Leadership in Global Environment of Business

For internationalizing firms, the consequences of poor business management decisions are usually more costly when mistakes occur abroad than when they occur at home.

True

In a "common market," barriers to the cross-border flow of factors of production are removed.

True

The 2011 "Arab Spring" in the Middle East was facilitated in large part by social media.

True

The initial phase of globalization was triggered by the introduction of the railroads and ocean transport.

True

The two primary types of international investment are portfolio investment and foreign direct investment.

True

As market globalization intensifies, ________.

individual firms respond to the challenges and new advantages that it brings

Culture is not ________.

inherited

________ refers to the transfer of assets to another country or the acquisition of assets in that country.

International investment

Which of the following terms refers to the existence of a legal system based on clear rules and fair enforcement?

rule of law

In international economics, co-determination refers to the tendency for a financial or monetary crisis in one country to spread rapidly to other countries, due to integrated national economies.

False

________ are letters, figures, colors, or other characters that communicate a meaning.

Symbols

Nationalization refers to the gradual integration and growing interdependence of national economies.

False

The first wave of offshoring began in the 1990s with the exodus of service-sector jobs in credit card processing, software code writing, accounting, health care, and banking services.

False

________ refers to the sequence of value-adding activities performed by the firm in the course of developing, producing, marketing, and servicing a product.

A value chain

Which of the following best explains why export growth has outpaced the growth of domestic production during the last few decades?

Advanced economies now source many of their consumable products from low-cost manufacturing nations

Globalization Debate (Scenario)In his international business class, Professor Jang organizes a debate on the societal effects of market globalization. Juan Prince takes a position that highlights the negative effects of market globalization. He emphasizes how multinational enterprises can wield so much influence that they threaten national sovereignty. He also notes the prevalence of low wages and sweatshop conditions as firms utilize low-cost labor abroad. Juan then describes the detrimental effects of corporate pollution on the environment, and he ends his argument by explaining how market globalization helps homogenize national cultures. Rina Taylor is assigned to counter Juan's position.Which of the following statements most likely to counters Juan's argument concerning the homogenization of national cultures?

As globalization standardizes superficial aspects of life across national cultures, people resist these forces by insisting on their national identity and taking steps to protect it.

Which of the following countries have the LEAST corruption?

Denmark

Internationalization Conference (Scenario)At a conference on business internationalization strategies, representatives of three different businesses meet to discuss a joint venture between their companies. Business A is located in a country that internationalized during the second phase of globalization. Business B is based in a country that internationalized during the third phase of globalization. Business C is located in an emerging market country.The representative from Business C is most likely from ________.

Brazil

In recent years, business executives and scholars have used ________ to refer to the advantages possessed by nations and individual firms in international trade and investment.

Competitive advantage

________ represents the apex of the pyramid of ethical behavior.

Corporate social responsibility

Which of the following pairs of nations are on opposite ends of the political freedom scale?

Cuba and Sweden

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. LeShaun Golding researched the risks linked to establishing the plant in Country B. He cited government intervention, lack of local managerial talent, and unethical business practices as the most prominent risks for this location. LeShaun noted all of the following types of risks EXCEPT ________

Currency risk

Which of the following would be the best way for a manager to learn about country risks in a host country?

Employees working in the host country

________ is seizure of corporate assets with compensation

Expropriation

Which of the following is another term for importing?

Global sourcing

Which of the following managers portrays high uncertainty avoidance?

Henry is the managing editor at Paes publications. He emphasizes careful evaluation of all options and ensuring they are consistent with company policies, which often slows down the progress.

Which of the following is characteristic of collectivist societies?

In collectivist societies, compromise and conformity help maintain group harmony

Which of the following is a driver of globalization?

Integration of world financial markets

Which of the following is true of a code of ethics?

It guides decision-making by all employees in the firm.

Internationalization Conference (Scenario)At a conference on business internationalization strategies, representatives of three different businesses meet to discuss a joint venture between their companies. Business A is located in a country that internationalized during the second phase of globalization. Business B is based in a country that internationalized during the third phase of globalization. Business C is located in an emerging market country.The representative from Business B is most likely from ________.

Japan

Acme Ethical Standards (Scenario)Four senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil.________ is most likely to point to a controversial practice in his/her country in which the compensation of top executives is far greater than that of low-ranking subordinates.

