MKT 310 Exam 2

Hindus believe that ______ is achieved by spiritual progress and reincarnation.

movement between castes

When considering the implications of its decision to provide an electric version of its cars, VW

must use moral imagination.

Celeste, a manager at a multinational investment firm located in Italy, knows that the company isn't reporting accurate profits to the government. She explains that this action is fine because all the multinational investment firms behave in the same manner. Celeste can be described as a(n) ______.

naive immoralist

The ______ believes that if a multinational firm sees that other firms are not following ethical norms, then they don't have to either.

naive immoralist

Because of economies of scale, some countries specialize in manufacturing a particular product (such as cars) for which the global market can only support a limited number of firms. This is a reflection of _____.

new trade theory

The social rules and guidelines used to determine appropriate behavior in a particular setting are known as ______.

norms

Rights that are taken for granted in developed nations, such as freedom of association and freedom of speech are

not universally accepted.

When making ethical decisions, ______ factors are stressed in Japan while ______ factors are more important in the United States.

organizational; individual or personal

What is the focus of Hofstede's power distance dimension?

people are not equal in physical capabilities

One concept included in Kantian ethics that is not found in the utilitarian approach is the need to respect

people's dignity.

Which aspect of Porter's Diamond is best evidenced by the US semiconductor industry providing the basis for US success in the production of personal computers?

related and supporting industries

Islam prohibits payment of interest. This is one example which shows how ______ can be the root of an ethical system.

religion

When discussing constant returns to specialization, it is realistic to assume that the units of resources required to produce one unit will _____ no matter where a country is on the production possibilities frontier.

remain the same

Which philosophical approach is typically associated with managers from developed nations, and claims that a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries?

righteous moralism

According to the text, which three actions can managers take to ensure that ethical issues are considered in business decision making? (Check all that apply.)

-Build an organizational culture that values ethical behavior. -Favor hiring and promoting of people with a sense of personal ethics. -Implement decision-making processes that consider ethical aspects of business decisions.

Which three situations are considered positive aspects of the collectivist attitude found in the Japanese business culture? (Check all that apply.)

-Cooperation within the group is driven by the need to improve group performance. -There is strong incentive for individuals to work together for the common good. -Workers tend to remain at the same company for a long time -- even a lifetime.

The straw men approach to ethics is comprised of which four approaches? (Check all that apply.)

-Cultural relativism -Naive immoralist -Friedman doctrine -Righteous moralist

What are two examples of basic factors of production as identified by Porter? (Check all that apply.)

-Demographics -Location

What are two reasons diminishing returns to specialization occur? (Check both responses.)

-Different goods use resources in different proportions. -Not all resources are of the same quality.

What three characteristics are emphasized by the Japanese culture and boost the competitiveness of Japanese companies? (Check all that apply.)

-Education -Loyalty -Honesty

A new trade theorist would say that a company should rely on which three things to gain first-mover advantages? (Check all that apply.)

-Entrepreneurship -Innovation -Luck

Drag and drop the descriptions of the attributes in Porter's Diamond that determine national competitive advantage listed on the right to the corresponding attributes listed on the left.

-Factor endowments: a nation's position in areas such as skilled labor, arable land, or infrastructure -Demand conditions: the nature of home stipulations for a product or service -Related and supporting industries: the presence or absence of businesses that are internationally competitive -Firm strategy, structure, and rivalry: the conditions governing how companies are created, organized, and managed

Choose the four national attributes that Porter theorizes shape the environment that local firms compete in.

-Firm strategy, structure & rivalry -Related & supporting industries -Factor endowments -Demand conditions

Which two phrases reflect the economic implications of Islam? (Check all that apply.)

-Hold property as trustees, rather than as owners (per Western definition of ownership) -Cannot earn profit through exploitation of others

Which three practices would be considered acceptable according to the concept of cultural relativism? (Check all that apply.)

-If a culture supports slavery, it is okay to use slave labor. -You should adopt the culture of the country that you are doing business in, no matter what. -There is a rejection of universal notions of morality.

What are three principles of social stratification? (Check all that apply.)

-It is generally universal. -It involves beliefs as well as inequality. -It carries over to the next generation.

What are three rituals associated with orthodox Muslims? (Check all that apply.)

-Muslims are forbidden to consume alcohol. -Multiple episodes of daily prayer. -Muslims are forbidden to consume pork.

According to Rawls' view of justice, when people operate under a veil of ignorance, they would unanimously agree on two fundamental principles of justice. What are these two principles? (Check all that apply.)

-Once basic liberty is ensured, inequality in basic social goods is to be allowed only if such inequalities benefit everyone. -Each person is permitted the maximum amount of basic liberties compatible with a similar liberty for others.

What are three benefits of learning the native language of a company you are doing business with? (Check all that apply.)

-People like to speak in their own language. -You can build rapport more easily. -Businesses may prevent major blunders through improper translation.

What are three of the determinants of culture? (Check all that apply.)

-Political philosophy -Economic philosophy -Social structure

What are the three values central to the Confucian system of ethics that may have led to economic success in some Asian countries? (Check all that apply.)

-Reciprocal obligations -Loyalty -Honesty in dealing with others

What are three examples of the "hidden curriculum" of schools? (Check all that apply.)

-Respect for others -Dealing with competition -Obedience to authority

Which two theories provide the moral compass that is important when thinking through the ethical implications of decisions in a systematic way? (Check all that apply.)

-Rights theories -Rawl's theory of justice

What are four determinants of ethical behavior? (Check all that apply.)

-Societal culture -Leadership -Organizational culture -Personal ethics and -Decision Making Process -Unrealistic Performance Goals

Choose three advanced factors that Porter believes are MOST significant for competitive advantage. (Check all that apply.)

-Technological know-how -Research facilities -Skilled labor

There is a connection between culture and competitive advantage. What are two reasons why this connection is important? (Check all that apply.)

