final int bus
Rule of law
(Blank) involves a legal system where instructions are clarified, publicly imposed, justly applied, and valued by all
quotas
(blank) are measurable limits set on the imports of certain goods for a designated period of time
contract laws
(blank) assign rights, duties, and obligations to all parties involved in an agreement and include stipulations on the sale of goods, distribution of products, licensing, franchising, and joint ventures
APEC
(blank) involves 21 nations, from both sides of the Pacific, and aims for increased unrestricted trade and economic alliances among member and potential member countries
Regional economic assimilation
(blank) involves countries establishing agreements with one another for the purpose of minimizing obstacles concerning trade and business ventures
nationalization
(blank) involves government seizure of a whole industry, which may or may not include any form of payment
currency control
(blank) involves limitations on the expenditure of tangible monetary exchanges from a certain nation or on the influx of foreign currencies
litigation
(blank) is a confrontational method of resolving international disputes that involves parties filing lawsuits against each other in order to produce anticipated outcomes for themselves
Protectionism
(blank) is a global economic principle created to limit unrestricted trade while guarding home-country businesses from overseas competition
transparency
(blank) is the degree to which organization disclose substantial information about their financial position and accounting measures
customs
(blank) represents locations at the ports of entry in each country where government authorities inspect imported products and levy tariffs.
Which of the following defines the comparative advantage principle?
. It may be beneficial for two countries to trade with each other as long as one is relatively more efficient at producing a product needed by the other.
Market economy
A (blank) depends on the interactions of supply and demand in order to determine prices for products and services
political system
A (blank) is a group of official organizations that create a government
Taking advantage of universal needs and common consumer trends
A computer corporation produces and sells computer chips that are in high demand. The firm is able to sell the chips worldwide due to standardization. This best demonstrates which of the following pressures that compel companies to integrate their activities globally?
national industrial policy
A contemporary perspective that aids in explaining the emergence of a country's competitive advantage
transnational
A coordinated approach to internationalization in which the firm strives to be relatively responsive to local needs while retaining sufficient central control of operations is a ________ strategy
Which of the following describes a convertible currency?
A currency that can be easily exchanged for other currencies
The value of the currency will weaken as residents and foreign investors exchange their holdings for hard currency.
A developing country has experienced rapid changes in the value of its currency and the military is rumored to be planning a coup. How is this instability likely to affect the value of the nation's currency?
Pegging its currency to the value of a hard currency or basket of currencies
A developing country wants to stabilize the value of its currency. Which strategy is most likely to achieve that goal?
economies of scale
A firm most likely opts for global integration in order to take advantage of which of the following factors?
What is the eclectic paradigm?
A framework that explains the extent of value chain operations that firms should own overseas
It occurs after an MNE makes large investments in a country's property and facilities.
A huge MNE was the victim of creeping expropriation from a foreign government. Why is creeping expropriation ethically wrong?
The New Zealand government enacted pro-trade policies in conjunction with the private sector. The government transformed New Zealand into an industrialized, competitive, and free-market economy. This is an example of ________.
A national industrial policy
functional structure
A(n) ________ is an arrangement in which management of the firm's international operations is organized by functional activity such as production and marketing
Which of the following is characteristic of a global industry?
A) A small number of major players compete head-on in multiple markets.
Which of the following is characteristic of a global industry? A) A small number of major players compete head-on in multiple markets. B) Competition is designed on a country-by-country basis. C) Numerous firms compete within the industry worldwide. D) Different marketing activities are designed to meet local needs across the globe.
A) A small number of major players compete head-on in multiple markets.
________ refers to lowering the cost of the firm's operations and activities on a global scale.
A) Efficiency
________ refers to lowering the cost of the firm's operations and activities on a global scale. A) Efficiency B) Protectionism C) Flexibility D) Currency control
A) Efficiency
Quik Meal is a fast-growing MNE that manufactures and sells energy gels for consumption by serious athletes, such as marathoners and triathletes. The energy gels produced by Quik Meal taste much better than the gels sold by other firms, which has led to an increase in sales. Managers and executives with Quik Meal need to determine the best organizational structure for the young firm. Quik Meal has subsidiaries in Japan and Brazil, while company headquarters are based in San Francisco. / / Which of the following questions would be more important for Quik Meal executives to evaluate when determining whether to centralize or decentralize the firm's structure?
A) How much modification is needed for Quik Meal products in Japan and Brazil?
Which of the following questions would be more important for Quik Meal executives to evaluate when determining whether to centralize or decentralize the firm's structure? A) How much modification is needed for Quik Meal products in Japan and Brazil? B) How many athletes from each country participated in the Olympics? C) What sports drinks are available and popular in Asia? D) What is the possibility of Quik Meal establishing a subsidiary in India?
A) How much modification is needed for Quik Meal products in Japan and Brazil?
Which of the following is necessary for local responsiveness to effectively increase a firm's competitiveness?
A) Local managers need to be able to make decisions based on local needs.
