MGMT 425 Test 3

polycentric

A business is more likely to understand the cultural differences in a host country when using a(n) _____ staffing policy.

a turnkey project

A business would be better off entering into a country with an unstable political environment through _____.

practical

A company that helps the expatriate manager and family ease into day-to-day life in the host country by ensuring access to a support network of friends is providing ______ training.

won't

A company with a homogeneous employee base __________ utilize talents from every employee, including women and minorities

buying agent

A confirming house is sometimes referred to as a(n) _____

circular

A counterpurchase agreement is BEST described as _______

True The risk-averse firm that enters a market on a small scale may miss the chance to capture first-mover advantages.

A disadvantage of small scale entry is a lack of commitment to build market share and capture first-mover advantages. True false question.

cultural myopia

A firm's failure to understand the differences of a host-country that require different approaches to marketing and management is known as _____

polycentric

A major problem with a(n) ________ staffing policy is the gap that can form between host-country managers and parent-country managers.

control

A performance appraisal would be part of an organization's ______ system

control

A performance appraisal would be part of an organization's ______ system.

cultural bias

A problem that arises when a home-office manager evaluates the performance of an expatriate is ______, which can be alleviated by receiving input from on-site managers.

relational

A successful alliance is the result of building interpersonal relationships between the firms' managers. This is known as _____ capital.

performance appraisal

A system that is used to evaluate the performance of managers against some stated criteria is called a(n) ______ system.

buyback

A(n) ____ agreement involves taking a percentage of a company's output as partial payment

expatriate

A(n) _____ manager is a citizen of one country who is working abroad in one of the firm's subsidiaries

acquisition

A(n) _____ strategy is faster to complete.

inability to cope with larger overseas responsibilities

According to Tung's study, what was the number one reason for expatriate failure for managers of Japanese firms?

leave their firms within 3 years of arriving home

According to a study in the text on repatriated employees, 40% of them ______.

on-site; off-site

According to most expatriates, the appraisal of a(n) _____ manager should be given more credence than the appraisal of a(n) _____ manager.

1. inability of the spouse to adjust 2. manager's inability to adjust 3. other family problems 4. manager's personal maturity 5. inability to cope with larger oversees responsibilities

According to research done by R. L. Tung, rank the most common reasons why US multinationals experience expatriate failure from most to least importance. Place the most important reason at the top of the list and the least important reason at the bottom of the list.

impact on spouse's career

According to research, the primary reason a manager will turn down an international assignment is _____.

global mindset

According to some researchers, a manager who demonstrates cognitive complexity and a cosmopolitan outlook has a(n)

top management

Advocating for a diverse workforce within a company must be driven by _____.

Gather data from third parties such as former employees and investment bankers.

After his company had already committed to an alliance with a company based in Indonesia, Tomas realized that the Indonesian company had made five poor investments over the past twelve months and its financial records were unsound. Which step in selecting a good alliance partner would have helped Tomas's company avoid this situation?

discount

After the US completed a counterpurchase agreement with Indonesia, it ended up with counterpurchase credits. Since it had no use for these credits, it sold them to a third-party trading house. These credits would be sold to the third-party at a _____

resentment and lower productivity

An ethnocentric staffing policy can lead to which two negative outcomes for host-country nationals?

packaging

An export _____ company can advise companies on the best design and materials for their product packages. These companies can also help minimize packaging to maximize the number of items to be shipped.

draft

An order written by an exporter which tells the importer to pay $4,975 by June 20th is an example of a(n) _____

corporate culture

An organization's norms and value systems are called its _______

small

Andre wants his company to take its time and learn as much as it can about the foreign market it is considering. He wants to limit as much risk as possible. Andre is interested in a ____ scale entry mode.

acqusition

As a way to enter the foreign market, Camille's company is considering purchasing a business in their target market rather than trying to build a subsidiary from scratch. They are considering a(n) ______ strategy.

premium

As an incentive to encourage employees to take an expatriate position, Favorite Food Brands Inc. provides extra pay each month in addition to the employees' salary. This extra pay is known as a foreign service _____.

inexpensive

As compared to other staffing policies, a geocentric staffing policy is __________ to implement

repatriation

As the final step in training their expatriate team, Renata's company is holding a seminar which will focus on what to expect when the expatriates return to the US after their two years of work in Indonesia. This training is an example of _____.

False As the pressure to reduce costs increases, the best entry modes are wholly owned subsidiaries and exporting.

As the pressure to reduce costs increases, the best entry modes are franchising and joint ventures.

polycentric

At Big Style Furniture Inc., the company's executives at headquarters are all parent-company nationals, but the foreign subsidiaries all have home-country presidents. This demonstrates the _______ staffing policy

letter of credit

At the request of the importer, the national bank paid the exporting company upon presentation of the documents that had been issued. What document did the importer request?

Both parties agree in advance to swap skills and technology that is coveted to ensure equitable gain Write contractual safeguards into an alliance agreement to avoid opportunism by a partner Make it difficult to transfer technology not meant to be transferred to a partner

Bart's company wants to structure an alliance with another firm but it wants to do this with the assurance of minimal risk. What three methods should Bart's company consider in order to achieve this?

Value

Belinda's company introduced a line of water filtration devices for the home market. These were brought to Haiti and sold at an affordable price. Soon, the demand for the product outweighed the availability in Haiti. This shows how Belinda's company created ____ for their product.

acquisition

Bob's Bicycle Company is planning to enter into foreign markets where there are already well-established incumbent enterprises and global competitors are also interested in establishing a presence. Based on these circumstances, Bob's Bicycle Company should enter the foreign markets via _____.

export credit

Brett's Bicycle Shop has decided to export products to Finland without using a letter of credit. One way the shop can insure against payment default would be to purchase _____ insurance. Multiple choice question.