-This connection can affect the choice of countries to do business in and locate production facilities in. -The connection suggests which countries might produce the most viable competitors.

What three predictions of new trade theory regarding trade patterns are supported by studies? (Check all that apply.)

-Trade increases the variety of products available. -Trade leads to lower average costs. -Trade increases the specialization of production within an industry.

What are the four dimensions originally identified by Hofstede?

-Uncertainty avoidance -Power distance -Masculinity vs femininity -Individualism vs collectivism

Mores

-Use of alcohol -Theft

What two simultaneous outcomes are implied by new trade theory?

-a nation can increase the variety of goods available to consumers -a nation can lower the cost of the goods being offered to consumers

The two major Christian organizations are

-the Orthodox Church. -the Roman Catholic Church.

What are three sources of economies of scale?

-the ability of large-volume producers to use more effective, specialized employees -spreading fixed costs over a larger volume -the ability of large-volume producers to use more specialized equipment

James is an expatriate from Nebraska managing a tech support center in India. He is a firm believer in the minimum wage and treating employees fairly. Yet he sees his assistant manager firing an employee and hiring his neighbor to do the job at a lower rate. Knowing this would never be accepted in the United States, James confronts his assistant manager, claiming this behavior isn't right. He is displaying the ______ approach to ethics.

righteous moralist

A mudarabah contract allows an Islamic bank to _____ in exchange for a loan.

share in company profits

Reflecting the theories of Smith, Ricardo, and Heckscher-Ohlin, free trade permits ______, which allows a country to manufacture and export in those areas where they have a comparative advantage.

specialization

SolarCorp. won the bid to build an energy facility for a host country government. However, the execution of the contract has been delayed due to bureaucratic procedures in the less developed nation. In order to legally overcome this problem, SolarCorp. could resort to the payment of

speed money

Unrealistic performance goals can often only be attained by

taking shortcuts or behaving in an unethical manner.

Krisp Systems decides to move production to a developing country where they are free to pump pollutants into the atmosphere without legal restriction. By doing this, the company is contributing to

the global tragedy of the commons.

In the video, the phrase "lost in translation" refers to

the misunderstandings that occur when people in different countries interpret a message differently than was intended.

Business ethics are defined as

the principles that govern the proper conduct and moral decisions that arise in a business environment.

The Republic of Monaslu has the world's most efficient car manufacturing industry, while the country of Ingora has the world's most efficient electronics industry. The Republic of Monaslu trades cars with Ingora in exchange for consumer electronics. This form of trade between the two countries illustrates

the theory of absolute advantage.

According to the theory of international trade, it makes sense for a company to disperse its production to those countries where

they can be performed most efficiently

TimeTurner Corp. is a company based in the United States that manufactures luxury wrist watches. By western standards, if the company uses sweatshop labor to make these watches it is most likely to be considered

unethical

A criticism of Ricardo's theory of comparative advantage is that it is a simple model that includes many

unrealistic assumptions.

The managers of Simple Sound Manufacturing are struggling to meet their quota that was recently increased by upper management. They decide to eliminate two quality control steps in the manufacturing process. This is unethical behavior that was a result of

unrealistic performance goals.

What a group believes to be good, right, and desirable is a reflection of their ______.

values

In the 1980s, Western businesses questioned the ethics of operating in South Africa because the apartheid system in place there

violated basic human rights.

The majority of Christians live in Europe and the Americas. However, Christianity is rapidly growing in ______.

Africa

Understanding how cultural differences across and within nations affect the way business is practiced is known as ______ literacy.

Cross-Cultural

______ is important because managers need to have a deep understanding of the prevailing culture in those areas in which they do business.

Cross-cultural literacy

Suppose a Japanese company has branch offices in Spain where Spanish is spoken at work, and France where French is spoken at work. Which is true?

Cultural misunderstandings occur even when everyone is working toward the same goal.

Which of the four straw men approaches is associated with the phrase, "When in Rome, do as the Romans do"?

Cultural relativism

A company's organizational _____ reflects the values and norms that are shared among employees of an organization.

Culture

A system of values and norms that are shared among a group of people and that when taken together constitute a design for living is called ____.

Culture

Fifty years ago, it was not widely accepted that a woman could hold a senior management position. Of course, today this is a common reality. This demonstrates how ______ can change over time.

Culture

The system of values and norms that are shared among a group of people and when considered as a whole represent a design for living is called

Culture

Which statement regarding openness of an economy and growth is TRUE?

Economies that are open to trade grow at a faster rate economically than those that are closed.

Unrealistic performance expectations

Eliminates

Which language is most prominent in terms of international business?

English

A business strategy that does not violate the accepted principles of right or wrong governing the conduct of businesspeople is called a(n) _____ strategy.

Ethical

Bennie is managing a call center in Italy. He is finding it difficult to motivate employees to meet their call volume using the standard tactics employed in the United States. Bennie is told by another manager that if he starts offering "daily bonuses" to employees, they will meet their targets. He is torn between doing what is right and meeting his numbers. Which type of challenge is Bennie facing?

Ethical

When Phil's manufacturing company was fined by the US government for the amount of carbon dioxide it released into the air, it decided to move its business to Thailand where it knew there were fewer restrictions on air emissions. Environmentalists would most likely question the ______ implications of this decision.

Ethical

Henri reminded the group members that they should follow the principles of right and wrong set down by the organization when making their decision. These principles represent the _____ that govern the actions of the group.

Ethics

Which aspect of international business convinced Leon Sullivan to lead the way in eliminating apartheid in South Africa?

Ethics

What management position serves as the organization's internal control point for improprieties?

Ethics Officer

______ is judging another's culture solely by the values and standards of one's own culture.

Ethnocentrism

Hofstede's work confirmed Western stereotypes, but it has been criticized for this result because the research team was composed of

Europeans and Americans.