Which of the following is necessary for local responsiveness to effectively increase a firm's competitiveness? A) Local managers need to be able to make decisions based on local needs. B) Corporate executives must standardize marketing and merchandising. C) Employees must be hired and trained only within a local region. D) A firm's bankers and financial managers must be locally based
A) Local managers need to be able to make decisions based on local needs.
Which of the following characterizes a multidomestic strategy?
A) Subsidiary managers adapt products and services to meet local needs.
Which of the following characterizes a multidomestic strategy? A) Subsidiary managers adapt products and services to meet local needs. B) Management practices are universal across local businesses. C) Firm executives control all subsidiaries to maximize efficiency. D) The firm allows subsidiaries to standardize products and services across countries.
A) Subsidiary managers adapt products and services to meet local needs.
Which of the following is an example of a global industry?
A) automobiles
Which of the following is an example of a global industry? A) automobiles B) beverages C) publishing D) retailing
A) automobiles
During the interview, Dan states that he expects Ace to surpass the competition in two years if he becomes CEO. Which of the following traits does Dan most likely exhibit with his statement that might appeal to the board of directors? A) commitment to the success of Ace B) arrogance about his abilities to help Ace C) recognition of the homogeneity across communities D) subjective ethical standards
A) commitment to the success of Ace
The Ace Children's Clothing Company is a mature MNE that has been manufacturing and selling children's clothing in Ace stores around the world for 30 years. Ace has seen a downturn in global sales recently due to trendy adult clothing companies branching out into children's clothing. The Ace board of directors is interviewing candidates to replace the outgoing CEO. The board wants a CEO who will take Ace into the future and pull customers back into Ace stores. Two candidates are being interviewed for the position: Dan Elizarde and Tanya Carson. Tanya and Dan have comparable executive experience with retail clothing companies. Therefore, the board will be basing its final decision on visionary leadership skills. / / During the interview, Dan states that he expects Ace to surpass the competition in two years if he becomes CEO. Which of the following traits does Dan most likely exhibit with his statement that might appeal to the board of directors?
A) commitment to the success of Ace
Which of the following is a characteristic of a global team?
A) culturally diverse
Which of the following is a characteristic of a global team? A) culturally diverse B) similarly trained C) domestically based D) constant face-to-face interaction
A) culturally diverse
In which of the following are substantial autonomy and decision making authority delegated to a firm's subsidiaries around the world?
A) decentralized approach
In which of the following are substantial autonomy and decision making authority delegated to a firm's subsidiaries around the world? A) decentralized approach B) global strategy C) transnational strategy D) nationalization
A) decentralized approach
Armaz Inc., a manufacturing company, has its headquarters located in Texas, U.S., and subsidiaries in India, China, and Vietnam. Which of the following decisions will be the most centralized?
A) decision about building factories in Cambodia
Armaz Inc., a manufacturing company, has its headquarters located in Texas, U.S., and subsidiaries in India, China, and Vietnam. Which of the following decisions will be the most centralized? A) decision about building factories in Cambodia B) decision about hiring a marketing manager for its India operations C) decision to open a retail store in Vietnam D) decision about marketing newly developed products for the Chinese market
A) decision about building factories in Cambodia
Which of the following organizational arrangements for foreign operations is most closely associated with home replication strategy?
A) export department
Which of the following organizational arrangements for foreign operations is most closely associated with home replication strategy? A) export department B) international division C) geographic area structure D) product structure
A) export department
Which of the following is a disadvantage of a geographic area structure?
A) geographic area managers' lack of global orientation for developing and managing products
Which of the following is a disadvantage of a geographic area structure? A) geographic area managers' lack of global orientation for developing and managing products B) limited communications and coordination among the subsidiaries within each geographic region C) minimal balance between global integration and local adaptation D) decreased responsiveness to customer needs and wants in each regional/local market
A) geographic area managers' lack of global orientation for developing and managing products
In which of the following organizational structures does an employee at a foreign subsidiary report to both a local manager and a corporate manager?
A) global matrix structure
In which of the following organizational structures does an employee at a foreign subsidiary report to both a local manager and a corporate manager? A) global matrix structure B) functional structure C) home replication structure D) multidomestic structure
A) global matrix structure
In the ________ strategy, a firm views international business as separate from, and secondary to, its domestic business.
A) home replication
In the ________ strategy, a firm views international business as separate from, and secondary to, its domestic business. A) home replication B) multilocal C) global D) transnational
A) home replication
Brogj Inc. is a cosmetics manufacturer based in California, United States. The firm varies its products to suit the different conditions abroad. Brogj is an example of a ________.
A) multidomestic industry
Brogj Inc. is a cosmetics manufacturer based in California, United States. The firm varies its products to suit the different conditions abroad. Brogj is an example of a ________. A) multidomestic industry B) regional industry C) global industry D) globally integrated industry
A) multidomestic industry
The Ace Children's Clothing Company is a mature MNE that has been manufacturing and selling children's clothing in Ace stores around the world for 30 years. Ace has seen a downturn in global sales recently due to trendy adult clothing companies branching out into children's clothing. The Ace board of directors is interviewing candidates to replace the outgoing CEO. The board wants a CEO who will take Ace into the future and pull customers back into Ace stores. Two candidates are being interviewed for the position: Dan Elizarde and Tanya Carson. Tanya and Dan have comparable executive experience with retail clothing companies. Therefore, the board will be basing its final decision on visionary leadership skills. / / Which of the following characteristics should the winning candidate most likely possess if Ace executives desire a CEO with a global mind-set?