Turnkey

Bruce works as a contractor and agrees to oversee every aspect of a new plant a US company is building in Norway. Next week he enters the final phase of the project as he organizes the training of all company personnel. This is an example of a(n) ____ project. Multiple choice question.

counterpurchase

Caitlin's U.S. firm sold paint additives to Japan and in return her company was paid by Japan but is also required to purchase plastic products produced in Japan with some of the proceeds from the sale of the paint additive. This example demonstrates _____

ELAN

Chad runs a small business and is interested in exporting his product to France but he needs some advice on the legal issues this would entail. Which organization would provide him with a free initial consultation for his legal questions?

Inadequate preacquisition screening Culture clash between acquired and acquiring firms Not realizing gains from combining operations

Choose three reasons why acquisitions fail.

True Strategic alliances include licensing arrangements, formal joint ventures, informal cooperative arrangements, and cross-shareholding deals.

Colin's coffee company made a licensing deal with Folger's brand coffee. This is an example of a strategic alliance

"fair play"

Companies that have a reputation based on ____ probably make the best allies in a strategic alliance.

more

Companies that provide the same level of medical benefits to expatriates as they do for home-country employees, typically pay ________ for the benefits received by the expatriate

balance sheet

Company ABC carefully examined the cost of living in Costa Rica before it determined compensation for the manager it was sending from the US. It wanted to be sure the manager would be able to enjoy the same standard of living in Costa Rica as at home. This is referred to as the ______ approach to compensation.

switch trading

Countertrade agreements can result in credits. These credits can be purchased by a third party which has a better use for them. What is the name given to this type of transaction?

developing

Countertrade would be more likely used by a _____ nation.

toughness

Cultural _____ refers to the relationship between the country of assignment and how well an expatriate adjusts to living in that country.

japan

Currently you will find the BEST use of countertrading in _____

expatriate failure

Darren Peterson is a Seattle, Washington native who works for Microsoft. The company sent him to manage a branch of the company in China, but he was homesick and returned home in six months. This is an example of

empathize

Developing steadfast friendships with host-country nationals is an aspect of which dimension in Mendenhall and Oddou's model?

others-orientation

Developing steadfast friendships with host-country nationals is an aspect of which dimension in Mendenhall and Oddou's model?

the company can move production to another country only low-skilled tasks might be sent to another country an MNC can import employment practices and contractual agreements from its home country

Domestic unions encounter particular challenges with multinational firms. What are three of those challenges?

reciprocal

Double taxation can be an issue for an expatriate when a(n) ______ treaty is not in place.

cultural

Eleanor's company is providing her with training in the social and business practices of the country of Morocco. She will be working there for the next two years and it is important for her to understand these practices. This demonstrates expatriate ______ training.

management development.

Elizabeth has been assigned to a one-year position in the company's overseas office. This is Elizabeth's fourth year-long overseas assignment with the company. Elizabeth's experience is an example of

licensing

Even though the formula for the new paint process was created by Eliza's company, her company decided it didn't want the expense of manufacturing the paint so it provided the formula to another company in exchange for a royalty fee. This shows an advantage of _____.

30%

Expatriate failure can be reduced through training, but despite the known benefits of training, one study showed that only about ______ of managers sent on an expatriate assignment receive training prior to departure.

employees

Expatriate failure refers to a firm's inability to identify _____ who will not thrive abroad.

entry modes

Exporting, licensing, and establishing a joint venture are types of ______ companies can use. Multiple choice question.

Intimidated by language, culture, currency Unfamiliar with opportunities

Exports only account for a small percentage of US business. Which two characteristics does the text cite as being the reason businesses don't export more?

unfamiliar with opportunities and intimidated by language, culture, and currency

Exports only account for a small percentage of US business. Which two characteristics does the text cite as being the reason businesses don't export more?

Franchising

Fast food restaurants like McDonald's and Pizza Hut which have sold their trademark to thousands of operations around the world are good examples of _____.

immigration laws

Firms may be prevented from using a geocentric staffing policy because of ______ in the host country.

a wholly owned subsidiary

Firms that are pursuing a global standardization strategy tend to prefer establishing this strategy through _____

customs broker

Freestyle Performance Group is new to the exporting business and has no understanding of the customs requirements foreign countries might place on the athletic equipment they want to export. Which type of service provider can help the company with this problem?

customs brokers

Freestyle Performance Group is new to the exporting business and has no understanding of the customs requirements foreign countries might place on the athletic equipment they want to export. Which type of service provider can help the company with this problem?

wholly owned subsidiary

Garrett believes it is important for his company to retain control over the new technology they have developed. Based on this, it would be MOST beneficial for his company to pursue a _____ when entering a foreign market.

letter of credit

Gina's company is in competition with four other suppliers who are trying to get similar products into France. One way Gina's company could boost its appeal with the importer would be to forgo a _____

ethnocentric

Hartson Electric Corp. has filled all of its key management positions with parent-country nationals. This demonstrates the concept of ______ staffing.

the products were not suitable for the market

Henry's company decided to introduce a line of winter clothing to its product mix available in South Africa. One year later, the line was removed from the mix since it failed to sell. What was the most likely reason this product failed to sell in South Africa?

ethnocentric

Host-country nationals would encounter the greatest limits on advancement opportunities when faced with a(n) _____ staffing policy.

unintentional

Host-nation managers may be biased by their own cultural frame of reference when giving a performance appraisal to an expatriate. This is a form of _____ bias.

