptness.
Monochronic
Which of the following focuses on the resources a corporation possesses compared with others, and recommends that corporations that utilize internationalization strategies own or control certain resources that are not readily accessible to competitors?
Monopolistic advantage theory
Which one of the following focuses on the resources a corporation possesses compared with others and recommends that corporations that utilize internationalization strategies own or control certain resources that are not readily accessible to competitors?
Monopolistic advantage theory
Which of the following is a contemporary perspective that aids in explaining the emergence of a country's competitive advantage?
National industrial policy
Which one of the following is a preemptive cost-effective plan set into motion by a government in order to develop or reinforce a specific industry?
National industrial policy
Which principle or theory advocates exporting and attaining access to a larger global market with the purpose of increasing economies of scale?
New trade theory
________ involves companies transferring value-chain activities to more economical sites in foreign countries.
Offshoring
Which one of the following is a host-country mindset in which an individual acquires an attachment to the country in which they conduct theirbusiness?
Polycentric orientation
In a(n) ________ culture, people are flexible, and they value multitasking and spending a lot of time with others. Such cultures do not put much emphasis on time and schedules.
Polychronic
is an inflexibly held attitude that is generally negative and typically aimed at particular groups of people.
Prejudices
ABC Enterprises transferred some of its manufacturing and other value-chain activities to a more cost-effective location in China five years ago.Recently, ABC Enterprises has undergone a change in management, and the new manager has decided to move those value-chain and manufacturing activities back to the home country. In which one of the following is ABC participating?
Reshoring
Which one of the following statements is most likely true? A. Risks can be avoided, but not managed, by taking proactive action. B. Political risks can be avoided by having a company presence in the country. C. Risks cannot be avoided, but they can be managed and anticipated. D. Commercial risks can be avoided by constantly conducting research to find out how to prevent them. E. Country risk and cross-cultural risk can be managed and anticipated, but currency risk cannot.
Risks cannot be avoided, but they can be managed and anticipated.
Which phase of globalization is composed of the growth and supremacy of multinational enterprises in the industrial and agricultural industries?
Second phase
Which of the following terms represents the arrangement of activities conducted by a company in the course of creating, manufacturing, promoting, and servicing a product?
Value chain
Joe has just relocated to China for work and is in the process of learning the rules, behaviors, and lifestyles that are considered appropriate in Chinese society. Joe is engaged in ________.
Socialization
________ refers to the degree of competence a country has in overseeing its own matters. It implies that the laws of one country cannot be applied to another country.
Sovereignty
The ________ consists of approximately 160 countries worldwide and was created to control and safeguard fairness in international trade and investments.
The World Trade Organization (WTO)
Which principle or theory describes how two different countries can benefit through trade only if one of those countries is moderately more effective at producing a product needed by the other?
The comparative advantage principle
The ________ in the internationalization process model involves commencing limited international activities by way of simple exporting.
The experimental involvement stage
________ proposes that countries should export only products that use copious factors of production and import only goods that use limited factors of production.
The factor proportions theory
A grocer in Niagara Falls, Ontario, regularly bought vegetables from farmers in Rochester, New York. The invention of the telephone during this phase made it much easier for the grocer to call the New York farmers to ask about current prices and adjust her selling prices. In what phase of globalization did this situation occur?
The first phase—1830 to the late 1800s
Which dimension of market globalization is a result of the North American Free Trade Agreement, as well as other countries' agreements that have facilitated reduced trade barriers among their members?
The growth of regional economic integration blocs
Which one of the following globalization drivers increased monetary connectivity and simplified cross-border transactions?
The integration of world financial markets
Which one of the following factors best explains why trade growth has outperformed GDP growth over the years?
The liberalization of markets
Which phase of globalization was triggered by the rise of electricity and steel production?
