Exam 1

The predictable decline in the average cost of producing each unit of output as a production facility gets larger and output increases is known as the experience curve. True or false?

False

According to the Harvard Business Review article: The New Era of Globalization Will Be Shaped by Customers, Technology, and Value Chains: "If you ask the average CEO what's making them lose sleep these days, it's a good bet that the answer will be tariffs and trade wars." True or false?

True

According to the Technology lecture in Hub 3, "Technology" is a sort of knowledge or skill used for employing and controliling factors fo prodcution that, in turrn could lead to the outp ut of products and services. True or false?

True

According to the theory of comparative advantage, international trade can still be a positive-sum game that benefits both countries having an absolute advantage over one another. True or false?

True

After Simone was transferred from the U.S. home office to the French satellite office, she was frustrated that most of her workers took the month of August off for vacation. She believed they would work the extra hours if she offered them bonus pay, but they weren't interested. In misunderstanding her workforce's motivations, Simone is exhibiting a self-reference criterion. True or false?

True

Hofstede's pragmatic versus normative dimension reflects an assessment of how individuals handle unexplainable aspects of their lives. True or false?

True

In the Podcast "Making Sense" found in Hub 3 specific reference was made to 5 distinct levels of virtual corporate operations. One of them, was described as "Nirvana" where you design your working environment to your well being. True or false?

True

Nearly 60 percent of global output is now destined for international trade. True or false?

True

According to the Harvard Business Review article: The New Era of Globalization Will Be Shaped by Customers, which, if any, of the following are identified as factors assuming greater weight tan the dirve to find the lowest possbile global labor costs? a) All of the above b) Proximity to customers c) The availability of a more highly skilled workforces d) None of the above e) The quality of infrastructure.

a) All of the above

In the Podcast "Making Sense" found in Hub 3, which, if any, of the following levels were identified? a) All of the above. b) A level that is asynchronous and the firm begins to think globally, passing the baton to people around the world. c) A level where the firm recreated online capabilities but in the office. d) A level where a firm is not acclimated to working in a remote environment. e) None of the above.

a) All of the above.

The monopolistic advantage theory states that: a) FDI is made by firms in oligopolistic industries possessing technical advantages over local companies. b) a firm that has a monopoly has a major advantage in overseas investment. c) the firm making the overseas investment first has a monopolistic advantage. d) a firm that has a monopoly domestically will have no competition making overseas investments.

a) FDI is made by firms in oligopolistic industries possessing technical advantages over local companies.

What is an example of the competitive driver of international business activity? a) a company that enters a foreign market to distract companies with similar products or services b) a company that searches for markets with rising gross domestic product per capita and population growth c) a manufacturing company that lobbies its home country government for protection against imports d) a company that expands its local manufacturing facility in a foreign country in order to qualify for tax rebates

a) a company that enters a foreign market to distract companies with similar products or services

Government administrations get concerned when the number and value of imports into the country are greater than the value of the country's exports. In other words, the administration is concerned about: a) a trade deficit. b) product differentiation. c) economies of scale. d) absolute advantage.

a) a trade deficit.

An international manager has three choices when deciding how to employ a technique used in domestic operations to an international operation: transfer it intact, not use it, or: a) adapt it to local conditions. b) standardize it. c) provide it to the competition. d) produce it in mass quantities.

a) adapt it to local conditions.

James realized the company's marketing materials should avoid the color red in South Africa because it is the color of mourning in that country. What part of culture is James taking into consideration? a) aesthetics b) gift-giving c) stereotypes d) spoken language

a) aesthetics

An automobile manufacturer decided to enter the European market because if it didn't, then all of the other car companies that were already there would get the business. Which driver is causing internationalization for the manufacturer? a) competitive b) political c) market d) cost

a) competitive

Low-context cultures such as the United States tend to have these kinds of communication patterns: a) explicit. b) subtle. c) loudly voiced. d) nondirective.

a) explicit.

