ibu exam 1 mc
A foreign direct investment occurs when... foreign ownership is in private rather than government securities a company has a controlling interest in a foreign company a foreign firm agrees to a licensing agreement with a large conglomerate a company owns at least 25% of a foreign firm
a company has a controlling interest in a foreign country
Which of the following is the LEAST likely reason that small countries worry about overdependence caused by globalization? A large country may substantially increase its demand for the small country's production. A large international firm may dictate its terms of operations in a small country. A large company may exploit legal loopholes to avoid tax payments. A large country on which they depend may pressure them on political matters.
a large country may substantially increase its demand for the small country's production
Which of the following was a notable trend in political systems during the second half of the 20th century and beginning of the 21st century? A totalitarian revolution swept the world as people looked to strong state leadership in uncertain times. Socialistic revolutions swept the world as countries aspired toward greater social justice. A wave of theocratic revolutions occurred as people around the world looked to spirituality to guide them. A wave of democratic transformations occurred as countries around the world moved away from totalitarian systems.
a wave of democratic transformations occurred as countries around the world moved away from totalitarian systems
Which of the following was a notable trend in political systems during the second half of the 20th century and beginning of the 21st century? Socialistic revolutions swept the world as countries aspired toward greater social justice. A totalitarian revolution swept the world as people looked to strong state leadership in uncertain times. A wave of theocratic revolutions occurred as people around the world looked to spirituality to guide them. A wave of democratic transformations occurred as countries around the world moved away from totalitarian systems.
a wave of democratic transformations occurred as countries around the world moved away from totalitarian systems
Some countries opt for a mixed economic system in the belief that although an economic system should aspire to achieve the efficiencies created by free markets, it must also support policies to ________. restrict economic growth destabilize poverty rates inequitably distribute wealth achieve low unemployment
achieve low unemployment
A manager practicing relativism would most likely ________. adapt to local conditions instead of implementing home-country practices refuse to change company policies and procedures to comply with local norms enforce home-country laws on host-country employees and suppliers apply universal laws to each country despite local customs and traditions
adapt to local conditions instead of implementing home-country practices
What seems to be the social aim of morality according to John McCall? All the other answers are correct To avoid serious harm and at promote human well-being To control and direct human behavior To guide action
all the other answers are correct
Which of the following statements is correct? Rights theory provides backing to the intuition that the ends cannot justify the means All the other statements are correct One's negative rights impose duties on others to not harm one's interests All rights create obligations for some party (or parties)
all the other statements are correct
Rockwall Enterprises is planning to expand the firm by establishing operations outside of the United States. In which of the following countries would Rockwall most likely be able to establish operations most quickly? japan australia germany brazil
australia
Which of the following is a statement that summarizes all economic transactions between a country and the rest of the world during a given period of time? trade deficit purchasing power parity balance of payments Gini coefficient
balance of payments
________ is a summary of all economic transactions between one country and the rest of the world over a given period of time. Foreign Direct Investment Balance of Payments Public Debt Income Distribution
balance of payments
The ________ view calls for companies to develop low-cost, high-powered, resource-minimizing innovations that can be marketed to the billions of people living on less than a few dollars a day. Hierarchy of Needs Gini coefficient Base of the Pyramid Happy Planet Index
base of the pyramid
In computing GNI, the value of a Ford car that is manufactured in Mexico using capital from the United States would ________. be added to the GNI of the United States but not the GNI of Mexico not be added to the GNI of the United States but would be added to the GNI of Mexico be added to the GNI of the United States as well as to the GNI and GDP of Mexico only affect the computation of GDP and have no bearing on GNI
be added to the GNI of the united states but not the GNI of mexico
In a democracy, ________. the opportunity to truly participate in the political process is restricted to a select few the rights of the individual are merged with the state citizens have the right to participate in the decision-making process the court system is directly supervised by the political system
citizens have the right to participate in the decision-making process
A ________ law system is based on a systematic and extensive codification of laws and puts political officials in charge of specifying accessible, detailed, and written law that applies to all citizens. theocratic civil common customary