A) open-minded about diversity
Which of the following characteristics should the winning candidate most likely possess if Ace executives desire a CEO with a global mind-set? A) open-minded about diversity B) subjective ethical standards C) fluency in two languages D) proponent of cultural imperialism
A) open-minded about diversity
Organizational culture is ________.
A) the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt
Organizational culture is ________. A) the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt B) an approach in which a firm views international business as separate from, and secondary to, its domestic business C) a reporting structure inside the firm that specifies the links between people, functions, and processes D) an organizational design in which all international activities are centralized within one division in the firm, separate from domestic units
A) the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt
________ is defined as the coordination of a firm's worldwide value-chain activities to obtain synergy, efficiency, and cross-fertilization. A. Global integration B. Collaboration C. Globalization D. Local responsiveness E. Global sourcing
A. Global integration
Sharon manages a large international computer corporation that has branches in many countries. For each country in which the corporation is located, Sharon allows the local manager to make decisions on product choice and distribution. Based on the integration-responsiveness framework, which of the following strategies does this practice best demonstrate? A. Multidomestic strategy B. Vision strategy C. Transnational strategy D. Global strategy E. Home replication strategy
A. Multidomestic strategy
The Korean automobile firm Hyundai emphasizes the importance of science and technology throughout its organization and allocates funds for the research and development of innovative automobile features. Which of the following dimensions of a successful international firm is best demonstrated by Hyundai? A. Organizational culture B. Organizational processes C. Visionary leadership D. Strategy E. Organizational structure
A. Organizational culture
In a(n) ________, the headquarters of a company has significant authority and control over the company's global activities. A. centralized approach B. international division structure C. export department D. decentralized approach E. global approach
A. centralized approach
According to the author, the success of multinational firms has been based upon ________ and ________, which have become especially relevant during the worldwide recession. A. efficiency; flexibility B. generalized customer needs; domestic partnerships C. risk-averse practices; human resource practices D. logistical operations; raw materials E. independent suppliers; high-cost parts
A. efficiency; flexibility
Norway
According to the 2015 World Economic Outlook Database, the country with the lowest level of debt is ________.
efficiency; flexibility
According to the author, the success of multinational firms has been based upon ________ and ________, which have become especially relevant during the worldwide recession.
boycott
Activists organized a(n) ________ of petroleum company BP following the oil spill in the Gulf of Mexico.
Changes in the political climate might influence government interference in business practices, putting the safety of the company's employees in jeopardy.
An American company that does business overseas has to be concerned about local events. Why should a company be concerned about political events and the legal environment in the country in which it does business?
Environmental law would cause the greatest hindrance because firms must pay for pollution.
An agricultural firm is considering doing business in a foreign country with environmental laws, foreign investment laws, e-commerce laws, an underdeveloped legal system, and a socialistic government. Which of the following would most prevent the company from maximizing its profits?
product structure
An international cellular phone corporation sells mobile devices, tablets, various networks, and connected home solutions overseas. The corporation separates its company according to each of these separate areas. Which organizational structure does this example describe?
A centralized approach means substantial autonomy and decision-making authority are delegated to the firm's subsidiaries around the world.
Answer: FALSE
A company can be compelled to be locally responsive in individual countries to provide uniform services to global customers.
Answer: FALSE
A multidomestic industry is one in which competition takes place on a regional or worldwide basis.
Answer: FALSE
An export department structure requires considerable resource commitment.
Answer: FALSE
Companies that proactively build a global organizational culture subscribe to subjective ethical and moral standards.
Answer: FALSE
Converging buyer characteristics, growing acceptance of global brands, and increased diffusion of uniform technology make it difficult to pursue a global strategy.
Answer: FALSE
Due to the competition involved in global industries, marketing strategies are determined by the unique needs and regulations of each nation.
Answer: FALSE
Efficiency refers to emphasizing consensus-based decision making and problem solving, in which managers readily share their knowledge.
Answer: FALSE
Global integration is a plan of action that accounts for competition on a country-by-country basis.
Answer: FALSE
Global strategy is an approach to internationalization in which headquarters delegates considerable autonomy to each country manager, allowing him or her to operate independently and pursue local responsiveness.
Answer: FALSE
Headquarters of a firm is the primary contributor to decisions about local market research.
Answer: FALSE
In a multidomestic strategy, there is maximum pressure on headquarters staff because there is little incentive for decision making by individual managers.
Answer: FALSE
One of the advantages of a global matrix structure is that it provides better management of subsidiaries or products, or operations in many foreign markets.
