Self Assessment Pt. 1

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.

Which of the following types of organizations would wield the greatest power over a firm attempting to do business in Canada?

Canada's Ministry of Foreign Affairs

Which of the following countries is an example of a strongly collectivist society?

China

The ________ is a policy platform and practical framework for companies committed to sustainability and responsible business practices. It is the world's largest voluntary corporate citizenship initiative, representing thousands of businesses in more than 135 countries.

United Nations Global Compact

Which of the following countries hosts the greatest number of MNEs?

United States

Which of the following is a typical outcome of free trade?

Unrestricted international trade generally increases the overall prosperity of poor countries.

Which of the following is an element of socialism often found in democratic societies?

government intervention in the affairs of individuals and firms

Which of the following comparative advantages is acquired over time?

innovative capacity

The U.S. Securities and Exchange Act encourages confidence in business transactions by ________.

requiring public companies to frequently disclose their financial indicators to investors

Which of the following stages comes before procurement in a firm's value chain?

research and development

Which of the following is NOT true about Islam?

Islam discourages free trade

The Great Depression marked the beginning of the second phase of globalization.

false

In countries with minimal corruption ________.

financial accounting information is transparent

In a typical value chain, the firm ________.

performs marketing activities such as pricing, promotion, and selling

Religion-based totalitarian states are called ________.

theocratic

Both common law and civil law systems originated in ________.

western Europe

________ describes the total value of assets that MNEs own abroad via their investment activities.

FDI stock

Which of the following is true with regard to firm-level theories?

Firm-level explanations address the question: "How can internationalizing firms gain and sustain competitive advantage?"

Which of the following legal systems is largely practiced in the Middle East?

religious

Islamic law is based on the ________.

Qur'an

Which of the following is characteristic of globalization of markets?

declining trade barriers

Restaurant Chain Internationalization (Scenario) Harold Meyer is the vice president of a successful U.S. restaurant chain. He is getting ready to transfer to the Gulf Arab region to help establish the restaurant chain in Saudi Arabia. He is in the process of gathering information to learn about Saudi culture. Harold decides to drop alcoholic drinks from the restaurant chain menu in Saudi Arabia. Which of the following might have led to his decision?

Alcoholic drinks are not allowed in 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, if true, strengthens the conclusion of the above passage?

American companies best thrive in cultures that are deal-oriented.

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

________ refers to offering, giving, receiving, or soliciting anything of value to influence the actions of a government official or a corporate manager.

Bribery

Which of the following is true with regard to bribery?

Bribery promotes a culture of dishonesty and immorality.

Which of the following situations is an example of geocentric orientation?

Derek, the VP of Banner Technologies, wants managers from the firm's India office to visit the U.S. branch to provide training to American officials visiting India.

World Conference (Scenario) At a world conference to be conducted in Tokyo, representatives from nearly every country in the world will gather to discuss issues related to international trade. Representative A is from a totalitarian state. Representative B is from a socialist nation. Representative C hails from a democratic society. Representative C is most likely from ________.

Canada

Which of the following religions has the largest number of adherents?

Christianity

Which of the following is the underlying principle of socialism?

Collective welfare of people outweighs the welfare of the individual.

________ represents the apex of the pyramid of ethical behavior.

Corporate social responsibility

Earth-Rite Organic Foods (Scenario) Earth-Rite Organic Foods Inc. is an MNE based in Sweden with subsidiaries located in numerous countries around the world. Earth-Rite has annual sales of $10 billion and employs more than 90,000 individuals worldwide. Earth-Rite currently dominates the organic food industry, but competitors are beginning to catch up because of a growing demand for organic produce. Earth-Rite is considering a collaborative venture with a small chain of organic grocery stores located in Brazil, a country where Earth-Rite has no stores. Which of the following benefits would Earth-Rite most likely accrue if it entered into a joint venture with the Brazilian grocery store chain?

Earth Rite would have access to the foreign partners' know-how.

Which of the following statements is true about value chain and international business?

Exporting firms perform most of the upstream value chain activities in the home market.

________ is seizure of corporate assets with compensation.

Expropriation

marked the end of the 50-year Cold War and smoothed the integration of former command economies into the global economy.

Free-market reforms in China and the former Soviet Union

A U.S. shoe manufacturer is considering internationalizing to promote growth by diversifying its markets. Which of the following, if true, would most strongly support the claim that moving to France would help the company grow through market diversification?

French consumers represent a sizeable market that could significantly boost the company's sales.