civil
Ian, a financial manager, is preparing to transfer to Germany where he will serve as an expatriate manager of his employer's European office. Which type of legal system will Ian most likely have to deal with in Germany? mixed theocratic civil common
civil
Monique has recently been hired as an accounts supervisor at Ballston Enterprises. She wants to understand Ballston's values and its expectations for employee behavior. Which of the following would most likely provide Monique with this information? mission statement vision statement code of conduct employee contract
code of conduct
Political systems based on the ________ paradigm, such as those of Japan and China, accept the principle that government may intervene to ensure that business practices benefit society. collectivistic pluralistic laissez-faire individualistic
collectivistic
Which of the following is NOT a key stakeholder group that a company must work to satisfy in order to survive in a global environment? customers competitors employees shareholders
competitors
An advocate of the legal-justification standard would most likely assert that the law ________. offers necessary moral flexibility for a society contains enforceable rules that apply to everyone protects business activities that are unethical but not illegal develops slowly in response to evolving societal dilemmas
contains enforceable rules that apply to everyone
The fact that an English word such as blue jeans has entered the Spanish language, while a Spanish word such as macho has come into American English illustrates that ________. existing national borders are shifting cultural diffusion is a two-way process cultural trends come from emerging nations material cultures are becoming universal
cultural diffusion is a two-way process
Cultural change imposed by an alien culture is called ________. cultural imperialism multicultural ethnocentrism collectivism high-context
cultural imperialism
Which of the following terms is used to refer to habits or ways of behaving in specific circumstances that are passed down through generations? aesthetics prejudices customs attitudes
customs
Which of the following has NOT been a major force increasing globalization in recent decades? liberalization of cross-border trade decreasing prices of natural resources increase in and expansion of technology growing pressure from consumers
decreasing prices of natural resources
A(n) ________ is a political system in which government leaders are elected directly by the wide participation of the people or by their representatives. theocracy plutocracy autocracy democracy
democracy
Which of the following statements best describes a pluralistic society? Multiple segments of society adhere to the same political philosophy. Different ideologies are held by different segments of society. Two dominant political parties rule local and federal governments. Various ethnic groups belong to the official political party.
different ideologies are held by different segments of society
The Ethical Trading Initiative (ETI) is primarily focused on ________. fair trade laws for undeveloped countries greenhouse gas emission reduction tiered pricing by pharmaceutical firms employment practices of MNEs
employment practices of MNEs
Which of the following is most important to the effectiveness of an internal code of conduct? adhering to industry standards and norms relying on nonprofit NGOs to develop guidelines paying bonuses to suppliers and distributors that agree to the code ensuring that employees understand the code by requiring confirmation in writing
ensuring that employees understand the code by requiring confirmation in writing
A worrisome outcome of chronic inflation is that it tends to ________. give central banking officials excessive flexibility to manage monetary policy lower consumer demand for foreign goods, which triggers lower prices and eventually lower increase the real income of people, thereby inflating their spending and borrowing levels erode confidence in a country's currency
erode confidence in a country's currency
Countries often use local content regulations to determine the proportion of the product that must be made in the local market versus made outside of the local market in order to ________. maximize product safety favor domestic companies relieve production pressures on local companies ensure a cultural fit
favor domestic companies
The same automobile company produces Fiats and Ferraris. The company builds an engine plant in China with low production costs for Fiats but not Ferraris. The probable reason is that ________. Fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy Fiat competes mainly on a focus strategy, whereas Ferrari competes mainly on a mass-market strategy although Ferrari did not build an engine plant, it will use the same Fiat engines in its models Ferrari faces global competitors in China, whereas Fiat competes in China mainly against Chinese competitors
fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy
The distinguishing feature of political ideologies along the political spectrum is ________, with some emphasizing its primacy and others opposing it. liberalism freedom capitalism socialism
freedom
Communism primarily relies on a system of ________. private business ownership government-controlled economic activity competitive pricing and marketing market-generated supply and demand
government-controlled economic activity
The measure of the value of production that occurs within a country's borders without regard to whether the production is done by domestic or foreign factors of production is its ________. net national product (NNP) gross national income (GNI) gross domestic product (GDP) gross national product (GNP)