Answer: FALSE
Organizational culture refers to managerial routines, behaviors, and mechanisms that allow the firm to function as intended.
Answer: FALSE
Visionary leadership is more complex and important in domestic firms than global firms because corporate headquarters is where major decisions are made.
Answer: FALSE
When using a home replication strategy, firms delegate autonomy to managers in each foreign unit, allowing them to operate independently and pursue local responsiveness.
Answer: FALSE
A company can be compelled to globally integrate its activities to seek cost reduction through scale economies.
Answer: TRUE
By standardizing international operations as much as possible yet being adaptable to the needs of local markets, a firm is utilizing a transnational strategy of globalization.
Answer: TRUE
Decisions about local products that will be sold in only one country are typically the joint responsibility of corporate and country-level managers, with the latter taking the lead role.
Answer: TRUE
During the recent global financial crisis, efficiency and flexibility became particularly important to the success of multinational firms.
Answer: TRUE
Firms that want to become globally competitive must seek simultaneously three strategic objectives—efficiency, flexibility, and learning.
Answer: TRUE
Geographic area structure is an organizational design in which management and control are decentralized to the level of individual geographic regions.
Answer: TRUE
Global IT infrastructure and tools such as intranets, the Internet, and electronic data interchange ensure that distant parts of the global network share knowledge and learn from each other.
Answer: TRUE
In order to facilitate shared decision-making between headquarters and country managers, corporate representatives should often visit subsidiary locations.
Answer: TRUE
Organizational structure describes the reporting relationships inside the firm that specify the links between people, functions, and processes.
Answer: TRUE
Sourcing inputs from large-scale, centralized suppliers allows firms to obtain economies of scale, more consistent quality, lower costs, and generally more efficient operations.
Answer: TRUE
Strategic global teams identify or implement initiatives that enhance the long-term direction of the firm in its global industry.
Answer: TRUE
The home replication strategy is often employed as a means of extending a product's life cycle in a foreign market and to replicate home-market success.
Answer: TRUE
When using a multidomestic strategy, products and services are carefully adapted to suit the unique needs of each country.
Answer: TRUE
With a global strategy, headquarters seeks substantial control over its country operations in order to minimize redundancy and achieve maximum efficiency, learning, and integration worldwide.
Answer: TRUE
rival domestic firms complain to their government when foreign firms receive governmental support
Asterix, a French theme park, spoke out against the French government's support for the creation of Disneyland Paris because Disney is an American company. This example shows that
Extra Clean Soap Company has been manufacturing soap products, such as dishwashing liquid, bath soap, and shampoo, for over 20 years from its facility and headquarters in Dublin, Ireland. A recent opportunity allowed Extra Clean to purchase soap companies in Taiwan and India. Extra Clean is now servicing both foreign and domestic markets with its products and manufacturing in all three locations. Recent reports from managers in the foreign facilities indicate that Extra Clean sales in Taiwan and India are low due to a lack of local responsiveness. Extra Clean managers from Ireland, India, and Taiwan are having a teleconference in an attempt to devise a strategy to improve the profitability of Extra Clean. / / Which of the following most likely supports Extra Clean implementing a multidomestic strategy instead of a global strategy?
B) Extra Clean managers lack internationalization experience.
Which of the following most likely supports Extra Clean implementing a multidomestic strategy instead of a global strategy? A) The Taiwan manufacturing facility requires an update in equipments. B) Extra Clean managers lack internationalization experience. C) Recent studies have shown that consumer trends in Taiwan, India, and Ireland are converging. D) Foreign rivals of Extra Clean compete at a global level.
B) Extra Clean managers lack internationalization experience.
The Ace Children's Clothing Company is a mature MNE that has been manufacturing and selling children's clothing in Ace stores around the world for 30 years. Ace has seen a downturn in global sales recently due to trendy adult clothing companies branching out into children's clothing. The Ace board of directors is interviewing candidates to replace the outgoing CEO. The board wants a CEO who will take Ace into the future and pull customers back into Ace stores. Two candidates are being interviewed for the position: Dan Elizarde and Tanya Carson. Tanya and Dan have comparable executive experience with retail clothing companies. Therefore, the board will be basing its final decision on visionary leadership skills. / / Which of the following best supports the decision by the Ace board of directors to hire Tanya as the CEO?
B) Tanya's innovative ideas and ability to spot future retail trends
Which of the following best supports the decision by the Ace board of directors to hire Tanya as the CEO? A) Tanya's recognition of the homogeneity across communities B) Tanya's innovative ideas and ability to spot future retail trends C) Tanya's subjective moral and ethical standards D) Tanya's competitive personality and dogmatic determination
B) Tanya's innovative ideas and ability to spot future retail trends
Which of the following is true about global teams?
B) To develop global strategies, the team should include culturally diverse managers whose business activities span the globe.
Which of the following is true about global teams? A) It is a locally distributed group of employees charged with specific problem solving that affects company operations at the domestic scale. B) To develop global strategies, the team should include culturally diverse managers whose business activities span the globe. C) Strategic global teams focus on the efficient and effective operation of the business across the whole network. D) Operational global teams identify or implement initiatives that enhance the long-term direction of the firm in its global industry
B) To develop global strategies, the team should include culturally diverse managers whose business activities span the globe.
