International Business Exam 1

c. Shared beliefs and rituals that are concerned with the realm of the sacred.

10. Religion may be defined as: a. Social rules that govern peoples' actions toward each other. b. A set of moral principles, or values, that are used to guide and shape behavior. c. Shared beliefs and rituals that are concerned with the realm of the sacred. d. Routine conventions of everyday life.

d. Protestant

11. According to sociologists, which of the following branches of Christianity has the most important economic implications? a. Orthodox b. Catholic c. Mormon d. Protestant

d. Verbal and nonverbal

12. What are the two forms of language? a. Explicit and implicit b. Superficial and deep c. Body and verbal d. Verbal and nonverbal

a. Ethical practices of all nations are similar in nature.

13. Identify the incorrect statement regarding ethical issues in international business. a. Ethical practices of all nations are similar in nature. b. They are often rooted in the fact that political systems, law, economic development, and culture of nations vary significantly. c. Managers in multinational firms need to be particularly sensitive to differences in business practices because they work across national borders. d. Human rights and environmental regulations are some of the common ethical issues.

a. Social responsibility

14. The idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences is known as: a. Social responsibility b. Noblesse oblige c. Business ethics d. Ethical dilemma

b. A strong personal ethical code governing the conduct of an individual.

15. Which of the following is not likely to lead to unethical behavior? a. Pressure from the parent company to meet the unrealistic performance goals. b. A strong personal ethical code governing the conduct of an individual. c. An organizational culture that deemphasizes business ethics. d. A process that does not incorporate ethical considerations into business decision making.

c. Firm invests directly in facilities to produce or market a product in a foreign country.

17. FDI occurs when a: a. Domestic firm imports products and services from another country. b. Firm invests in the stock of another company. c. Firm invests directly in facilities to produce or market a product in a foreign country. d. Firm ships its product from one country to another.

a. The amount of FDI undertaken over a given period of time.

18. The stock of FDI is: a. The amount of FDI undertaken over a given period of time. b. The total accumulated value of foreign-owned assets at a given time. c. The flow of FDI out of a country. d. The flow of FDI into a country.

b. Developed; each other's markets

19. Historically, most FDI has been directed at the _____ nations of the world as firms based in advanced countries invested in: a. Developed; underdeveloped countries b. Developed; each other's markets c. Underdeveloped; underdeveloped countries d. Underdeveloped; each other's markets

a. National economies are turning into independent economic systems.

1. Which of the following is not characteristic of globalization? a. National economies are turning into independent economic systems. b. Barriers to cross-border trade and investment are declining. c. Material culture is starting to look similar the world over. d. Perceived distance is shrinking due to advances in transportation and telecommunications.

b. It is transforming industries and is highly welcomed by those who believed their jobs were protected from foreign competition.

2. Identify the incorrect statement concerning globalization. a. It has been blamed for unemployment in developed nations, environmental degradation and the Americanization of popular culture. b. It is transforming industries and is highly welcomed by those who believed their jobs were protected from foreign competition. c. According to most economists it is a very beneficial process where gains outweigh the losses by a wide margin. d. It has created new threats for businesses accustomed to dominating their domestic markets

a. Its small and wealthy domestic markets

20. The U.S. has been an attractive target for FDI because of all of the following reasons except: a. Its small and wealthy domestic markets b. Its dynamic and stable economy c. Its favorable political environment d. Its advanced higher education system

a. True

21. The most global markets currently are markets for industrial goods and materials that serve a universal need the world over. a. True b. False

a. True

22. Underlying the trend towards greater globalization is technological change and a decline in barriers to the free flow of goods, services, and capital. a. True b. False

b. False

23. The expansion of world trade implies that nations are becoming less dependent on each other for important goods and services. a. True b. False

b. False

24. H-O factor endorsement theory argues that countries trade with each other because they possess the relative advantage of producing particular product over others. a. True b. False

a. True

25. The values and norms of a culture are evolutionary. a. True b. False

b. False

27. In today's world of global communications, rapid transportation, and global markets, cultural differences have ceased to exist. a. True b. False

a. True

28. A firm's strategy can be defined as the actions that managers take to attain the goals of the firm. a. True b. False

a. True

29. Profitability can be defined as the rate of return that the firm makes on its invested capital, which is calculated by dividing the total sales of the firm by total invested capital. a. True b. False

b. Industrial goods

3. The most global markets currently are markets for: a. Services b. Industrial goods c. Consumer goods d. Consumer durables

a. True

30. The strategy, operations, and organization of a firm must all be consistent with each other if the firm is to attain a competitive advantage and achieve superior profitability. a. True b. False

a. True

31. Employees in a business often take their cue from business leaders, and if those leaders do not behave in an ethical manner, they might not either. a. True b. False

a. True

32. Cultural relativism is the belief that ethics are nothing more than a reflection of culture and therefore, a firm should adopt the ethics of the culture in which it is operating a. True b. False

b. False

33. China is the biggest FDI investor in the US. a. True b. False

a. True

34. US FDI inflow outpaces outflow in recent years. a. True b. False

a. True

35. Foreign direct investment can make a positive contribution to a host economy by supplying capital, technology, and management resources that would otherwise not be available and thus boost that country's economic growth rate. a. True b. False

a. The values and norms of a culture do not emerge fully formed. They are the evolutionary product of political philosophy, economic philosophy, education, language, social structure, and religion

36. Discuss the determinants of culture.

a. Motivation for expansion... i. Achieve the scale of economies ii. Upgrade the product mix iii. Increase profit margin iv. Leverage cross-border learning v. Diversify industry risk vi. Seeking sustained future growth opportunity

37. Recall the HBR case on Yushan Bicycles, What is the motivation behind Yushan's expansion abroad? How effectively is it achieving its internationalization strategy?

a. International trade

4. ________ occur(s) when a firm exports goods or services to consumers in another country. a. International trade b. Merger and acquisitions c. Foreign direct investment d. Greenfield investment

d. Location economies

5. Economies that arise from performing a value creation activity in the optimal place for that activity are referred to as: a. Value creation economies b. Production economies c. Factor economies d. Location economies

b. Global standardization

6. When a firm has a strategic goal of pursuing a low-cost strategy on a worldwide scale, the firm should follow a(n) _______ strategy. a. Localization b. Global standardization c. Experience learning d. Customization

b. Learning effects

7. When individuals gain knowledge of the most efficient ways to perform particular tasks, they are saving costs through: a. Location economies b. Learning effects c. Experience curve effects d. Value creation effects

d. Culture is static.

8. Which of the following is not true regarding culture? a. Culture is evolving b. It is a system of values and norms that are shared among a group of people. c. It involves the knowledge and beliefs of people. d. Culture is static.

b. Culture

9. The system of values and norms that are shared among a group of people and that when taken together constitute a design for living best defines a. Norm b. Culture c. Value system d. Society

b. Moral courage

Which of the following enables managers to walk away from a decision that is profitable, but unethical? a. Noblesse oblige b. Moral courage c. Difference principle d. Friedman doctrine

b. False

country is defined as a system of values and norms that are shared among a group of people and that when taken together constitute a design for living. a. True b. False