International Business Module 1
What commonly used variable measures where and how fast internationalization is taking place?
foreign direct investment
______ is the best strategy for advancing the world's economic development.
free trade
The liberalization of trade has been responsible for
increased spending on public education greater civil liberties an increase in political rights
In which of the following environments is decision making most complex?
international
The ____________ environment consists of interactions between the domestic environmental forces and the foreign environmental
international
The forces in the foreign environments are often ______; that is, they are connected to one another.
interrelated
Which of the following are contributing to the shift of the world's economic center of gravity back to Asia? (Check all that apply.)
rapid urbanization of populations industrialization in the emerging markets
Which of the following are benefits of a globalized product line?
reduced inventory costs reduced production costs reduced development costs
What is the unconscious reference to your own values when judging behaviors of others in a new and different environment?
self-reference criterion
Which of the following statements reflects Theodore Levitt's definition of globalization?
selling the same things in the same way everywhere adopting strategies that operate as if the entire world is a single entity creating worldwide markets for standardized products
Which of the following is NOT a negative effect of the North American Free Trade Agreement?
substantial decrease in production facilities along the U.S.-Mexican border
Which of the following are negative affects of the North American Free Trade Agreement?
substantial increases in population along the U.S.-Mexican border. substantial increases in air pollution along the U.S.-Mexican border. substantial increases in ground water pollution along the U.S.-Mexican border
Global communications networks that enable manufacturing workers to coordinate production and design functions worldwide are an example of a
technological driver
To ensure a continuous supply of raw materials, industrialized companies are sometimes forced to invest in the developing nations where most new deposits are being discovered.
true
Foreign business denotes the operations of a company
within a foreign country
When nations and corporations were ranked by GNI and total sales, respectively, for 2016, how many had GNI greater than the total annual sales of Walmart Stores?
24
Between 1992 and 2018, the United States saw an increase of nearly _____ in nonfarm jobs.
40%
Despite globalization, the number of people living in poverty in sub-Saharan Africa rose _____ between 1990 and 2013.
43%
Which of the following is an example of a domestic force affecting foreign operations?
A home country suffers a shortage of foreign currency, so its government restricts overseas investment. A union decides to call a strike at a domestic company, and the strike causes disruptions in the supply of parts to a company in another country.
A vast expansion of agricultural and industrial production in _____ stimulated the emergence of an internationally integrated trading system stretching from Asia to the Mediterranean and Africa.
China
Which country was the world's leading manufacturing country for about 1800 years until Britain became dominant in 1840?
China
How does the foreign environment operate differently than the domestic environment? (check all that apply)
Forces in the foreign environment are interrelated. Forces in the foreign environment have different values. Forces in the foreign environment are difficult to assess.
Which one of the following was a multinational company by the 1920s?
Ford motor
Which of the following statements are true regarding the link between free trade and jobs?
Free trade can cause companies to go out of business. Free trade promotes more jobs. Free trade promotes new, better jobs.
Which of the following is NOT typically an argument against globalization?
Globalization has decreased efficiency.
Match the following external forces with the appropriate definition.
Competitive: Kinds and number of competitors and their activities Financial: Variables such as interest rates, inflation rates, and taxation Economic: Variables such as gross national income, unit labor cost, and personal consumption expenditure Legal: The many foreign and domestic laws governing business operations Political: ]Elements of nations' climates such as nationalism and forms of government Physical: Elements of nature such as topography, climate, and natural resources
Which of the following human conditions has been attributed to the liberalization of trade?
Decrease in infant mortality Increase in literacy rate Increase in life expectancy
Which one of the following trading firms was formed to carry out colonial activities in Asia and to open ocean trade routes to the East?
Dutch East India Company
Which of the following trading firms were established in the 1600s?
Dutch East India Company British East India Company
Which of the following statements reflect workers' fears regarding the impact of globalization on labor?
Globalization reduces wages in the United States. U.S. companies have moved abroad to avoid unionization. Jobs migrate to developing nations where labor costs are lower.
Which of the following statements is true regarding gross national income?
Gross national income is a measure of value added, not sales.
Which of the following was one of the first U.S. companies to own foreign production facilities, have worldwide distribution networks, and market its products under global brands?
Singer Sewing Machine
Which of the following are true of state-owned transnational corporations?
State-owned transnationals come from both developing and developed countries. There is a minimum of 650 state-owned transnationals. State-owned transnationals collectively have assets exceeding $2 trillion.
Which of the following are regional economic groupings of nations? (Check all that apply.)
