Management Ch. 5

Exchange Rate

The ratio at which one nation's currency can be exchanged for another nation's currency or gold

Culture

A blueprint of acceptable behavior that is passed from one generation to the next

What is a multinational corporation (MNC)?

A corporation, such as IBM, ExxonMobile, and Nestlé, that operates on a worldwide scale, without significant ties to any one nation or region

What is the World Trade Organization (WTO)?

A global association of member countries that promotes free trade

If it wants to reduce the dollars flowing out of the country, the U.S. can limit the number of garments being imported from China and Vietnam by imposing

A quota

Which of the following characteristics relates to global business (globalization)?

A strategy in which organizations treat the entire world or major regions of it as the domain for conducting business

What term describes the agreement between ten Southeast Asian countries with the goal to promote economic growth and overall progress in the area via trade and security?

Association of Southeast Asian Nations

You are the international marketing manager for Checker Burger, Inc., producer of a popular soy burger. There is an excellent market for your burgers in the republic of East Slabovia, a producer of high-quality brandy. The only problem is that East Slaboviar currency is not accepted on the international currency exchange. What can you do to help your trade?

Barter burgers for brandy

Dumping

By requiring products to be sold for not less than what it costs to produce them, the United States is attempting to prohibit

Licensing

Describes a trade arrangement in which one company--the licensor--allows another company--the licensee--to use its company name, products, patents, brands, trademarks, raw materials, and/or production processes in exchange for a fee, or royalty

The fact that the American company 3M owns a film-manufacturing facility in Italy is an example

Direct investment

What term describes the purchase of overseas production and marketing facilities, in which a company may control the facilities outright, or it may be the majority stockholder in the company that controls the facilities?

Direct investment

Which of the following characteristics relates to the North American Free Trade Agreement (NAFTA)?

Effectively merged Canada, the U.S., and Mexico into one market of about 400 million consumers by eliminating most tariffs and trade restrictions on agricultural and manufactured products among the 3 countries

Which of the following characteristics related to the World Bank?

Established and supported by the industrialized nations in 1946 to loan money to underdeveloped and developing countries

Which of the following refers to an economic and political union of 28 member nations that are located primarily in Europe?

European Union (EU)

What name is given to the ratio at which one nation's currency can be exchanged for another nation's currency or for gold?

Exchange rate

Which of the following characteristics relates to countertrade agreements?

Exporting that involves bartering products for other products instead of for currency

Which of the following refers to the market value of a nation's total output of goods

Gross domestic product (GDP)

Which of the following refers to a tax levied by a nation on goods bought outside its borders and imported into the country?

Import tariff

What terms describes the physical facilities that support a country's economic activities, such as railroads, highways, ports, airfields, utilities and power plants, schools, hospitals, communication systems, and commercials distribution systems?

Infrastructure

If Peru wants to purchase machine parts from a German company but lacks German marks, it will probably go to which of the following institutions to borrow the marks

International Monetary Fund

The basic mission of which of the following is to oversee the international monetary system and help ensure stable currencies and exchange rates throughout the world?

International Monetary Fund (IMF)

Which of the following refers to the buying, selling, and trading of goods and services across national boundaries

International business

Because many countries do not permit foreigners to purchase and operate facilities in their countries, a company wishing to do business in such a country may share the business costs with the host country by forming a

Joint venture

Miller Beer allows a Canadian firm to use its name, formula, and brands in return for a royalty. This arrangement is known as

Licensing

What is meant by contract manufacturing?

Occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification

Which of the following characteristics relates to dumping?

Occurs when a country or business firm sells products at less than what it costs to produce them

What name is given to the maximum number of units of a particular product that may be imported into a country?

Quota

Strategic alliance

Refers to a partnership formed to create competitive advantage on a worldwide basis

Trading company

Refers to the acquisition of goods in one country and selling of them to buyers in another country

You are the international marketing manager for Brides & Grooms, Inc., a designer and manufacturer of wedding apparel. This year's fashions are featuring white for the entire wedding party. You schedule this year's Asian kick-off for next Monday in Tokyo, when you discover that white is the Japanese color of mourning. What did you overlook?

Social and cultural differences

Exporting

The sale of goods and services to foreign markets

What is an embargo?

The suspension of trade in a particular product by the government

Which of the following refers to the acquisition of goods in one country and selling of them to buyers in another country?

Trading company

Which of the following refers to the acquisition of goods in one country and the selling of them to buyers in another country?

Trading company

Franchising

What name is given to a form of licensing in which a company agrees to provide a name, logo, methods of operation, advertising, products, and other elements associated with the company's business, in return for a financial commitment and the agreement to conduct business in accordance with the company's standard of operations?

Organization of Economic Cooperation and Development (OECD)

What term describes an international economic organization comprised of 30 countries that accept the basic principles of free-market economies and representative democracy, and that recommend and promote policies to improve the well-being of consumers and societies across the world?

A Countertrade Agreement

When a nation pays for imports with its own goods

Outsourcing

You are the executive vice president of Banana Computer, Inc. You have a competitive machine, but your major competitor has the benefit of large-scale production, making its products less expensive to manufacture. In order to remain price-competitive, you send your parts and subassemblies to Mexico for the final stage of assembly, thereby taking advantage of

China's arrangement with the Congo to barter infrastructure in exchange for metals is an example of a

countertrade agreement

You are the president of Henry Motor Corp., and you see the great potential markets in Eastern Europe for personal transportation. Your plan is to purchase an old Soviet tank plant and convert it into an auto factory. The Russian government welcomes your plan, which is an example of

direct investment

According to Hofstede's cultural dimensions theory, _______ tend to be self-reliant and place a high level of importance on freedom and ambition, while _______ place more value on the team than the individual.

individualists; collectivists

When Weseeyu, Inc., of Rochester, New York, sells contact lenses to people in Moscow, Russia, the company

is exporting the lenses

If companies do research to learn about cultural differences before engaging in trade in a particular country, then problems arising from these cultural differences can be

minimized

A corporation that operates in several countries without significant ties to any of them is a

multinational

Most businesspeople engaged in international trade underestimate the importance of

social and cultural differences

The translation of product names can be a crucial factor in the success or failure of a foreign marketing effort because of

sociocultural differences

International business

the buying, selling, and trading of goods and services across national boundaries