gross domestic product (GDP)
Expatriate managers located in cultures characterized by ________ have noticed that local employees are highly motivated by retirement programs. high future orientation low uncertainty avoidance high power distance low masculinity
high future orientation
The term "________ culture" describes a country in which the norm is a money-and-things orientation and a belief that it's better to "live to work" than to "work to live." physiological high masculinity non-fatalistic high-femininity
high masculinity
In ________ cultures, people expect others to understand unarticulated moods, subtle gestures, and environmental clues. monochronic high-context low-contact high-contact
high-context
The United Nations' ________ measures life expectancy, educational attainment, and the standard of living in a given country. Genuine Progress Indicator Human Development Index Emerging Economic Stability Net National Product
human development index
Gross national income (GNI), the broadest measure of economic activity for a country, is defined as the ________. income generated by both total domestic production and the international production activities of national companies total of all economic activity in one country less services, such as government administration, health services, and education income generated in one country, regardless of who owns the productive assets total of all consumption and investment that takes place in a national economy
income generated by both total domestic production and the international production activities of national companies
The Gini coefficient estimates a country's ________. political and legal risk gross national product economic development income inequality
income inequality
The pushback against democracy has powered a rise in totalitarianism, a situation that is likely to include which of the following? increasing adoption of the principles of the rule of law suppression of state-control in the direction of legal activities growing demands worldwide for greater fairness and justice in legal proceedings increasing adoption of the principles of the rule of man
increasing adoption of the principles of the rule of man
Wharton Enterprises, a U.S. firm, manufactures small kitchen appliances. The firm has recently developed an innovative blender design that Wharton executives anticipate being very profitable. Currently, Wharton has production facilities in the United States and China. Wharton executives are trying to determine where the new product should be manufactured. Which of the following best supports a decision to manufacture the new product in the United States instead of China? A strategic marketing plan can be quickly developed in the United States. The United States is experiencing an economic recession. Contract enforcement is a simple process in the United States. Intellectual property rights are strongly protected by U.S. patent laws.
intellectual property rights are strongly protected by the U.S. patent laws
Which of the following problems in China is blamed for the annual loss of $250 billion by American MNEs? environmental hazards embezzlement intellectual property violations child labor violations
intellectual property violations
Which of the following is an advantage of conducting business in totalitarian nations? Laws regarding the resolution of contractual disputes are clearly defined. International companies are less likely to face local political opposition to their activities. International companies run no risk of their public image being tarnished. Government deals are always straightforward and transparent.
international companies are less likely to face local political opposition to their activities
Utilitarian moral theory: Is consequentialist, is not aggregative and does not require measurement Is not consequentialist, is aggregative, and requires measurement Is consequentialist, is aggregative, and requires measurement Is consequentialist, is not aggregative, and requires measurement
is a consequentialist, is aggregative, and requires measurement
Which of the following best defines international business? It includes all business transactions involving two or more countries It includes all private economic flows between two or more countries It includes all business transactions in countries other than your home country It includes all economic flows between two or more countries
it includes all business transactions involving two or more countries
Managers at Morrison Manufacturing are considering expanding the firm's production overseas and want to ensure that the firm is located in a country with a high degree of economic freedom. Presently, which of the following locations would most likely offer Morrison the highest economic freedom? Bolivia North Korea Venezuela Japan
japan
Which of the following countries has a collectivist orientation? australia japan netherlands canadq
japan
Which term refers to two or more companies that share ownership of an FDI? franchise joint venture turnkey operation transnational firm
joint venture
Which of the following ideas holds that a government should NOT interfere in business affairs? pluralism the rule of man laissez-faire collectivism
laissez-faire
Why is the argument that "anything legal is ethical" most likely insufficient? Laws can never be changed; thus, rules for all possible ethical dilemmas are found in the law. Everything that is unethical is also illegal. The law is an extremely efficient way to solve ethical dilemmas. Laws are frequently based on imprecisely defined moral concepts.
