BUS 187 FINAL EXAM 12-20 REVIEW QUESTIONS

Which strategy makes sense when pressures are high for local responsiveness, but low for cost reductions? a) Global standardization strategy b) International strategy c) Transnational strategy d) Localization strategy

d) Localization strategy

The main differences between distribution systems include all of the following except a) retail concentration b) product attributes c) channel length d) channel exclusivity

b) product attributes

What is the rate of return the firm makes on its invested capital? a) Profit growth b) Profitability c) Net return d) Value created

b) profitability

Financial statements of U.S. firms must be prepared according to a) FASB b) IASB c) IFAC d) EUAC

a) FASB

_______ has an accounting system that was developed with the government in mind. a) France b) Japan c) Great Britain d) Germany

a) France

Countertrade is attractive for all of the following reasons except a) It may involve the exchange of unusable or poor-quality goods that the firm cannot dispose of profitably b) It can give a firm a way to finance an export deal when other means are not available c) It can be a strategic marketing weapon d) It can give a firm an advantage over firms that are unwilling to engage in countertrade arrangements

a) It may involve the exchange of unusable or poor-quality goods that the firm cannot dispose of profitably

Which of the following is not an example of a primary activity? a) Logistics b) Marketing and sales c) Customer service d) Production

a) Logistics

Which type of organization structure has a dual decision-making system? a) Matrix b) Worldwide product division c) Worldwide area division d) International division

a) Matrix

Which of the following is not a common pitfall of exporting? a) a product offering that is customized to the local market b) a poor understanding of competitive conditions in the foreign market c) poor market analysis d) problems securing financing

a) a product offering that is customized to the local market

The most common method of transferring funds from subsidiaries to the parent is through a) dividend remittances b) royalty payments and fees c) transfer prices d) backing loans

a) dividend remittances

Which of the following is not important to a successful strategic alliance? a) establishing a 50:50 relationship with partner b) creating strong interpersonal relationships c) a shared vision d) learning from the partner

a) establishing a 50:50 relationship with partner

Which of the following is not a response by labor to the increased bargaining power of multinationals? a) Establishing global unions b) Setting-up their own international organizations c) Lobbying for national legislation to restrict multinationals d) Trying to achieve regulations of multinationals through international organization such as the United Nations

a) establishing global unions

Firms should produce in multiple locations when a) fixed costs are low b) fixed costs are substantial c) the minimum efficient scale of production is high d) flexible manufacturing technologies are available

a) fixed costs are low

Concentrated production makes sense when a) minimum efficient scale is high b) location externalities are not important c) the product does not serve universal needs d) there are few trade barriers

a) minimum efficient scale is high

Standardized advertising makes sense in all of the following situations except a) when cultural differences among nations are significant b) when a firm is trying to save money c) when creative talent is scarce and one large effort to develop a campaign will be more successful than numerous smaller efforts d) when brand names are global

a) when cultural differences among nations are significant

By 2020, which two accounting bodies are expected to dominate accounting practices? a) The historic cost principle and FSAB b) FASB and the IASB c) The IASB and the historic cost principle d) The current rate method and the historic cost principle

b) FASB and IASB

When a firm wants to pursue a transnational strategy, a _________ approach to staffing makes sense. a) Ethnocentric b) Geocentric c) Polycentric d) Transcentric

b) Geocentric

Compared to the other countries, corporate income tax rates in ________ are relatively low. a) Canada b) Ireland c) Germany d) Japan

b) Ireland

All of the following are key factors that influence the decision of where to produce except a) country factors b) competitors factors c) technological factors d) product factors

b) competitor's factors

A __________ specifies that parent companies are not taxed on foreign source income until they actually receive a dividend. a) tax credit b) deferral principle c) tax haven d) tax treaty

b) deferral principle

A _______ is an order written by an exporter instructing an importer to pay a specified amount of money at a specified time. a) letter of credit b) draft c) bill of lading d) confirmed letter of credit

b) draft (bill of exchange)