The second phase—1900-1930
Which one of the following is an example of the competitive advantage of a nation? A. Server farms in the nation of Beta run pretty much the same hardware and software as server farms in the nations of Tau and Upsilon. B. In the nation of Alpha, the leading consumer electronics firm uses a patented chip that costs less than any other alternative. The other Alpha firms in the industry, however, cannot use the chip and are no better or worse than competitors in other countries. C. The three clothing manufacturers in the nation of Epsilon are the best in the world. One holds several worldwide patents. Another has access to low-cost cotton cloth. A third has a valuable brand name. The dominance of these firms also provides benefits to new Epsilon clothing firms, which can hire knowledgeable workers from the market leaders. Your answer is correct. D. The gPhone, the best-selling smartphone in the world, is designed, manufactured, and marketed by Strawberry, Inc., and headquartered in the nation of Gamma. A close competitor is the Robot phone from the nation of Sigma. Other phone manufacturers in Gamma lag far behind the two leaders. E. The music industry in the nation of Delta moved up from seventh in the world last year to third this year.
The three clothing manufacturers in the nation of Epsilon are the best in the world. One holds several worldwide patents. Another has access to low-cost cotton cloth. A third has a valuable brand name. The dominance of these firms also provides benefits to new Epsilon clothing firms, which can hire knowledgeable workers from the market leaders.
Which of the following is NOT a motive for firms to internationalize?
To supplement unemployment in the domestic market by fostering foreign talent.
________ is defined as the ability to accept uncertainty and a lack of clarity in the thinking and actions of others.
Tolerance for ambiguity
In some countries, which of the following would be affected by a lack of status differences between employees and managers?
Union-management relationships
The greatest significance of globalization is reflected directly in a company's ________.
Value chain
Which cultural dimension forms the basis for personal motivations and behaviors?
Values
What is one of the most significant expressions of a culture that provides cultural insight?
Verbal language
facilitator
a firm or an individual with special expertise in banking, legal advice, customs clearance, or related support services that helps focal firms perform international business transactions.
The formation of the WTO and the emergence of economic integration blocs led to ________.
a global decrease in barriers to trade
The sequence of activities implemented by a company in the course of creating, manufacturing, promoting, and servicing a product is known as________.
a value chain
One of the most noteworthy influences on globalization has been ________.
advances in technology, including communications, data, and engineering
Cross-cultural differences in business can lead to problems with ________, which is when information and instructions can be understood in multiple ways.
ambiguity
Cultural metaphors
are distinctive traditions or institutions that serve as a guide or map for deciphering attitudes, values, and behavior.
For the first 10 years of its existence, Ravi Patel's company sold only to customers within the United States. The company would occasionally get orders from overseas customers who had heard from relatives or friends about Ravi's products. But now, Ravi has decided to try actively exporting to selected retailers in Canada, Mexico, and Central America, kind of like dipping his toes in the water. Which stage in the internationalization process model describes Ravi's company today?
experimentalinvolvement
________ are corporations or individuals with expertise in finance, legal advice, customs clearance, or support services that help firms perform international business transactions.
facilitator
In the pre-export stage of the internationalization process, ________.
firms receive unsolicited product orders from abroad
The spread of Starbucks around the world is an example of the ________ of markets.
globalization of markets
Which term refers to an expression whose symbolic meaning differs from the literal meaning?
idiom
In ________, people are primarily concerned with their own self-interest, and ties among individuals are fairly loose.
individualistic societies
When a domestic firm seeks opportunities in foreign markets, the firm's motive is best described as ________.
strategic
Societies that score low on uncertainly avoidance ________.
take risks and make decisions more quickly.
A European clothing retailer postponed acquiring firms located abroad due to a fear of not being able to work well with foreign business partners and being unable to integrate the different cultures. The clothing retailer was primarily concerned about cross-cultural differences affecting________.
teamwork
Sovereignty
the ability of a nation to govern its own affairs.
Acculturation
the process of adjusting and adapting to a culture other than one's own. It is commonly experienced by people who live in other countries for extended periods, such as expatriate workers.
Socialization
the process of learning the rules and behavioral patterns appropriate to one's society.
Reshoring
the return of manufacturing and services back to the home country.
Information technology
the science and process of creating and utilizing information resources.
The World Trade Organization (WTO)
was formed because of GATT and aimed to regulate and ensure fairness in global trade and investment.
Global outsourcing
when a firm delegates performance of avalue-adding activity to an external supplier or contractor located abroad.