Which statement accurately describes how personal ethics might be challenged in international transactions?

Expatriate managers may face more pressure to violate their personal ethics.

Based on the theories of Smith, Ricardo, and Heckscher-Ohlin, in a country with access to cheap labor, productive land, and diverse plant life, it makes sense to _____ agricultural goods.

Export

True or false: Most economists prefer the Ricardian model when discussing trade even though it is a relatively poor predictor of real-world international trade.

False

True or false: One positive aspect of high managerial mobility is that executives have a sense of loyalty and commitment to an individual company.

False

True or false: Porter's theory of national competitive advantage stresses a decreased commitment by companies to research and development.

False

True or false: Pursuing strategies that are sustainable has little impact on helping an organization ensure that ethical issues are considered in business decisions.

False

True or false: Sustainable strategies adopted by a company typically only benefit upper management.

False

In Porter's model of the determinants of national competitive advantage, he noted many US firms were led by people with ______ backgrounds, likely leading to US firms' lack of attention to improving manufacturing process and product design.

Finance

According to new trade theory, the dominance of the United States in the commercial jet aircraft industry is related to ___- mover advantages.

First

In the United States, the majority of people are very aware of what time it is, what they need to accomplish in that time, and when they are out of time. This attitude toward time is an example of a _____.

Folkway

Monica asked her manager if appropriate dress for the meeting was business casual or traditional business. Monica is inquiring about the ______ associated with the meeting.

Folkway

Jenna expects the people she works with to be prompt. Recently, she became very frustrated when a foreign executive was late to their meeting because he felt it was more important to finish a phone conversation. People's attitude toward time is an example of how _____ can affect business.

Folkways

Which congressional act outlaws the payment of bribes to foreign government officials to gain businesses?

Foreign Corrupt Practices Act

Manatee Mfg. is able to source parts for its refrigeration products from anywhere in the world because the United States does not place any quotas or limitations on the imports they need. This is a reflection of a _____ policy.

Free Trade

______ is reflected in a nation in which the government does not attempt to influence what its citizens can buy from another country by applying import duties or what citizens can produce and sell to another country.

Free Trade

The European Union (EU) supports rules-based free trade. Why?

Free trade funds the economic welfare of EU member countries and helps to attract foreign investment.

The straw men theory that states that businesses should behave in a socially responsible manner, according to ethical custom and without deception and fraud is the _______.

Friedman Doctrine

What is the likely result for the gains from specialization according to the concept of diminishing returns?

Gains are likely to be exhausted before specialization is complete.

Personal ethics

Gift Giving

Porter states that ______ can influence each of the four components of the diamond through subsidies, education policies, and policies towards capital markets.

Government

Porter's theory stresses the advantages of businesses working with ______ to promote strong competition within domestic markets.

Government

Stephen usually eats lunch with three of his co-workers and on the weekends he gets together with his college friends. The people Stephen interacts with represent two types of _____.

Groups

New trade theory, which states that countries may have an advantage in exporting because of first-mover advantages, is different from which theory that says countries have export advantages because of factor endowments?

Heckscher-Ohlin

What is the theory that states that countries will export goods that make intensive use of the factors that are abundant in the economy?

Heckscher-Ohlin

What theory argues that free trade is beneficial, but that differences in factor endowments, not productivity, determine the pattern of international trade?

Heckscher-Ohlin

1919-1933

Heckscher-Ohlin Theory

The _____ degree of social mobility in the US limits the impact of class background on business operations.

High

The religion where followers believe in reincarnation and karma is

Hinduism

The work of _____ is the main research used to understand the impact of culture on multinational corporations.

Hofstede

Islamic fundamentalists are usually ____ toward Western-based businesses.

Hostile

An organization's code of ethics may be partially based on documents such as the UN Universal Declaration of

Human rights

Because ______ violations were so prevalent in Myanmar in the 1990s, many Western companies could no longer condone doing business there.

Human rights

an ___ distribution is one that is considered fair and equitable.

Just

One important drawback to the utilitarian philosophy to business ethics is that it does not consider _____.

Justice

What theories concentrate on the fair distribution of economic goods and services in a society?

Justice

the ___ theories concentrate on the attainment of a fair and equitable distribution of economic goods and services.

Justice

______ ethics hold that one should always respect the humanity in others and act in accordance with rules that could apply to everyone.

Kantian

As the guiding principle of Islam, the ______ actually promotes free enterprise and supports earning legitimate profits through commercial efforts.

Koran. (Quran)

What is a negative effect of the collectivist manner associated with Japanese businesses?

Lack of dynamism and entrepreneurship

Kate's grandmother was born in Belgium and she says she is Flemish. Anne's grandmother was also born in Belgium and she says she is French. In some areas of Belgium, all signs are in French and are not possible to read unless you know the French language. The same is true for other areas with all signs in Flemish. What is creating the divide between these two cultures?

Language

The Hewlett-Packard example discussed in this chapter suggests that one cause of unethical behavior in a company can stem from _____.

Leadership

______ argued that it was ethically justified for General Motors to operate in South Africa so long as conditions of promoting the abolition of apartheid laws were fulfilled.

Leon Sullivan

______ raised questions about the Heckscher-Ohlin theory.

Leontief

According to the Heckscher-Ohlin theory, it is expected that the US would export capital-intensive goods and import labor-intensive goods, but the opposite was found to be true. This became known as the

Leontief paradox.

A company decides to outsource all product designs to Singapore because it has been found to have the most efficient design companies. In this situation, the ______ implication for international business is being considered.

Location

The factor that impacts all the theories of trade because companies should produce where it is most efficient is

Location

To achieve the highest efficiencies, a US company decides to manufacture its products in Thailand, but does all final assembly of the products in China. The company is focusing on the ______ implication for international business.