An opponent of globalization would state that: a) globalization has had harmful effects on labor and labor standards. b) countries that have rejected globalization are among the most advanced nations of the world. c) globally integrated countries spend more on public education, especially in developing countries. d) globalization has increased the proportion of people in developing countries who live on $1.25 per day or less.

a) globalization has had harmful effects on labor and labor standards.

Understanding a person's body language and facial expressions would be especially important during business conversations in which type of culture? a) high-context b) polychronic c) low-context d) monochronic

a) high-context

The construction industry has joined the ranks of other industries and now carries out business across national borders. In other words, the construction industry has become a(n): a) international business. b) foreign-owned company. c) international affiliate. d) domestic affiliate.

a) international business.

When interacting with an international affiliate, business professionals should remember that ethnocentrism: a) is detrimental and noninclusive. b) can be beneficial to negotiations. c) is atypical behavior and uncommon in most cultures. d) should be practiced whenever possible.

a) is detrimental and noninclusive.

An advertising company based in Toronto decided to establish an operation in France because it was concerned that its competition would try to take over its clients in Europe, which represents 65 percent of its business. Which type of driver is responsible for this decision to go international? a) market b) technological c) cost d) political

a) market

Qing Yuan is the finance director of a firm in Seattle. He often attends meetings for work and it is not uncommon for these meetings to overlap one another so he is finishing up with one while he should be at another. Trompenaars would say that Qing Yuan works at a company that reflects what dimension of time? a) polychronic b) theocentric c) ethnocentric d) monochronic

a) polychronic

An example of a political driver of globalization is: a) privatization of industries b) the introduction of competitor firms c) increased communication created by advanced communication technologies. d) globalizing product lines to decrease costs of production.

a) privatization of industries

Kai was recently assigned to a management role in his company's overseas operation. He has been surprised several times when his employees responded negatively because they said he didn't take their culture into consideration when he made decisions. Kai is demonstrating a: a) production orientation. b) self-fulfilling prophecy. c) marketing orientation. d) self-reference criterion.

a) production orientation. b) self-fulfilling prophecy. c) marketing orientation. d) self-reference criterion.

Theory based on _________blank states that international and interregional differences in production costs occur because of differences in the supply of production factors. a) resource endowments b) comparative advantage c) absolute advantage d) mercantilist advantage

a) resource endowments

In Trompenaars's affective culture, emotions are seen as: a) responses to be freely displayed. b) private, and therefore, not displayed. c) a weakness, and therefore hidden. d) appropriate to share with family members only.

a) responses to be freely displayed.

In 2019, what product was included in the five largest categories of U.S. goods exported to China? a) soybeans b) toys c) soft goods d) furniture

a) soybeans

In low-context cultures it is common to find: a) that communication tends to be explicit. b) leadership is mostly from behind, allowing the workgroup to self-direct. c) indirection is prized because it recognizes the ability of the other. d) subtlety and innuendo during conversations.

a) that communication tends to be explicit.

Latrell decided not to take the overseas management position because he knew managers worked alongside their staff and did not have private offices in this particular international culture. He thought this made managers look less important and inconsequential. What aspect of culture is he concerned with? a) unspoken language b) verbal communication c) aesthetics d) folklore

a) unspoken language

Who advocated the early attempt to develop an international trade theory in response to the practice of mercantilism? a) Raymond Vernon b) Adam Smith c) Stefan Linder d) David Ricardo

b) Adam Smith

If Ecuador has an absolute advantage in coffee and Argentina in wheat, then, according to trade theory: a) there will be a perfect trade balance between the two countries. b) Ecuador should focus production on coffee and trade for other goods. c) Argentina should focus on producing coffee and trade for wheat. d) Ecuador would do well to produce its own wheat rather than import it from Bolivia.

b) Ecuador should focus production on coffee and trade for other goods.

