GEB4891 Chapter 11

Which of the following is a potential advantage of conducting international operations?

Competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.

Communication between domestic headquarters and overseas operations is often made difficult by:

all of the above

Which group generally softens up executives with praise before they criticize?

Americans

________ is the fastest-growing market for pocket book maker Coach and the second-largest market for Dell.

China

In China, one should eat heartily to demonstrate enjoyment of the food.

False

Punctuality is generally revered in all cultures of the world.

False

Which of the following is NOT a typical characteristic of most Japanese managers?

Impulsive

The strategic-management process for multinational firms is ____ for purely domestic firms, and the process is ____ for international firms.

conceptually the same as; more complex

Foreign revenue as a percentage of total company revenues ______ in hundreds of U.S. firms, including ExxonMobil, Gillette, and Citicorp.

exceeds 50 percent

Joint ventures and partnerships between domestic and foreign firms are:

extremely commonplace.

Strengths of competitors in foreign lands are often ______, and weaknesses are often ______.

underestimated; overestimated

A firm's power and prestige in domestic markets may be significantly enhanced if the firm competes globally:

which can translate into improved negotiating power among important groups

Which of the following is NOT true concerning the Japanese concept of Wa?

Discussions potentially disruptive to Wa are generally conducted in very formal settings.

Joint ventures and partnerships between domestic and foreign firms are becoming the exception rather than the rule.

False

Which of the following U.S. industries is NOT yet greatly challenged by foreign competitors?

Furniture manufacturing

______ is a process of doing business worldwide, so strategic decisions are made based on global profitability of the firm rather than just domestic considerations.

Globalization

_____ recently cut its corporate tax rate by five percentage points, leaving ______ with the highest corporate tax rate among all the nations in the world.

Japan; the U.S.

Which of the following is NOT true regarding European workers and workplaces?

Many Europeans respond enthusiastically to pay-for-performance, commission salaries, and objective measurement reward systems.

The lowest cost source for precision machinery is:

Mexico.

The various opportunities and threats that face multinational corporations are almost limitless, and the number and complexity of these factors ________ the number of products and the number of geographic areas served.

drastically increase with

Desire for ______ is a part of the social fabric in worker-manager relations in Mexico.

harmony

The smile is one form of communication that works the same worldwide.

true

Trade barriers are one of the unique and diverse risks that face multinational corporations.

true

Whereas ______ businesses embody individualism, achievement, competition, and informality, ______ businesses stress collectivism, continuity, cooperation, and formality.

American; Mexican

Although a firm's power and prestige in domestic markets may be significantly enhanced when the firm competes globally, this rarely translates into improved negotiating power among creditors, suppliers, or distributors.

False

Although growth in revenues and profits is a common expectation of shareholders, it is not a measure of organizational success.

False

Brazil offers skilled labor and technology, while Germany offers abundant natural resources and rapidly developing markets.

False

Europeans are especially motivated by pay-for-performance, commission salaries, and objective measurement and reward systems.

False

Foreign banks currently operate and compete in most parts of the United States.

False

Foreign revenue as a percentage of total company revenues is approaching 20 percent for Colgate-Palmolive.

False

In the United States, an amicable relationship is often mandatory before conducting business.

False

Mass communication and high technology have led to highly individualized and distinct patterns of consumption in diverse cultures worldwide.

False

The U.S. government's OPIC:

offers insurance to offset some risks of doing business internationally.

In general, U.S. managers feel the day has been productive if it is spent:

rushing to meetings and conferences.

A primary reason why most domestic firms are engaging in global operations is that growth in demand for goods and services outside the U.S. is considerably higher than inside.

true

American firms that seem insulated from foreign competition today may be vulnerable tomorrow.

true

In China, business relations revolve around guanxi, or personal relations.

true

Yum Brands, which owns KFC and Pizza Hut, reported in 2011 that its China division overtook the U.S. in profits generated.

true

________ countries are market leaders in labor-intensive industries and ________ offers abundant natural resources and rapidly developing markets.

East Asian; Brazil

A global strategy means considering individual countries distinctly, one at a time, when designing, producing, and marketing products.

False

While multinational corporations face almost limitless social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive opportunities and threats, the number and complexity of these factors do not dramatically increase with the number of products produced and the number of geographic areas served.

False

With the rise in world commerce, government regulatory bodies are no longer able to closely monitor foreign business practices.

False

Wynn and Las Vegas Sands report their net revenue in Brazil is growing more than triple their U.S. properties.

False

Which of the following statements is NOT true?

Markets are shifting slowly and in many cases diverging in tastes, trends, and prices.

Which U.S. industry is already greatly challenged by foreign competitors?

None of the above

The _____ opportunities and threats that face a multinational corporation are almost limitless.

all of the above

Marketing managers in Japan see making a sale ______ the selling process.

as the beginning of

Organizations that conduct business operations across national borders are called:

multinational corporations

High corporate tax rates:

provide strong incentives to avoid and evade taxes

In an industry that is, or is rapidly becoming global, the riskiest possible posture is to:

remain a domestic competitor

Time spent with the family and the quality of relationships are more important in some cultures than the personal achievement and accomplishments espoused by the traditional U.S. manager.

true

To see and appreciate the world from the perspective of others has become a matter of survival for business.

true

While there are a few U.S. industries that are not yet greatly challenged by foreign competitors, many products and components within these industries too are now manufactured in foreign countries.

true

Exports of goods and services from the U.S. were valued at $1.6 trillion in 2009, which accounted for ________ percent of the U.S. gross domestic product.