A firm's headquarters is the primary contributor to ________.
B) capital planning
A firm's headquarters is the primary contributor to ________. A) local market research B) capital planning C) human resource management D) compliance with local laws and regulations
B) capital planning
Which of the following activities would be considered last by a manager while developing strategies?
B) deciding how best to contend with competitors
Which of the following activities would be considered last by a manager while developing strategies? A) analyzing the particular challenges that confront the firm B) deciding how best to contend with competitors C) examining the firm's specific strengths and weaknesses D) analyzing the particular opportunities for the firm
B) deciding how best to contend with competitors
Armaz Inc., a manufacturing company, has its headquarters located in Texas, U.S., and subsidiaries in India, China, and Vietnam. Which of the following decisions will be the LEAST decentralized?
B) decision about hiring a marketing manager in the United States
Armaz Inc., a manufacturing company, has its headquarters located in Texas, U.S., and subsidiaries in India, China, and Vietnam. Which of the following decisions will be the LEAST decentralized? A) decision about building factories in Cambodia B) decision about hiring a marketing manager in the United States C) decision to open a retail store in Vietnam D) decision about developing new products for foreign markets
B) decision about hiring a marketing manager in the United States
Marketing the same product worldwide is most appropriate for the ________ industry.
B) electronics
Marketing the same product worldwide is most appropriate for the ________ industry. A) furniture B) electronics C) food and beverage D) retailing
B) electronics
In which of the following types of organizational arrangements would a firm most likely have a division that focused solely on global marketing?
B) functional structure
In which of the following types of organizational arrangements would a firm most likely have a division that focused solely on global marketing? A) product structure B) functional structure C) geographic area structure D) international division
B) functional structure
Coordinating the international value-chain activities of a firm across multiple countries to achieve maximum efficiency is known as ________.
B) global integration
Coordinating the international value-chain activities of a firm across multiple countries to achieve maximum efficiency is known as ________. A) local responsiveness B) global integration C) adaptation D) country-by-country responsiveness
B) global integration
In establishing a firm's organizational structure, a fundamental issue is ________.
B) how much decision-making responsibility the firm should retain at headquarters
In establishing a firm's organizational structure, a fundamental issue is ________. A) how to optimize local responsiveness and flexibility B) how much decision-making responsibility the firm should retain at headquarters C) how to leverage natural endowments available to the firm D) how the firm should invest in human assets
B) how much decision-making responsibility the firm should retain at headquarters
Which of the following is an advantage of a multidomestic strategy?
B) minimal pressure on headquarters staff
Which of the following is an advantage of a multidomestic strategy? A) standardized organizational culture B) minimal pressure on headquarters staff C) minimum redundancy D) low operating costs
B) minimal pressure on headquarters staff
Which of the following would exert pressure on a firm to become locally responsive?
B) the need to cater to local customer needs
Which of the following would exert pressure on a firm to become locally responsive? A) the need to monitor and respond to global competitors B) the need to cater to local customer needs C) the desire to capitalize on converging consumer trends D) the desire to provide uniform service to consumers
B) the need to cater to local customer needs
GramTech Solutions is a software development firm based in the United States. The firm's CEO, David Ghaster, wants to open an outlet in India. Being a visionary leader, he would ________.
B) understand the market and culture in India and develop international supermanagers
GramTech Solutions is a software development firm based in the United States. The firm's CEO, David Ghaster, wants to open an outlet in India. Being a visionary leader, he would ________. A) require employees to discover a strategic vision for the firm B) understand the market and culture in India and develop international supermanagers C) commit minimum resources for international ventures because of the currency risk involved D) cut down on employees' cross-cultural training to save capital to open a firm in India
B) understand the market and culture in India and develop international supermanagers
A firm most likely opts for global integration in order to take advantage of which of the following factors? A. Adaptation to different distribution channels B. Economies of scale C. Responsiveness to local competitors D. Leveraged natural resources E. Customized products
B. Economies of scale
Which term refers to a company's ability to lower the cost of operation throughout its value chain? A. Flexibility B. Efficiency C. Learning D. Organizational culture E. Strategy
B. Efficiency Efficiency refers to using resources to the fullest while driving down costs. International firms are constantly looking to maximize every part of the value chain from R&D to customer service.
Which of the following represents a low-control strategy? A. Franchising B. Exporting C. Licensing D. Equity joint ventures E. Foreign direct investment
B. Exporting
Which of the following statements about local responsiveness is FALSE? A. Businesses take the local culture into consideration for transactions. B. Firms prefer to pay for many product variations for individual markets despite the sharp increase in costs. C. Companies adhere to local customer preferences. D. Firms adjust their practices to meet the specific needs of each country. E. Firms adjust to the local competitive environment.