Many firms provide the same level of benefits they would receive at home.

How are medical and pension benefits treated for expatriates?

loans

How does the Ex-Im bank fund the financing aid it provides to facilitate exports, imports, and the exchange of commodities between the US and other countries?

management

Human resource _____ is the term used to describe a company's activities that include compensation, performance evaluations, staffing, and labor relations.

a company needs the right people in the right place to outperform rivals.

Human resources plays a key role in a firm's organizational architecture because

countertrade

If Saudi Arabia buys jets from Boeing and pays for the jets in crude oil, it is using _____ to structure the sale

maker

If a US exporter writes a draft that instructs the Bank of Thailand to pay for merchandise shipped to Thailand, then the US exporter would be considered the ____ in this scenario

True The benefits of a licensing agreement might be outweighed by the risk of losing control over technology.

If a company is concerned with losing control over its technology, it might want to license the technology rapidly to foreign firms before imitation occurs.

ethnocentric

If a firm believes that the host country does not have qualified personnel to fill senior management positions, it is likely to choose (an) ________ staffing policy

joint ventures and franchising

If a firm's core competency is management know-how, which two foreign entry modes make the most sense?

receiving a defective product not receiving the product

If a payment is made before products are shipped, an importer may be concerned about ________

receiving a defective product or not receiving the product at all

If a payment is made before products are shipped, an importer may be concerned about ________

letter of credit

If both parties in a trade trust a reputable bank, they can use the bank to handle payments in the form of a ______.

greenfield venture

If incumbent competitors are not available to be acquired in a foreign country, a company will enter the country using a(n) _____.

True Development costs and risk are not associated with a licensing agreement.

In a licensing agreement, a company doesn't have to be responsible for the development costs of opening a foreign market.

countertrdae

In exchange for getting an order for commercial aircraft from Air India, Boeing might be required to buy aircraft doors from an Indian company. This is an instance of using ____ as a marketing tool.

cultural

In his new position as global marketing manager, Sam will be interacting with local managers to develop marketing campaigns. Which type of training will best help Sam be successful in his interactions with host-country nationals?

Host-nation managers Home-office managers

In many business situations, two groups are responsible for evaluating the performance of expatriate managers. Who are these two groups?

management culture

In order to make sure that a foreign enterprise has an organizational culture that is not antagonistic to an acquiring enterprise, it is vital that the acquiring enterprise screen the _____.

Learn from the partners Build trust between the partners Be sensitive to cultural differences

In order to maximize the benefits of an alliance, a company should strive for what three factors?

the maker sells the draft to investor which includes a discount from face value

In what way are time drafts negotiable?

national unions

International trade secretariats were established in the 1960s to provide worldwide links for _____ in particular industries.

toughness

Jacob's company assigned him to work in Indonesia for three years. He and his family moved from their home in Atlanta to Indonesia and quickly adapted to their new living arrangements. Mendenhall and Oddou would say that Jacob demonstrates excellent cultural _____.

self-orientation

James is being considered for the expatriate position with his company because he possesses high self-esteem, self-confidence, and mental well-being. Which of Mendenhall and Oddou's dimensions does this represent?

compensation

Jason felt he should receive a higher salary as an expatriate working in the Cayman Islands because the cost-of-living there was greater than the United States. Which aspect of his job is Jason concerned with?

freight forwarder

Jason's company is involved with the international transportation of goods. The company is able to keep costs down for its customers because it combines smaller shipments from a variety of companies into one large shipment. Jason's company is an example of a ____.

corporate culture

Jorie was hired in part because she was comfortable with the company's norms and value systems. In other words, she was a good fit for the company's ______.

franchising

Just as licensing is a way for a firm to avoid many of the costs and risks associated with opening a foreign market, _____ also provides this benefit.

exporting

Kent told the management team that there were many opportunities for market expansion of their product in western Europe. He felt they should find a means to sell there and begin shipping product immediately. What entry mode is Kent interested in?

hard

Kevin's evaluation of the performance of his manager based in Belgium was based solely on the profitability and market share established by the office. Kevin used __________ data in his evaluation

joint venture and licensing

Killian's company has developed proprietary technology that it wants to maintain control over when entering a foreign market. Because of this, Killian's company would NOT want to consider which two types of entry into the foreign market?

staffing

Kimberly works in the human resource department and her main responsibility is selecting employees for particular jobs. Which aspect of human resource management is Kimberly involved with?

pioneering

Kylie's company was the first to bring BBQ pork sandwiches to fast-food franchises in England. In order to convince the customer base in England, his company spent thousands of dollars in advertising and promotional efforts to explain the BBQ concept. These expenses are an example of _____ costs.

proactive

Lila warned the management team that if they didn't try to enter the foreign market now, it would be hard to expect growth experience because all of their competition would saturate the market. Lila would like her company to be

proactive

Lila warned the management team that if they didn't try to enter the foreign market now, it would be hard to expect growth experience because all of their competition would saturate the market. Lila would like her company to be _________

export management company

Lisette runs a small perfume business and is interested in exporting but she does not have a large enough staff to expedite the marketing needed to do this. She could find an export specialist by working with a(n) _____.

licensing the technology to foreign firms

Mallory believes her company's newest technology product will be quickly imitated by others. In order to gain global acceptance before other companies imitate the product, Mallory's company should consider _____.

commerce

Marcus is in charge of finding out all of the available export opportunities for his company. The best source for him to begin is the US Department of _____.

inadequate market analysis

Marcus's company began exporting their line of ski-wear to Australia last year but soon realized that there was little need for the products in that country. Why did this company's attempt to export fail?

