Issues in International Business :)

time of completion of a job minus the time it was available for the first operation

Job flow time is defined as the

36. Identify the strengths and influences of the classical theories of international trade.

Mercantilism is a forerunner of modern-day protectionism, the idea that governments should actively protect domestic industries from imports and vigorously promote exports. Absolute advantage is identified as the birth of modern economics, a forerunner of the free trade movement, which defeats mercantilism, at least intellectually. Comparative advantage gives guidance that is more realistic to nations interested in trade but having no absolute advantage. This theory explains patterns of trade based on factor endowments.

40. Discuss the political arguments against free trade.

Political arguments include national security, consumer protection, foreign policy, and environmental and social responsibility. National security is often invoked to protect defense-related industries. Many nations fear that if they rely on arms imports, their national security may be compromised if there are political or diplomatic disagreements between them and the arms-producing nation. Consumer protection has frequently been used as an argument for nations to erect trade barriers. Foreign policy objectives are often sought through trade intervention. Trade embargoes are politically motivated trade sanctions against foreign countries to signal displeasure. Environmental and social responsibility can be used as political arguments to initiate trade intervention against certain countries.

38. Discuss the propositions of the modern theories of international trade.

Product life cycle theory is an economic theory that accounts for changes in the patterns of trade over time. Comparative advantage first resides in the lead innovation nation, which exports to other nations. Production migrates to other advanced nations and then to developing nations in different product life cycle stages. This theory is the first theory to incorporate dynamic changes in patterns of trade. Its weakness is that the United States may not always be the lead innovation nation. Strategic trade theory suggests that strategic intervention by governments in certain industries can enhance their odds for international success. Strategic intervention by governments may help domestic firms reap first-mover advantages in certain industries. First-mover firms, aided by governments, may have better odds at winning internationally. Strategic trade theory provides direct policy advice, is more realistic, and incorporates the role of governments in trade. The theory of national competitive advantage of industries is that the competitive advantage of certain industries in different nations depends on four aspects that form a "diamond." The four aspects are: 1) factor endowments, 2) domestic demand, 3) firm strategy, structure, and rivalry, and 4) related and supporting industries. This theory is the most recent, most complex, and most realistic among various theories. The weakness is that the theory has not been comprehensively tested, and that overseas demand may stimulate the competitiveness of certain industries.

3. ______ enables firms to anticipate future needs and move early to identify, develop, and leverage resources and capabilities for future competition. a. Strategic foresight b. Social complexity c. Valuable, rare, and hard-to-imitate resources d. Easily imitable capabilities

a. Strategic foresight

27. Which of the following statements is true of import quotas? a. They are the most straightforward denial of absolute or comparative advantage. b. They are government payments to domestic firms. c. They are rules stipulating that a certain proportion of the value of the goods made in one country must originate from that country. d. They are bureaucratic rules that make it harder to import foreign goods.

a. They are the most straightforward denial of absolute or comparative advantage.

39. Compare and contrast absolute advantage and comparative advantage trade theories.

The economic advantage one nation enjoys that is absolutely superior to other nations summarizes the theory of absolute advantage. According to this theory, nations should specialize in economic activities in which they have an absolute advantage and trade with others. By specializing and trading, each nation produces more and consumes more. Therefore, the wealth of trading nations and the world overall increases. Its strengths are in being the birth of modern economics, serving as the forerunner of the free trade movement and defeating mercantilism, at least intellectually. The weakness of the theory is that when one nation is inferior to another, the theory is unable to provide any advice, and when there are many nations, it may be difficult to find an absolute advantage. To compensate, the theory of relative advantage claims that there may be an economic activity in which a nation has a relative advantage in comparison with other nations. This theory's strengths are that it offers more realistic guidance to nations interested in trade but having no absolute advantage and explains patterns of trade based on factor endowments.

