Business 340 International Business

What is the name of a start-up company that attempts to do business abroad from its inception

A born global firm

The regulatory pillar is defined as

:coercive power of governments exercised through laws, regulations, and rules.

In India, McDonald's offers the Maharaja Mac, made without beef. In France and Germany, they serve beer with their hamburgers. In Argentine, you can purchase wine at McDonald's. There are kosher McDonald's in Israel and in many Middle Eastern Muslim countries, they sell the McArabia meal. What kind of strategic response is McDonald's employing around the world?

A localization or multi-domestic strategy.

What kind of economic system do we enjoy in the United States?

A market economy with strong elements of command

When McDonald's first entered Russia, there were no factories capable of making buns, French fries, pickles, hamburgers, condiments or any of the supplies McDonald's would need on a regular basis. Since FDI was prohibited in Russia, they couldn't invest in the country. Instead, they built the needed factories, trained the management team and workers, and then turned these factories over to Russian owners. The factory would then produce the necessary supplies for the McDonald's restaurant. What kind of strategic alliance is this?

A turnkey project

According to our discussion in class, what is one major, overlooked strategy for reducing expatriate failure? A. Send more female expatriates. B. Send more male expatriates. C. Send more third-country expatriates. D. Use more host-country nationals. E. Adopt a geocentric staffing approach.

A. Send more female expatriates

Which of the following are the three As of global supply chain management?

Agility, adaptability, and alignment

Thinking globally, why is it generally more difficult to both reduce costs and be locally responsive?

All of the above, picture of correct answers on 4/13/22

As far as a global brand is concerned, Coca Cola is a good example of:

Assonance and alliteration

"In the desert, there is no sense of urgency or haste and no sense of the future. There attitude is that tomorrow will come, yesterday was, so why be concerned with any time other than now?" This attitude reflects:

Attitudes towards time.

British Petroleum (BP) imports oil from the Nigerian Petroleum Corporation (NNPC) and processes the oil into gasoline at its refinery in the UK. By contract, NNPC agrees to export a certain amount of oil to BP for a specified amount of money. But NNPC acts opportunistically, and charges a higher than agreed upon price, citing a variety of reasons, such as inflation, natural disasters, or rising oil prices after the deal is signed. BP must either pay the inflated prices or refuse to pay and absorb the costs of its idle refiner. BP could also act opportunistically and refuse to accept an oil shipment from NNPC, citing unsatisfactory quality, even thought the real reason might be declining fuel demand. When one/both sides behave opportunistically, the result can be market failure. How could internalization overcome the market failure in this scenario?

BP could undertake upstream vertical FDI by owning oil production assets in Nigeria

What were the first six countries to sign the treaty that created what we today call the European Union?

Belgium, the Netherlands, Luxembourg, France, Germany and Italy

Statement A: It is imperative that firms develop resources and capabilities to combat currency risks. At a minimum, firms must foster foreign exchange literacy, include a currency risk analysis when assessing risks for any country and use appropriate currency risks management strategies. Statement B: Invoicing in the home-country currency is a viable strategy for managing currency risk.

Both statements are true

Statement A: Older, poorer, and less educated voters in the Brexit referendum chose to remain in the European Union. Statement B: The border between Ireland and Northern Ireland was a "Hard" Brexit complication.

Both statements are true

Statement A: When thinking about making an acquisition, management must not overpay, should focus on strategic and organization fit and thoroughly address integration concerns. Statement B: When managing alliances and acquisitions, management must understand the rules of the game governing alliances and acquisitions around the world and they must pay attention to the soft relationship aspects inherent in alliances and acquisitions.

Both statements are true

Statement A: Culture is a learned, shared, compelling, and interrelated set of words, materials and behaviors that provide guidelines for action in society. Statement B: Culture shock arises when you are not familiar with the values, experiences, and knowledge that shape the foreign culture

Both statements are true. What is the Washington Consensus?

How can you use the VRIO framework to help you succeed and thrive in the global work force you will enter shortly after graduation?