Large

Matt's company spent billions of dollars to acquire the financial investment operations of a company in Sweden. This would be an example of a _____ scale entry.

cross

Maureen wants to set up a licensing agreement with a foreign partner but she is worried that the partner might take advantage of the technology she has and use it as a way to create competition against her. To resolve this, Maureen should consider a _____-licensing agreement.

ethnocentric

Maxwell Manufacturing is worried about transferring its core competencies to a facility in Thailand, so it decided to send personnel from the parent company who understand the competencies to the facility in Thailand. This would be an example of the ______ staffing strategy.

first-mover

Meg's company was the initial producer of three-wheeled bikes in parts of Europe and benefited greatly because her company captured the demand early. This is an example of a _____ advantage.

self-orientation

Mendenhall and Oddou's dimension known as _____ is seen as a predictor of success in a foreign posting due to the individual's high self-esteem and self-confidence.

barter

Michael doesn't have the money to buy a new car and he wishes he could trade in his old car, his bike, and his computer to buy a new car. If Michael was running a company this way, what type of countertrade would he be thinking about?

expatriate

Mieko is a citizen of Japan and is currently working as a manager in the US headquarters of Toyota. As such, Mieko is considered to be a(n)

knowledge

Nathan was worried that his company was missing a lot of opportunity to sell their products in China because of the separation created by language, culture, and distance. In other words, his company had a lack of _____.

strategic alliance

Nelson Warm Air Corp. entered into a short-term agreement with Hudson Heating as they developed systems to install in all rental units, such as apartments and town homes, throughout France. This short-term agreement is an example of _____.

on what scale should they go in

Nora's company is considering going into a foreign market. They have determined which markets to go into and the timing for going into them. What other basic entry decision do they need to make?

exporting

Not having to establish manufacturing operations overseas and being able to work to achieve experience curve and location economies are advantages of ______.

managing

Now that his company has developed an alliance with a partner firm in Argentina, it has become Kendrik's job to recognize any cultural differences there are between the two firms. Kendrik is in the process of _____ the alliance.

geocentric

Of the types of international staffing policies identified by research, which one tends to be the most attractive one, although it has its own problems?

turnkey

Oil-refining technology was sold to firms in Saudi Arabia and other Gulf states and now those Western firms that sold the technology have to compete with these countries in the oil industry. This shows how a(n) ____ strategy can be a disadvantage.

True Establishing the technological standard for an industry gives a firm an advantage over the competition.

One advantage of a strategic alliance is that it can help the firm develop technological standards for the industry that will, in turn, benefit the firm.

countertrade

One drawback of _______ is that unsaleable or poor quality goods may be exchanged in place of payment of currency

there is little opportunity for host-country nationals to gain any experience outside of their own country

One drawback to a polycentric staffing policy is ________.

three

One estimate provided in the text shows that the average cost per expatriate failure to the parent firm can be as high as ____ times the expatriate's annual domestic salary plus the cost of relocation.

culture

One way management development programs can help build a company's _____ is by socializing new managers into the norms and value systems of the firm.

export credit

One way to avoid payment default on a foreign export sent without a letter of credit is to purchase _____ insurance.

has not had a lot of success

Organized labor _____ in responding to the bargaining power of MNCs.

piggybacking

Parul contacted another company to see if they could provide the mulch she needed for an overseas client because her lawncare company does not produce mulch. This type of arrangement is an example of ____ marketing.

emphasize

Perceptual ability is synonymous with the ability to _____.

before

Pioneering costs are associated with businesses that enter a national market _____ other businesses.

joint venture

Potentially giving up control of technology to its local partner and not having tight control over the local partner are disadvantages of a ______.

management development

Programs that aim to improve the overall productivity and quality of the firm's management resources are called ______ programs.

may be dropping.

Recent research shows that the rate of expatriate failure

5%

Recent statistics from the Small Business Administration show that about _____ of US firms with fewer than 500 employees are involved in exporting.

geocentric

Recent trends show that the _____ staffing policy is being used by more international businesses.

operations management culture financial position

Screening of the foreign firm to be acquired should include detailed auditing of which three aspects of the business?

countertrade

Since the developing country was not able to pay in hard currency, Daveed's company agreed to accept motor parts for use in their motorcycle product line as payment. Unfortunately, the motor parts they received were all broken. This is an example of a disadvantage of _____

export

Sogo shosha are the Japanese trading houses that work with their affiliated companies to identify _____ opportunities

lack of trust

Special mechanisms for financing exports and imports have been created to deal with the issue of _____ that is present when firms deal with strangers.

licensing

Stanley invented a new way to make a book out of photos taken with a smart phone. He made an arrangement with Shutterfly which granted the company the right to use his idea in exchange for a 10% royalty fee each time his concept was sold. This is an example of a ____ agreement.

there is little risk to losing control over the management skills

Starbucks has thousands of franchises throughout the world. It enters foreign markets via franchising because ______.

greenfield venture

Starting a subsidiary in a foreign country from "scratch" where nothing is established is called a(n) _____.

late

Stephen's US based company entered the European market long after its competitors had established themselves. This is known as ________ entry. Multiple choice question.

management development

SunShine Agricultural Group is introducing a program that will be focused on managers to increase their skill levels by providing educational opportunities and allowing them to rotate through different jobs in the company. Which type of program does this describe?

coordinate the company's globally dispersed operations. solidify a common culture in the company.