Overall, what has occurred with the dollar volume of service exports worldwide? a) Service exports have decreased with the advent of competition. b) There has been an absolute increase. c) The dollar volume of exports has maintained a low, but consistent, rate. d) There has been no change.

b) There has been an absolute increase.

Mexico and Canada are major U.S. trading partners because they have the benefit of lower freight charges and shorter delivery times. Why do these benefits exist for these two nations? a) They established these parameters in the USMCA agreement. b) They share a border with the United States. c) They source production materials from China. d) They have established economies of scale for goods and services.

b) They share a border with the United States.

Trompenaars's achievement versus ascription dimension describes social status based on what one does or who one is. In the United States, where people build who they are through work, social status tends to be: a) based on ascription. b) based on achievement. c) a subtle form of prejudice. d) ignored because the United States does not have classes.

b) based on achievement.

Unconscious reference to one's own ________blank when judging behavioral actions of others in a new and different environment is called the self-reference criterion. a) physical characteristics b) cultural values c) personality traits d) work experience

b) cultural values

The tendency toward an international integration of goods, technology, information, labor, and capital, or the process of making this integration happen, is called: a) multinationalization b) economic globalization c) international business d) internationalization.

b) economic globalization

Trompenaars's neutral vs. affective dimension is used to determine how a culture: a) values work over social life. b) expresses emotions. c) respects individual or group behaviors. d) regulates behaviors.

b) expresses emotions.

Hofstede's masculinity-femininity dimension suggests that, as an international manager, you might a) find women too competitive in a feminine culture. b) find men and women equally ready to assume leadership roles in a feminine culture. c) avoid feminine cultures because their production levels will lag. d) avoid highly masculine cultures because they violate EEOC standards.

b) find men and women equally ready to assume leadership roles in a feminine culture.

A boot designer was surprised when its marketing campaign featuring a cowboy fell flat in some South American countries but prospered in the United States. They later determined that a cowboy was not a glamourous job in parts of South America so it held little appeal to consumers. In this instance, the company used what aspect of aesthetics incorrectly? a) nonverbal communication b) folklore c) gift-giving d) art

b) folklore

What is an example of an external force that represents financial factors affecting a business? a) geographic location b) interest rates c) domestic laws d) employee salaries

b) interest rates

Data have shown a clear and definitive link between: a) protectionist legislation and enhanced economic welfare of a country. b) liberalization of trade and economic growth c) liberalization of trade and reduced disparity in personal income. d) government subsidies and the development of globally competitive industries.

b) liberalization of trade and economic growth

The focus group participants were asked if they liked the website for Welby Appliance Corporated. The majority responded that they did. Months later, the manufacturer was surprised when people in certain parts of the world were angry that no instructions came with the appliance they purchased and were told they could find them on the website. However, these particular customers didn't have access to a computer. In this instance, what department of Welby Appliance failed to take into account culture? a) finance b) marketing c) production d) human resources

b) marketing

Trompenaars's dimension of internal vs. external direction is similar to Kluckhohn and Strodtbeck's relationship to a) social life. b) nature. c) religion. d) behaviors.

b) nature

Chavez's manager told him not to make the "OK" sign with his hand when meeting with the representatives from France as that gesture is viewed as vulgar and inappropriate in their culture. Which aspect of culture is his manager referring to? a) spoken language b) nonverbal communication c) religion d) material culture

b) nonverbal communication

The forces in the foreign environment differ from the domestic environment in that they originate: a) in the firm's home country. b) outside the firm's home country. c) concurrently in the home and host country. d) in only the host country.

b) outside the firm's home country.

Jannine prefers to keep her work life and home life separate. She doesn't socialize with her work associates after work and doesn't discuss her family when she is at work. Which of Trompenaars's dimensions does this exemplify? a) universalism vs. particularism b) specific vs. diffuse c) individualism vs. collectivism d) achievement vs. ascription

b) specific vs. diffuse

Firms from ______ had the largest total outstanding stock of direct overseas investment at the beginning of 2020. a) Japan b) the United States c) the United Kingdom d) Germany

b) the United States

Monochronic time is best illustrated by: a) a rock concert. b) the flight schedule at an airport. c) the multitude of activities required by new parents. d) on-duty nurses' roles in an emergency room.

b) the flight schedule at an airport.