Phone Center (Scenario) The Technix Computer Corporation recently finished construction of a customer service phone center in New Delhi, India. Phone center agents will be responsible for answering technical questions from customers around the globe. Technix has hired 55 local computer experts as phone agents, and a training session is underway. Technical specialists and call center specialists from the United States have flown to India to train the new Indian employees. Hank Patelli, a senior manager of a Technix phone center in Michigan, will oversee the New Delhi phone center for six months until a local manager is hired and trained to replace him. Ashok, one of the Indian employees, asks Hank if the weekend training session could be rescheduled because it is a Hindu festival day. What will be the most likely outcome if Hank agrees to Ashok's request?

Hank will develop a relationship of trust and understanding with the Indian employees.

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 the consulting group to consider when deciding whether to recommend that Acme internationalize its sales efforts to Germany?

How intense is the competition from German companies offering similar products?

Which of the following is characteristic of collectivist societies?

In collectivist societies, compromise and conformity help maintain group harmony.

Which of the following countries is considered primarily socialist?

India

is the most populous Muslim country in the world.

Indonesia

Which of the following is true about national industrial policy?

It is designed to create monetary and fiscal policies, such as low-interest loans, that provide a stable supply of capital for company investment needs.

Which of the following reflects the major contribution of GATT to globalization?

It reduced barriers to international trade and investment

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. The managers discuss various ethical problems commonly encountered in their local territories. Which of the following representatives is most likely to label counterfeiting of goods as the biggest challenge in his/her country?

Jang

Which of the following situations illustrate a polychronic perspective?

Latin Americans have a flexible perception of time and may not arrive exactly at the pre-determined time for appointments.

Japanese Supercenter (Scenario) The Tag-Mart chain of discount superstores is nearing completion of its new supercenter in Tokyo. The Tokyo store is the first foreign store for the large U.S.-based company. Tag-Mart offers a large variety of products at virtually unbeatable prices. A group of Tag-Mart representatives has traveled to Tokyo to inspect the new store and hire a store manager. The top two contenders for the position are Hisako Aoki and Takematsu Sato. Aoki has 25 years of experience managing a local department store renowned for its customer service. Sato, born and raised in Japan, earned a college degree in the U.S. before working six years as a manager at a Texas Tag-Mart. Which of the following, if true, most supports the decision to operate the Tokyo store in a manner similar to Tag-Mart stores in the U.S.?

Local shoppers desire both efficiency and low prices.

Which of the following is true about low-context cultures?

Low-context cultures rely on elaborate verbal explanations, putting much emphasis on spoken words.

________ is the belief that national prosperity is the result of a positive balance of trade, achieved by maximizing exports and minimizing imports.

Mercantilism

Which of the following is true with regard to mercantilism?

Mercantilism tends to harm firms that import.

Phone Center (Scenario) The Technix Computer Corporation recently finished construction of a customer service phone center in New Delhi, India. Phone center agents will be responsible for answering technical questions from customers around the globe. Technix has hired 55 local computer experts as phone agents, and a training session is underway. Technical specialists and call center specialists from the United States have flown to India to train the new Indian employees. Hank Patelli, a senior manager of a Technix phone center in Michigan, will oversee the New Delhi phone center for six months until a local manager is hired and trained to replace him. After the first training session, a number of the Michigan employees expressed frustration that the Indian employees lacked technical knowledge because none of them asked questions or offered answers. Which of the following would be the best way for Hank to handle the situation?

Remind the American employees that the Indians may be showing respect by remaining silent.

World Conference (Scenario) At a world conference to be conducted in Tokyo, representatives from nearly every country in the world will gather to discuss issues related to international trade. Representative A is from a totalitarian state. Representative B is from a socialist nation. Representative C hails from a democratic society. Representative B is most likely from ________.

Russia

________ fundamental tenet is that capital and wealth should be vested in the state and used primarily as a means of production rather than for profit.

Socialism's

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 true about the determinants of national competitive advantage?

The presence of demanding customers pressures firms to innovate faster and produce better products.

Which of the following is true about the first stage of evolution in the international product life cycle theory?

The product enjoys a temporary monopoly at this stage.

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 most likely supports Rina's argument over Juan's concerning wages and working conditions in developing countries?

Vietnam has experienced a five-fold increase in wages as a result of the growth of the footwear industry there.

