inter bus mid term questions
Knowledge that is codifiable and easy to communicate or write down is called _____ knowledge.
explicit
A relatively low-risk business operation that involves penetrating foreign markets (by exporting) or importing merchandise at competitive prices for domestic consumption refers to _______.
export-import business
The initial step toward globalization is ______.
exporting
The _____ states that when factors are allowed to move freely among trading nations, efficiency increases, which leads to price of factors becoming equal among countries.
factor-price equalization theory
A specific tariff describes a tax on imports levied as a constant percentage of the monetary value of one unit of the imported good.
false
Corporate social responsibility refers only to the company's obligations to its stockholders and investors.
false
Critics argue that open trade and foreign direct investment always take jobs from workers in developing economies and transfer them to workers in advanced industrial countries which leave the workers in the developing country, out of work.
false
Enron Corporation is a perfect example of effective social and ethical responsibility in the financial sector.
false
For the World Trade Organization, increasing trade barriers has been one of the most simple ways to encourage trade and globalization.
false
In the business world, the purpose of ethics is to direct business men and women to make as much money as they can any way possible.
false
In the final stage of globalization, global companies produce goods in one country and export them to other countries.
false
Latin American negotiators will frequently engage in long periods of silence, or may have peripheral discussions among one another while ignoring foreign business people in the room.
false
MNEs can never successfully enter foreign markets as traders, licensors, or franchisors.
false
One could argue that regional and global integration are not complements, but substitutes to economic development of a particular region.
false
One way international trade benefits consumers is by providing lower living standards.
false
Power distance examines the extent to which societies tolerate risk or are risk averse.
false
Research studies find that culture is not learned; rather it is inherited.
false
Security investments have little impact on the BOP's financial account.
false
Strategic alliances are primarily aimed at enhancing goodwill.
false
The Sarbanes-Oxley Act of 2002 set "green" standards for companies.
false
The first step a domestic firm takes when entering an international arena is usually to create an international division.
false
The openness and proliferation of globalization and free trade rules can best be attributed to the interwar period between World War I and II.
false
The primary reason why language mistakes occur in global business is that organizations tend to use backward translation.
false
The world economy is quickly shifting away from countries with emerging economies.
false
Trade barriers lead to decreased competition from abroad, and raise prices and profits of domestic firms. Interestingly, such protection over time will often lead to higher-quality domestic products and services.
false
Under the terms of the Foreign Corrupt Practices Act, it is illegal to give a bribe to a foreign official or foreign political party, but permissible to give a bribe to a businessperson if bribery is considered "an integral part of doing business in the country's environment."
false
Well-designed corporate ethics codes guarantee that employees will always make the ethical choice.
false
When doing business in Japan, it is appropriate to look directly into the eyes of your hosts.
false
When it comes to franchising, the parent company's objective is to make sure that when a customer visits its franchisee in any country, the quality of products and services provided are similar in every store.
false
Whether the trade balance is positive (surplus) or negative (deficit) is important because it provides a measure of the financing needs of a particular country. Hence, the trade balance is more important than current account balance.
false
With business becoming increasingly global, its success, fortunately, depends only on the domestic environment.
false
The forex market consists of spot, forward, and discount markets.
false (international and currency traders)
The ________ consists of domestic-country-owned assets abroad, foreign-owned assets in the domestic country, and net financial derivatives.
financial account
Which of the following is NOT a key aspect of globalization?
financial independence
NAFTA is in which stage of the economic integration process?
first stage (free trade area)
McDonald's, Burger King, and Subway are all examples of businesses that operate as ______.
franchises
Three countries, X, Y, and Z are part of a member area where they have eliminated all barriers to trade such as tariffs, quotas, and non-tariff barriers like border restrictions, while at the same time keeping their own external tariffs against nonmembers. Such an area could be described as a(n) _____ area.
free trade
The words "aspirin," "escalator," and "zipper" are examples of _____.
generalized trademarks
Insurance that reduces future risk is referred to as a(n) _______.
hedge
Increasingly, emerging economies are
innovative and technologically advanced
_____ advantages refer to the mode of entry abroad.
internalization
A business that is jointly owned and operated by two or more firms that pool their resources to penetrate host country markets, generate and split profits, and share commercial risk is called a(n) _____.
international joint venture
All of the following are arguments against globalization EXCEPT:
it may lead to an increase in the appearance of old industries.