Swedish telecommunications company, Ericsson frequently transfers managers from the parent company to foreign subsidiaries and vice versa. Ericcsson hopes this practice will be an effective way to accomplish what two things?

opportunism

TRW Automotive has clauses in each of its contracts with Japanese auto component suppliers which bar the Japanese firms from supplying US-owned auto companies with component parts. This protects TRW from the possibility of these Japanese firms from entering into alliance with TRW just to gain access to US markets. By including this clause in its contracts, TRW is avoiding the threat of _____.

exporting

Terence realized that it didn't make sense to try to ship the product to Italy because there were lower-costs for producing the product already in place there. Terence decides not to use _____ as a way to get his product to Italy.

exporting

The Export Legal Assistance Network consists of trade attorneys who provide advice on matters involving _____.

financing; export credit insurance

The Export-Import Bank provides ______ while the Foreign Credit Insurance Association provides ______

export-import

The Foreign Credit Insurance Association operates under the direction of the _____ Bank.

political and commercial risks

The Foreign Credit Insurance Association provides coverage against which two risks?

adding value by better serving customers reducing the cost of value creation

The HRM function can help a firm achieve its two primary strategic goals, which are _______

foster harmony and minimize conflict

The HRM function tries to ______ between the firm and organized labor.

Incentive systems People Culture

The HRM functions have a critical impact on which three elements of a firm's organizational architecture?

US department of commerce

The International Trade Administration is an organization within the _____.

Sogo Shosha

The Japanese trading houses that work with their affiliated companies to identify export opportunities are called ___________

Small Business Administration

The Service Corps of Retired Executives is an organization within the _____.

two

The Towers Watson survey results cited in the text suggest that US CEOs earn roughly ______ -times the pay of non-US CEOs.

prospects

The US Department of Commerce would supply a business with a best _____ list if the company was interested in learning more about potential foreign markets.

buyback

The US energy company agreed to build three hydrogen-energy facilities in Thailand. As part of the agreement, the US company had to take 15% of the plants' output as partial payment for the contract. This is an example of a(n) _____.

balance sheet

The ______ approach to expatriate compensation seeks a balance of purchasing power between the two countries.

HRM

The ______ function of an international firm usually addresses international labor relations.

benefits, risks, costs

The attractiveness of a country as a potential market should be assessed by balancing what three items associated with doing business in that country?

wholly owned subsidiary

The best way for a company to profit from technological know-how that it wants to maintain control over when entering a foreign market, is to enter the market through a(n) _____.

inability of the spouse to adjust

The biggest reason for expatriate failure with US multinationals is ______.

a document of title a receipt a contract

The bill of lading acts as _____.

the organization doesn't know what they have done while overseas they are assigned to a job that doesn't take advantage of their skills the organization doesn't know how to use their new knowledge

The challenges that expatriate managers face when returning home often include which three situations?

strategic alliance

The entry mode that may allow competitors to access markets and technology at a low cost is a ___________.

Export-Import Bank Foreign Credit Insurance Association

The government provides two sources of assistance to US exporters to finance their export programs. The two sources are ______.

decentralize

The historical trend for the response from most international businesses has been to _____ their approach to international labor relations.

top management

The hubris hypothesis blames _____ as the reason why acquisitions fail.

polycentric

The lack of a manager's mobility among national operations in _____ firms implies that compensation for these managers should be country specific.

trust

The letter of credit and a bill of lading are both financial devices that were created in a response to a lack of ____ that can develop when companies export products.

letter of credit

The main advantage of the ________ is that both parties are likely to trust reputable banks regardless of whether they trust each other.

gives the competition a low-cost way to access new technology and markets

The main criticism of a strategic alliance is that it ______.

Greenfield

The major disadvantages of _______ ventures is that they are slower to establish and come with financial risks.

False a 50/50 joint venture is the most common type

The most typical joint venture is a 60/40 venture, in which one party holds a 60 percent ownership stake and the other holds a 40 percent ownership stake.

control

The performance appraisal system is a component of the ___ system within a company.

unstable

The potential for risk is higher when considering a foreign market with a politically _____ nation.

licensing

The potential of losing control over technological know-how is a major drawback associated with ____.

repatriation

The process that involves preparing expatriate managers to return to their home-country organization is called ______.

inpatriate

The term _____ is sometimes given to identify a subset of expatriates who are citizens of a foreign country working in the home country of their multinational employer.

easy

The threat to unions from an MNC keeping highly-skilled tasks in the home country and farming out the low-skilled tasks to foreign plants is that it is _________ for the company to switch production facilities, reducing the bargaining power of organized labor.

geocentric polycentric ethnocentric

The three types of staffing policies in international business are _______

distance between the two parties problems enforcing contractual obligations

The two factors that lead to a lack of trust in an export transaction are ______.

how expatriate managers should be paid how compensation should be adjusted to reflect economic circumstances

The two issues that impact compensation practices in an international business are ______.

universities

The unique feature of the CIBER network is that it connects the US business community with the research capacities associated with _____.

first-mover

There are potential hazards associated with entering a market early. These are called _____ disadvantages.

expatriate failure

Tom's company hired three individuals from the US to work in its plant based in Japan. Unfortunately, at the end of six months, all three of the employees ended up quitting because they did not like adhering to the Japanese principles in place at the plant. This demonstrates ______.

True The letter of credit is a financial liability and could prevent an importer from borrowing funds for other purposes.

True or false: A letter of credit may place limitations on an importer's ability to secure a loan.

False An offset is more attractive than a straight counterpurchase because it gives the exporter greater flexibility to choose the goods it wishes to purchase.