Location

As the result of criticism of his original work, Hofstede went on to expand his model with the addition of which dimension?

Long-term vs short-term orientation

Which theory does NOT support unrestricted free trade between countries?

Mercantilism

______ is the first theory of trade that advocated that a country should export more than it imports and should accumulate gold and silver to make up the difference and maintain a trade surplus.

Mercantilism

Free trade _____ the efficient use of resources within a country.

Might increase

In post-independence India, some think that the values of Hindu asceticism and self-reliance have had a(n) ______ impact on economic development.

Negative

Which theory states that for products where economies of scale are significant and that control a substantial amount of world demand, the first movers in an industry can gain a scale-based cost advantage NOT available to late entrants?

New trade

Which trade theory has these implications: (1) nations may benefit from trade even when they do not differ in resource endowments or technology; and (2) specialization allows for scale economies and lower production costs?

New trade

______ refers to the moral obligation to act in an honorable and benevolent manner.

Noblesse oblige

Even though Parul disagreed with her co-worker, she waited until he was done speaking before she responded because she knew it wasn't polite to interrupt someone while they were talking. The social rule Parul followed is an example of a(n) _____.

Norm

Trevor told his foreign-born roommate that it was socially acceptable in the United States to question a professor if you believed he or she was saying something that was not true. This example of a social rule that governs behavior demonstrates the idea of a

Norm

Camille knows it would be inappropriate of her to ask the new client if she planned to invest in shares of company stock. Social rules that dictate appropriate behaviors are called _____.

Norms

______ supply the standards and models for acceptable behavior in a society.

Norms

Which theory was based on the observation that early in the development of a commodity, all the parts and labor come from the area in which it was invented?

Product life-cycle

According to Weber, thrift, efficiency and hard work are the result of a person's belief in the ethics of _____.

Protestantism

______ is considered the religion that emphasizes individual economic and political freedoms which formed the basis on which entrepreneurial free market capitalism is based.

Protestantism

______ is/are a system of shared beliefs that are concerned with the realm of the sacred and involve rituals reflecting the belief.

Religion

The set of shared beliefs followed by Catholics and those of the Jewish faith represent their individual _____.

Religions

As demonstrated by the Nike example in the text, which situation is generally MOST preferred when considering employment practices in international business?

Requiring good conditions in home and foreign operations even when this results in a smaller profit margin

Which theory is said to predict trade patterns more accurately?

Ricardo

The ___ theories recognize that there are things we CANNOT do against individuals because they have certain moral, fundamental rights.

Rights

A(n) ______ is a group of people who share a common set of values and norms.

Society

The Leontief paradox would be used to explain which of these situations?

The US exports goods that require skilled labor and imports heavy manufacturing products that require large amounts of capital.

Which description of leader behavior is most likely to promote a strong ethical culture in an organization?

The boss who consistently demonstrates strong personal ethics in all dealings with clients.

How would sociologists describe the class system in British society today?

The class system still exists and "money still begets money"

In an organization where personal ethics are important, which individual should be considered for a job opening?

The individual who has a disappointing interview but has glowing letters of recommendation that attest to his integrity.

As modernization occurs, what situation is contrary to the Buddha's teaching?

There is more separation between people and nature.

What is an accurate description of developed nations with regard to the environment?

They have more substantive environmental regulations.

In the real world, it costs money to move products from one country to another, but Ricardo's model does not address these ______ costs.

Transportation

True or False: While religion can influence the values and norms of society, the values and norms of society can also impact religion.

True

True or false: A sociologist would disagree with the idea that the British class system has dissolved.

True

True or false: Business people may behave unethically simply because they forget to ask whether the decision or action they are making is ethical.

True

True or false: Businesses based in a utilitarian philosophy often use cost-benefit analysis when determining action.

True

True or false: Companies can use psychological tests in the hiring process to help identify people who have a strong sense of personal ethics.

True

True or false: Economic advancement and globalization may be important factors in societal change.

True

True or false: Education provides a competitive economic advantage through the creation of a pool of skilled and educated workers.

True

True or false: First mover advantages are especially important in industries where the global market can profitably support only a limited number of firms.

True

True or false: Historically, the British class system prevented people from moving up in society.

True

True or false: It is possible for one country to encompass several societies.

True

True or false: New trade theory is very useful in explaining trade patterns.

True

True or false: Successful industries within a country tend to group into clusters of related industries.

True

True or false: The benefits from free trade are not evenly distributed throughout an economy.

True

True or false: The decision-making process is one of the determinants of ethical behavior.

True

______ is the Hofstede dimension that measures a society's tolerance for ambiguity and uncertainty.

Uncertainty avoidance

The Universal Declaration of Human Rights was created by the _____ and has been ratified by almost every country.

United Nations UN

The UN ______ is a global expression of what many believe are the rights to which all human beings are inherently entitled.

Universal Declaration of Human Rights

The Koran characterizes the practice of charging interest as

Unjust

The trade theories associated with Smith and Ricardo advocate for _____ free trade.

Unrestricted

______ ethics measure actions on a cost-benefit scale.

Utilitarian

Which ethical theory emphasizes that the best actions are those that benefit the most number of people and harm the least number of people?

Utilitarianism

Garrett's company believes minimizing air emissions is the right thing to do, and it will not contract with a supplier who thinks otherwise. This idea about what the company believes to be right is an example of a

Value

In Westernized societies, freedom to choose is considered everyone's right. The idea of what is good and right is an example of a(n) _____.

Value

A group's consideration and acceptance of what is good and right represents their

Values

Assumptions about how things should be that a group shares are called _____.

Values

Freedom, democracy, and justice are three examples of _____ within a society.

Values

In some nations, war has resulted when members of society feel their freedoms are being discounted. In other words, people are willing to fight for their _____.

Values

Organizational culture

Values

Based on Islamic principles, businesses that attempt to exploit others in order to earn a profit in a Muslim country ______ be welcomed to do business.