_______ refers to the practice in which a company or individual provides the foreign partner with the technology to manufacture and sell products or services in a target country for an annual fee.
licensing
In China, consumers drink soup, which usually contains rice, and do not use a spoon. In Muslim countries, it would be inappropriate to bring a gift for another man's wife. These are examples of cultural_____.
manners and customs
_____ refers to the way a society does things.
manners and customs
A political risk that only affects a certain industry or set of firms in a given country is called a ______ risk.
micro political
In a(n) _______, a global business explains why it exists and what it plans to accomplish.
mission statement
All of the following countries can be considered globalization "winners" EXCEPT:
north Korea
According to Hofstede, which of the following countries is best described as a highly feminine culture?
norway
A(n) ______ is a tool that people use to coordinate their actions to obtain something they seek or value.
organization
The corporate practice of acquiring or producing quality goods or services at a lower cost abroad thereby eliminating domestic production is called _____.
outsourcing
A statement of account that shows all transactions between the residents of one country and the rest of the world for a given period of time is called balance of ______.
payments
A(n) ________ union is created when member countries of an economic and monetary union work closely with one another to arrive at common defense and foreign policies and behave as a single country.
political
_____ risks are the risks that political forces or problems in a given country will have a meaningful negative impact upon the conduct of business in that country.
political
Of the following, which dimension identified by Hofstede refers to the level of egalitarianism in a society?
power distance
_____ corruption is business corruption involving other private businesses, individuals, or groups.
private
The practice of making illegal payments to government officials or engaging in blackmail, extortion, or other related activities to obtain government contracts or governmental approval for business activities is called _____ corruption.
public
Most, if not all, democracies today are what are known as _____ democracies.
representative
Corporate ______ responsibility is an important output control for many companies intent on "giving back" to their communities.
social
A(n) _______ is a new phase in the evolution of the multinational corporation, where work is sourced wherever it is most efficient and the corporation transcends nationality altogether.
stateless corporation
An agreement between two or more firms that do not involve the creation of a separate entity with joint ownership and in which the firms stand to gain revenues and maximize profits through cooperation for a given period of time is called a(n) _____.
strategic alliance
Knowledge that is informal in nature and difficult to communicate is known as _____ knowledge.
tacit
The sale and purchase of goods and services across national borders is known as _____.
trade
A _______ occurs when merchandise imports exceed merchandise exports for a country.
trade deficit
A fundamental consideration that must be made in business is the risk-return trade-off. In general, the greater the risk (loss of capital invested) entrepreneurs are willing to take, the greater the rewards (profit) they are likely to reap.
true
A sustainable decoupling process would eventually lead to a multi-polar world—a world economy in which the engines of growth could comprise the United States, the European Union, China, India, Brazil, Russia, and South Africa rather than the United States alone.
true
According to the law of one price, identical goods should sell for the same price in different countries according to the local currencies.
true
Countries that have successfully adapted to globalization realize that they cannot succeed without high-quality government management at home.
true
Factor price equalization theory, states that when factors are allowed to move freely among trading nations, efficiency increases, which leads to superior allocation of production of goods and services among countries.
true
Foreign direct investment (FDI) in a country brings funds and business culture from abroad, creates new well-paying jobs, introduces innovative technologies, and enhances the skills of domestic workers.
true
Global businesses that use a functional structure usually have a narrow product line.
true
Global businesses with a hybrid structure are said to be organized by more than one dimension at the top level.
true
Hofstede's masculine vs. feminine dimension is the extent to which a society values traditionally masculine attributes (assertiveness, competition) or traditionally feminine ones (modesty, caring for others).
true
If the dollar was expected to appreciate in the 60-day forward market against the Japanese yen, it would be selling at a premium.
true
In Arab countries, business executives will often digress from the primary purpose of the meeting, then eventually return to the topic initially discussed.
true
Interestingly, licensing and franchising typically leads to the penetration of international markets without significant capital investment abroad by the parent company.
true
Key aspects of globalization include the elimination of barriers to trade and information technology.
true
Latin Americans are not as conscious about time as are North Americans.
true
Mercantilists believed that for a nation to become wealthy, that nation must export as much as possible and, in turn, import as little as possible.
true
NAFTA is a comprehensive free-trade agreement among Canada, United States, and Mexico that addresses issues ranging from protection of workers' rights and the environment to phased reduction of tariff and non-tariff trade barriers, which were finally eliminated in 2009.
true
One factor affecting change in currency values is different price levels in different countries for the same goods and services.
true
Organizational culture can be a very effective control mechanism for an organization, particularly when the norms of a given business's culture are fully accepted by that organization's workforce.