True or false: An exporter has greater flexibility when using a straight counterpurchase agreement rather than an offset agreement

false An offset is more attractive than a straight counterpurchase because it gives the exporter greater flexibility to choose the goods it wishes to purchase.

True or false: An exporter has greater flexibility when using a straight counterpurchase agreement rather than an offset agreement.

true The Ex-Im Bank guarantees repayment of medium and long term loans U.S. commercial banks make to foreign borrowers for purchasing U.S. exports. This provides commercial banks with the confidence to make the loan.

True or false: Commercial banks are more willing to lend cash to foreign enterprises when the Ex-Im Bank guarantees the transaction

False In an ethnocentric staffing approach, home-country nationals are placed into management positions

True or false: Firms that use an ethnocentric staffing policy place host-country nationals into management positions

False In an ethnocentric staffing approach, home-country nationals are placed into management positions.

True or false: Firms that use an ethnocentric staffing policy place host-country nationals into management positions.

False Even when countertrade is not the only option for structuring an export transaction, many countries prefer countertrade to cash deals.

True or false: For export transactions, many countries prefer cash deals rather than countertrade

False Hard data provides information such as profitability and market share

True or false: Hard data allows a manager to evaluate an expatriate based on things such as cultural awareness and the ability of the expatriate to work with local managers.

False

True or false: In Tung's study, expatriate failure within European firms was mainly the result of poor working conditions.

False Expatriate failure tends to stem from the inability of the manager's spouse to adjust or other family matters.

True or false: In Tung's study, expatriate failure within European firms was mainly the result of poor working conditions.

True By focusing on one market when initially entering the export market, a company will minimize the amount of risk it is undertaking. A firm that enters many markets at once runs the risk of spreading its limited management resources too thin.

True or false: In order to reduce the risks associated with exporting, it is a good idea for a company to initially focus on one market.

True Indicators show that people want to act and behave like global citizens and are taking the steps to do so.

True or false: It is expected that people's global mindset will continue to grow and will improve significantly in the next 20 years.

False An expatriates total compensation package may amount to 3x what he or she would cost the firm in a home country posting.

True or false: It is less expensive to employ someone as an expatriate than to keep that person at the home-country-firm.

True Large firms tend to be more proactive, while small firms are more reactive.

True or false: Smaller firms tend to be more reactive than large firms when it comes to exporting.

False The Ex-Im Bank is an independent agency of the US government

True or false: The Export-Import Bank was developed by the European Community with the advent of the euro.

True The HRM function plays a role in reducing the costs of value creation and adding value by better serving customers.

True or false: The HRM function plays a valuable role in helping a firm achieve its primary strategic goals

True More and more international companies are trying to centralize this practice since labor costs account for a large percentage of total costs.

True or false: Today, the level of centralized input into labor relations practices is increasing.

True English is the language of world business

True or false: While an exclusive reliance on English may diminish an expatriate's ability to interact with a host country, It is possible to conduct business anywhere in the world using only English.

chemical metal-refining pharmaceutical

Turnkey projects would be commonly associated with which three industries?

lack of quality control franchisor may not be able to take profits out of one country to support another

Two disadvantages of franchising are _______.

Strikes Refusing to work overtime Disrupting production

Unions derive their bargaining power using what three methods?

bargaining power

Unions use threats to disrupt production in order to gain ______.

True A firm that enters into a turnkey project with a foreign enterprise may inadvertently create a competitor, and it could lose its competitive advantage by selling its process technology.

Using a turnkey operation can create competition for a firm and it could lose its competitive advantage by selling its process technology through the turnkey project.

brings together complementary skills that neither company could easily develop on their own allow firms to share the fixed costs of developing new products may facilitate entry into a foreign market helps a firm establish technological standards that will benefit the firm

What are the four advantages associated with a strategic alliance?

wholly-owned subsidiaries licensing joint ventures turnkey projects franchising exporting

What are the six modes companies use to enter foreign markets?

achieve international regulations on MNCs enact national legislation to restrict MNCs establish international labor organizations

What are the three actions organized labor has attempted in order to deal with the increased bargaining power of MNCs?

Alliance structure Partner selection Alliance management

What are the three factors that can lead to the success of a strategic alliance?

greenfield venture acquisition of an established firm

What are the two methods for establishing a wholly owned subsidiary?

the importer has to pay the bank's fee for the letter of credit it could limit the importer's ability to borrow since it is a liability

What are the two negatives associated with a letter of credit?

the international trade administration and the US and foreign commercial service

What are the two organizations found within the US Department of Commerce that provide businesses with intelligence and assistance for going after foreign markets?

Pay the expatriate's income tax in the host country Make up the difference when a higher rate in the host country reduces the expatriate's take-home pay

What are the two ways a company may address the issue of double taxation for an expatriate?

create switching costs, preempt rivals, build sales volume

What are three advantages associated with first-movers?

meet political considerations which make a joint venture the only feasible entry mode take advantage of a local partner's knowledge of the host country share the development costs and risks of operating in the host country

What are three advantages of a joint venture?

Firm may realize location and experience curve economies Firm has tight control over foreign operations Can retain competitive advantage based on technology

What are three advantages of a wholly owned subsidiary?

fast to execute beat out the competition less risk than greenfield venture

What are three advantages of acquisitions?

increases cultural understanding fosters a better image of the firm in the host country improves employee's effectiveness

What are three benefits of foreign language training for expatriates?

Tax differentials Foreign service premium Benefits

What are three components of a typical expatriate compensation?