Stella manages the production team at Camden Inc., a manufacturer of heavy industry machinery in the United States. She needs to decide if her firm should export finished products or manufacture abroad. Which of the following would most likely help her evaluate the best alternative in this instance?

What are the costs of transporting raw materials, components, and finished products?

The culture of which of the following countries has a close conversational distance?

brazil

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?

Restaurant Chain Internationalization (Scenario) Harold Meyer is the vice president of a successful U.S. restaurant chain. He is getting ready to transfer to the Gulf Arab region to help establish the restaurant chain in Saudi Arabia. He is in the process of gathering information to learn about Saudi culture. Harold learned that organizations in Saudi Arabia emphasizes loyalty to the family and tribe and that ties among individuals are highly valued. Based on Harold's observation, Saudi Arabia is ________.

a collectivist culture

Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. The CEO introduced another overseas effort by noting that it represented an attempt to confront an international competitor. The CEO was most likely referring to which of the following efforts?

a distribution center established in London to preempt the growth of a British car manufacturer

Which of the following is an example of a new global challenger?

a firm from Russia that is rapidly growing in the communications industry

Cultural intelligence is defined as ________.

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

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

Freehold Investment Corp. (Scenario) Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures. Bethany presents another opportunity that involves the purchase of a manufacturing plant in South Korea. She explains that this type of strategy will involve ________ ownership on the part of the firm.

active

Acculturation is defined as the process of ________.

adjusting and adapting to a culture other than one's own

Firms that are more successful at global competition display each of the following qualities EXCEPT ________.

approaching internationalization from a reactive standpoint

In cross-border business, successful managers ________.

are empathetic to cultural differences

Sustainable firms ________.

avoid emitting toxic wastes

Common law can best be described as a system ________.

based on legal precedents set by the nation's courts

Current trends suggest that early internationalizing firms will ________.

become even more common in international business

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

born global

Which of the following approaches to ethical standards for corporate governance reflects the view that the best action emphasizes the welfare of the entire community or nation?

common good approach

refers to the superior features of a country that provide unique benefits in global competition, typically derived from either natural endowments or deliberate national policies.

comparative advantage

The ________ states that it can be beneficial for two countries to trade without barriers as long as one is relatively more efficient at producing goods or services needed by the other.

comparative advantage principle

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 base of the pyramid of ethical behavior.

complying with laws and regulation

Firms with high power distance are most likely to be characterized by ________.

concentrated power among executives and little autonomy for subordinates

Which of the following is the LEAST adversarial method of resolving a contractual dispute?

conciliation

Low-context cultures tend to ________.

conduct negotiations as efficiently as possible

refers to the tendency of a financial or monetary crisis in one country to spread rapidly to other countries, due to the ongoing integration of national economies

contagion

Which of the following is an element of the comparative advantage principle?

relative efficiency of production

The globalization of finance ________.

contributes to firms' abilities to develop and operate world-scale production and marketing

With regard to the iceberg concept of culture, ________ is the most deeply embedded.

conversational patterns

Which of the following grants protections to the creators of art, music, books, software, movies, and TV shows?

copyright

________ refers to the system of procedures and processes by which corporations are managed, directed, and controlled.

corporate governance

Which of the following is NOT an example of a cross-cultural risk factor?

costs of production

The process of reproducing assets without compensating those who originally created them is known as ________.

counterfeiting

Which of the following terms indicates potential loss or adverse effects on company operations and profitability caused by developments in a country's political and/or legal environments.

country risk

Which of the following would NOT be considered an example of foreign direct investment (FDI)? -purchase of capital assets of a foreign company -cross-border purchase of stocks -cross-border purchase of a textile plant -purchase of foreign land for business operations

cross-border purchase of stocks

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

________ refers to a distinctive tradition or institution strongly associated with a particular society.

cultural metaphor

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 -political risk -country risk -cross-cultural risk

currency risk

According to Porter's competitive advantage of nations, ________ refer to the nature of home-market demand for specific products and services.

demand conditions

Which form of government is characterized by private property rights and limited government?

democratic

Which of the following countries have the LEAST corruption?

denmark

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 is most likely applicable to Country B?

detailed contracts that clearly state all potential contingencies

In a world ever sensitive to social and environmental issues, more and more firms are embracing CSR and sustainability. Such firms are more likely than not to ________.

develop closer relations with foreign stakeholders to better understand their needs and work jointly toward solutions

Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. One shareholder wanted clarification about a research effort that investigated the possibility of setting up a plant in China. The CEO explained that serving China's rapidly growing middle class population would enable Sterling to increase the size of its customer base dramatically. In China, the CEO was most likely interested in ________.