laws are frequently based on imprecisely defined moral concepts
The ________ of a country specifies the rules that regulate behavior, the processes by which laws are enforced, and the procedures used to resolve grievances. legal system political philosophy philosophical orientation political system
legal system
Reebok pays a royalty to the German Soccer League to use the team's logo on t-shirts that it sells. Reebok and the German Soccer League most likely have a __ licensing merchandising franchising leasing
licensing
________ is a contractual arrangement in which a firm in one country allows the use of its intellectual property by a firm in a second country in return for a royalty payment. licensing franchising merchandising leasing
licensing
Which of the rights listed does John McCall classify as basic rights? Life, freedom of expression, freedom of association Life, freedom of expression, right to deduct from taxable income mortgage interest paid Life, privacy, freedom of expression Life, privacy, freedom of association
life, freedom of expression, freedom of association
Which of the following most likely complicates ethical behavior for firms that expand overseas? unstable financial settings international codes of conduct local laws and values expatriate management
local laws and values
Which of the following is most typical of a command economy? Quality of products and services tends to be consistent. Consumers have choices of many substitutes for any given product. Many products are usually in short supply. The prices of goods and services frequently change.
many products are usually in short supply
Market economies are primarily characterized by ________. restricted consumer powers formal cooperation among government, companies, and workers to achieve stable growth minimal governmental participation heavy government spending and high taxation to pay for a range of social services
minimal government participation
A culture in which people prefer to finish one task before starting another is most accurately characterized as which of the following? monochronic high power-distance low-context pragmatic
monochronic
The belief that there are universal standards of behavior that all cultures should follow is called ________. naturalism ethical relativism ethical humanism normativism or universalism
normativism or universalism
In a totalitarian political system, ________. one agent monopolizes political power political power resides with the citizens of the country governments direct most economic activity but few social ones an individualistic outlook shapes political debate and policy formation
one agent monopolizes political power
Which of the following statements about approaches to political risk management is NOT true? Passive political risk management assumes that it is difficult, if not impossible, to systematically model political risk. Passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards. Active political risk management assumes that political events unfold in observable patterns that statistical methods can detect. Active political risk management assumes that positive and negative political events in any country are neither independent nor random events.
passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards
People in the port city of Jeddah were less culturally conservative than people in the interior of the country. The most likely reason for this is that ________. the coastal area has to trade with countries using different religious holidays the coastal area has a culture with a higher uncertainty avoidance the coastal area is secular, whereas the interior of Saudi Arabia has a state religion people in the port cities have more contact with foreigners
people in the port cities have more contact with foreigners
________ is the belief that both private and public groups play important roles in a nation's political activities. Pluralism Totalitarianism Anarchism Capitalism
pluralism
________ is the possibility that political forces may change a country's business environment in ways that lead investors to lose some or all of the value of their investment or be forced to accept a lower-than-projected rate of return. Political risk Transaction risk Operating risk Governmental risk
political risk
Organizations which have cultures that score high on ________ tend to be more hierarchical, with power deriving from prestige, force, and inheritance. uncertainty avoidance femininity power distance short-term orientation
power distance
Country X is in the process of transforming from a command economy to a market economy. This process most likely involves ________. high economic growth rates for the long term standardized procedures implemented by the state privatization of many factors of production violent political and legal upheaval
privatization of many factors of production
________ political risks arise from political actions, such as public corruption or a partisan judicial system, that interfere with transactions between sellers and buyers and that can significantly raise the costs of getting things done. Systemic Procedural Catastrophic Distributive
procedural
Which of the following sequences of steps best reflects the Markkula Center framework for ethical decision-making: Recognize the issue as ethical, get the facts including identifying all stakeholders, evaluate alternative actions, decide, test the decision, act, and reflect on the outcome Focus carefully on implementation of the decision because that is always most important Identify stakeholders, consider alternatives, decide and act, reflect on the outcome Get the facts, evaluate alternative actions, act, and reflect on the outcome