37. Discuss the determinants of the success and failure of a firm's exports around the globe.

The success of a firm's exports around the globe is determined by discovering and leveraging comparative advantages of world-class locations. Managers need to constantly monitor and nurture the current comparative advantage of certain locations and take advantage of new locations. The managers who fail to realize the departure of comparative advantage from certain locations is likely to fall behind. Managers need to be politically active to demonstrate, safeguard, and advance the gains from international trade. They often fail to realize that free trade is not free; it requires constant efforts and sacrifices to demonstrate and advance the gains from such trade.

minimizes make span

Which of the following statements concerning Johnson's rule is true?

the order is behind schedule

a negative SPO value signifies that

According to the theory of absolute advantage, which of the following is true of a nation with free trade? a. A nation gains by specializing in economic activities in which it has an absolute advantage. b. A nation gains absolute advantage by restricting trade with other countries. c. A nation gains tremendously by focusing on economic activities in which it has a comparative advantage. d. A nation will develop absolute advantage based on its locally abundant factors.

a. A nation gains by specializing in economic activities in which it has an absolute advantage.

Which of the following terms best describes foreign direct investment? a. Directly investing in, controlling, and managing value-added activities in other countries. b. Directly investing in, controlling, and managing value-added activities in other markets. c. Directly investing in shares of multinational enterprise. d. All of these answers

a. Directly investing in, controlling, and managing value-added activities in other countries.

Which of the following statements is true of the theory of national competitive advantage of industries? a. It focuses on why certain industries within a nation are competitive internationally. b. It proposes to help only a few strategically important industries. c. It was first proposed in the 1960s by the American economist Raymond Vernon. d. It is the idea that governments should actively protect domestic industries from imports and vigorously promote exports.

a. It focuses on why certain industries within a nation are competitive internationally.

2. Which of the following statements is true of captive sourcing? a. It means setting up subsidiaries to perform in-house work in foreign locations. b. It means moving offshored activities back to the home country. c. It means outsourcing to an international firm. d. It means outsourcing to a domestic firm.

a. It means setting up subsidiaries to perform in-house work in foreign locations.

33. _____ are rules stipulating that a certain proportion of the value of the goods made in one country must originate from that country. a. Local content requirements b. Voluntary export restraints c. Import quotas d. Subsidies

a. Local content requirements

In order to better compare/contrast costs of living in the carious environments GNP/GDP may be adjusted to: a. PPP (purchasing power parity) b. Foreign exchange rate c. Country's inflation rate d. Five-year national bond appreciation/depreciation

a. PPP (purchasing power parity)

. According to the resource-based view, which of the following is the reason for economic gains from international trade? a. Some firms in a nation generate exports that are hard to imitate. b. Some firms in a nation generate exports that are not valuable or unique. c. Firms importing products have a balance of trade. d. Firms exporting more products have a trade surplus.

a. Some firms in a nation generate exports that are hard to imitate.

According to the text, most MNEs are ____ the base of the pyramid. a. Focusing on b. Ignoring c. Aware of countless opportunities of d. Considering FDI in the economies at

b. Ignoring

17. Which of the following statements is true of intangible resources? a. They include human, innovation, and reputational resources. b. They include technological and organizational resources and capabilities. c. They are organized as financial and physical resources. d. They are observable and quantifiable.

a. They include human, innovation, and reputational resources.

Which of the following is true of related and supporting industries within the theory of national competitive advantage of industries? a. They provide the foundation upon which key industries can excel b. They highlight a firm's structure, strategy, and rivalry c. They are able to be developed in a country within a few months to boost a firm's competitive advantage d. Most firms thrive in the absence of strong related and supporting industries

a. They provide the foundation upon which key industries can excel

4. _____ helps managers make decisions on what capabilities to focus on in-house and what to outsource. a. Value chain analysis b. Cause and effect analysis c. Strategic management d. System dynamics

a. Value chain analysis

How many individuals are employed by foreign-owned firms throughout the world? a. About 80 million c. About 18 million b. About 40 million d. About 1 million

a. about 80 million

Strategic trade theory suggests that strategic intervention by governments in certain industries can enhance their odds for international success. These industries: a. are highly capital-intensive industries. b. are highly labor-intensive industries. c. have low barriers to entry. d. let domestic firms enter the market easily without government assistance.

a. are highly capital-intensive industries.