The European Union Mercosur The North American Free Trade Agreement
Which one of the worst natural disasters in history is associated with international trade?
black death
In international business, which of the following is typically NOT a choice international managers have in deciding what to do with a concept employed in domestic operations?
change the national culture
A company defending its home market by entering the competitor's home market is an example of a ______ driver.
competitive
A company that decides to go abroad as a way to increase economies of scale is basing this decision on which driver of international business activity?
cost
Management moving production or other parts of the company's value chain to countries where wages are lower is an example of ______ drivers.
cost
What are the five major drivers of internationalization listed in the text?
cost competitive technological market political
The self-reference __________ is the unconscious reference to the one's own cultural values.
criterion
The world development indicators from the World Bank show that the number of people living in extreme poverty has _______.
declined
The _____________ environment is all the ____________________ forces originating in the home country that surround and influence the development of the company.
domestic uncontrollable
A company's managers tend to be most familiar with the forces in the _______.
domestic environment
Free trade enhances ______ development.
economic
The tendency toward international integration and interdependency of goods, technology, information, labor, and capital is called ______.
economic globalization
True or false: A nation's GNI and a company's sales are directly comparable.
false
True or false: Domestic forces do not affect foreign operations.
false
What is an example of an internal force that can affect a company's environment?
human resources
Which of the following are typical arguments against globalization?
Globalization produces uneven results across nations. Globalization has been linked to a decline in environmental conditions. Globalization has worsened labor standards.
Which empire raised the cost of Asian trade for Europeans and drove the search for sea routes to Asia?
Ottoman
___________ is the transportation of any good into a country from a foreign origination point.
importing
The ____________ environment consists of interactions between the domestic environmental forces and the foreign environmental forces.
international
The _________________ environment consists of interactions between the domestic environmental forces and the foreign environmental forces
international
A company with operations in multiple nations is referred to as a(n):
international company
The definition of international business includes: (check all that apply)
international trade foreign manufacturing service industries
Which of the following foreign forces are especially difficult to assess?
legal political
Foreign subsidiaries must obey the local laws. If they don't, they could be subject to
legal action by the country of the parent company. ????
Data have shown a clear and definitive link between
liberalization of trade and economic growth.
A supplier that moves locations to be closer to an original equipment manufacturer is an example of a _____ driver.
market
An accounting firm establishing foreign operations in markets in which their principal accounts are located to prevent competitors from gaining access to this accounts is an example of a _____ driver.
market
What is identified in the text as being one of the five major drivers of globalization?
market
When a supplier to an original equipment manufacturer (e.g., a battery manufacturer supplying an automobile producer) follows its major customer to a new country, it is an example of a ________ driver of international business activity.
market
The argument that free trade is the best strategy for advancing the world's economic development is considered
a proposition with which almost all economists agree.
Historically, international business as a business practice is considered
a result of the rise of the Ottoman Empire ?????
Barriers to the free movement of a nation's people, such as mountain ranges, help maintain pockets of distinct cultures within a country, thus affecting a company's decision making. This scenario is an example of foreign forces _______.
being interrelated
An international business is defined as a(n)
business whose activities involve crossing national borders.
An OPEC nation investing in filling stations in a foreign country to guarantee a market for its crude oil at a more favorable price is an example of a ______ driver.
competitive
Companies internationalizing their operations to guarantee a supply of key raw materials is an example of a ______ driver.
competitive
New firms, mainly from newly industrialized countries, entering the world markets in computers and electronics is an example of a ______ driver.
competitive
A manager's unfamiliarity with other cultures adds to the ________ of foreign environments.
complexity
Environment as used in the textbook involves the forces surrounding and influencing the life and development of the firm and is classified as
controllable and uncontrollable
A business that decides to increase sales by entering the international market may do so in order to create economy of scale. This would be an example of which driver of internationalization?
cost
Which of the following is NOT a major driver of internationalization?
cultural drivers
The term ________ means all the forces influencing the life and development of the firm.
environment
_______ is the transportation of any domestic good to a destination outside a country.
exporting
The forces influencing the life and development of the firm are classified into which two categories?
external internal
True or false: Importing is the transportation of any domestic good to a destination outside a country.
false
True or false: The vast proportion of most U.S. companies' potential customers are located within the United States.
false
Sanctions being placed on Russia and Russian companies in response to Russia's actions in Ukraine is an example of:
forces in the foreign environment having different values.
Which environment refers to all the uncontrollable forces originating outside the home country that surround and influence the firm?
foreign
______ business denotes the operations of a company outside its home market.
foreign
The forces in the ____________________ environment that occur outside a firm's home country are the same as those in the environment (that is, the ______________ environment of the home country).
foreign domestic
What term refers to direct investments in equipment, structures, and organizations in a foreign country at a level sufficient to obtain significant management control?
foreign direct investment (fdi)
According to Theodore Levitt, ______ means selling the same thing in the same way everywhere in the world.
globalization
What was Theodore Levitt referring to when he said that the future belonged to corporations that operated "as if the entire world were a single entity; [such an organization] sells the same things in the same way everywhere"?
globalization ???????