By possessing valuable, rate and hard-to-imitate capabilities that are indispensable to an employer

This staffing approach focuses on finding the most suitable managers, regardless of nationality. It creates a corporate-wide culture and identity for a geographically dispersed MNE. The top manager us usually a mix of PCN, HCN or TCN managers. What approach to international staffing is this? A. Polycentric staffing. B. Ethnocentric staffing. C. Geocentric staffing. D. Regiocentric staffing. E. Multilateral staffing.

C. Geocentric staffing

Which of the following countries is NOT a Triad country

China

Statistics vary, but up to 70% of global acquisitions fail. Often, the seeds of failure occur before the merger even takes place. Which of the following is NOT a pre-acquisition reason for failure?

Clashes of organizational cultures compounded by clashes of national cultures

This form of regional economic integration features free movement of goods, people, and capital. What is it?

Common Market

To completely understand this theory of international trade, one must also understand the concept of "opportunity costs." What is this theory?

Comparative advantage

The advantages of this compensation approach include creating equity with local nationals, simplicity, and identification with the host country. The disadvantages include variation between assignments for the same employee, variation between expatriates of the same nationality in different countries and potential re-entry problems. To which staffing approach do the above descriptions refer? A. Straight salary. B. Balance sheet approach. C. Straight commission. D. Going rate approach. E. Combination of commission and salary.

D. Going rate approach

Geert Bonsaert of Rotterdam, in the Netherlands, has been transferred to NDW's Shanghai subsidiary. Previously, he has been managing NDW's Dutch operations in Amsterdam. NDW has its headquarters in Lansing, MI, USA. What kind of employee is Geert? A. Non-national. B. Repatriate. C. Host country national. D. Third country national. E. Parent country national.

D. Third country national

Pizza Hut found out that its long-time licensee in Thailand took its know-how and established a direct competitor, called The Pizza Company, which now controls 70% of the market in Thailand. This is a description of which type of risk?

Dissemination

Jean-Marie Sautier of Montpelier, France, had been transferred to the Lansing, Michigan headquarters of NDW. He was supposed to spend three years learning from HQ before returning to Paris, but his wife, Agnes, had a terrible time dealing with American culture (particularly the cuisine), superficial lifestyles and the Michigan winters. On top of that, the scope of Jean-Marie's job was substantially larger than in Paris and he was not accustomed to the American workstyle. For the first time in his career, he had failed to meet his quarterly goals and objectives. He felt like Americans lived to work and spent all of their free time in the office. Though well compensated for his efforts, he did not like spending eighty hours a week at work. Also, in France, it was normal to use all of his vacation time, but in the U.S., his co-workers took pride in their number of unused vacation days. On top of everything else, his thick French accent made communication with co-workers difficult. Eighteen months after arriving in Lansing, Jean-Marie requested a transfer back to the Paris office. He felt like he had failed in his expatriate assignment and wondered what repercussions this failure would have on his career with NDW. Which of the following reasons does NOT describe Jean-Marie Sautier's apparent failure? A. Pre-mature return. B. Fulfillment of business objectives C. Work related pressures. D. Inability of his family to adjust to life in the U.S.A. E. A combination of work- and family-related problems.

Does NOT describe: B. Fulfillment of business objectives Does describe: All of the above on the actual test

We have an existing brand name that we want to globalize. Which of the following is NOT a question we want to ask ourselves?

Does the brand represent our home country?

Which pricing strategy can effectively put an end to gray trade?

Ethnocentric pricing

What is the difference between an exporter and an MNE

FDI

Which of the following is NOT one of the "Four Fs" of informal sources of financing?

Flourishers; (correct four fs include family, friends, founders and foolhardy)

According to Chapter 1, what does FDI stand for?

Foreign Direct Investment

Ultimately, what drives economic development in countries across the world?

Formal, market supporting institutions

Which of the following is NOT an example of a tangible resource

Human resources

With over 600 owned boutiques and a presence in more than 100 countries world-wide, Godiva has grown into a global premium brand of chocolates over the past 90 years. In Belgium, Godiva remains refrigerated to 58 degrees Fahrenheit and if they are not sold or consumed within 12-14 days, they are discarded. However, in the rest of the world, Godiva has adapted its recipe to the tastes of the local markets. For example, the Godiva chocolates sold in Japan are less sweet and more bitter. In the U.S., Godiva adds more sugar, chemical preservatives, and wax so the chocolates last longer and don't need refrigeration. Both recipes conform to its countries' tastes. What organizational structure best fits the scenario described above?