developing economies of scale

Which of the following would most likely be considered an appropriate action for a multinational company in meeting its global corporate social responsibility obligations?

devoting substantial R&D to poor-country ailments

In which of the following stages of the internationalization process is a firm preoccupied with business in its home market?

domestic focus

Business dealings in low-context cultures are characterized by ________.

efficient negotiations

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

The purpose of material productions in a society is to ________.

enable people to cope with their environments

Which of the following types of assumptions is the cause of most problems between business managers and foreign employees?

ethnocentric assumptions

Using one's own culture as a standard for judging other cultures is known as ________.

ethnocentric orientation

When using the five-step framework for making ethical decisions, which of the following steps involves investigating which individuals have a stake in the outcome?

examining the facts

Nations running a trade surplus ________.

export more goods than they import

The ________ rests on the premise that countries differ in the type and quantity of production factors they possess.

factor proportions theory

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

Firms expand abroad mainly as a reaction to market globalization.

false

In international economics, codetermination 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

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

false

The end of the Cold War in 1989 hindered the forces of market liberalization in Eastern Europe.

false

In a deal-oriented culture, managers ________.

focus on the task at hand and prefer getting down to business

Global Operations Report (Scenario) As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with preparing a comprehensive report on the company's global operations over the past twenty years. Deva assigns three strategists to collaborate on the History portion of the report, which details the rationale behind Pax's decisions to expand operations in particular areas. Rashid Ahl focuses on early expansion to China, which occurred after China began to make its market more accessible to foreign companies. Markus Teller focuses on Pax's expansion to Eastern Europe, which was motivated by increased industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan, which happened when the company's commercial bank expanded its service network to Asia. Which of the following drivers of market globalization is Lavonne's research most likely to recognize as the factor responsible for the company's expansion to Japan?

integration of world financial markets

Trademarks, copyrights, and patents are examples of ________.

intellectual property rights

All of the following are reasons to study international business EXCEPT -international trade and investment have experienced unprecedented decline -international trade is a critical engine for job creation -international business contributes to economic prosperity -international business provides an opportunity to support sustainability and corporate citizenship

international trade and investment have experienced unprecedented decline

An idiom ________.

is an expression whose symbolic meaning is different from its literal meaning

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

it guides decision-making by all employees in the firm

Income repatriation laws affect MNEs that earn profits in foreign countries by ________.

limiting the amount of net income or dividends that can be transferred to the home-country headquarters

Host-Country Legal System (Scenario) Super Sports, a large sporting goods chain based in Australia, wants to open a store in Norway. With stores around the world, Super Sports executives realize that legal systems vary from country to country. Having never opened a store in Norway, the Super Sports legal team is investigating Norwegian laws to determine how they would impact the corporation and its ability to do business in Norway. Which of the following would most likely oppose the opening of a Super Sports store in Norway?

local sports retailers

The eclectic paradigm specifies three conditions that determine whether a company will internationalize via FDI. Which of the following refer(s) to one of those conditions?

location-specific advantages

Which of the following best explains why Taiwanese computer manufacturers established subsidiaries in the United States?

low cost financial capital

Which of the following laws is responsible for the ban on cigarette advertisements in France?

marketing and distribution laws

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

A ________ is one or more resources or capabilities a company possesses that few other firms have.

monopolistic advantage

Which of the following explains how firms can use FDI to gain and sustain competitive advantage?

monopolistic advantage theory

The Coca-Cola Company is an example of ________.

multinational enterprise

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

national competitive advantage

A proactive economic development plan initiated by the government, often in collaboration with the private sector, that aims to develop or support particular industries within the country is referred to as ________.

national industrial policy

Which of the following is a societal consequence of market globalization?

offshoring and the flight of jobs

________ confer the exclusive right to manufacture, use, and sell products or processes.

patents

Kazmia Revitalization (Scenario) The leaders of Kazmia, a small nation in the southern hemisphere, have called a meeting to discuss ways to encourage foreign firms to invest in Kazmia. The country was once a leader in diamond mining and exports; however, the diamond mines have been depleted. Meanwhile, the standard of living in Kazmia has plummeted to its lowest levels, and young people are fleeing the country. Government leaders must devise a plan to reinvigorate the once prosperous nation. According to Porter, Kazmia can attain economic prosperity by systematically cultivating new and superior factor endowments through ________.