B. Firms prefer to pay for many product variations for individual markets despite the sharp increase in costs.
Which of the following identifies the reporting relationships in an organization? A. Visionary leadership B. Organizational structure C. Home replication strategy D. Organizational culture E. Local responsiveness
B. Organizational structure Organizational structure describes the reporting relationships inside the firm, or the "boxes and lines" that specify the links between people, functions, and processes that allow the firm to carry out its operations.
Most firms prefer to internationalize in stages, but ________ are an exception to the stages approach because they internationalize a few years after being founded. A. risk-averse firms B. born global firms C. conservative firms D. firms in culturally close markets E. firms in low-risk markets
B. born global firms
Purevelon, a manufacturer of soaps and beauty products, controls all business decisions globally from its headquarters in Kansas City, Missouri. Purevelon has a__________. A. geographic area structure B. centralized structure C. multidomestic approach D. transnational strategy E. decentralized structure
B. centralized structure A centralized approach gives headquarters considerable authority and control over the firm's activities worldwide.
The ________ refers to an approach in which a firm views international business as separate from, and secondary to, its domestic business. A. global strategy B. home replication strategy C. multinational strategy D. transnational strategy E. multidomestic strategy
B. home replication strategy
In a decentralized organizational structure, a firm's subsidiary carries out all of the following activities EXCEPT ________. A. sales B. new product development C. marketing D. local market research E. human resource management
B. new product development
Top managers who provide inspirational direction and motivation to employees in an attempt to take a company to a better future are exhibiting ________. A. technical skills B. visionary leadership C. discipline D. flexibility E. efficiency
B. visionary leadership Visionary leadership is a quality of senior management that provides inspirational guidance and motivation to personnel, leading the firm to a better future.
Established in 2010, Instagram quickly found an international market for its photo- site. Currently, only a small fraction of Instagram's customers are from the United States. Instagram is an example of a(n) ________.
Born Global Firm
Which statement best describes network theory?
Buyers and sellers are linked to one another through continuous exchanges.
Which of the following best characterizes the concept of global integration?
C) Creating variations of the same product for different markets is an unnecessary expense.
Which of the following best characterizes the concept of global integration? A) Effective global competition requires that products be specialized based on the market. B) Making adjustments for unique markets is an essential element of international business. C) Creating variations of the same product for different markets is an unnecessary expense. D) The differences in market-to-market distribution channels must be accommodated.
C) Creating variations of the same product for different markets is an unnecessary expense.
Extra Clean Soap Company has been manufacturing soap products, such as dishwashing liquid, bath soap, and shampoo, for over 20 years from its facility and headquarters in Dublin, Ireland. A recent opportunity allowed Extra Clean to purchase soap companies in Taiwan and India. Extra Clean is now servicing both foreign and domestic markets with its products and manufacturing in all three locations. Recent reports from managers in the foreign facilities indicate that Extra Clean sales in Taiwan and India are low due to a lack of local responsiveness. Extra Clean managers from Ireland, India, and Taiwan are having a teleconference in an attempt to devise a strategy to improve the profitability of Extra Clean. / / Which of the following most likely supports Extra Clean implementing a transnational strategy?
C) Extra Clean could reduce the number of global suppliers.
Which of the following most likely supports Extra Clean implementing a transnational strategy? A) The country managers have been trained in the United States. B) Extra Clean is a highly centralized organization. C) Extra Clean could reduce the number of global suppliers. D) There is high local competition in each of the markets.
C) Extra Clean could reduce the number of global suppliers.
Which of the following is true about foreign units of a company using a multidomestic strategy?
C) They are autonomous and operate independently.
Which of the following is true about foreign units of a company using a multidomestic strategy? A) They are centralized to ensure efficiency and learning. B) They are highly controlled by the company's headquarters. C) They are autonomous and operate independently. D) They pursue global integration.
C) They are autonomous and operate independently.
Strategy is ________.
C) a planned set of actions that managers employ to make best use of the firm's resources and core competencies to gain competitive advantage
Strategy is ________. A) a quality of executive management that provides inspirational guidance and motivation to personnel, leading the firm to a better future B) the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt C) a planned set of actions that managers employ to make best use of the firm's resources and core competencies to gain competitive advantage D) the procurement of selected value-chain activities, including production of intermediate goods or finished products, from independent suppliers
C) a planned set of actions that managers employ to make best use of the firm's resources and core competencies to gain competitive advantage
A firm would be compelled to seek global integration when it has to ________.
C) capitalize on converging consumer trends and universal needs
A firm would be compelled to seek global integration when it has to ________. A) adjust to cultural differences B) cater to local customer needs C) capitalize on converging consumer trends and universal needs D) accommodate differences in distribution channels
C) capitalize on converging consumer trends and universal needs
Which of the following gives headquarters considerable authority and control over the firm's activities worldwide?
C) centralized approach
Which of the following gives headquarters considerable authority and control over the firm's activities worldwide? A) nationalization B) home replication strategy C) centralized approach D) decentralized approach
C) centralized approach
Global integration is the coordination of the firm's value-chain activities across multiple countries to achieve worldwide efficiency, synergy, and ________ in order to take advantage of similarities between countries.