Geographic area structure

According to the text and the lecture video, what is the main difference between "global business" and "international business?"

Global business refers to business around the world, including the domestic market. International business refers to cross border economic activities.

Which of the following is NOT a disadvantage of globalization?

Higher economic growth and standards of living

In the EU, many advertisers emphasize visual communication rather than attempting to communicate their message through the region's various languages. Visual ads that incorporate pictures rather than words can be more universally understood. Visuals have the advantage of being less culture-specific. For example, Cartier, the French luxury-products firm, launched a campaign in 123 countries. The campaign used magazines only and featured minimal copy (words). It emphasized dramatic photography so that the same message could be conveyed in Brazil, Japan, Russia, and dozens of other countries. What type of advertising is Cartier using?

Identical advertising without language localization

Which of the following is NOT a disadvantage of globalism?

Increase in technology sharing

Globalization is defined as the "close integration of countries and peoples of the world." Which of the following is NOT a disadvantage of globalization?

Increasing cultural integration

Which of the following is NOT a benefit of studying global business?

Increasing levels of self-referencing

Kathy decided to use the contaminated corn. She felt like it was the right thing to do for the benefit of the company. She also didn't feel that with all the other carcinogens (cancer causing agents) out there that people might be able to trace the source of their cancer back to the corn chips. Therefore, she felt justified in using the contaminated corn. Which ethical philosophy did Kathy apparently use to reach this decision?

Intuitionism

Kathy decided not to use the contaminated corn. The decision did not feel right, and she was concerned that she would harm consumers. Further, she was afraid someone would discover she was using the contaminated corn, and she could go to prison if that came to light. Which ethical philosophies was Kathy apparently using to reach this decision?

Intuitionism, deontology, and the categorical imperative or TV test.

From a global branding perspective, why is the SuzyShier.com website problematic?

It has a new meaning in a different linguistic context

Which of the following is NOT a problem with the WeightWatchers global brand name?

It has too many syllables

What does "causal ambiguity" have to do with the VRIO model?

It makes it difficult to identify the actual cause of a firm's successful performance, making that firm hard to imitate.

What is the major drawback with the institution-based view of global business success?

It suggests that the success or failure of a firm depends entirely on the environment.

In low context countries, contracts serve as a verbal expression of a final agreement whose integrity is legally enforceable. Written contracts, by contrast, exhibit much less finality in such high context countries as:

Japan

What explanation can you give for Japan's lack of entrepreneurship?

Japan is a group-oriented, high uncertainty avoidance culture with little access to venture capital or other informal sources of funds.

With over 600 owned boutiques and presence in more than 100 countries world-wide, Godiva has grown into a global premium brand of chocolates over the past 90 years, conforming to each countries' tastes. Which of the phrases below best describes the probable development, diffusion, and flow of corporate knowledge?

Knowledge is mostly developed and retained in each subsidiary. There is only a limited flow of knowledge to and from headquarters.

With over 600 owned boutiques and presence in more than 100 countries world-wide, Godiva has grown into a global premium brand of chocolates over the past 90 years, conforming to each countries' tastes. What is the implied strategy in the scenario above?

Localizatoin strategy

This theory suggests that the wealth of the world is fixed and that a nation that exports more and imports less will be richer. What is this theory?

Mercantilism

In an economic union, there are four specific policies for unification. Which of the policies listed below is not one of these four specific policies?

Military policy

This theory suggests that the competitive advantage of certain industries in different nations depends on four aspects that form a diamond. What is this theory?

National competitive advantage of industries

This theory suggests that under free trade, a nation gains by specializing in economic activities in which it has an absolute advantage. What theory is this?

None of the above; not mercantilism or product life cycle

What does OLI stand for?

Ownership, location, internalization

What are the two answers to this question: What determines the success or failure of firms around the globe?