11

What percent of the world's population lives in the United States?

5

What percent of the world's population lives outside the United States?

55

Almost 70 percent of the world's population lives outside of the U.S.

False

As long as the price and quality of a firm's products and services are competitive on a local basis, they have nothing to worry about.

False

In Mexico, business associates usually entertain each other at their homes.

False

It is an exaggeration to say that in an industry that is global, the riskiest possible posture is to remain a domestic competitor.

False

It is possible to obtain insurance from the U.S. government 's OPIC to eliminate all risks associated with doing business internationally.

False

Keeping informed about the number and the nature of competitors is easier when doing business internationally.

False

Many countries became less protectionist during the recent global economic recession.

False

Mexican workers expect and desire a work environment in which self-expression and initiative are encouraged.

False

More time and effort are required to identify and evaluate external trends and events in domestic corporations than in multinational ones.

False

Since the 1980s, most countries including the U.S. have been steadily lowering their tax rates.

False

The drive to improve the efficiency of global business operations is leading to lesser functional specialization.

False

The strategic-management process is conceptually different for multinational firms than for purely domestic firms.

False

The understanding of Asian cultures is a strength U.S. firms have in competing with Pacific Rim firms.

False

Though China has more than 1.3 billion residents, the middle class segment that is able to buy goods and services is rapidly shrinking.

False

Weaknesses of competitors in foreign lands are often underestimated, and strengths are often overestimated.

False

All of the following are potential disadvantages to initiating, continuing, or expanding business across national borders EXCEPT:

Foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

All of the following are potential advantages to initiating, continuing, and/or expanding international operations EXCEPT:

Foreign operations could be seized by nationalistic factions.

President Obama recently said, "______ progress in just two decades is one of the most stunning achievements in human history."

India's

How does life in Mexico compare to life in the United States?

It is slower.

________ can enable firms to learn the technology, culture, and business practices of other people and to make contacts with potential customers, suppliers, creditors, and distributors in foreign countries.

Joint ventures

Which of the following nations has the highest corporate tax rate?

The United States

The world population that lives outside of the U.S. is growing _____ the U.S. population.

at the same rate as

Mass communication and high technology have ________ in diverse cultures worldwide.

created similar patterns of consumption

Multinational corporations face unique and diverse risks, which include all of the following EXCEPT:

favorable foreign court interpretations of contracts and agreements

Most economists argue that protectionism ______ the world economy because it ______ trade among countries.

harms; inhibits

All of the following are things that many cultures around the world value more than the competitiveness that is so important in the U.S. EXCEPT:

individualism

In South Korea, activities involve concern for ________, or harmony based on respect of hierarchical relationships, including obedience to authority.

inhwa

The domestic food industry ______ , so Kraft Foods is focusing on foreign acquisitions.

is growing 3% per year

Protectionism involves countries doing all of the following EXCEPT:

liberalizing restrictions on the import of foreign goods

U.S. managers in Japan have to be careful about ______, whereby Japanese workers expect supervisors to alert them privately of changes rather than informing them in a meeting.

nemaswashio

In Europe it is generally true that the farther ______ on the continent, the more participatory the management style.

north

In which of the following industries is the U.S. NOT yet greatly challenged by foreign competitors?

retailing

Americans place an exceptionally high priority on ______ whereas many foreigners place more worth on_______.

time; relationships

A potential advantage to initiating, continuing, or expanding international operations is that foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

true

An important business activity in Japan is entertaining because it strengthens Wa.

true

Before entering international markets, firms should do research to try and diminish the risk of doing business in new markets.

true

Firms are often motivated to initiate international operations because competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.

true

Geographic distance and cultural differences are two of the factors that can make communication between domestic headquarters and overseas operations difficult.

true

In socialist countries such as France, Belgium, and the United Kingdom, the only grounds for immediate dismissal from work is a criminal offense.

true

In today's global climate, many companies may find it difficult to survive by relying solely on domestic markets.

true

Labor markets have become steadily more international with more and more countries around the world welcoming foreign investment and capital.

true

Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people.

true

One aspect of the global challenge faced by U.S. business involves the complications of having to deal with two or more monetary systems.

true

One of the dangers of remaining a local competitor is that more aggressive companies will use their global growth to capture economies of scale and learning.

true

Organizations that conduct business operations across national borders are called international firms or multinational corporations.

true

Perhaps the greatest advantage of international operations to a firm is the ability to gain new customers for its products and services, thus increasing revenues.

true

Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people.

true

Shifts in the nature and location of production systems, especially to China and India, are reducing the response time to changing market conditions.

true

Strategists in multinational corporations are often confronted with the need to be globally competitive and nationally responsive at the same time.

true

The U.S. furniture manufacturing industry is not yet greatly challenged by foreign competitors.

true

The availability, depth, and reliability of economic and marketing information in different countries vary extensively.

true

The need to amortize massive R&D investments over many markets is a major reason why the aircraft manufacturing industry became global.

true

The social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive opportunities and threats that face a multinational corporation are almost limitless.

true

The strategic-management process is more complex for international firms due to more variables and relationships.

true