true
Porter stresses the importance of domestic demand for goods and services when determining a nation's competitive advantage. When domestic demand remains high, the number of suppliers will also be high.
true
Restrictions on the transfer or exchange of a given foreign country's currency is an example of an economic risk.
true
Subsidiaries require major marketing efforts to penetrate the international market because of cultural differences and because the entrant is new and relatively unknown.
true
The International Monetary Fund (IMF) was established under the Bretton Woods Agreement to help ensure the stability of the international monetary and financial system.
true
The ability of a firm to adjust to a culture different from its own is called acculturation.
true
The decoupling of world economic order and the move to a multipolar world helps explain why China is now the world's largest recipient of FDI.
true
The foundations of the globalized business world are political—and so are the biggest threats to the system.
true
The four basic steps in ethical decision making are: define all the facts and circumstances, identify the people affected, determine the alternative decisions and consequences, and make the decision and carry it out.
true
The growth trends in China and India today illustrate the impact that international business has on blue-collar and white-collar workers in wealthy countries as relatively low-skill factory jobs as well as high-skill service profession jobs migrate overseas.
true
The infant industry argument is part of the socio-economic category of managed trade.
true
The reason why some organizations reject a functional organizational structure is because they believe it renders them unable to respond to environmental changes that require coordination between functional areas, and because it offers each employee a restricted view of the organization's primary goal.
true
The stakeholder model of strategy formulation believes businesses exist to benefit not just their shareholders, but also all the various groups that have a meaningful stake in their operations. Such groups, for example, might include a company's employees, customers, and the community where it operates.
true
When MNEs go abroad, they generally do so for two major reasons. There could be massive competition in the home market or firms may genuinely identify new business opportunities abroad based upon the company's competitive advantage in production, technology and management.
true
In this form of government, all citizens vote directly on matters affecting the community
Athenian democracy
The so-called BRIC countries consist of: _____.
Brazil, Russia, India, China
The _____ is a report published each year by Transparency International, providing metrics to the potential corruption risk for 174 countries.
Corruption Perceptions Index
Of the following, which is NOT a cost of regional integration?
Enhancing the flow of capital, labor, and technology
_____ is considered by many to be the most infamous financial scandal in United States history.
Enron
______ refers to a negative tariff or tax aimed at boosting exports.
Export subsidy
Of the following statements about WorldCom, which is NOT true?
Five techniques were used to cook the books.
_________ is an organizational structure that groups people together because they hold similar positions in a company, perform a similar set of tasks, or use the same kind of skills.
Functional structure
Which of the following is NOT true about franchising?
In franchising, the parent firm assumes relatively less risk than with licensing.
_____ refers to agreements, sometimes temporary, between countries (or a group of countries) that aim at achieving certain trade outcomes.
Managed trade agreements
The oldest form of trade theory is called _____.
Mercantilism
Which of the following is NOT an objective of the WTO?
Naming commissioners to local trade organizations
Which of the following is a U.S. government agency that sells political risk insurance to U.S. businesses operating in countries with which the U.S. has a bilateral investment treaty?
Overseas Private Investment Corporation
_____ refers to the way people in a society relate to one another within group settings.
Social institution
Of the following, which is NOT true of the Enron financial scandal?
The scandal surprised no one because Enron was always regarded as an unethical company.
The color black in the United States indicates mourning, but in Japan white is the color of mourning. Green is an acceptable color in Muslim countries; all flags of those countries contain green. These are examples of which of the following?
aesthetics
_______ is an economic ideology where by the government owns and controls all major factors of production, and is philosophically an economically classless society.
communisum
The ability of one country that has an absolute advantage in the production of two or more goods (or services) to produce one of them relatively more efficiently than the other is called a(n) _____.
comparative advantage
A company's obligations to society, including the welfare of people and places affected by company activities is called _____.
corporate social responsibility
Successive waves of globalization include characteristics such as the expansion of trade, the diffusion of technology, extensive migration, and _____.
cross-fertilization of diverse cultures
_______ refers to a fundamental global shift in which industrialized country-dependent developing economies begin to grow based on their own underlying economic strengths rather than the ups and downs of the world's richest countries.
decoupling
The U.S. government may require that apparel imported into the United States should use U.S. cotton, or use a certain amount of American labor. This is an example of a(n) _____.
domestic content provision
Countries that have been moving toward more open trade and free market policies are known as _____.
emerging economies
Multinational ______ are firms that are headquartered in one country, but own and control manufacturing, services, research and development facilities, or other business entities on foreign soil.
enterprises MNEs