Would not

A payment which ensures that a business receives the standard treatment that it ought to receive from a foreign government is known as

a grease payment.

Carla questioned the ethics of her company in hiring an Indonesian firm to manufacture its clothing products. She knew that women who worked in these sewing factories were forced to work long hours in substandard conditions and she knew she wouldn't like to work that way. Carla is demonstrating the use of ______.

a moral imagination

A person who follows the idea of _____ says that the multinational's home-country standards of ethics are the appropriate approach to follow in foreign countries.

a righteous moralist

VW's decision to commit significant financial and R&D resources to electric vehicles can best be described as ____ approach to business ethics.

a utilitarian

Some ethics experts have proposed practical guides or ethical ______ to make ethical decisions in a systematic way.

algorithms

Rawls' view of justice states that all economic goods and services should be distributed equally except when

an unequal distribution would work to everyone's advantage.

Kluckhohn and Strodtbeck's theory of culture states that all definitions of culture must

answer a limited number of universal problems.

A policy of racial segregation and political and economic discrimination against nonwhites in South Africa was known as the

apartheid system.

As countries get richer, we often see a shift ______ traditional values (such as staying married and obeying one's parents) and ______ secular rational values (including abortion and divorce).

away from; toward

In a business setting, noblesse oblige refers to _____ behavior considered to be the responsibility of successful enterprises.

benevolent

One justification given for investment in China, which has a questionable human rights record, is that investment will

boost economic growth and raise the standard of living.

According to Adam Smith's theory of absolute advantage, who benefits from engaging in trade?

both countries engaging in a trade process

The economic principles of Islam prohibit a bank from _____.

charging interest

In the past, there has been a mutual lack of respect between upper management and working-class employees at British companies. This lack of respect was the result of the perception that those in upper management were a "step above" the employees. This perception was a reflection of _____.

class consciousness

Many companies develop a formal statement of primary values and ethical standards for employees and managers to follow. This is called a

code of ethics.

Economic studies have suggested that according to the theory of ______ advantage, countries will experience higher growth rates if they follow a more open stance toward international growth.

comparative

Heckscher and Ohlin identified differences in national factor endowments as the root of ______.

comparative advantage

The best way to describe the labor-management relationship in an organization based in Confucian culture is

cooperation is achieved at a lower cost.

VW's goal of being the world leader in electric vehicles together with its decision to devote large resources to the effort signals

corporate social responsibility.

According to new trade theory, first movers in an industry can gain a scale-based _____ advantage that later entrants find almost impossible to match.

cost

International business frequently have to address ethical issues that develop because

countries have different business laws, practices and regulations.

Maria's boss asked her to do whatever it takes to secure a contract. Maria knows that paying a bribe would ensure that the contract would be signed, but walks away because she knows that while paying the bribe would ensure large profits, doing so would be unethical. Maria is demonstrating moral ______.

courage

The human resource manager reminded the employees that when working with colleagues in the Middle East, it was imperative to remember that giving a deadline on a project is perceived as demanding. The manager is showing the importance of ______ in international business.

cross-cultural literacy

Energy Resources Ltd. does business in 50 countries around the world. The company stresses to all employees the importance of understanding the prevailing culture in the countries that they are doing business in. In other words, the company is aware of the importance of

cross-cultural literacy.

The belief that ethics are culturally determined and a firm should adopt the ethics of the country it is doing business in is

cultural relativism.

When a company with branches in Japan and the United States changes its performance appraisal system to reflect the fact that American managers are more individualistic as compared to their more group-oriented Japanese counterparts, the company is recognizing the need to vary company processes and practices based on how ______ affects work-related values.

culture

A production possibilities frontier shows ___ returns to specialization when more units of resources are required to produce each additional unit.

decreasing

Kyra works for a costume jewelry manufacturer and while their products are lower in cost, there is a high degree of consumer pressure to create the best quality jewelry possible and to constantly innovate with new jewelry designs. Which aspect of Porter's Diamond does this demonstrate?

demand conditions

Hindus believe in ______, the behaviors and responsibilities governing individual conduct.

dharma

Country A wants to produce more rice. Unfortunately, it will have to farm less productive land to produce this rice. This fact represents the idea of ______ returns to specialization.

diminishing

It takes 12 units of resources to produce 100 pounds of silk. It takes 13 units to produce 115 pounds of silk and 15 units to produce 120 pounds of silk. This is an example of ______ returns to specialization.

diminishing

According to Michael Porter, there is a strong correlation between _____ and the creation and persistence of competitive advantage in an industry.

domestic rivalry

Porter argues that achieving international success in a certain industry is a function of factor endowments, domestic demand conditions, related and supported industries, and ______.

domestic rivalry

Culture can best be described as a ______ phenomenon.

dynamic

Compared to China and the United Kingdom, social mobility is _____ in the United States.

easier

Sanjay told his staff that the company didn't care if the components came from a company using sweatshop labor, the parts were needed to meet the order and the company needed the order to make the sales quota. In this situation, the company makes this decision based on purely _____ terms.

economic

Based on new trade theory, as the size of markets increases, companies may be able to attain better ______.

economies of scale

The reductions in the cost of a single unit that result from large scale output of that product are called

economies of scale

One way a company can become more informed about the practices of an international affiliate is to

employ local citizens to help them do business in a particular culture.

Companies will try to ___ governments to influence trade policy, such as promoting free trade or trade restrictions.

encourage

The fact that the caste system has NOT held back the _____ in India demonstrates how culture should not be overemphasized when discussing the economic sphere.

entrepreneurial activity

A focus on individual religious freedom, not surprisingly, may have set the stage for

entrepreneurship.

Ethical issues arise in international business when

environmental regulations in host nations are less stringent than those in the home country.