24. According to the resource-based view of management, an implication for action is that _____ though important, is not likely to be a successful strategy. a. benchmarking b. commoditization c. reshoring d. ambidexterity

a. benchmarking

Managers who fail to realize when a location no longer has a _____ are likely to fall behind. a. comparative advantage b. absolute advantage c. economic advantage d. first-mover advantage

a. comparative advantage

28. Net losses that occur in an economy as the result of tariffs are known as: a. deadweight costs b. tariff barriers c. import quotas d. the material, labor, and distribution gains associated with producing a product

a. deadweight costs

The theory of national competitive advantage of industries is also popularly known as the _____. a. diamond theory b. product life cycle theory c. factor endowment theory d. mercantilism theory

a. diamond theory

28. A "LEGO" view of a firm: a. fails to realize that social capital associated with complex relationships and knowledge permeating many firms can be a source of competitive advantage. b. states that in order to attain competitive advantage, market-based and nonmarket- based (political) capabilities need to complement each other c. is another way of saying "casual ambiguity" d. is a term used to describe a firm's ambidexterity

a. fails to realize that social capital associated with complex relationships and knowledge permeating many firms can be a source of competitive advantage.

29. The strategic trade theory is criticized because _____. a. many industries claim that they are strategically important b. the government does not intervene when necessary c. the theory claims that the United States will always have a strategic advantage in terms of innovation d. stage-by-stage migration of production takes several years

a. many industries claim that they are strategically important

7. Critics of ______ make the political argument that many large firms in developed economies are unethical and are interested only in the cheapest and most exploitable labor. Not only is work commoditized, but people are also degraded as tradable commodities that can be jettisoned. a. offshoring b. environmental law c. reshoring d. benchmarking

a. offshoring

The oldest and most frequently used economic argument against free trade is the urge to shield domestic industries, firms, and jobs from allegedly unfair foreign competition. This is called _____. a. protectionism b. economic nationalism c. anti-globalization d. developmentalism

a. protectionism

The value of imported items to Australia equals $1 trillion, but the value of exported items from Australia equals $750 billion. Australia has a $250 billion _____. a. trade deficit b. trade surplus c. absolute advantage d. comparative disadvantage

a. trade deficit

13. A _____ engages managers to ascertain a firm's strengths and weaknesses on an activity-by-activity basis, relative to rivals. a. value chain analysis b. cause and effect analysis c. VRIO framework d. franchise model

a. value chain analysis

In the 1990s, the term "emerging economy/market" replaced the commonly used term: a. Fast growing economy/market b. Developing economy/market c. Undeveloped economy/market d. Third world economy/market

b. Developing economy/market

10. Which of the following assets is difficult to imitate? a. Current assets b. Intangible assets c. Tangible assets d. Material assets

b. Intangible assets

23. Which of the following statements is true of the resource-based view of global business? a. It deals with the external opportunities and threats. b. It concentrates on a firm's internal strengths and weaknesses. c. It consists of only primary activities and support activities. d. It refers to the difficulty of identifying the causal determinants of firm performance.

b. It concentrates on a firm's internal strengths and weaknesses.

18. Which of the following statements is true of a VRIO framework? a. It focuses on visual analysis, range, impact, and objective of resources and capabilities. b. It focuses on value, rarity, imitability, and organizational aspects of resources and capabilities. c. It involves the difficulty of identifying the actual cause of a firm's successful performance. d. It involves a series of activities used in the production of goods and services that make a product.

b. It focuses on value, rarity, imitability, and organizational aspects of resources and capabilities.

Which of the following statements is true of trade? a. It only consists of the exchange of services. b. It involves export and import of goods and services. c. It leads to the stagnation of the wealth of the world. d. It only consists of the buying and selling of tangible goods.

b. It involves export and import of goods and services.

Which of the following statements is true of the theory of absolute advantage? a. It was advocated by British economist David Ricardo. b. It opened the floodgates for the free trade movement. c. It suggests that international trade is a zero-sum game. d. It is more realistic and useful than comparative advantage when applied in the real world.

b. It opened the floodgates for the free trade movement.

