INTB 3080 Midterm Exam

Which of the following factors would make a country desirable to do business with? (Check all that apply.)

> A market-based economy > Democratic political institutions

What is the objective of a pure command economy?

Allotment of resources for the overall good of society

Country A has a free market economy and a group-oriented social structure. Country B has all of the same traits, but also possesses an advanced education system. Which country would be more attractive as an investment opportunity?

B

What ethical system was the official ethical system of China until the communist revolution and emphasizes taking the right actions to attain salvation?

Confucianism

______ law is the body of law that governs oral and written agreements associated with the exchange of goods, services, money and property.

Contract

Which congressional act outlaws the payment of bribes to foreign government officials to gain businesses?

Foreign Corrupt Practices Act

______ is considered the religion that emphasizes individual economic and political freedoms which formed the basis on which entrepreneurial free market capitalism is based.

Protestantism

What is an accurate description of developed nations with regard to the environment?

They have more substantive environmental regulations.

True or false: Business people may behave unethically simply because they forget to ask whether the decision or action they are making is ethical.

True

The most important concerns regarding the costs of FDI for the home country center on the

balance-of-payments and employment effects of outward FDI.

A country that bases its laws on the traditions within the country's legal history operates under a _____ law legal system.

common

The human resource manager reminded the employees that when working with colleagues in the Middle East, it was imperative to remember that giving a deadline on a project is perceived as demanding. The manager is showing the importance of ______ in international business.

cross-cultural literacy

When a company with branches in Japan and the United States changes its performance appraisal system to reflect the fact that American managers are more individualistic as compared to their more group-oriented Japanese counterparts, the company is recognizing the need to vary company processes and practices based on how ______ affects work-related values.

culture

Political systems that emphasize individualism tend to promote _____.

democracy

______ refers to a political system in which the citizens exercise power directly or elect representatives to form a governing body.

democracy

Ethical issues arise in international business when

environmental regulations in host nations are less stringent than those in the home country.

Henri reminded the group members that they should follow the principles of right and wrong set down by the organization when making their decision. These principles represent the _____ that govern the actions of the group.

ethics

Geoff believes that the way his U.S.-based company does business is superior to the way his French affiliate office conducts business. Geoff's attitude is an example of _____.

ethnocentrism

The Foreign Corrupt Practices Act was amended to include _____ because some U.S. businesses complained the act would put U.S. firms at a competitive disadvantage.

facilitating payments

Cross-cultural _____ is necessary for a business to understand the cultural differences that exist between companies involved in international business.

literacy

In a pure ______ economy, all productive activities are owned privately—not by the state.

market

Rights that are taken for granted in developed nations, such as freedom of association and freedom of speech are

not universally accepted

The system of government in a nation is called the _____ system.

political

The term ______ refers to the interconnection of the political, economic, and legal systems of a country.

political economy

______ set certain safety standards to which a manufactured good must meet.

product safety laws

Islam prohibits payment of interest. This is one example which shows how ______ can be the root of an ethical system.

religion

In a command economy, businesses are owned by _____.

the state

The Koran characterizes the practice of charging interest as

unjust

The set of shared beliefs followed by Catholics and those of the Jewish faith represent their individual _____.

religions

Most developing countries do not have access to the technology available in developed nations, but these developing nations need technology to create new jobs and stimulate the economy. Which aspect of inward FDI do these developing nations rely on to have access to needed technology?

resource-transfer effects

Collectivism

restricts an individual's right to do something on the grounds that it runs counter to the "good of society."

Countries such as the United States, the United Kingdom, France, Germany, the Netherlands, and Japan dominate in the share of total global stock of FDI and FDI outflows and in rankings of the world's largest multinationals because they

were the most developed countries postwar and home to the largest and best capitalized enterprises.

What are three of the determinants of culture? (Check all that apply.)

> Social structure > Economic philosophy > Political philosophy

Which language is most prominent in terms of international business?

English

______ join the political entity of a state to the cultural entity of a nation.

Nation-states

What are four determinants of ethical behavior? (Check all that apply.)

Personal ethics Societal culture Organizational culture Leadership

A country that has lax intellectual property laws will find that

firms will be reluctant to enter into such a country

The production of goods in a pure market economy is determined by

supply and demand

Unrealistic performance goals can often only be attained by

taking shortcuts or behaving in an unethical manner.

Following the global financial downturn in 2008-2009, some developed nations subsidized automobile makers to help them survive the economic climate. One negative consequence of this action was that

the companies had an unfair competitive advantage in the global industry.