The kinds of forces in the foreign environment are ________ those in the domestic environment except that they occur in foreign nations. a) less demanding than b) the same as c) different from d) more stringent than

b) the same as

Some countries send out buying missions to other countries in order to find products to import because their exports are exceeding the value of their imports. In other words, the nations are experiencing a(n): a) economy of scale. b) trade surplus. c) product differentiation. d) absolute advantage.

b) trade surplus.

Which countries have become increasingly important trading partners to the United States as suppliers of electronic products? a) Canada and Mexico b) Germany and the United Kingdom c) China, Vietnam, and Malaysia d) China, Canada, and Mexico

c) China, Vietnam, and Malaysia

What is one argument in support of globalization? a) Environmental issues are lessened through globalization. b) Globalization enhances access to health care for participants. c) Free trade enhances economic development. d) The process of globalization has enhanced the equalization of countries in terms of political and social economy.

c) Free trade enhances economic development.

The argument that free trade is the best strategy for advancing the world's economic development is considered: a) the basis for much protectionist legislation in emerging markets. b) one that has very little support in research studies. c) a proposition with which most economists agree. d) one of the most contentious issues associated with economic globalization.

c) a proposition with which most economists agree.

The marketing team decided to develop two promotional campaigns: one featuring slender female models and the other using curvier female models to address the cultural differences of their audience. With what aspect of culture is the marketing team concerned? a) gift-giving b) verbal communication c) aesthetics d) artifacts

c) aesthetics

A nation that is struggling to remain competitive in the world market may decide to reduce the value of the country's currency relative to other currencies. This process is called currency: a) surplus. b) deficit. c) devaluation. e) customization.

c) devaluation.

International business differs from domestic business in that a firm operating across borders must deal with the forces associated with which three kinds of environments? a) geographic, political, economic b) initial, secondary, primary c) foreign, domestic, international d) multicultural, ethnocentric, stereotypical

c) foreign, domestic, international

Keoni believes an annual review should be a reflection of an employee's accomplishments from the year, while Maalik believes an annual review should be used to motivate an employee to work harder. Their beliefs are based on the culture in which they were raised. Which business function is being affected by culture in this scenario? a) accounting b) production c) human resources d) marketing

c) human resources

What is an example of an internal force that can affect a company's environment? a) international competitors b) availability of natural resources c) human resources d) economic downturn

c) human resources

Katerina grew up in eastern Europe but moved to New York after college. Compared to her friends that stayed in Europe, she enjoys much more freedom with her time and is able to enjoy leisure activities and be active in her career. Which of Hofstede's dimensions does this demonstrate? a) uncertainty avoidance b) masculinity vs. femininity c) indulgence vs. restraint d) pragmatic vs. normative

c) indulgence vs. restraint

A bicycle designer and manufacturer is headquartered in Illinois. It does business in the United States and exports to Europe and South America. This company is an example of a(n) a) domestic corporation. b) global partnership. c) international company. d) foreign subsidy.

c) international company.

What is identified in the text as being one of the five major drivers of globalization? a) geographic b) cultural c) market d) transportation

c) market

Due to the expanding importance of foreign-owned firms in local economies, host governments have made their policies toward these companies: a) more strict. b) inflexible. c) more liberal d) extremely conservative.

c) more liberal

The 17th and 18th centuries have frequently been termed the "Age of Mercantilism" because: a) individual states were able to support themselves as more merchants were established. b) the Americas were discovered. c) national power depended on the sponsorship and control of merchant capital. d) the merchant class was created during this time.

c) national power depended on the sponsorship and control of merchant capital.