Playing by the formal and informal rules of the game AND firm-specific resources and capabilities

How can Kellogg's add value to a bushel of corn that has a market price of $3.50 per busher? Kellogg's adds value to the corn through:

R&D, processing, and marketing

A major role of formal institutions is to

Reduce uncertainty

Which of the following is NOT a first mover advantage?

Resolution of technological and market uncertainties

"an unconscious reference to one's own cultural values, experiences, and knowledge as a basis for decisions" is the definition for:

Self-reference criterion

Statement A: Germany is an example of an emerging economy Statement B: "Base of Pyramid" countries consist of approximately five billion people who have a per capita GDP/GNI of less than $2,000 per year.

Statement A is false, Statement B is true

According to the lecture, which of the following is a cultural construct?

Social distancing during the covid-19 pandemic.

Statement A: Complementary assets are the combination of resources that go into producing a competitive advantage for a firm. Statement B: If what a firm produces is valuable but not rare, the firm suffers from a competitive disadvantage.

Statement A is true, Statement B is false

Statement A: Large-scale market entries show a strategic commitment to certain markets, assure local customers and suppliers of long-term commitment, and deter potential entrants. Statement B: Large-scale entries are easy to reverse, provide almost unlimited strategic flexibility and have minor losses when market entry bets are wrong.

Statement A is true, Statement B is false

Statement A: Political realities either enable or constrain FDI from reaching its full economic potential. The success or failure of FDI depends significantly on the foreign institutions governing the "rules of the game." Statement B: The institution-based view of FDI suggests that some firms are at FDI because they leverage OLI advantages in a way that is valuable, unique and hard to imitate by rival firms

Statement A is true, Statement B is false.

Statement A: The Regulatory pillar refers to the coercive power of governments exercised through laws, regulations, and rules Statement B: The Cognitive pillar refers to mechanisms through which norms influence individual and firm behavior

Statement A is true, statement B is false

Shortly after Steve Jobs returned to Apple in the 1990's it invested in a small computer company that was developing interesting computer animation techniques. The company was called Pixar and ultimately created classics such as Toy Story 1 and 2, Monsters Inc., and The Incredibles. What kind of strategic alliance is this?

Strategic investment

This theory allows for government policy that provides companies with a strategic advantage in international trade through subsidies and other governmental support. What is this theory?

Strategic trade

Kathy decided to use the contaminated corn. She agreed with her boss that it didn't matter how she cut production costs, as long as she ended up cutting production costs. The ethical philosophy known as _______ allowed her to justify using the contaminated corn.

Teleology

Which of the following advertisements form the video lecture is an example of prototype advertising?

The Drakkar Noir advertisements

Which of the following consists of national heads of government (plus the president and vice president of the European Commission), meets four times per year and provides overall direction to the European Union?

The European Council

Which is the only democratically elected political institution in the EU?

The European Parliament

Using your knowledge of the EU institutions, which of the following statements is false?

The European Parliament can propose, amend, and reject EU legislation

Who is this person?

The President of the European Council (Charles Michel)

Which treaty replaced the failed constitution of Europe?

The Treaty of Lisbon

Which of the following are examples of managed floats?

The U.S. dollar, the Euro, the pound sterling

Kathy decided not to use the contaminated corn, despite the costs to her company and herself. As a consumer herself, she would not want other companies to use the same decision process she used to market product that could potentially harm consumers. Plus, she would not want her family to discover that she knowingly marketed a defective and illegal product. Which ethical philosophy did Kathy apparently use to reach this decision?

The categorical imperative or TV test.

Annouk Van Hoof of Harlem, the Netherlands, has created a new product that is quite popular in the EU: The Airport Jacket. With the EU single market, exporting to other EU countries has been quite easy. Recently, she has been receiving inquiries from the United States for her product and has decided to begin exporting the Airport Jacket to the U.S. However, she has faced a bewildering set of rules, regulations and bureaucratic hurdles for getting her product into the market. She doesn't really know what to do. The above scenario is a description of:

The liability of foreignness

What is social complexity?

The socially intricate and interdependent ways that firms are organized.

What is the Washington Consensus

The unquestioned belief in the superiority of private ownership over state ownership in economic policy making

According to our discussion in class, why do skyscrapers burn regularly in Dubai, UAE?

