BUA 343 Exam 1 Part 2
18. The initial phase of globalization was triggered by the introduction of the railroads and ocean transport. A. True B. False
True
2. Currency risk refers to the risk posed by adverse fluctuations in exchange rates. A. True B. False
True
41. Is this statement true or false: Most companies have a distinctive set of norms, values, and modes of behavior that distinguish them from other organizations. A. True B. False
True
43. Is this statement true or false: In cultures with a monochronic view of time, people view time as linear, managers make commitments, set deadlines, and adhere to a strict schedule of meetings and activities. A. True B. False
True
15. In discussing the expansion effort to India, the CEO reminded shareholders of Black and Decker's move to partner with the Indian auto retailer Bajaj. The CEO was most likely attempting to justify which of the following? A) a joint venture that would position Sterling for long-term sales in India B) a marketing effort targeted to American citizens living in India C) a price drop to ward off competition from an emerging Indian auto retailer D) a new manufacturing protocol based on an efficient Indian production method
A
22. ________ refers to the sequence of value-adding activities performed by the firm in the course of developing, producing, marketing, and servicing a product. A) A value chain B) A supply chain C) Value gap D) Value migration
A
23. Which of the following stages comes before sourcing in a firm's value chain? A) research & development B) marketing C) manufacturing D) distribution
A
24. Which of the following refers to a specialized logistics service provider that arranges international shipping for exporting firms? A) freight forwarder B) wholesaler C) distributor D) turnkey contractor
A
26. As defined in Canada and the United States, small and medium-sized enterprises (SMEs) are manufacturers or service providers with ________ or fewer employees. A) 500 B) 5000 C) 1000 D) 250
A
31. If Hudson Motors grants the right to Mercury Motors Inc., an Asian automobile firm, the right to use its business system in exchange for compensation, Hudson Motors would play the role of a ________. A) franchisor B) licensor C) agent D) turnkey contractor
A
35. Cross Cultural Risk is: A. A situation or event where a cultural misunderstanding puts some human value at stake B. Risk of adverse fluctuations in foreign exchange rates C. Firms potential loss or failure from poorly developed foreign strategies D. Potentially adverse effects on company operations caused by developments in legal, environment
A
39. ________ are the most transformative technology in developing economies. A) Mobile phones B) Walkie Talkies C) IPods D) E-mail
A
Overseas Expansion (Scenario) Whittaker Semiconductors has recently decided to expand its operations overseas. Amanda Quan, Vice President of International Business, assigned a team of investigators to analyze the risks faced by the company in making this move. Of particular interest were the risks that might affect the success of a new production plant to be located in one of three potential countries. 16. Philip Baxter reported on the risks associated with establishing the plant in Country A. The most significant risk, in his view, was posed by the government's complex bureaucratic structure. Philip reported the likelihood of significant administrative delays in opening the plant. The risk identified by Philip is an example of which of the following? A) country risk B) commercial risk C) currency risk D) cross-cultural risk
A
(Scenario) In the last two years, the sales of consumer electronics in China have risen by 9.4 percent. Moreover, the market is becoming increasingly competitive since a large number of Japanese, European, and American manufacturers are building factories to face the competition from low-cost Chinese manufacturers. Grande Co. is a U.S.-based consumer electronics manufacturer that has been negotiating with Chinese authorities for eight years to open a factory in the country. Since Grande has spent significant time and energy on negotiation in the past eight years, they should quit and set up a factory in a more responsive society. 46. Which of the following, if true, strengthens the conclusion of the above passage? A) In China, companies belonging to deal-oriented cultures have been the most successful. B) American companies best thrive in cultures that are deal-oriented. C) For the Chinese, relationship is less important than business deals. D) The management of Grande is characterized by a host country mind-set.
B
14. The CEO justified one of the company's moves by pointing out that it not only enabled Sterling to benefit from global sourcing advantages, but it also provided access to new ideas about business methods. The shareholders viewed this justification positively most likely because they understood which of the following? A) Sourcing advantages are usually more important to growth than obtaining new business ideas. B) International firms may have more than one motive for international expansion. C) The most compelling motive for international expansion is to gain new ideas from other markets. D) This expansion strategy would enable the company to better manage cross-cultural risk.