Which of the following markets are appealing to managers who face a mature, saturated market at home?
markets with a rising gross domestic product per capita markets whose economies are growing rapidly markets with a rising population
__________ have grown faster than world output in nearly each of the past 60 years.
merchandise exports
Decision making in the international environment is considered ________ it is in a purely domestic environment.
more complex than
Labor standards in developed nations tend to be _____ than in developing nations.
more rigorous
Preferential trading arrangements such as NAFTA and the European Union are ______ drivers.
political
The trend toward the unification and socialization of the global community is considered a ______ driver.
political
You are interested in expanding your business into a foreign country. The government of that country exercises strict control over types and quantities of products that can be imported, so you may be limited in how much you can export. Which driver is most impacting your decision to expand?
political
Data suggest that the liberation of trade has improved:
poverty rate life expectancy health education
Which of the following regions have not experienced economic success despite efforts to liberalize and privatize their economies? (Check all that apply.)
sub-Saharan Africa Latin America
Cable and satellite TV systems in Europe and Asia that allow an advertiser to reach numerous countries is an example of a _______ driver.
technological
Economic globalization refers to the tendency toward an international integration and independency of which of the following?
technology information labor goods capital
Rapid urbanization of populations combined with industrialization in the emerging markets is quickly shifting the world's economic center of gravity from
the Americas and Europe to Asia.
The kinds of forces in the foreign environment are ________ those in the domestic environment except that they occur in foreign nations.
the same as
A ______ corporation is an enterprise made up of entities in more than one nation, operating under a decision making system that allows a common strategy and coherent policies.
transnational
Management has no direct control over _______, although it can exert influence over them.
uncontrollable forces
The external forces are commonly called
uncontrollable forces
Which of the following adds complexity to foreign environments?
unfamiliarity with other cultures
Current trends indicate that the world's economic center of gravity is shifting to ______.
Asia
What is an example of an external force that represents financial factors affecting a business?
Interest rates
Which of the following sectors of human life were profoundly impacted by international trade? (Check all that apply.)
Arts Agriculture Politics Public health
Which of following are considered external forces? (check all that apply)
Economic Physical Technological Competitive Distributive
________ refers to the transportation of any domestic good or service to a destination outside a country or region.
Exporting
Which of the following statements are true regarding the growth in exports?
Exports in 2017 were nine times larger than they were in 1980. Merchandise exports have grown faster than world output in nearly each of the past 60 years. In 2017, the total value of exported services was $5.3 trillion.
A(n) ______ company is a company with operations in multiple nations.
International
___________ business is business that is carried out across national borders.
International
Which of the following statements are true regarding the international environment? (Check all that apply)
It consists of interactions between the foreign environmental forces of two countries. It consists of the interactions between the domestic environmental forces and the foreign environmental forces.
Which of the following statements are true regarding the international environment?
It consists of the interactions between the domestic environmental forces and the foreign environmental forces. It consists of interactions between the foreign environmental forces of two countries.
Which of the following statements are true regarding a transnational corporation?
It operates under a decision making system that allows coherent policies. It operates under a decision making system that allows a common strategy. It is composed of entities in more than one nation.
Which of the following statements are true regarding the Ottoman Empire?
The empire influenced the emerging trade routes for people, goods, and money that spanned from England to China. The empire spanned Europe, North Africa, and the Middle East. The empire drove the search for sea routes to Asia, including the expeditions that discovered the Americas.
Which of the following are political drivers that are leading firms to internationalize their operations?
The formation of the European Union Preferential trade agreements like NAFTA
Which of the following factors are contributing to the globalization of business operations?
The progressive reduction of barriers to trade and foreign investment by governments The privatization of much of the industry in formerly communist nations
In international business, what are the three choices international managers have in deciding what to do with a concept employed in domestic operations? (Check three.)
Transfer it intact. Adapt it to local conditions. Do not use it overseas.
Which of the following statements are true of transnational corporations?
Transnationals have approximately 900,000 foreign affiliates. Transnationals collectively account for 10% of world gross domestic product. Transnationals account for about half of world trade.
Which of the following international organizations affect the international market? (check all that apply)
World Bank European Union OPEC
The term globalization was first coined in a Harvard Business Review article in which the author maintained that
the future belonged to global companies that sold the same things the same way, everywhere.