MGMT Ch. 8

An attractive business climate is defined by one single dimension: Does the business minimize the political risk to the company?

false

What are the two types of political risk that affect companies conducting global business?

political uncertainty and policy uncertainty

A cosmetics company that is considering entering the South American market would be especially interested in the discretionary income within that region. In other words, which of the following would be a determining factor in its global strategy?

purchasing power

Global business is defined as____.

the buying and selling of goods and services to people from different countries

When McDonald's entered into an agreement with a French entrepreneur who wanted to own and operate a McDonald's fast-food restaurant in Paris, McDonald's saw the new restaurant as an opportunity. Unfortunately, the restaurant in Paris was not maintained at the cleanliness standards prescribed by McDonald's (but acceptable to the cleanliness standards of the French). McDonald's brought legal action to have the restaurant closed. This example illustrates ____.

a problem with franchising in different cultures

A country or region that has an attractive business climate for companies that want to go global has ____.

an effective but cost-efficient place to build an office or manufacturing site

Uganda is one of only two countries in the world that produce a mineral required in the manufacturing of cellular phones. A company which mines that rare mineral decided to not invest in the country due to a bloody civil war resulting from a change in rulers. The mining company used a(n) ____.

avoidance strategy

The most important factor used by a globalizing company for determining if a country or a region has an attractive business climate is ____.

easy access to growing markets

Which of the following represents the correct sequence for the phase model of globalization?

exporting; cooperative contracts; strategic alliances; wholly-owned affiliates

It appears that all companies follow the phase model of globalization when entering foreign markets.

false

Multinational companies typically have no difficulty determining the correct balance between global consistency and local adaptation.

false

Protectionism is the use of trade barriers to protect local companies and their workers from ____.

foreign competition

In a multinational firm, managers at company headquarters typically prefer an emphasis on ____ because it simplifies decisions.

global consistency

New companies with sales, employees, and financing in different countries that are found with an active global strategy are called ____.

global new ventures

The Japanese government has proclaimed that its snow is different from that found in any other region of the world and as a result ensures that all snow skis marketed for sale in Japan must be manufactured in Japan. This is an example of a(n) ____.

government import standard

A news article on Latin America read, "Mexico is the closest Latin America gets to the U.S. both geographically and culturally." According to Hofstede, this means the Mexican culture ____.

has a masculine orientation

The evidence clearly shows that ____ is the most important factor in determining the success or failure of an international assignment.

how well an expatriate's spouse and family adjust to the foreign culture

An expatriate is someone who ____.

lives and works outside his or her own country

All global new ventures share two common factors. One is the bringing of a good or service to several different foreign markets at the same time. The other is ____.

none of these

Historically, most companies have used the ____ to successfully enter foreign markets.

phase model of globalization

The Japanese government decreed that Japanese snow was different from all others and required that all snow equipment marketed in the country be made in Japan for safety reasons. The elimination of non-Japanese companies from the market is an example of how ____ can influence global business.

policy uncertainty

To protect its farmers, Japan put limitations on the amount of mushrooms and leeks that could be imported into Japan from China. This limitation is an example of a(n) ____.

quota

As Malta got ready for its admittance into the European Union (EU), all taxes on the importation of goods manufactured in Malta were eliminated. Malta was preparing to become part of a(n) ____.

regional trading zone

____ are long-term, low-interest loans, cash grants, and tax deductions used to develop and protect companies or special industries.

subsidies

As Malta got ready for its admittance into the European Union (EU), the EU removed all taxes on the importation of goods manufactured in Malta. In other words, the EU abolished ____ for Malta-manufactured merchandise.

tariffs

Unlike licensing, franchising, or joint ventures, wholly owned affiliates are 100 percent owned by the parent company.

true

The term ____ is used by Hofstede to describe the degree to which people in a country are uncomfortable with unstructured, ambiguous, unpredictable situations.

uncertainty avoidance