recognize the issue as ethical, get the facts including identifying all stakeholders, evaluate alternative actions, decide, test the decision, act, and reflect on the outcome
The saying "When in Rome, do as the Romans do" applies to the ________ approach. relativism normativism deontological teleological
relativism
Which of the following is the best example of an acquired group membership? race national origin religion gender
religion
In which of the following countries would there be the highest likelihood of encountering a bribery situation? Germany Russia South Korea United States
russia
Elite Manufacturing seeks a foreign location with a highly favorable business environment and a comprehensive legal code. Which of the following countries would be most suitable for Elite? japan united kingdom singapore canada
singapore
Which of the following is NOT a characteristic of capitalism? state control of factors of production right to profit from individual effort private ownership of assets private control of investment
state control of factors of production
Which of the following would most likely be used in a totalitarian system to promote unconditional support for the official ideology? state control of the education system a representative legislative body privately owned media outlets a parliamentary system
state control of the education system
________ means meeting humanity's needs without harming the ability of future generations to meet their needs. Casuistry Sustainability Ethical behavior Corporate social responsibility
sustainability
The view that globalization is inevitable is most likely based on the belief that... international organizations will replace nation-states technical advances in transportation and communications are highly persistent protesters against globalization will be persuaded to change their views people want more global homogeneity of cultures
technical advances in transportation and communications are highly persistent
All of the following are reasons piracy has occurred EXCEPT ________. the protection of intellectual property rights varies little from country to country technology allows copyrighted material to be reproduced cheaply without much loss of quality some countries offer little protection for certain products in some cultures, people see little morally wrong in buying counterfeit goods
the protection of intellectual property rights varies little from country to country
Dawson Enterprises, a U.S. firm, conducts business in Saudi Arabia. The MNE recently experienced a business dispute with a local firm and was forced to meet the demands of the local firm without going through due process. Dawson's experience most likely occurred because Saudi Arabia relies on ________. common law theoretic law bureaucratic law civil law
theocratic law
What is the most likely reason that governments cooperate with each other through treaties, agreements, and consultations? to be in compliance with United Nations' requirements to gain an advantageous division of labor to attack problems jointly that one country acting alone cannot solve to assure that all countries get an equitable share of taxes from multinational enterprises
to attack problems jointly that one country acting alone cannot solve
Susan decides not to set up production facilities in Ronesia because its business laws are vague and are often interpreted according to the convenience of the government. Bribery is a common feature in conducting business deals there and a refusal to pay up is not an option. What kind of government does Ronesia have? pluralist totalitarian theocratic democratic
totalitarian
Expropriation is best defined as the ________. conversion of state-owned property to privately owned property transference of ownership of resources from private to public sector with no compensation conversion of state-owned property to privately owned property with no compensation transference of ownership from private to public sector with compensation to private owners for their losses
transference of ownership from private to public sector with compensation to private owners for their losses
In which of the following countries would business activity, given its status as a "not free" marketplace, be under the greatest government control? Vietnam India Brazil Pakistan
vietnam
Which of the following is most likely a characteristic of a "partly free" country, such as Guatemala, Pakistan, or Tanzania? strict religious constraints weak rule of law respect for civil liberties fair election procedures
weak rule of law
Nugent Electronics plans to expand into foreign markets. Top executives want the firm to focus only on locations where the rule of law prevails. Which of the following should most likely be considered by Skinner? developing, non-Western countries emerging economies experiencing rapid growth countries inclined toward totalitarian-style government wealthier, westernized countries
wealthier, westernized countries
In a practical sense, the term political system is meant to signify the ________. philosophical orientations in a country organization of military power in a country cultural values in a country working government in a country
working government in a country