What are two examples of nonverbal communication?

> Giving a thumbs up sign to indicate you agree with a statement > Standing an appropriate distance from a colleague during a conversation

What are the three values central to the Confucian system of ethics that may have led to economic success in some Asian countries? (Check all that apply.)

> Loyalty > Reciprocal obligations > Honesty in dealing with others

The two major Christian organizations are

> the Orthodox Church. > the Roman Catholic Church.

Select the accurate description of a common law system.

A common law system has a degree of flexibility that other legal systems lack.

You are the Global HR manager, based in the USA and you are developing the compensation packages for the employees in the European subsidiary in Denmark. Which compensation package will be more effective for the team from Denmark?

A package that favors a fix salary.

The majority of Christians live in Europe and the Americas. However, Christianity is rapidly growing in ______.

Africa

As a global manager working for an American company and traveling to your international subsidiaries what can you expect when working with your colleagues in Denmark and in Japan? Please select the correct answer

As opposed to your Japanese colleagues who need to collect a lot of facts and need time to make a decision, you will experience that the Danes are more flexible and can more quickly adapt to new situations.

As a judge in France, Maurice is not allowed to interpret the law but relies on a strict set of codes to determine the outcome of a case. Which type of law is in place in France?

Civil Law System

______ refers to a political system that values the needs of society over that of an individual.

Collectivism

In the country of Doran, all businesses are owned by the state. The government plans production, fixes commodity prices, and also directs investments to ensure they benefit the nation as a whole and not only a few individuals. What type of economy has the country of Doran adopted?

Command

Considering the connection between culture and competitive advantage, which of the following countries would be the best investment site for Intelligent Tool Corp.?

Country B, where education is well-developed and social stratification is lacking.

If Kendra was working in the home office in Ohio she never would have agreed to pay the government official to speed up the delivery of the cargo; but since she is working in the company's foreign office, she agrees to the practice since it is considered normal in this country. Which philosophical approach to ethics is Kendra using to make her decision?

Cultural Relativism

Intel spreads the huge fixed costs of developing new generation chips over the nearly 2 billion chips it sells to computer makers. Intel benefits from

Economies of scale

______ are situations where none of the available alternatives seems morally acceptable.

Ethical dilemmas

Which statement accurately describes how personal ethics might be challenged in international transactions?

Expatriate managers may face more pressure to violate their personal ethics.

True or False: Unlike the economic system of a country, the legal system is NOT influenced by the prevailing political system.

False

True or false: Pursuing strategies that are sustainable has little impact on helping an organization ensure that ethical issues are considered in business decisions.

False

Airbus pioneered the development of the new superjumbo jet at a cost of $15 billion. It quickly obtained contracts for much of the 400 units that are expected to be ordered in the next 20 years, thereby effectively shutting out its competitor, Boeing. Airbus benefits from

First-mover advantage

______ property refers to property that is the product of any innovative activity, such as a screenplay, a music score, or the chemical formula for a new drug.

Intellectual

How has social media affected group life?

It has emphasized the idea of an extended social group.

Which statement BEST describes a totalitarian system?

It is a form of government in which the state recognizes no limits to its authority and strives to regulate all aspects of public and private life.

Which of the following best describes THE STRONGEST contributor to the unpopularity of American cars in Japan?

Japanese cars are often more efficient and reliable than American cars

Alex considers himself a "true French Canadian" and agrees with political activists who think there should be a separation from English speaking citizens who are dominating certain provinces. What seems to be the cause of this division in Canada?

Language

ComTek Limited has an order to sell 50,000 central processing units (CPUs) to Brazil, but the Brazilian government stipulated that 35 percent of the component parts of those CPUs must be produced in Brazil. This stipulation is an example of a(n)

Local content requirement

James is the warehouse supply manager for a major tool corporation. It is his job to take inventory of the tools the company has available and send orders to make more tools when supplies run low. This supply and demand form of production is an example of a ____________ economy.

Market

Adherents of Islam are called

Muslims

As demonstrated by the Nike example in the text, which situation is generally MOST preferred when considering employment practices in international business?

Requiring good conditions in home and foreign operations even when this results in a smaller profit margin

Mexico has raised the taxes on cheeses imported from the United States. These taxes are an example of a(n)

Tariff

Which description of leader behavior is most likely to promote a strong ethical culture in an organization?