_____ can determine the success and failure of a firm's exports around the globe. a. Monitoring and nurturing the absolute advantage of certain locations b. Leveraging comparative advantage of world-class locations c. Discovering absolute advantage of selective locations d. Improving the old promising locations

b. Leveraging comparative advantage of world-class locations

_____ are government payments to domestic firms. a. Import quotas b. Subsidies c. Voluntary export restraints d. Local content requirements

b. Subsidies

Which of the following statements is true of administrative policies? a. They are imposed on imports that have been dumped. b. They are bureaucratic rules that make it harder to import foreign goods. c. They have been developed to show that, on the surface, exporting countries voluntarily agree to restrict their exports. d. They are rules ordering a certain proportion of the value of the goods made in one country must originate from that country.

b. They are bureaucratic rules that make it harder to import foreign goods.

8. Which of the following statements is true of non-value adding capabilities? a. They identify the causal determinants of successful firm performance. b. They can lead to competitive disadvantage. c. They give a firm a sustained competitive advantage even if it is not properly organized. d. They consist of primary activities and support activities.

b. They can lead to competitive disadvantage.

The firm that engages in foreign direct investment is a: a. Global firm b. Multinational enterprise c. International enterprise d. Foreign direct investor

b. multinational enterprise

31. A(n) _____ is a government payment to a domestic firm. a. embargo b. subsidy c. tariff barrier d. business payment

b. subsidy

6. The employees at Leo Corp. are _____ assets. They help the firm gain a competitive advantage. a. complementary b. tangible c. intangible d. material

b. tangible

The value of exported items to the United Kingdom equals $1 trillion last year, but the value of items imported by the United Kingdom equals $750 billion. The United Kingdom has a $250 billion _____. a. trade deficit b. trade surplus c. trade volume d. trade debit

b. trade surplus

According to the institution-based view, why do nations benefit from international trade? a. Because some firms in one nation generate exports that are valuable, unique, and hard to imitate that firms from other nations find it beneficial to import. b. Because governments actively protect domestic industries from imports and vigorously promote exports. c. Because different rules governing trade are designed to determine how economic gains from international trade are shared. d. Because the wealth of the world (measured in gold and silver) is fixed and a nation that exports more than it imports will enjoy the net inflows of gold and silver and become richer.

c. Because different rules governing trade are designed to determine how economic gains from international trade are shared.

Which of the following is NOT a reason why global business should be studied? a. Because many ambitious students aspire to join the top ranks of large firms. b. To acquire hands-on global experience in global business. c. Because many top rank managers are selected from the pool of expatriate managers d. In order for one's earning potential to be maximized.

c. Because many top rank managers are selected from the pool of expatriate managers

21. _____ is a process of market competition through which unique products that command high prices and high margins gradually lose their ability to do so, thus becoming commodities. a. Commodification b. Singularization c. Commoditization d. Redistribution

c. Commoditization

____ is/are measured as the sum of value added by resident firms, households, and government operating in an economy. a. Gross national product b. Gross national income c. Gross domestic product d. National reserves

c. Gross domestic product

In the context of the product life cycle theory, which of the following statements is true of the maturing stage? a. In this stage, a new product is commoditized. b. In this stage, a new product is standardized. c. In this stage, it becomes worthwhile to produce goods in other developed nations. d. In this stage, production of a new product that commands a price premium is involved.

c. In this stage, it becomes worthwhile to produce goods in other developed nations.

. In the context of the product life cycle theory, which of the following statements is true of the first stage? a. In this stage, a new product is commoditized. b. In this stage, a new product is standardized. c. In this stage, production of a new product that commands a price premium is involved. d. In this stage, it becomes worthwhile to produce a product in other developed nations.

c. In this stage, production of a new product that commands a price premium is involved.

19. Which of the following statements is true of benchmarking? a. It focuses on a VRIO framework. b. It deals with setting up subsidiaries to perform in-house work in foreign locations. c. It is a process in SWOT analysis. d. It is the process of turning over an activity to an outside supplier.

c. It is a process in SWOT analysis.