B
21. Governments have facilitated economic integration by ________. A) increasing barriers to international trade and investment B) developing supranational institutions to further reduce trade barriers C) adopting different monetary and fiscal policies within the same regional economic integration blocs D) standardizing consumer lifestyles and preferences
B
25. Within the international value chain, which of the following would operate as a facilitator? A) importer B) lawyer C) retailer D) distributor
B
34. MNEs are best known for their ________. A) reluctance to explore emerging markets B) foreign direct investment activities C) high rates of employee attrition D) preference for exporting as the main strategy for entering foreign markets
B
36) Firms that are more successful at global competition display each of the following qualities EXCEPT ________. A) identifying foreign market opportunities aggressively B) approaching internationalization from a reactive standpoint C) actively pursuing partnerships with foreign firms D) focusing intensively on building organizational capacities
B
38. Reduction in trade barriers is associated with the emergence of ________. A) fragmentary monetary and fiscal policies across the borders B) regional economic integration blocs C) widespread violation of intellectual property rights law D) violation of GATT provisions
B
4. International business is defined as the performance of ________ activities by firms across national borders. A) marketing and fiduciary B) trade and investment C) finance and operational D) manufacturing and sales
B
47. Which of the following can be inferred from the above passage? A) The Chinese culture is more likely than not to be deal-oriented. B) The Chinese culture is more likely than not to be relationship-oriented. C) The American culture is more likely than not to be relationship-oriented. D) The American culture is less likely to take an impersonal approach to business.
B
9. Each of the following has contributed to the rapid integration of world economies EXCEPT ________. A) the growth of emerging market countries B) the increase in trade barriers C) advances in information technology D) the liberalization of markets
B
(Scenario) As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with preparing a comprehensive report on the company's global operations over the past twenty years. Deva assigns three strategists to collaborate on the History portion of the report, which details the rationale behind Pax's decisions to expand operations in particular areas. Rashid Ahl focuses on early expansion to China, which occurred after China began to make its market more accessible to foreign companies. Markus Teller focuses on Pax's expansion to Eastern Europe, which was motivated by increased industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan, which happened when the company's commercial bank expanded its service network to Asia. 50. To which of the following drivers of market globalization is Markus most likely to attribute his company's expansion to Eastern Europe? A) advances in technology B) integration of world financial markets C) market liberalization D) industrialization
C
10. Fluctuating exchange rates are an example of which of the following? A) country risk B) political risk C) currency risk D) cross-cultural risk
C
19. Which of the following is characteristic of globalization of markets? A) lack of skilled labor B) conservatism C) declining trade barriers D) diminishing gap between the rich and the poor
C
20. Which of the following is a driver of globalization? A) greater emphasis on proactive internationalization B) internationalization of firm's value chain C) integration of world financial markets D) globalization of services
C
28. Delegating certain noncore functions to outside vendors is a strategy known as ________. A) franchising B) licensing C) outsourcing D) diversifying
C
29. Sovereign wealth funds are owned by ________. A) MNEs B) private investors C) national governments D) publicly traded corporations
C
32. Which of the following refers to the participant responsible for conceiving and designing a product for consumption by customers worldwide? A) government B) facilitator C) focal firm D) intermediary
C
33. Peter, a graduate student from Michigan, ordered a notebook from Opus Inc., an American MNC manufacturing and selling computers and related products. The notebook that Peter ordered from Michigan was assembled in Opus' factory in Taipei. This exemplifies the ________ stage in the international value chain. A) research and development B) sourcing C) production D) after-sales service
C
45. Which of the following situations is an example of geocentric orientation? A) Marsha, CEO of QST Solutions, believes that top level executives at her company should be Americans to avoid any communication gaps. B) The Gram Group of retail stores decided to open branches in China and focus on changing their policies to suit the Chinese population to maximize profits. C) Ahmed, a citizen of the UAE is CEO of UK-based Banner Technologies. He wants managers from the firm's India office to visit the U.S. branch to provide training to American officials visiting India. D) Chill&Break Inc., an American global coffee company, is used to judging other cultures by the standards of its own culture.