Scandinavia scores high on the individualism and uncertainty avoidance measures of societal culture. According to Hofstede's dimensions of societal culture, Scandinavia is more likely to engage in ______ business behavior than -- for example -- Russia.

ethical

Young children are permitted to work in the manufacturing of soccer balls in Pakistan, but this would not be legal in the United States. However, a company wants to sell these soccer balls in the United States to Kick-Rite Sports Equipment and Kick-Rite is not sure it wants to sell these particular soccer balls. This is an example of a(n) ______ dilemma.

ethical

Geoff believes that the way his US-based company does business is superior to the way his French affiliate office conducts business. Geoff's attitude is an example of _____.

ethnocentrism

An ethical strategy is an action that

evaluates the impact of decisions based on the acceptable moral principles.

Portugal can produce wine and cloth with less labor than England. But, given all factors of production, England can produce cloth relatively better than Portugal. According to Ricardo's theory of comparative advantage, it make sense for England to

export cloth and import wine from Portugal.

An amendment to the Foreign Corrupt Practices Act allowed for the use of ______ in which a business is ensured that it will receive the standard treatment it ought to receive from a foreign government.

facilitating payments

The Foreign Corrupt Practices Act was amended to include _____ because some US businesses complained the act would put US firms at a competitive disadvantage.

facilitating payments

According to Heckscher and Ohlin, each country has certain ______, such as land, labor, and capital.

factor endowments

The Heckscher-Ohlin theory of international trade focuses on ______ when explaining what a country chooses to export.

factors of production

Since the global market can only support one producer of superjumbo aircraft, Airbus had the benefit of a(n) _____.

first-mover advantage

The development of the superjumbo jet by Airbus, which basically shuts out other producers of this type of aircraft, demonstrates the idea of a(n) ______ based on scale economies because the global market can probably only support one producer of superjumbo aircraft.

first-mover advantage

Preempting demand, gaining volume cost advantages, building the brand, and establishing a long-term competitive advantage are associated with

first-mover advantages.

Generon Inc. has moved its production to a new nation. It freely dumps its harmful waste in the rivers and causes environmental degradation there. In this case, Generon has contributed to the

global tragedy of the commons.

If a country has an open economy and embraces free trade, citizens, on average, will benefit from ______ income levels and living standards.

higher

Up until the 1990s, companies conducted business in Myanmar and South Africa. However, it soon became evident that extreme ______ existed there, and companies began to leave.

human rights violations

Moral ______ allows a business to think about how a decision might impact the stakeholder.

imagination

In a Confucian society, expensive lawyers would not be needed to resolve contract disputes because

importance is attached to honesty.

New trade theory states that some countries specialize in the production and export of a particular product because

in certain industries the world can only support a limited number of firms.

According to the Friedman Doctrine, what is the only social responsibility a company has as long as it stays within the rules of law?

increasing profits

In the United States, class membership is determined to a greater degree by _____.

individual economic achievement

The Hofstede dimension that is focused on the degree to which people in a society are integrated into groups is

individualism versus collectivism.

According to Hofstede, if the ties between people are loose, it is most likely a sign of a(n) ______ society.

individualistic

A caste system is a type of social structure that divides people on the basis of _____.

inherited social status

One explanation for the Leontief paradox is that the US has an advantage and exports goods produced with

innovative technologies.

A country is said to have an absolute advantage in the production of an item when the country

is more efficient than any other country at producing the item.

There _____ a strict one-to-one relationship between one culture and a nation-state.

is not

The fair and equitable dissemination of economic goods and services is the focus of a(n) _____ distribution.

just

When applying reasoning for why Japan exports automobiles or why Switzerland exports watches, David Ricardo's theory of comparative advantage bases the explanation in terms of differences in

labor productivity.

Alex considers himself a "true French Canadian" and agrees with political activists who think there should be a separation from English speaking citizens who are dominating certain provinces. What seems to be the cause of this division in Canada?

language

The tragedy of the commons phenomenon was named when Garrett Hardin noticed

large open areas were free for all to use as pasture.

One of the most important things an international business person can do to avoid cultural misunderstandings is to

listen to your client or customer.

Cross-cultural _____ is necessary for a business to understand the cultural differences that exist between companies involved in international business.

literacy

In some cultures, people are more willing to work hard to achieve material wealth and may have to wait years before feeling they have succeeded. This is a reflection of which dimension identified by Hofstede?

long-term versus short-term orientation

Which of Hofstede's dimensions focuses on delaying gratification of material needs?

long-term versus short-term orientation

Confucianism values harmonious relationships, which are based on moral and ethical conduct and ______.

loyalty to others

In an organization operating in a Confucian culture, it would be the sacred duty of an employee to be loyal to his or her

manager

An accurate description of the apartheid system in South Africa is that it

mandated segregation between whites and nonwhites.

The Hofstede dimension that looks at the relationship between gender and work roles is

masculinity versus femininity.

The government of the Republic of Senna enforces tariffs and quotas to limit imported goods, while exports are subsidized. By using these instruments, the government seeks to achieve a surplus in the balance of trade. Based on this information, which approach most influences the Republic of Senna's approach to international trade?

mercantilism

When a government intervenes to achieve a surplus in the nation's balance of trade, this action is consistent with the main tenet of ______.

mercantilism

When an employee says no to a supervisor because what he or she was asked to do was unethical, it exhibits the employee's

moral courage.

What are two criticisms of Hostede's work? (Check all that apply.)

-Hofstede's research was culturally bound. -Hostede assumed a one-to-one correspondence between culture and nation.

Folkways

-Japanese Business Etiquette -Time orientation

A basic message of Ricardo's theory of comparative advantage is that: (Check the two that apply.)

-even if countries lack an absolute advantage in the production of any good, consumers can still consume more if there are no restrictions on trade. -potential world production is greater with unrestricted free trade than it is with restricted trade.