Shared ownership arrangements can lead to conflicts and battles for control. Giving up control of technology to host country partner Not having tight control over a local partner to realize experience curve or location economies

What are three disadvantages of joint ventures?

uncertainty of future revenue take longer to establish preemption by other competitors

What are three disadvantages to greenfield ventures?

designs copyrights patents

What are three examples of intangible property that might be covered by a licensing agreement?

counterpurchase buyback offset

What are three forms of countertrade?

The executive team feels comfortable working in a variety of cultures. The firm makes best use of human resources

What are two advantages of a geocentric staffing policy?

The firm makes best use of human resources. The executive team feels comfortable working in a variety of cultures.

What are two advantages of a geocentric staffing policy?

fewer cultural misunderstandings may be less expensive to implement

What are two advantages of using a polycentric approach to staffing?

subject to the full capital costs and risks most costly entry mode

What are two disadvantages of operating a wholly owned subsidiary?

role-playing to have someone experience bias personally helping people focus on differences to reduce stereotyping

What are two examples of techniques that can be used in a diversity workshop to educate employees about the value of building a more inclusive workforce?

If the customer set is diverse, they may appreciate interacting with a company who "looks" like them. A diverse workforce may improve the brand image of a company making it more attractive for top talent

What are two reasons why a diverse workforce will improve company performance?

variance in compensation practices differences in equal employment legislation

What are two situations that can complicate HRM activities in an international business?

countertrade

What did the Soviet Union rely on to purchase imports in the 1960s since its currencies were generally nonconvertible?

company readiness to export

What does the acronym CORE represent?

export management companies

What firms are export specialists that handle all aspects of marketing for their clients?

Cost of living Hardship Housing Education

What four allowances are typically accounted for in expatriate compensation?

franchise

What is NOT a form of countertrade?

a means of market access

What is a common motive in most strategic alliance agreements?

government embassy

What is a resource for finding confirming houses?

people

What is at the center of every firm's organizational architecture and must be present for a firm to outperform its competition?

combine smaller shipments into a single large shipment to lower shipping costs

What is the primary task of a freight forwarder?

it specifies an amount to be paid and when it should be paid

What is the purpose of a bill of exchange?

early entry

What is the term used for when one company enters markets before its competitors?

export-import bank

What organization is an independent agency of the US government that was set up to provide financing to facilitate exports, imports, and the exchange of commodities?

low-cost manufacturing locations abroad tariff barriers transport costs

What three factors can cause exporting to be uneconomical?

unable to work language differences loss of network of friends

What three reasons are mentioned in the text to explain why spouses fail to adjust to international postings?

useful when entering markets where FDI is limited by host government earning greater returns from valuable assets

What two characteristics are associated with turnkey projects?

Willingness to communicate Relationship development

What two factors play a key role in the others-orientation dimension identified by Mendenhall and Oddou?

name of potential distributor in a foreign market products sold by potential distributors in a foreign market

What two items would be included on a "best prospects" list supplied by the US Department of Commerce?

Cultural training Language training

What two types of training have been found to reduce expatriate failure?

wholly owned subsidiary

When Kent's US-based firm acquired an established European investment firm, it used that firm to promote its financial products. Kent's company owns 100% of the stock of the European firm making it a ____.

practical

When Rob Bennett was posted to Thailand for a management opportunity, he and his wife quickly joined the expatriate community to learn the ins and outs of living in the Thai culture. This is a form of ______ training.

True A large scale entrant means potential competitors would have to compete against the existing institution but also the now-successful new institution and this would cause other competitors to question the value of their entry into the same market.

When a company enters a market on a large scale, it would be common for potential competitors to decide against entering that market.

False A greenfield venture is built from the ground up and takes away the need to try and teach the skill as it would have to in an acquisition.

When a company has a skill that is difficult to articulate, it is easier for that company to enter a foreign market through a greenfield venture.

rapid

When a company makes a commitment to enter a market on a large scale, this implies a _____ entry.

hardship allowance

When an expatriate is sent to a country where basic amenities such as health care, schools, and retail stores are grossly deficient, a company will often provide the expatriate with a _____.

letter of credit

When an importer is in a strong bargaining position and is pitting competing suppliers against one another, an exporter might be forced to forego a(n) _____ in order to get the order.

Gather as much publicly-available information as possible about the company Conduct face-to-face meetings to get to know the potential partner Check with informed third party sources like investment bankers and former employees

When determining whether a company would make a good partner, the text suggests three things a firm needs to do. Which of the following are included in that list?

cost-of-living

When his company transferred him to Germany, Ricardo's company provided him with a compensation package that includes a _____ allowance, which is meant to help him enjoy the same standard of living in Germany as he does currently at home.

growing interpersonal relationships between managers of the firms

When managing an alliance, relational capital refers to _____.

piggybacking

When one firm distributes another firm's products because it does not carry that particular product, it is using _____ marketing.

joint venture

When the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson came together to make mobile phones, they became known as Sony-Ericsson. They were sharing consumer electronics expertise and technological leadership in the communications sector. This is an example of a _____.

time

When the warehouse manager received the draft with the shipment of textiles, he noticed that payment for the materials was not due for 60 days. This is an example of a _____ draft.

Instead of trying to spread itself too thin by going after 22 foreign markets, Natalie's company focused on three potential foreign markets.

Which company is taking steps to minimize risk as it enters the export market?

the department of commerce

Which department of the US federal government provides the most all-inclusive source of information regarding export opportunities?