Which of the following is a difference between merchandise trade and service trade? a. Merchandise trade takes place only between a firm and a consumer, whereas service trade takes place only between a producer and a consumer. b. Merchandise trade includes services and foreign direct investment, whereas service trade includes only trade in goods. c. Merchandise trade is the buying and selling of tangible products, whereas service trade is the buying and selling of intangible services. d. Merchandise trade is defined by the Four Modes of Supply of the General Agreement on Trade in Services (GATS), whereas service trade is defined by the Four Modes of Demand of the GATS.

c. Merchandise trade is the buying and selling of tangible products, whereas service trade is the buying and selling of intangible services.

_____ is the assumption that a resource used in producing for one industry can be shifted and put to use in another industry. a. Resource dependence b. Resource necessity c. Resource mobility d. Resource endowment

c. Resource mobility

15. _____ are the tangible and intangible assets a firm uses to choose and implement its strategies. a. Benchmarks b. Commodities c. Resources d. Value chains

c. Resources

5. Which of the following assets is easy to imitate? a. Current assets b. Intangible assets c. Tangible assets d. Complementary assets

c. Tangible assets

Which of the following statements is true of nontariff barriers? a. They are government payments to international firms. b. They are restrictions on the quantity of goods exported. c. They can discourage imports by means of subsidies. d. They tend to encourage imports over exports.

c. They can discourage imports by means of subsidies.

25. Managers attempt, via the _____, to distinguish resources and capabilities that are valuable, rare, hard-to-imitate, and organizationally embedded from those that do not share these attributes. a. statistical analysis b. cause and effect analysis c. VRIO framework d. SWOT analysis

c. VRIO framework

30. The _____ theory is also known as Heckscher-Ohlin theory. a. strategic trade b. diamond c. factor endowment d. product life cycle

c. factor endowment

14. In the context of the VRIO framework, the question of _____ is a reminder of the cliché: If everyone has it, an individual cannot make money from it. a. organization b. imitation c. rarity d. value

c. rarity

A(n) _____ is a means of discouraging imports by placing a tax on imported goods. a. embargo b. non-tariff barrier c. tariff barrier d. import quota

c. tariff barrier

virtual corporations and hollow corporations

companies who outsource most of the functions of the supply chain network are known as

20. Which of the following terms is also known as foreign direct investment? a. Reshoring b. Offshoring c. Onshoring d. Captive sourcing

d. Captive sourcing

35. _____ is defined as the relative advantage in one economic activity that one nation enjoys in relation to other nations. a. Outright advantage b. First-mover advantage c. Absolute advantage d. Comparative advantage

d. Comparative advantage

Which of the following statements is true of the theory of mercantilism? a. It suggested that the wealth of the world was flexible. b. It proposed the first dynamic theory to account for changes in the patterns of trade over time. c. It is also referred to as a modern trade theory. d. It is the oldest theory in international trade.

d. It is the oldest theory in international trade.

Which of the following statements is true of trade surplus? a. It occurs when a nation only imports goods and services. b. It occurs when a nation imports goods and services more than it exports. c. It occurs when a nation only exports goods and services. d. It occurs when a nation exports goods and services more than it imports.

d. It occurs when a nation exports goods and services more than it imports.

The global economy can be viewed as a pyramid. The Triad represents: a. US, Germany, England b. US, Western Europe, China c. Brazil, India, China d. North America, Western Europe, Japan

d. North America, Western Europe, Japan

_____ against free trade include national security, consumer protection, foreign policy, and environmental and social responsibility. a. Conservative arguments b. Protectionist arguments c. Economic arguments d. Political arguments

d. Political arguments

22. _____ is moving formerly offshored activities back to the home country of the focal firm. a. Domestic in-house activity b. Foreign direct investment c. Onshoring d. Reshoring

d. Reshoring

11. _____ refers to the socially elaborate ways of organizing typical of many firms. a. Social constructionism b. Structuralism c. Interactionism d. Social complexity

d. Social complexity

12. Which of the following statements is true of tangible resources? a. They include reputational resources and capabilities. b. They include human, innovation, and reputational resources and capabilities. c. They are hard to observe and impossible to quantify. d. They are organized as financial, physical, technological, and organizational resources.

d. They are organized as financial, physical, technological, and organizational resources.