What are two examples of nonverbal communication?

-giving a thumbs up sign to indicate you agree with a statement -standing an appropriate distance from a colleague during a conversation

To shift a country's production possibility frontier outward, it is necessary to (Check the two that apply.)

-increase the efficiency with which resources are used. -increase the stock of the country's resources.

Though culture is important, it is probably less significant in explaining different economic growth between nations than what three other factors?

-legal systems -political systems -economic systems

Which statement BEST reflects the implications of cultural differences for business?

A company may need to vary management processes by country as a result of local cultural differences.

What is an example of a sustainable strategy?

A strategy designed to reduce CO2 emissions

When a country is more efficient at producing a product than any other country, the country has a(n) ______ advantage in the production of that product.

Absolute

1776

Absolute Advantage Theory

To gain competitive advantage, it is important to encourage companies to invest ___ in factors of production.

Advanced

Country A has a free market economy and a group-oriented social structure. Country B has all of the same traits, but also possesses an advanced education system. Which country would be more attractive as an investment opportunity?

B

What are the types of factors of production identified by Porter?

Basic and advanced

The religion where followers try to achieve nirvana or spiritual enlightenment is _____.

Buddhism

In Japanese society today, it is common for a person's social status to be associated with his or her

Business

Leadership

CEO

The first thing Brett's manager told him when he started working was that the company always considered the social consequences of any business decision. This is a reflection of _____.

CSR (Corporate Social Responsibility)

A company _____ benefit from related industries that are internationally competitive and can spill over into the company.

Can

Companies participating in international trade _____ exert strong influences on government trading policies.

Can

Global warming is said to be the result of which greenhouse gas?

Carbon dioxide

The most rigid form of social stratification is the _____ system.

Caste

The ____ system is a less rigid form of social stratification than the caste system.

Class

Porter's study identified components of the German textile and apparel sector: cotton, wool, synthetic fibers, sewing machine needles, textile machinery. These were all successful industries in a single country that grouped into related industries. This grouping is an example of a(n)

Cluster

Which is true of free trade blocs like the EU?

Companies can capitalize on economies of scale in production.

What characterizes a typical business based in Japan?

Companies develop long-term relationships with suppliers.

Ricardo's theory of _____ advantage states that it makes sense for a country to specialize in the production of those goods that it produces most efficiently and then purchase the goods that it produces less efficiently from other countries, even if this means buying goods from other countries that it could produce more efficiently itself.

Comparative

1817

Comparative Advantage Theory

Porter states that a company can gain ______ advantage if their home customers are demanding and knowledgeable.

Competitive

Hofstede's fifth dimension was inspired by _____.

Confucianism

What ethical system was the official ethical system of China until the communist revolution and emphasizes taking the right actions to attain salvation?

Confucianism

Loyalty, honesty in dealing with others, and reciprocal obligations are the building blocks of

Confucianism.

Decision-making processes

Considerations

Which form of returns to specialization means that the units of resources required to produce one unit are assumed to remain the same no matter where a country is on the production possibilities frontier?

Constant

Gemini Corp. is a multinational company. Which argument should the company use to justify conducting business in a repressive country?

Continuing inward investment helps boost economic growth and living standards in the country.

Hofstede studied how ______ relates to values in the workplace.

Culture

What did Porter call the concept where firms are typically most sensitive to the needs of their closest customers?

Demand conditions

Which type of returns to specialization happen when additional units of resources are required to produce each additional unit?

Diminishing

What concept negates the idea that a country can specialize to the degree suggested by the Ricardian model?

Diminishing returns

The US economy is considered _____ because it is impacted by the philosophy of individualism.

Dynamic

The orthodox Muslim is required to pray ___ times a day.

Five

The routine conventions of living, thinking, and acting in a group are called ______.

Folkways

According to Hofstede, societies with stiff codes of behavior, rules, and laws score ___ on the uncertainty avoidance index.

High

Generally, an open economy can ___ a country's stock of resources.

Increase

If a country decides to focus production on wheat because it has an absolute advantage in this crop and it trades with another country that has an absolute advantage in its corn crop, then the level of production of these crops for both countries is likely to

Increase

When a country decides to specialize in the production of one item, it is most likely to ___ the level of production of that item.

Increase

Western society values _______ over ______.

Individuals over Groups

Individuals or groups who work for or own the business are referred to as ______ stakeholders.

Internal

What assumption does the Ricardian model of comparative advantage make in terms of converting resources?

It assumes that all resources can easily shift from one thing to another.

How has social media affected group life?

It has emphasized the idea of an extended social group.

Circa 1550's

Mercantilism

Social _____ refers to how difficult or easy it is for an individual to move out of the social strata into which they are born.

Mobility

What helps managers walk away from a decision that is profitable, but not ethical?

Moral courage

According to Hofstede's theory, cultures high in masculinity and power distance are _____ (more or less?) likely to engage in unethical behavior.

More

Norms that are more widely observed within a society and have greater moral significance than folkways are called _____.

Mores

Social norms that address the customs and conventions of a society and are central to the functioning of the society are called _____.

Mores

Adherents of Islam are called

Muslims

______ join the political entity of a state to the cultural entity of a nation.

Nation-states

1990

National Comparative Advantage Theory

1980's

New Trade Theory

mid 1960's

Product Life-Cycle Theory

Which approach to business ethics includes cultural relativism, the righteous moralist, and the naive immoralist?

Straw Men

The basic social organization of a society is called its social _____.

Structure

Why is the EU interested in forming a free trade agreement with Japan?

The EU believes that free trade is a positive-sum game.

Which company is contributing to the global tragedy of the commons?

Virtual-Day Inc. moved production to a South American country with lower environmental regulations and sends pollutants freely into the air.

Compared to a Protestant society, a Buddhist society has a ___ emphasis on entrepreneurial activity.