C
49. Peter, a graduate student from Michigan, ordered a notebook from Opus Inc., an American MNC manufacturing and selling computers and related products. The notebook that Peter ordered from Michigan was assembled in Opus' factory in Taipei. This exemplifies the ________ stage in the international value chain. A) research and development B) sourcing C) production D) after-sales service
C
7. Each of the following represents a factor of production EXCEPT ________. A) manufacturing infrastructure B) technology C) government regulations D) managerial talent
C
Shareholders Meeting (Scenario) A senior manager at Hudson Motors Inc. presented the top management of his firm with a strategy aimed at improving sales and profits. Based in Kentucky, Hudson Motors has always used American-made parts for its automobiles. However, sales and profits have slumped miserably over the past three years. In his plan, the senior manager proposes to delegate certain noncore operations to external vendors besides setting up manufacturing units in Asia, where the cost of labor is significantly low. 30. By proposing to set up manufacturing units in Asia, the senior manager of Hudson Motors is proposing the top management of his firm to adopt which of the following strategies? A) product differentiation B) diversification C) outsourcing D) crowdsourcing
C
Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. 11. One shareholder questioned the CEO's rationale for beginning an exploratory effort to establish a new manufacturing plant in India. The CEO responded by explaining that India was an untapped market with a high demand for products such as those produced by Sterling. His rationale represented an example of which of the following reasons for international expansion? A) investing in a potentially rewarding relationship with a foreign partner B) gaining access to lower-cost or better-value factors of production C) seeking opportunities for growth through market diversification D) better serving key customers that have relocated abroad
C
12. The CEO introduced another overseas effort by noting that it represented an attempt to confront an international competitor. The CEO was most likely referring to which of the following efforts? A) a new plant established in Vietnam to benefit from low-cost labor B) a sales outlet established in Indonesia, where Sterling could charge more for its products C) a marketing and advertising partnership established with a successful French car retailer D) a distribution center established in London to preempt the growth of a British car manufacturer
D
13. One shareholder wanted clarification about a research effort that investigated the possibility of setting up a plant in China. The CEO explained that serving China's rapidly growing middle class population would enable Sterling to increase the size of its customer base dramatically. In China, the CEO was most likely interested in ________. A) avoiding government intervention B) challenging Chinese competitors C) gaining access to innovative ideas D) developing economies of scale
D
17. Rosa Suarez reported on her analysis of cross-cultural risks involved with establishing the plant in Country C. Each of the following was most likely discussed in her report EXCEPT ________. A) language barriers B) lifestyle differences C) religious beliefs D) the level of national debt
D
27. A born global firm is defined as ________. A) a consortium of firms that plan, finance, organize, manage, and implement all phases of a project and then hand it over to a foreign customer after training local personnel B) a large global company that sells diverse and unrelated products C) an intermediary that engages in import and export of a variety of commodities, products, and services D) a young entrepreneurial company that initiates international business activity early in its evolution, moving rapidly into foreign markets
D
37. A value chain is ________. A) the sequence of administrative policies implemented to promote economic integration by a government B) the process of relocating manufacturing and production to valuable and cost-effective locations abroad C) the process of integrating national economies during a financial crisis D) the sequence of value-adding activities performed by a firm in the course of developing, producing, marketing, and servicing a product
D
48. Which of the following represent the demand side of international business transactions? A) focal firms B) facilitators C) intermediaries D) retailers
D
6. Which of the following describes "social capital" A.) The expected collective or economic benefits derived from cooperation between individuals and groups. B.) Social networks have value C.) Crowd sourced funding D.) A & B E.) B & C
D
8. Which of the following best explains why world export growth has outpaced the growth of domestic production during the last few decades? A) Both world exports and domestic production have grown significantly over the past 30 years. B) The cost to import products is generally higher than the cost to produce domestic products. C) Growth in gross domestic product in most countries has steadily increased since 1970. D) Advanced economies now source many of their consumable products from low-cost manufacturing nations.
D
5. Which of the following definitions could be used for culture? A.) customary beliefs, social forms, and material traits of a racial, religious, or social group; B.) characteristic features of everyday existence shared by people in a place or time C.) set of shared attitudes, values, goals, and practices that characterizes an institution or organization D.) None of the above E.) All of the above
E
1. The globalization of markets refers to the growing independence and self-sufficiency of countries worldwide A. True B. False
False
3. MNEs with extensive international operations tend to focus mainly on downstream activities such as marketing in foreign countries. A. True B. False
False
40. Is this statement true or false: While China has been a growing leader in manufacturing and export, it has not been able to develop a middle class. A. True B. False
False
42. Is this statement true or false: Japan and China are examples of low-context cultures. A. True B. False
False
44. Is this statement true or false: English is the most common primary language in the world. A. True B. False
False