27. If managers find that their firm's particular activity is unsatisfactory, which of the following is a remedy for the situation? a. Long Range Planning b. Captive sourcing c. Using a franchise model d. Using a decision model

d. Using a decision model

Why study global business? a. In order to increase one's employability b. In order not to get Bangalored or Shanghaied c. In order to better understand how to become a sought-after, globe-trotting manager d. All of these answers

d. all of these answers

A small Austrian fishery firm wanted to expand into a new region of the country, but was in competition with a bigger, more established firm. The smaller firm, however, was successful in developing and maintaining key political relationships and were ultimately granted the necessary government permits. Which of the following was key to the smaller firm's success? a. causal ambiguity b. commoditization c. social complexity d. ambidexterity

d. ambidexterity

16. Lavalle is a movie studio in New Jersey. Its components include photography crews, musicians, singers, makeup artists, animation specialists, and managers on the business side. These components are called _____. a. current assets b. material assets c. tangible assets d. complementary assets

d. complementary assets

Plentiful labor supply in China and innovative commercialization of basic research in the United States are both examples of the_____ theory. a. diamond b. strategic trade c. product life cycle d. factor endowment

d. factor endowment

The product life cycle theory is criticized because _____. a. it assumes that absolute and comparative advantages stem from different factor endowments b. it assumes that China is absolutely inefficient than the United States in the production of both wheat and aircrafts c. it argues that by trying to be self-sufficient and producing a wide range of goods, the wealth of a nation is reduced. d. it assumes that a stage-by-stage migration of production takes at least several years, if not decades

d. it assumes that a stage-by-stage migration of production takes at least several years, if not decades

China is able to produce wheat relatively less inefficientlythan it is able to produce aircraft. By letting China specialize in the production of wheat an importing some wheat from China, the United States is able to devote its resources to aircraft. In this example, the United States is: a. utilizing strategic government intervention b. gaining first-mover advantage c. leveraging absolute advantage d. leveraging comparative advantage

d. leveraging comparative advantage

26. JB and Sons is a firm that has valuable, rare, and hard-to-imitate capabilities that are organizationally embedded and exploited. JB and Sons can expect _____ firm performance. a. below average b. average c. above average d. persistently above average

d. persistently above average

9. A _____ is a series of activities used in the production of goods and services that make a product or service more valuable. a. rarity sequence b. SWOT analysis c. value framework d. value chain

d. value chain

monitor the progress of jobs and sequence work

gantt charts can be used to

Longest task time

in an assembly line where each task is performed at one station, the minimum possible cycle time will be determined by:

all of the above

in one-machine scheduling problem, which one of the following local scheduling rules will minimize make span?

zero slack time

the critical path is composed of the activities that have _______________

from other areas in the organization, selected because of their special skills, from the function area of the project (All the above)

the project teams include individuals

late start date minus early start date

the slack of an activity may be described as

an activity inserted into the network to show a precedence relationship with no actual passage of time

the term "dummy" in a CPM?PERT network refers to______________

Which of the following definitions best defines an expatriate manager? a. A manager who works outside his or her native country b. A manager of great expertise c. An ex-manager rehired for advisory purposes d. None of these answers

when choosing a priority sequencing rule

supports the overall business strategy of the company

when developing an operations and supply chain strategy, the most important consideration is that

management of activities involved in the procurement of raw materials, their transformation

which of the following best defines supple chain management?

total time needed to complete a group of jobs

which of the following defines the makespan

arrivals come from a very small, predictable population

which of the following is an assumption in common single server queuing models?

average arrival rate

which of the following is not a measure for evaluating service performances of waiting lines?

first come first serve

which of the following local scheduling rules is most likely to be utilized in a service setting?

none of the above

which of the following local scheduling rules tends to minimize idle time

earliest due date first

which of the following local scheduling rules tends to minimize the average lateness

SPT

which of the following rules tends to perform well with respect to mean flow time, WIP inv, and shop utilization, but produces a large variance in past-due hours?

minimizes idle time and make span

which of the following statements concerning Johnson's rule for two machines in series is true?