C) cross-fertilization
Global integration is the coordination of the firm's value-chain activities across multiple countries to achieve worldwide efficiency, synergy, and ________ in order to take advantage of similarities between countries. A) capability B) expertise C) cross-fertilization D) redundancy
C) cross-fertilization
International division managers usually oversee ________.
C) distributor relationships
International division managers usually oversee ________. A) large-scale investments B) product development C) distributor relationships D) corporate accounting
C) distributor relationships
Which of the following is an example of a multidomestic industry?
C) fashion
Which of the following is an example of a multidomestic industry? A) chemicals B) telecommunications C) fashion D) aerospace
C) fashion
The computer industry is an example of a ________.
C) global industry
The computer industry is an example of a ________. A) locally responsive industry B) multidomestic industry C) global industry D) country-by-country competitor
C) global industry
During the interview, Tanya describes her idea of expanding the Ace line into maternity clothes to draw in expecting mothers. Which of the following traits of a visionary leader is Tanya most likely exhibiting? A) subjective morality B) cultural imperialism C) global strategic vision D) dogmatic view
C) global strategic vision
The Ace Children's Clothing Company is a mature MNE that has been manufacturing and selling children's clothing in Ace stores around the world for 30 years. Ace has seen a downturn in global sales recently due to trendy adult clothing companies branching out into children's clothing. The Ace board of directors is interviewing candidates to replace the outgoing CEO. The board wants a CEO who will take Ace into the future and pull customers back into Ace stores. Two candidates are being interviewed for the position: Dan Elizarde and Tanya Carson. Tanya and Dan have comparable executive experience with retail clothing companies. Therefore, the board will be basing its final decision on visionary leadership skills. / / During the interview, Tanya describes her idea of expanding the Ace line into maternity clothes to draw in expecting mothers. Which of the following traits of a visionary leader is Tanya most likely exhibiting?
C) global strategic vision
Which of the following is the most critical asset of any organization?
C) human capital
Which of the following is the most critical asset of any organization? A) goodwill B) computer programs C) human capital D) bonds
C) human capital
Which of the following is a disadvantage of a multidomestic strategy?
C) inefficient manufacturing
Which of the following is a disadvantage of a multidomestic strategy? A) lack of opportunities to delegate tasks B) high pressure on headquarters staff C) inefficient manufacturing D) standardized products in culturally different markets
C) inefficient manufacturing
To establish positive relationships with country managers, senior corporate managers should ________.
C) invite local managers to discuss their experiences at regional and global conferences
To establish positive relationships with country managers, senior corporate managers should ________. A) transfer employees to different countries to maintain a centralized power structure B) encourage subjective ethical and moral standards across different countries C) invite local managers to discuss their experiences at regional and global conferences D) minimize decision making at the local level
C) invite local managers to discuss their experiences at regional and global conferences
Which of the following is a characteristic of a transnational strategy to internationalization?
C) local responsiveness with central control
Which of the following is a characteristic of a transnational strategy to internationalization? A) minimal pressure on headquarters staff B) decision making is delegated to local managers C) local responsiveness with central control D) international business is viewed as separate from, and secondary to domestic business
C) local responsiveness with central control
Companies that proactively build a global organizational culture will ________.
C) maintain a global perspective in all major initiatives
Companies that proactively build a global organizational culture will ________. A) promote independent headquarters and subsidiaries to avoid miscommunication B) subscribe to ethical standards developed in the home market to avert misunderstanding C) maintain a global perspective in all major initiatives D) adopt multiple corporate languages for business communications
C) maintain a global perspective in all major initiatives
A firm's subsidiary is the primary contributor to ________.
C) marketing
A firm's subsidiary is the primary contributor to ________. A) transfer pricing B) capital planning C) marketing D) global profitability
C) marketing
The managerial routines, behaviors, and mechanisms that allow a firm to function as intended are known as ________.
C) organizational processes
The managerial routines, behaviors, and mechanisms that allow a firm to function as intended are known as ________. A) organizational designs B) organizational culture C) organizational processes D) organizational structure
C) organizational processes
Graham Technologies is a U.K.-based consumer electronics manufacturer. The company markets netbooks, smartphones, laptops, and desktops in the international market and each product division operates as a stand-alone profit center with substantial autonomy. This is an example of a ________.
C) product structure
Graham Technologies is a U.K.-based consumer electronics manufacturer. The company markets netbooks, smartphones, laptops, and desktops in the international market and each product division operates as a stand-alone profit center with substantial autonomy. This is an example of a ________. A) global matrix structure B) functional structure C) product structure D) geographic area structure
C) product structure
Firms that emphasize global integration make and sell ________.