Marta

Which of the following is true about networks?

Networks are neither formal organizations with clearly defined hierarchical structures nor impersonal, decentralized markets.

Which of the following countries is considered a mixed economy?

Norway

In the ________ phase of international product life cycle theory, knowledge about how to produce the product is widespread and manufacturing becomes straightforward

Standardization

Which of the following statements would be supported by Michael Porter?

Rivalry among industry competitors spurs innovation

In which of the following countries would alcoholic drinks be prohibited?

Saudi Arabia

Subjective dimensions of culture (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. Which of the following can be inferred from the above passage?

The Chinese culture is more likely than not to be relationship-oriented.

Which of the following is an example of offshoring?

The IT support services for customers of Mayfair Inc., a U.S. based consumer electronics manufacturer, are based in India.

Common and Civil Law (Scenario) Zane Computer Corporation is considering the possibility of building a new manufacturing facility in a foreign country in order to lower labor and production costs. The legal department of Zane has raised some issues regarding two countries that are the top contenders for the new facility. The legal system of Country A is based on civil law, while the legal system of Country B is based on common law. Other than the legal systems of the two countries, all other aspects are virtually identical. Zane's legal experts must determine which system would be the most beneficial to Zane in the long-term. Which of the following statements supports Country B over Country A?

The flexibility of common law allows for judicial interpretation in unique cases

Sid Maxwell (Scenario)Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. Hudson uses a distinctive sign to enable its customers to easily identify its products. This distinctive sign that the company also uses to distinguish its offerings from that of its competitors is known as a ________.

Trademark

Acme Software (Scenario)Acme Software is a U.S.-based maker of software products for the health care industry. Recently Acme has been investigating whether it would be beneficial to internationalize some of its value-chain activities. Acme hires a consulting group to help determine which, if any, value-chain activities could be conducted abroad to promote business growth. The consulting group identifies two health care software development companies in India that could provide programming services at a lower cost than Acme's current expenditures for programming. In addition, the consultants conduct international market research which shows that German health care companies have a strong demand for the type of software that Acme offers.Which of the following would be most important for Acme to determine before outsourcing its programming services to India?

Would the lower cost of outsourcing allow Acme to sustain a competitive advantage in its business operations?

Cultural intelligence is defined as ________.

a person's ability to function effectively in situations characterized by cultural diversity

Firms with a strong social interest ________.

aim to optimize work conditions and diversity in hiring

Sustainable firms ________.

avoid emitting toxic wastes

When making decisions regarding ethical business actions, managers should ________.

balance their obligation to shareholders with explicit contributions to the broader public good

International entrepreneurship is a new field of scholarly inquiry that is a result of the________ phenomenon.

born global

Jordan is employed in an American investment firm and is currently working with some Japanese clients on a new project. He uses a lot of hand gestures during meetings which his clients find very distracting and rude. This has also led to many misunderstandings between Jordan and his Japanese clients in the recent past. Which of the following best describes such a situation?

cross-cultural risk

Which of the following is a comparative advantage?

entrepreneurial orientation

Which of the following approaches to ethical standards for corporate governance reflects the view that the best action treats everyone equally and in a just manner?

fairness approach

Boycotts and protests have the potential to harm businesses by ________.

lost sales and increased costs for public relations activities

In polychronic cultures, ________.

members are easily distracted and are inclined to do many tasks at once

Firms with strong environmental interests are most likely to ________.

minimize pollutants in manufacturing

According to Michael Porter, a nation's factor endowments help determine its ________.

national competitive advantage

Maxdime Inc. is an international automobile manufacturer that has decided to work on low-cost fuel efficient motorbikes. Foray Inc., a domestic automobile company based in China, is willing to partner temporarily with the R&D team of Maxdime to design and launch motorbikes specially for the Chinese market. This is an example of ________.

non-equity-based strategic alliance

Which of the following best explains why India was once characterized by high country risk?

political leaders enacted laws that targeted foreign firms for harassment

Country risk is considered similar to ________

political risk

Which of the following is characteristic of an effective legal system?

systematically enforced laws and regulations

Socialization is defined as ________.

the process of learning the rules and behavioral patterns appropriate to one's given society

Both common law and civil law systems originated in ________.

western Europe

Born global firms are ________.

young companies that internationalize early in their evolution