CORE

Which diagnostic tool on globalEDGE helps firms assess their exporting proficiency and identifies the firm's strengths and weaknesses within the context of exporting?

perceptual ability

Which dimension identified by Mendenhall and Oddou refers to understanding why people of other countries behave the way they do?

bill of landing

Which document shows that a carrier has received the merchandise?

exporting

Which entry mode can expand the size of the market and achieve economies of scale while not adding too much risk?

exporting

Which entry mode did many Japanese automakers use to gain access to US markets?

strategic alliance

Which form of market entry refers to a cooperative agreement between potential or actual competitors?

organized labor

Which group benefited from the establishment of international trade secretariats in the 1960s?

geocentric

Which international staffing policy seeks the best people for key jobs regardless of nationality?

CIBER

Which organization connects the technological needs of the US business community with the international education, language training, and research capabilities of universities across the United States?

service corps of retired executives

Which organization oversees volunteers who have international trade experience and who use this experience to provide one-on-one counseling to active and new export businesses?

polycentric

Which staffing policy requires host-country nationals to be recruited to manage subsidiaries while parent-company nationals occupy key positions at corporate headquarters?

geocentric

Which staffing policy results in executives who are comfortable working in a number of cultures?

wholly owned subsidiary

Which strategy for serving a foreign market comes with the highest financial cost?

cultural myopia

Which term is used when a company doesn't realize the cultural differences of a host-country and as a result, fails to consider different approaches to marketing and management?

Helps the firm achieve strategic goals Unlikely to try and exploit alliance for its own ends Shares the firm's vision for purpose of alliance

Which three characteristics are associated with a good ally in a strategic alliance?

language, distance, and time

Which three factors might make it difficult for some companies to gain knowledge of opportunities available in foreign countries?

It is similar to a license but with a longer time commitment The franchisee commits to abiding by strict rules on how it does business The franchiser typically receives a royalty payment

Which three of these statements accurately describe franchising?

Cost-of-living

Which type of allowance ensures that an expatriate will enjoy the same standard of living in a foreign post as he or she would at home?

sight draft

Which type of draft should a company use if it wants immediate payment from the drawee upon receipt?

large and diverse

Which type of exporter can get the greatest advantage from countertrade?

First-mover

While Jason's company was excited to be the initial company to introduce the new line of power tennis rackets in Europe, his company was also forced to spend countless time and money to get the foreign subsidiaries the information and product needed to sell the rackets. This demonstrates the idea of a _____ disadvantage.

quality control

While McDonald's has thousands of franchises around the world, it is difficult for the company to assure that every McDonald's strives to present the restaurant as the corporation wants it to. This shows how _____ is a concern with franchise agreements.

Time; sight

While a _____ draft is negotiable, a _____ draft is not.

drawee

While a maker initiates a draft, the party to whom the draft is presented is called the _____

compensation policy

While profound differences between countries complicate the HRM function, the major tasks still include staffing policy, management training and development, performance appraisal, and

enhance management and leadership skills of executives.

With regard to management development, research suggests that broad international experience will

staffing

_____ policy is concerned with the selection of employees for particular jobs

an offset

_______ occurs when a firm agrees to purchase goods from any firm in a country where a sale has been made with a percentage of the proceeds from an original sale

an offset

_______ occurs when a firm agrees to purchase goods from any firm in a country where a sale has been made with a percentage of the proceeds from an original sale.

which markets to enter, when to enter those markets, and on what scale

a firm that is thinking about expanding in foreign markets must make three basic decisions

importer

a letter of credit is requested by the _______ from a bank

ethnocentric staffing policy

all key management positions are filled by parent-country (home country) nationals

provides a quick global presence relatively low cost

benefits of franchising

labor relations performance evaluation staffing

human resource management includes which three activities?

cross

in a ______-licensing agreement, a firm will not only receive a royalty payment for licensing intangible property, but will also request that its foreign partner license its own valuable intangible property back to the firm.

ethnocentric=international polycentric=localization geocentric=transnational

match the staffing approach to its compatible strategy

polycentric staffing policies

requires host country nationals to be recruited to manage subsidiaries, while parent country nationals occupy key positions at corporate head quarters

geocentric staffing policy

seeks the best people for key jobs throughout the organization, regardless of nationality

high

strategic alliances tend to fail at a _______ rate

large

strategic flexibility is associated with ________ scale entry into a market

Turnkey project

the contractor agrees to handle every detail of the project for a foreign client, including the training of operating personnel

resulting risks and lack of flexibility

the two drawbacks of the large scale entry strategy

low

there is some evidence which shows that a joint venture with a local partner is associated with a ________ risk of potential adverse government interference

poorly executed promotional campaign not changing products to meet the foreign markets difficulty securing financing

three pitfalls of exporting

share the development costs and risks of operating in the host country meet political considerations which make a joint venture the only feasible entry mode take advantage of a local partner's knowledge of the host country

what are three advantages of a joint venture?

A licensor does not have control over manufacturing, marketing and strategy Licensing limits the ability to coordinate strategic moves across several countries A licensor can lose control over its technology by licensing it

what are three disadvantages to licensing for the licensor?

Since the exchange of goods are not simultaneous, one firm finances the other Firms may not get what they want or can use

what are two drawbacks to bartering?

easier to attract customers, puts limitations on other institutions considering entry

what benefits are associated with entering a market on a large scale?

a means of market access

what is a common motive in most strategic alliance agreements?

trading goods for other goods when they can't be traded for money

what is an accurate description of countertrade?

upon presentation

when a drawee receives a sight draft it should be paid ______

Strategic alliance

cooperative agreements between potential or actual competitors