international business ch 2
Which one of the following is an upstream value-chain activity? A. After-sales service B. Marketing C. Research and development D. Customer service E. Transportation
Research and development
_______ involves a company paying external suppliers and contractors, who are located in foreign nations, to perform value-adding activities. A. Reshoring B. Offshoring C. Sovereignty D. Global outsourcing E. Foreign direct investment
global outsourcing
The spread of Starbucks around the world is an example of the ________ of markets. A. globalization B. modernization C. industrialization D. market liberalization E. technological advancement
globalization
Which one of the following is considered an important measure of economic development of a country that often characterizes lower levels of globalization? A. Gross domestic product B. Sovereignty C. Gross national income per person D. The underground economy E. Number of supranational institutions
gross national income per person
Dimensions of Market Globalization
integration of interdependence of national economies rise of regional economic blocs growth of global investment and financial flows
Societal Consequences of Globalization
loss of national sovereignty offshoring and flight of jobs effect on the poor sustainability and natural environment effect on national culture
Firm-level Consequences of Market Globalization
new business opportunities for internationalizing firms new risks and rivalry from foreign comp more demanding buyers proactive internationalization Internationalization of the Firm's Value Chain
When a company transfers its value-chain activities by launching a subsidiary in a foreign country, it is called ________. A. exporting B. reshoring C. relaunching D. offshoring E. contagion
offshoring
Stages in the Firm's Value Chain
1) Research and Development 2) Procurement (Sourcing) 3) Manufacturing 4) Marketing 5) Distribution 6) Sales and Service
phases of globalization
1. intro to railroads and ocean transport, rise of manufacturing, crossborder trade of commodities 2. rise of electricity and steel production, emergence and dominance of early MNEs in manufacturing 3. formation of general agreement on tariffs and trade (GATT), focus by industrializing western countries to reduce trade barriers, rise ofMNEs from japan, global capital markets 4. privatization of state enterprises in transition economies, revolution in info, communication and transportation tech 5. rise of digital tech, boosting manufacturing productivity and efficiency of international trade in services
fastest modes of transportation (1500-1840s, 1850-1900, and 1900s-today)
1500-1840: human powered ships and horse drawn carriages 1850-1900: steamships and steam locomotive trains 1900-today: motor vehicles, propeller airplanes and jet aircraft
Which one of the following is an example of globalizing manufacturing? A. A British bank opens loan offices in the United States, Sri Lanka, and Guatemala. B. A U.S. paper manufacturer opens sales offices in Germany and Kazakhstan. C. A Swiss watch maker signs distribution contracts with retail stores around the world. D. A Mexican software company opens a Research and Development department in China. E. An Indian apparel company sets up a factory in Madagascar.
An Indian apparel company sets up a factory in Madagascar.
Mohammed lives in Turkey. Juan lives in Mexico. Both men were able to purchase the latest Mac book from their local retailer the day Apple released the new product. The functionality of the computer is the same with exception of the keyboard, which is customized for each language. This is an example of which of the following? A. Globalization of production B. Convergence of consumer lifestyles and preferences C. Rise of regional economic integration blocs D. Growth of global investment and financial flows E. Globalization of services
Convergence of consumer lifestyles and preferences
Which cause of globalization BEST explains why some emerging markets have increased their standards of living and become competitive producers and exporters of computers and software? A. A global decrease in barriers to trade B. Technological advances C. The implementation of free markets D. Financial markets integrating on a global scale E. Economic development and industrialization
Economic development and industrialization
Which one of the following best explains the globalization of production? A. Globally active corporations develop multinational operations through the exchange of goods, financial ventures, and various value-chain activities. B. Firms reduce manufacturing costs and retail prices by moving manufacturing activities to nations with lower costs of labor. C. Regional trade agreements like the North American Free Trade Agreement facilitate reduced trade barriers among member nations. D. Manufacturing firms and governments buy and sell large quantities of global currencies. E. Consumer shopping habits indicate changing trends and preferences to which manufacturers must respond.
Firms reduce manufacturing costs and retail prices by moving manufacturing activities to nations with lower costs of labor.