There are no formal construction guidelines, which allows construction companies to build skyscrapers in the least expensive way possible

What rule do the global brand names Lego, Roku, Subaru, Sony and Suzuki follow?

They all use basic consonant-vowel units

Which of the following treaties was the original treaty of what is now known as the European Union?

Treaty of Rome

If a balance of payments deficit causes currency to depreciate, why has the U.S. dollar been so strong for the past 10 years? In each of the last 10 years, the U.S. has also had a balance of payments deficit.

U.S. productivity has been high, Inflation has been low, There has been strong demand for the U.S. dollar over the past 10 years, The balance of payments deficit is only one factor determining exchange rates

Who benefits from a strong, or appreciating dollar?

U.S. tourists who will be traveling abroad

Kathy decided to use the contaminated corn in chips sold to third world countries. She did a bit of additional research and discovered that the average life expectancy rate in the third world countries was considerably lower than the age at which they would get liver cancer if they ate the chips produced with the contaminated corn. Thus, she weighed the benefits and costs of using or not using the contaminated corn, and concluded that more people would be benefited than harmed by her product. Which ethical philosophy did Kathy apparently use to reach this decision?

Utilitarianism.

Several factors contribute to creating a competitive advantage that is difficult to imitate. Which of the following is NOT a factor in creating a difficult-to-imitate competitive advantage?

VRIO outsourcing

What does VRIO stand for?

Value, rarity, imitability, organizational embeddedness.

What is the fundamental question of global business?

What determines the success or failure of firms around the globe?

What does 2W1H stand for?

Where, when, how

What is the difference between a forward discount and a forward premium?

Whether the spot rate is higher or lower than the forward rate

As in the TV show Jeopardy!, the answer is: exchange rate fluctuations, market conditions, lower economic levels, cheap, easy transportation across national borders and product positioning. What is the question?

Why would prices be lower for the same product in some countries but not in others?

When the Apple Corporation combined the ideas from a Sony Walkman with a combination lock, they were

associating

What does FDI stand for?

foreign direct investment

The system of law the prevails in the United States and the United Kingdom is known as:

common law

Toyota Motor Corp. holds at least 2 percent of almost 70 companies in Japan, according to data complied by Bloomberg. Toyota has holdings in banks, shipping companies, tire manufacturers, and even competitors. In turn, these companies own a portion of Toyota shares. For example, Toyota owns about 5 percent of Mazda Motor Corp. and Mazda will own 0.25 percent of Toyota. What kind of strategic alliance is this?

cross-shareholding

The Acme Corporation has employed Hofstede's cultural dimension concept to help domestic managers assigned to Japan better understand that culture. Domestic managers will learn that much of the difficulty most Americans encounter in dealing with the Japanese stems from the fact that the culture is a prime example of a(n):

high power distance/collectivist society

David Tran left Vietnam in the 70s because it wasn't friendly to his entrepreneurial ventures. First the Vietnam war impeded growth then after the war the Vietnamese government gave ethnic Chinese businessmen like Tran a hard time. He came to California and founded Huy Fong the maker of Sriracha sauce. Tran discovered the US was much friendlier toward his entrepreneurial ventures this is an example of

how institutions affect entrepreneurship

Unstable and unreliable institutional frameworks lead to:

increased transaction costs

Bombardier of the U.K. manufactures small jet aircraft for corporations, countries and even airlines. But their most profitable is the corporate jet. Given this, they have set up operations in the United States, which has the largest market by far for corporate jets. In matching its strategic goals with location, Bombardier is:

market seeking

John and Suzy were recently married. After a long and tiring day at work, John was looking forward to going to bed early. He had been dragging all evening and commented that he was exhausted. As he was getting ready for bed, Suzy asked him, "Are you tired?" John said yes, got in bed, and promptly fell asleep. Suzy, who experienced a very bad day, had wanted to talk through some issues. She was very mad at John for falling asleep and let her anger show the next day. John had no clue what he had done to deserve this anger. Which of the following cultural theories best describes John's reaction to Suzy's question?

messaging and context