A market situation in which there is a sufficiently large number of well-informed buyers and sellers of a homogeneous product such that no individual participant has enough power to determine the price of the product, resulting in a marketplace that is efficient in production and allocation of products is known as: a) mercantilism. b) absolute advantage. c) perfect competition. d) trade deficit.

c) perfect competition.

Hofstede's individualism-collectivism measures: a) the tendency to differentiate male roles. b) the amount of social distance between relatives. c) the degree to which people in the culture are integrated into groups. d) the degree to which social inequality is tolerated.

c) the degree to which people in the culture are integrated into groups.

Trompenaars's particularist dimension describes a culture in which: a) rules rather than relationships regulate behaviors. b) all rules apply to all people at all times. c) the judgment of something depends on the situation. d) rules never apply.

c) the judgment of something depends on the situation.

The rapid expansion of world exports in the last 40 years demonstrates that: a) domestic business cannot compete with cheap imports. b) business people can expect to meet lower levels of competition in their domestic markets. c) the opportunity to increase sales by exporting is a viable growth strategy. d) jobs will inevitably decline in developed countries due to import competition.

c) the opportunity to increase sales by exporting is a viable growth strategy.

The experience curve refers to: a) the plateau stage in the product life cycle where companies export products for the first time. b) the predictable decline in the average cost of producing each unit of output as a production facility gets larger and output increases. c) the rising scale on which efficiency improves as a result of cumulative experience and learning. d) the sloping curve that designates the end of the product life cycle.

c) the rising scale on which efficiency improves as a result of cumulative experience and learning.

International business really began: a) when Singer Sewing Machine put up a factory in Scotland in 1868 b) when Colt Firearms set up a plant in England. c) when Phoenician and Greek merchants sent representatives abroad to sell goods. d) when the East India Company chartered in 1600.

c) when Phoenician and Greek merchants sent representatives abroad to sell goods.

The three nations that exported the largest amount of goods to the United States in 2017 were: a) China, Mexico, and the United Kingdom. b) Canada, Mexico, and Japan. c) China, Canada, and Mexico. d) China, Japan, and Saudi Arabia.

c)China, Canada, and Mexico.

In the article "Society 3.0: Using technology to improve public goods", Vodafone Group CEO Vittorio Colao discusses why technology should not merely increase productivity but also benefit socieity at large. Which, if any, of the following best identify his concern(s)? a) The quality of services are essential to address social inequalities. b) None of the above. c) Public health, and public hospitals are very important thanks to "taxes". d) All of the above. e) Social entrepeneurs, business and government should collaborate more.

d) All of the above.

When examining the volume of international trade, how are goods and services currently represented? a) Goods and services have reached equal levels of trading volumes. b) Exports of goods and services quadrupled between 1990 and 2013. c) There are fewer goods traded than services. d) Exports of services grew faster than trade in merchandise for the last 20 years.

d) Exports of services grew faster than trade in merchandise for the last 20 years.

Which element in Porter's diamond model of national advantage distinguishes between the land a company owns and the transportation systems available for it to use? a) Export conditions b) Competitive conditions c) Supply conditions d) Factor conditions

d) Factor conditions

Which characteristic would be typical in a feminine culture? a) People live in order to work. b) Environmental matters are a personal, not a business, concern. c) Strong variation between male and female roles. d) Quality of work life is important.

d) Quality of work life is important.

The capability of one nation to produce more of a good or service than another country for the same or lower cost of inputs is a(n) a) mercantilist advantage. b) trade surplus. c) comparative advantage. d) absolute advantage.

d) absolute advantage.

In 2019, what was the included in the five largest categories of U.S. goods imported from China? a) grains b) automobiles c) aircraft d) apparel

d) apparel

Culture frameworks are helpful, but their use may: a) lead to further frameworks and further complication. b) result in too much empathy for a different culture. c) place too much emphasis on culture. d) apply outdated and oversimplified cultural views.

d) apply outdated and oversimplified cultural views.