proactive national industrial policy

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 activities in Acme's value chain would be internationalized if Acme decides to establish a development contract with one of the Indian software firms?

procurement

Which of the following refers to an important monopolistic advantage for firms?

proprietary technology

Global Operations Report (Scenario) As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with preparing a comprehensive report on the company's global operations over the past twenty years. Deva assigns three strategists to collaborate on the History portion of the report, which details the rationale behind Pax's decisions to expand operations in particular areas. Rashid Ahl focuses on early expansion to China, which occurred after China began to make its market more accessible to foreign companies. Markus Teller focuses on Pax's expansion to Eastern Europe, which was motivated by increased industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan, which happened when the company's commercial bank expanded its service network to Asia. In describing the main driver behind Pax's expansion to China, Rashid is most likely to emphasize ________.

reduction of barriers to trade

An underground economy

refers to the informal economic sector

Reduction in trade barriers is associated with the emergence of ________.

regional economic integration blocs

Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. One shareholder questioned the CEO's rationale for beginning an exploratory effort to establish a new manufacturing plant in India. The CEO responded by explaining that India was an untapped market with a high demand for products such as those produced by Sterling. His rationale represented an example of which of the following reasons for international expansion?

seeking opportunities for growth through market diversification

Which of the following is an example of a location-specific advantage?

skilled labor

The Organisation for Economic Co-operation and Development (OECD) is classified as a(n) ________.

special interest group

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 is the last stage of evolution in the international product life cycle theory?

standardization

means meeting humanity's needs without harming the ability of future generations to meet their needs.

sustainability

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

symbols

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

systematically enforced laws and regulations

Freehold Investment Corp. (Scenario) Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures. Phillip Hardy, one of the potential investors, expresses the desire to purchase only those types of assets in which he can maintain a relatively short-term interest. Which of the following investment opportunities would be most suited for Mr. Hardy?

the Freehold Eastern Growth Fund, which purchases Eastern European growth stocks

Which of the following acts makes it illegal for U.S. firms to offer bribes to foreign parties in order to secure or retain business?

the U.S. Foreign Corrupt Practices Act

Which of the following is an example of a supranational institution?

the World Trade Organization

According to the virtue approach ________.

the best action emphasizes moral excellence and righteousness that provide for the full development of our humanity

Which of the following is an example of an industrial cluster?

the consumer electronics industry in Japan

The fourth phase of globalization is characterized by

the enormous growth of cross-border trade and investment

Freehold Investment Corp. (Scenario) Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures. At the meeting, Dan explains to the attendees that Freehold direct investment projects differ from international trade in that ________.

the firm itself is crossing international borders to purchase foreign assets

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. Rosa Suarez reported on her analysis of cross-cultural risks involved with establishing the plant in Country C. Each of the following was most likely discussed in her report EXCEPT ________.

the level of national debt

Which of the following is an example of an ownership-specific advantage?

the physical assets owned by a firm

Socialization is defined as ________.

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

A value chain is ________.

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

Cross-cultural proficiency is characterized by all of the following EXCEPT ________.

tolerance for ambiguity

Which of the following behaviors of a firm can be called unethical?

tolerating sweatshop conditions

A ________ government seeks to control not only all economic and political matters but also the attitudes, values, and beliefs of the citizenry

totalitarian

The three major types of current political systems are ________.

totalitarianism, socialism, and democracy

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

The Nike "swoosh" is an example of a ________.

trademark

Countries that liberalize international trade and investment enjoy faster per-capita economic growth.

true

Environmental destruction diminishes as economies develop, at least in the long run.

true

Exporting is an entry strategy involving the sale of products or services to customers located abroad.

true

Firms are sometimes motivated to enter new markets because of unfavorable conditions in the home market, such as regulation or declining local industry sales.

true

Firms often internationalize proactively, in order to pursue new markets, find lower-cost inputs, or obtain other advantages.

true

Globalization of production activities and services is a dimension of market globalization.

true

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

true

SMEs usually choose exporting as their main strategy for entering foreign markets

true

Since the 1980s, emerging market countries have experienced substantial market liberalization and privatization.

true

Technological advances have helped make internationalization affordable for all sizes of firms.

true

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

true

To minimize globalization's harm and reap its benefits, governments should strive for nationalized economic regimes.

true

Which of the following refers to the extent to which people can tolerate risk in their lives?

uncertainty avoidance

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

value chain

Born global firms are ________.

young companies that internationalize early in their evolution