Weaker

In most Western societies the ______ is emphasized, whereas in Japan the _____ is more important.

Western- individual Japan- group

What is one negative aspect to companies of emphasizing individual performance in business?

a high degree of managerial mobility between companies

The theory of ______ advantage was the first to attack the tenet of mercantilism which implied that trade is a zero-sum game.

absolute

According to the tenets of Islam, the objective of life is to fulfill the dictates of God in hopes of achieving

admission to paradise.

According to the video, which would be the most beneficial quality for an international business manager?

being able to understand the perspective of a receiver of a message

Class ______ is an awareness of one's social or economic rank in society.

consciousness

Marietta is visiting her company's manufacturing subcontractor in Pakistan. She notices children working on the machinery with no air conditioning and little access to water. But she also knows these children are probably supporting their families. Marietta can't decide if children working in the factory is appropriate or inappropriate. This is an example of a(n) ______.

ethical dilemma

The set of moral principles that are used to guide and shape behavior are called _____.

ethics

Lucia is responsible for establishing a confidential service that employees can use to question if a practice is unethical and she also makes sure the company complies with government laws and regulations. Lucia is an example of a(n) _____.

ethics officer

The most contentious implication behind new trade theory is the argument that it generates for ______ intervention.

government

Unspoken language is another way to describe ______ communication.

nonverbal

In the ______ dimension identified by Hofstede, the degree of power and wealth is not balanced within a country.

power distance

The ethnocentric view that most new products are developed and introduced in the US is a key weakness in the ______ theory.

product life-cycle

While not as relevant today, the trade theory that was useful in explaining the pattern of trade when the US dominated the global market is the ______ theory.

product life-cycle

The ______ shows the combination of goods and/or services that can be produced by a country based on available resources.

production possibilities frontier

When an Islamic bank implements a mudarabah contract, it is similar to a _____ that might take place in the United States.

profit-sharing scheme

In Confucian culture, while employees are expected to be loyal to their superiors in business, those superiors must reward this loyalty by bestowing blessings on the employees.This demonstrates the idea of ______ obligations.

reciprocal

Guanxiwang refers to _____, which hold networks together.

relationships

Certain theories accept that there are rights, both positive and negative, that all humans have simply because they are human. These are called ______ theories.

rights

Free trade can result in dynamic gains that ______ economic growth.

stimulate

All societies are divided on a hierarchical basis into social categories called social _____.

strata

A(n) _____ strategy helps a company make good profits but does so without harming the environment.

sustainable

Starbucks' ethical sourcing policies are an example of a(n) ______ that benefits multiple stakeholders including shareholders, the environment, local communities, and customers.

sustainable strategy

Raymond Vernon's product life-cycle theory was based on the observation that for most of the 1900s the majority of the world's new products were developed in

the United States

Which of these common phrases can be used to describe the straw men approach known as cultural relativism?

"When in Rome, do as the Romans do."

Buddhism has all the same basic beliefs as Hinduism EXCEPT it does not advocate for which two factors?

-Advocacy in extreme ascetic behavior -Support for the caste system

Values

-Freedom -Role of Women

Which ideology has, as one of its key beliefs, that honesty has major economic implications?

Confucianism

______ are situations where none of the available alternatives seems morally acceptable.

Ethical dilemmas

True or False: According to Adam Smith, a country should produce all goods at home that it can, even if it could buy those goods at a lower cost from other countries.

False

Ricardo's theory encourages ______ because it suggests that trade is a positive-sum game where all participating countries realize economic gains.

Free trade

In Japan, most people perceive themselves to be middle class; therefore, class background has ____ impact on business operations.

Less

Garrett Hardin described how herders shared common land for grazing. It was advantageous to the poor to place more and more livestock on the commons because it would mean more income. Why did these actions result in ultimate tragedy?

The commons were overgrazed and eventually destroyed by the livestock.

True or false: According to cultural relativism, all ethics are culturally determined.

True

It is wrong to cheat on a test. Conversely, it is right to

accept responsibility for your actions.

Max Weber attributed the relationship between the emergence of ______ and Protestantism to the value system of the religion.

capitalism

According to new trade theory, the first mover's ability to benefit from increasing returns ______ for other firms.

creates a barrier to entry

With its goal of offering a complete line of electric cars beginning in 2020, VW is

demonstrating its commitment to pursuing a sustainable strategy.

Customers, suppliers, and unions are all examples of ___(internal or external?) stakeholders.

external

Within the context of the individual as the basic unit of a social organization, what is an implication of the emphasis on individualism in many Western societies?

high degree of managerial mobility between companies

An advantage of individualism is a(n)

high level of entrepreneurial activity.

In a culture, sex roles are sharply differentiated.

masculine

Sachs and Warner found a strong correlation between a(n) ______ response to trade and economic growth.

open

The generally accepted principles and values that govern interactions between individuals are called

personal ethics.

Historically, one way in which a British citizen could ensure that his or her children were accepted into a higher class was to

send them to the "right" school.

The primary problem with mercantilism is that its supporters claimed that trade should

show a gain by one country that results in a loss by another.

How do facilitating payments benefit a company?

smooths the progress of services to which the business is entitled

Nigel was born into a poor, working-class family in England. He is resigned to the fact that his life will be much like his fathers as he has no way to earn a degree and change his status. Nigel believes that a lack of _____ determines his fate.

social mobility

The idea that business people should favor decisions that have both good economic and social consequences is called corporate

social responsibility.

A class system is characterized by the fact that a person can move from one ______ to another.

social strata

The practice of "gift giving" between the parties to a business negotiation is considered right and proper in many Asian cultures. However, some Westerners view the practice as a form of bribery, and therefore unethical, particularly if the gifts are substantial. This demonstrates that

what is ethical depends on one's cultural perspective.

The proponents of mercantilism see trade as a ______ -sum game.

zero