According to the theory of comparative advantage, trade can benefit: a) the importing country involved in a trade. b) the exporting country involved in a trade. c) neither country involved in a trade. d) both countries involved in a trade.

d) both countries involved in a trade.

According to Trompenaars, a culture's attitude toward the environment can range from: a) overwhelmed by aesthetics to dominating the environment. b) focus on all aspects of the environment or just one. c) peaceful to war-like. d) control over the environment to harmony with it.

d) control over the environment to harmony with it.

A company that decides to engage in exporting as a way to increase economies of scale is basing this decision on which driver of international business activity? a) market b) political c) competitive d) cost

d) cost

Trompenaars's specific-diffuse dimension has to do with: a) social patterns for child-rearing. b) whether rules or relationships regulate behaviors. c) regard for the individual or the collective. d) differentiation between public and private life.

d) differentiation between public and private life.

When gross national income drops significantly, it affects a company's environment. Which type of external force does this represent? a) technological b) legal c) physical d) economic

d) economic

Dunning's eclectic theory of international production states that if a firm is going to invest in production facilities abroad, it must have one of 3 kinds of advantages. Which one relates to firms having various alternatives to entering foreign markets, ranging from making arm's-length market transactions to operating wholly owned subsidiaries? a) location-specific b) strategic c) ownership-specific d) internalization

d) internalization

Jetson Manufacturing has manufacturing operations in the United States, Germany, Indonesia, and Brazil. Jetson Manufacturing is an example of a(n): a) distribution center. b) international affiliate. c) state-owned corporation. d) international company.

d) international company.

When a government sees that local industry is threatened by imports, it can threaten to erect import barriers to stop or reduce these imports. This is an example of a _________ driver of international business activity. a) technological b) cost c) market d) political

d) political

Giuliana purchases Open Source bottled water from France because it is derived from natural springs and the store brand doesn't say where it comes from. What is influencing Giuliana's purchase decision? a) economies of scale b) a trade surplus c) overlapping demand d) product differentiation

d) product differentiation

The theory suggesting that rivalry between firms in an oligopolistic industry will result in firms closely following and imitating each other's international investments in order to keep a competitor from gaining an advantage is known as: a) internationalization theory. b) competitive imitation theory. c) internalization theory. d) strategic behavior theory.

d) strategic behavior theory.

Referring to Hall's high- and low-context framework, in a high-context culture: a) communication is explicit. b) communication is direct and focused on the topic. c) the context is irrelevant. d) the context carries much of the communication.

d) the context carries much of the communication.

A major portion of the exports from developing countries go to _________countries; this proportion has been _________. a) developing; increasing b) developing; decreasing c) developed; decreasing d) developed; increasing

developed; decreasing

An international company (IC) is a company headquartered in another nation. True or false?

false

Anthropologist E. T. Hall suggests that there are hundreds of ways managers can learn the characteristics of other cultures. True or false?

false

Gift giving across cultures is viewed as a simple kindness and not a reflection of intent. True or false?

false

Hofstede is primarily concerned with social values and the dimensions he identified that help parents understand their children. True or false?

false

Internalization theory suggests that when an organization has superior knowledge, it may obtain a better price by selling it to the open market. True or false?

false

Lobbyists who advocate for new laws that will affect the production standards of a business are an example of an internal force. True or false?

false

Portfolio investment is the purchase of sufficient stock in a firm to obtain significant management control. True or false?

false

Thanks in part to communication advancements, international trade has stabilized and become fairly evenly distributed across all countries of the world. True or false

false

The 17th and 18th centuries have frequently been termed the age of industrialism because this was the period when industrialization was advanced to the masses. True or false?

false

The dynamic capability theory states that for a firm to invest overseas, it must have three kinds of advantages: ownership specific, internalization, and location specific. True or false?

false