International Business (Chapter 1-3)
At the beginning of 2018, the value of the outstanding stock of foreign direct investment of all nations totaled more than
$30.8 trillion
What percentage of global output is now bound for international trade
60 percent
The three largest markets for American exports of goods in 2017 were
Canada, Mexico, and China.
What is Hall's high- and low-context framework based on
Communication styles
What company was the first to issue stock and is often identified as the world's first multinational corporation
Dutch East India Company
Anthropologist E. T. Hall suggests that there are hundreds of ways managers can learn the characteristics of other cultures.
False
Feminine cultures in Hofstede's dimensions care about relationships and are not focused on business success
False
Hofstede is primarily concerned with social values and the dimensions he identified that help parents understand their children
False
International trade includes exports, imports, and foreign direct investment.
False
The MBI model is linked with the global mind-set since it can be used to connect cultures across diversity boundaries
False
The dynamic capability theory states that for a firm to invest overseas, it must have three kinds of advantages: ownership specific location specific internalization
False
The majority of the world's outward FDI has been in the forms of imports and exports
False
The predictable decline in the average cost of producing each unit of output as a production facility gets larger and output increases is known as the experience curve
False
When adjusting to other cultures, the first step managers take is to compare their current culture to another to assess its value
False
Which of the environments associated with a company refers to the uncontrollable forces originating outside the home country?
Foreign
Which cultural framework is based on communication styles?
Hall's (high and low context)
Ethnocentricity gets in the way of communication across cultural borders because
People living in their own culture are often unaware of its influence on them
Big Tire Bikes Inc, is headquartered in Maryland and does business within the United States, as well as within many counties in Europe and South America. This company is an example of
international business
Jetson Manufacturing has manufacturing operations in the United States, Germany, Indonesia, and Brazil. This is an example of
international company
Religion is part of a group's culture because
it influences behavior through attitudes and beliefs
Natalie purchases Open Source bottled water from France because it is derived from natural springs and the store brand does say where it comes from. What is influencing Natalie's purchase decision?
Product differentiation
Which characteristic would be typical in a feminine culture?
Quality of work life is important.
Jensen Control Corp. now uses videoconferencing which helps the sales team demonstrate products to prospective international customers while eliminating expensive travel costs. Which of the five drivers of international business does this represent?
Technological
Material culture includes
manufactured goods
How do the dimensions of Kluckhohn and Strodtbeck's framework help us to better understand other cultures
They help us to further understand beliefs and act ions in other cultures
The operation's of a company outside its home or domestic market are known as foreign business
True
The plague known as the Black Death moved west and affected more people as the international trading system expanded
True
The proportion of world trade coming from North America, Latin America, Africa, and the Middle East has decreased since 1983.
True
The argument that free trade is the best strategy for advancing the world's economic development is considered
a proposition with which almost all economists agree.
Supporters of mercantilism would agree that
accumulation of precious metals is an activity essential to a nation's welfare
The increased internationalization of business requires _____________ to have basic knowledge of international business
all managers
An industry that has a limited number of competing firms, such as the U.S. mobile phone market in which four firms controlled 98 percent of the market in 2018, is known as
an oligopolistic industry
A global mind-set is a set of skills that evidience
an openness to diversity and an ability to work across cultural borders
When we use frameworks to help us understand culture, it's important to remember that frameworks
are comparative, with our own culture the reference point
Trompenaar's achievement versus ascription dimension describes social status based on what one does or who one is. In the United States, where people build who they are through work, social status tends to be
based on achievement
According to Trompenaars, a cultures attitude toward the environment can range from:
control over the environment to harmony with it
Hofstedes masculinity-femininity dimension is a measure of a culture's
distribution of roles between the sexes
Five years ago it cost Bernie's Bikes Inc. about $52 dollars to build a single bike. Today, it only costs the company about $31 because they have automated the process and are able to purchase component parts in larger quantities. What allowed the company to reduce the price to build a bike?
economies of scale
One argument against globalization is that it creates a decline in
environmental conditions
In examining the volume of international trade, the proportion of world exports and imports accounted for by the ten largest exporting and importing nations in 2016
exceeded 50 percent
The international product life cycle is used to***********************
explain how the international trade in manufactured goods will be linked to gross national income*************
When gross national income rates drop significantly, it affects a company's environment. Which type of external force does this represent?
external
In 2016, what was the included in the five largest categories of U.S. goods imported from China?
footware
Harrison Manufacturing, based in Toledo, recently purchased a new manufacturing facility and production equipment in Germany that it will use to produce component parts. This purchase is an example of
foreign direct investment
What is one argument in support of globalization
free trade enhances socioeconomic development
Due to the expanding importance of foreign-owned firms in local economies, host governments have made their policies toward these companies:
more liberal
The 17th and 18th centuries have frequently been termed the "Age of Mercantilism" because
national power depended on the sponsorship and control of merchant capital
Culture frameworks are helpful, but their use may
oversimplify and limit our understanding and learning after a point.
The two components of foreign investment include
portfolio investment direct investment
A country ________ when it decides to use its resources to produce only the product in which it has an absolute advantage
specializes
When one of the reasons suggested by Alfred Marshall for why firms tend to cluster together on a geographic basis
technological information can be readily shared
In low-context cultures it is common to find
that communication tends to be explicit
Firms from __________ had the largest total outstanding stock of direct overseas investment at the beginning of 2018
the United States
Accounting controls directly relate to a culture's assumptions about
the basic nature of people.
The kinds of forces in the foreign environment are __________ those in the domestic environment except that they occur in foreign nations.
the same as
Kinship and free association
the two basic types of social institutions
Trompenaar's diffuse cultures are called diffuse because
their differentiation between public and private life is spread out freely (diffused)
Overall, what has occurred with the dollar volume of service exports worldwide
There has been an absolute increase
What is an argument presented by opponents of globalization
A report by the Labor Secretariat for the North American Trade Agreement (NAFTA) reported that more than half of firms surveyed used threats to close U.S. operations as a tool to fight union-organizing efforts
The United States can produce more wheat for the same or lower costs than many other countries. This is an example of
Absolute Advantage
Who advocated the early attempt to develop an international trade theory in response to the practice of mercantilism?
Adam Smith
What is an example of an external force that can affect a company's environment?
The newly-elected governor decides to raise property taxes.
An international manager has three choices when deciding how to employ a technique used in domestic operations to an international operation:
Transfer it intact not use it adapt it to local condition
Currency devaluation helps a nation avoid losing markets and regain competitiveness in world markets
True
Hofstede's pragmatic versus normative dimension reflects an assessment of how individuals handle explainable aspects of their lives
True
In high-context cultures, people tend to form long-lasting relationships that endure over time.
True
Kluckhohn and Strodtbeck developed their cultural values classification system based on universal problems, such as people's relationship to nature
True
Rapid urbanization of populations combined with industrialization in the emerging markets is quickly shifting the world's economic center of gravity from Europe and the Americas back to Asia.
True
International business really began
When Phoenician and Greek merchants sent representatives abroad to sell goods
What is an example of the competitive driver of international business activity
a company that enters a foreign market to distract companies with similar products or services
Mercantillists believed that
a nation should have an export surplus in order to accumulate previous metals
Hofstede's individualism-collectivism measures
the degree to which people in the culture are integrated into groups.
Hofstede's power distance dimension can be described as
the extent to which society expects power to be distributed unequally.
Monochronic times is best illustrated by
the flight schedule at an airport