The boss who consistently demonstrates strong personal ethics in all dealings with clients.

True or false: Companies can use psychological tests in the hiring process to help identify people who have a strong sense of personal ethics.

True

True or false: It is possible for one country to encompass several societies.

True

True or false: Spoken language not only allows people to communicate with each other, but structures the way people perceive the world.

True

True or false: The decision-making process is one of the determinants of ethical behavior.

True

John, an American executive, learns that a foreign subsidiary hired a 12-year-old orphan girl to work on the factory floor. He knows that using child labor is in direct violation of the company's own ethical code. At the same time, he does not think that denying the child her only source of income is right. John is facing

an ethical dilemma

A(n) ______ is a document that specifies the conditions under which an exchange is to occur, detailing the rights and obligations of the involved parties.

contract

Understanding how cultural differences across and within nations affect the way business is practiced is known as ______ literacy.

cross-cultural

When it comes to FDI, JogRight Corp. makes greenfield investments in various foreign countries and fully manages all foreign operations on its own. This approach to FDI is risky because of the problems associated with

doing business in a different culture where the rules of the game may be very different.

Sanjay told his staff that the company didn't care if the components came from a company using sweatshop labor, the parts were needed to meet the order and the company needed the order to make the sales quota. In this situation, the company makes this decision based on purely _____ terms.

economic

Young children are permitted to work in the manufacturing of soccer balls in Pakistan, but this would not be legal in the United States. However, a company wants to sell these soccer balls in the United States to Kick-Rite Sports Equipment and Kick-Rite is not sure it wants to sell these particular soccer balls. This is an example of a(n) ______ dilemma.

ethical

Stephen usually eats lunch with three of his co-workers and on the weekends he gets together with his college friends. The people Stephen interacts with represent two types of _____.

groups

Jenner is obtaining a patent for the new diet drink formulation he created. He hopes that Coca Cola and other companies will be interested in licensing his formula. Jenner is protecting his _____ property with the patent.

intellectual

There _____ a strict one-to-one relationship between one culture and a nation-state.

is not

The Hewlett-Packard example discussed in this chapter suggests that one cause of unethical behavior in a company can stem from _____.

leadership

The ______ system of a country refers to the rules, or laws that regulate behavior along with the system that enforces them.

legal

The political economy of a country refers to the interaction of the political, economic, and _____ systems of a country.

legal

In a ______ economy, both private enterprise and state ownership co-exist.

mixed

________gives employees the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company

moral courage

Camille knows it would be inappropriate of her to ask the new client if she planned to invest in shares of company stock. Social rules that dictate appropriate behaviors are called _____.

norms

When making ethical decisions, ______ factors are stressed in Japan, while ______ factors are more important in the United States.

organizational; individual or personal

Even though there are many state-owned businesses in China, many Western businesses feel that they should still invest in the country because

the nation is moving toward a market-based system.

Saturn Systems Inc., which is headquartered in the United States, has its production plant located in a less-developed country where working conditions are poor. For example, employees at the Saturn Systems plant overseas work 15-hour shifts, are exposed to toxic chemicals, and are forced to work overtime. What type of behavior is Saturn Systems Inc. exhibiting?

unethical behavior

Assumptions about how things should be that a group shares are called _____.

values

AllSpice Incorporated plans to do business with a company located in the Leone Republic, a common law country. The companies have agreed to draft the business contract in the Leone Republic. Since the contract will be drafted under a common law framework, what best characterizes the contract?

very detailed with all contingencies spelled out

Gibson Electronics identifies licensees in various countries who produce and sell the company's products in their countries in return for a royalty fee on every unit sold. Gibson Electronics' approach is risky because of the problems associated with

sharing valuable technological know-how with a potential competitor.

Connor was born into a poor family, but he worked hard during high school and went on to receive his master's degree in business. Today, he is considered "upper middle class" and enjoys a comfortable lifestyle. Connor's journey is an example of:

social mobility

A number of employees at Sports Plus Inc., which is headquartered in a country where masculinity and power distance are high, do not behave in an ethical manner. In this context, the roots of unethical behavior can be traced to

societal culture

A(n) ______ is a group of people who share a common set of values and norms.

society

All societies are divided on a hierarchical basis into social categories called social _____.

strata

The basic social organization of a society is called its social _____.

structure

What three characteristics are emphasized by the Japanese culture and boost the competitiveness of Japanese companies? (Check all that apply.)

> Education > Honesty > Loyalty