China, India, and Eastern Europe have become known as cost-effective places for producing goods and services, and they have attracted an increasing amount of foreign capital into their economies. Which driver of globalization best explains this occurrence? A. A global decrease in barriers of trade B. Market liberalization and implementation of open markets C. Technological advances improving efficiency at a global scale D. Industrialization and rebuilding E. Financial markets integrating on a global scale
Market liberalization and implementation of open markets
A grocer in Niagara Falls, Ontario, regularly bought vegetables from farmers in Rochester, New York. The invention of the telephone during this phase made it much easier for the grocer to call the New York farmers to ask about current prices and adjust her selling prices. In what phase of globalization did this situation occur? A. The fifth phase—2007 to the present B. The fourth phase—1980s - 2006 C. The second phase—1900-1930 D. The third phase—1948 to the 1970s E. The first phase—1830 to the late 1800s
The first phase—1830 to the late 1800s
Which one of the following globalization drivers increased monetary connectivity and simplified cross-border transactions? A. The implementation of free markets B. Industrialization in underdeveloped nations C. The integration of global financial markets D. Global decreases in barriers to trade E. Advancements in communication technology
The integration of global financial markets
Which phase of globalization was triggered by the rise of electricity and steel production? A. The second phase—1900-1930 B. The fourth phase—1980 - 2006 C. The first phase—1830 to the late 0800s D. The third phase—1948 to the 1970s E. The fifth phase—2007 to the present
The second phase—1900-1930
The greatest significance of globalization is reflected directly in a company's ________. A. offshoring activities B. reshoring efforts C. balance sheet D. value chain E. market share
Value chain
The ________ consists of approximately 160 countries worldwide and was created to control and safeguard fairness in international trade and investments. A. APEC B. WTO C. IMF D. GATT E. NAFTA
WTO
The formation of the WTO and the emergence of economic integration blocs led to ________. A. market liberalization and implementation of free markets B. industrialization and innovation C. financial markets integrating on a global scale D. a global decrease in barriers to trade E. technological advances
a global decrease in barriers to trade
One of the most noteworthy influences on globalization has been ________. A. a global decrease in barriers to trade B. industrial growth, financial expansion, and innovation C. financial markets integrating on a global scale D. market liberalization and the implementation of free markets E. advances in technology, including communications, data, and engineering
advances in technology, including communications, data and engineering
Societal Consequences of Market Globalization
contagion (rapid spread of monetary crises from one country to another) loss of nation soverignty offshoring flight of jobs effect on the poor effect on environment effect on national culture
rationale of internationalization of firms value chain
cost savings increase efficiency, productivity and flexibility access customers, inputs, labor, tech benefit from foreign partner capabilities
globalization
refers to interconnectedness of national economies and growing interdependence of buyers, producers, suppliers and government around world
What should governments do to reduce the harm of globalization while also acquiring the benefits associated with globalization? A. Nationalize foreign companies. B. Make private property more accessible. C. Support exchange through political processes. D. Make it more difficult to enter new markets. E. Regulate financial institutions appropriately.
regulate financial institutions appropriately
ABC Enterprises transferred some of its manufacturing and other value-chain activities to a more cost-effective location in China five years ago. Recently, ABC Enterprises has undergone a change in management, and the new manager has decided to move those value-chain and manufacturing activities back to the home country. In which one of the following is ABC participating? A. Offshoring B. Sovereignty C. Global outsourcing D. Reshoring E. Global sourcing
reshoring
Which phase of globalization is composed of the growth and supremacy of multinational enterprises in the industrial and agricultural industries? A. Fifth phase B. First phase C. Third phase D. Fourth phase E. Second phase
second. phase
value chain
sequence of value adding activities performed by firm in process of developing, producing and marketing product or service
driving forces of market globalization
worldwide reduction of barriers to trade and investment market liberalization and adoption of free trade industrialization integration of world financial markets advances in tech bring suppliers and demanders together more efficiently
India has become a prominent provider of software technologies, and Brazil has become a frontrunner in commercial aircraft development. Which cause of globalization is illustrated by these examples? A. Industrialization, economic growth, and innovation B. Worldwide reduction in trade barriers C. Financial markets integrating globally D. Technological advancements in communication networks E. Market liberalization and the implementation of free markets
Industrialization, economic growth, and innovation