All of the following are advantages of acquisitions except a) they are quicker to execute b) it is easy to realize synergies by integrating the operations of the acquired entities c) they enable firms to preempt their competitors d) they may be less risky

b) it is easy to realize synergies by integrating the operations of the acquired entities

Which of the following is not an advantage of centralized decision-making? a) It facilitates coordination b) It motivates employees c) It gives top-level managers the means to bring about organizational change d) It avoids duplication of activitie

b) it motivates employees

When a firm uses the exchange rate at the balance sheet date to translate financial statements of a foreign subsidiary into the home currency, the firm is using a) the temporal method b) the current rate method c) FASB 52 d) the historic cost principle

b) the current rate method

What is the main disadvantage of wholly owned subsidiaries? a) they make it difficult to realize location and experience curve economies b) the firm bears the full cost and risk of setting up overseas operations c) they may inhibit the firm's ability to take profits out of one country to support competitive attacks in another d) high transport costs and tariffs can make it uneconomical

b) the firm bears the full cost and risk of setting up overseas operations

Which of the following does not promote new product development? a) Spending more money on basic and applied research and development b) weak demand c) Affluent consumers d) Intense competition

b) weak demand

Which type of organizational structure is often associated with a transnational strategy? a) worldwide area division b) worldwide product division c) matrix d) international division

c) Matrix

_______ refers to the time and effort spent learning the rules of a new market. a) First mover advantages b) Strategic commitments c) Pioneering costs d) Market entry costs

c) Pioneering costs

Which organization is responsible for formulating international accounting standards? a) the Global Federation of Accountants b) the World Bank c) the International Accounting Standards Board d) the International Panel of Accounting Standards and Ethics

c) The International Accounting Standards Board

________ is the most restrictive countertrade arrangement. a) counter-purchase b) switch trading c) barter d) offset

c) barter

Which of the following is not a purpose of the bill of lading? a) It is a contract b) It is a document of title c) It is a form of payment d) It is a receipt

c) it is a form of payment

Which of the following is not an advantage of buying from independent suppliers? a) it gives the firm greater flexibility b) it helps drive down the firm's cost structure c) it protects proprietary property d) it helps the firm to capture orders from international customers

c) it protects proprietary property

The most common reason for expatriate failure is a) The manager's inability to adjust b) The manager's emotional or personal maturity c) The inability of the spouse to adjust d) The manager's lack of technical competence

c) the inability of the spouse to adjust

The fee for moving cash from one location to another is called a) the money management fee b) the transaction cost c) the transfer fee d) the cost of capital

c) transfer fee

A pull strategy is best a) for industrial products b) when distribution channels are short c) when sufficient print and electronic media are available to carry the marketing message d) for complex new products

c) when sufficient print and electronic media are available to carry the marketing message

Which strategy tries to simultaneously achieve low costs through location economies, economies of scale, and learning effects, and differentiate the product offering across geographic markets to account for local differences? a) Internationalization b) Localization c) Global standardization d) Transnational

d) Transnational

Which of the following is not a pressure for local responsiveness? a) Excess capacity b) Host government demands c) Differences in consumer tastes and preferences d) Differences in distribution channels

d) differences in distribution channels

What is created when different stages of a value chain are dispersed to locations where value added is maximized or where the costs of value creation are minimized? a) Experience effects b) Learning effects c) Economies of scale d) A global web

d) global web

Which of the following is not an element in the marketing mix? a) product attributes b) communication strategy c) distribution strategy d) production strategy

d) production strategy

Which type of countertrade arrangement involves the use of a specialized third-party trading house? a) a buyback b) an offset c) a counter-purchase d) switch trading

d) switch trading

Which of the following does not help predict success in a foreign posting? a) Others-orientation b) Cultural toughness c) Perceptual ability d) Technical expertise

d) technical expertise

If a firm wants the option of global strategic coordination, the firm should choose a) franchising b) joint ventures c) licensing d) a wholly owned subsidiary

d) wholly owned subsidiary

How do most firms begin their international expansion? a) with a joint venture b) with a wholly owned subsidiary c) with licensing or franchising d) with exporting

d) with exporting