C) products that require minimal adaptatioN
Firms that emphasize global integration make and sell ________. A) unique products that follow a multilocal strategy B) an excessive variety of complex products C) products that require minimal adaptation D) products designed specifically for local markets
C) products that require minimal adaptation
You work at an international company that is headquartered in California. Your company's R&D and manufacturing activities take place near the company headquarters. The managers at the California location are responsible for company operations worldwide, and they view the entire world as one large marketplace. As a result, your company sells the same products on six continents. Which of the following strategies is being used by your company? A. A transnational strategy B. A countertrade strategy C. A global strategy D. A home replication strategy E. A multidomestic strategy
C. A global strategy Your company uses a global strategy, which means that at your company, headquarters seeks substantial control over its country operations in order to minimize redundancy and achieve maximum efficiency, learning, and integration worldwide. Your company asks, "Why not make the same thing, the same way, everywhere?" Thus, global strategy emphasizes central coordination and control of international operations.
Ten years ago, Jenessa started a clothing company dedicated to creating upscale workout clothes for the trend-setting college student. From the start of the company, Jenessa would tell all her employees that the goal was to have the clothes featured at universities around the world. Jenessa is exhibiting which trait of visionary leadership? A. Embracing diversity B. Sharing cosmopolitan values C. Communicating a strategic vision D. Having an international mind-set E. Investing in human resources
C. Communicating a strategic vision Visionary leaders communicate a strategic vision - what the firm wants to be in the future and how it will get there. As they develop strategic vision, senior managers focus on the ideal picture of what the firm should become. The picture is a central rallying point for all plans, employees, and employee actions.
Which term defines the business transactions where payments are made in kind instead of in cash? A. Global sourcing B. Importing C. Countertrade D. Exporting E. Home replication
C. Countertrade Countertrade refers to an international business transaction in which full or partial payments are made in kind rather than in cash. That is, instead of receiving money as payment for exported products, the firm receives other products or commodities.
n which of the following approaches does an organization give a lot of autonomy to its subsidiaries to manage the business? A. Home replication strategy B. Transnational strategy C. Multidomestic strategy D. Countertrade strategy E. Global strategy
C. Multidomestic strategy In a multidomestic strategy, corporate headquarters gives its subsidiaries around the world a lot of flexibility on how to market its products and services. This includes allowing for changes in the products, distribution channel selection, and advertising.
A computer corporation produces and sells computer chips that are in high demand. The firm is able to sell the chips worldwide due to standardization. This best demonstrates which of the following pressures that compel companies to integrate their activities globally? A. Profiting from traditional and social media to attract buyers worldwide B. Increasing costs through economies of scale C. Taking advantage of universal needs and common consumer trends D. Offering international customers uniform service E. Keeping a watch on global competitors and responding to them
C. Taking advantage of universal needs and common consumer trends
Samsung Electronics is based in South Korea, where the firm manages global activities from company headquarters. Samsung's expertise is shared among the firm's business units worldwide. Global teams of R&D personnel from Asia, Europe, and the Americas develop electronics with little variation. This is an example of a ________. A. home replication strategy B. transnational strategy C. global strategy D. multidomestic strategy E. flexibility strategy
C. global strategy
A coordinated approach to internationalization in which the firm strives to be relatively responsive to local needs while retaining sufficient central control of operations is a ________ strategy. A. home replication B. vision C. transnational D. multidomestic E. global
C. transnational
very large flows of capital have been invested into stock markets around the world
China and the former Soviet Union opened to global business following the globalization of finance in the 1990s. Today, it is true that ______.
some totalitarian regimes are evolving toward democracy and capitalism
China has added democratic approaches such as land reforms and open markets to increase commercial activity. This example shows that
Your company is entering a market that has several small clusters of well-established companies. Which of the following is true of an industrial cluster?
Companies in industrial clusters have advantages in information and knowledge exchange
How can monopolistic advantage theory explain how certain companies can succeed internationally without much competition?
Companies succeed overseas if they have developed resources and capabilities that no other company has.
An advantage of internalization is the ability to ________.
Control how a company products are produced
When changes in the price of one country's money could possibly damage the price of another country's money, it is called ________.
Currency risk
Which of the following is a feature of the fixed exchange rate system?
Currency value is established comparative to the value of another at a stated rate.
Which of the following is an advantage of an international division structure? A) It leverages the benefits of global strategy while responding to local needs. B) It allows better balance between global integration and local adaptation. C) It requires a small resource commitment. D) It allows concentration and development of international expertise
D) It allows concentration and development of international expertise
Which of the following is an advantage of an international division structure?
D) It allows concentration and development of international expertise.
Quik Meal is a fast-growing MNE that manufactures and sells energy gels for consumption by serious athletes, such as marathoners and triathletes. The energy gels produced by Quik Meal taste much better than the gels sold by other firms, which has led to an increase in sales. Managers and executives with Quik Meal need to determine the best organizational structure for the young firm. Quik Meal has subsidiaries in Japan and Brazil, while company headquarters are based in San Francisco. / / Which of the following strengthens the decision by Quik Meal executives to centralize operations?
D) Quik Meal products use the same trademark and packaging in every country.
Which of the following strengthens the decision by Quik Meal executives to centralize operations? A) Quik Meal offers five different flavors of energy gels for athletes. B) Quik Meal executives report a steady rate of sales in the U.S. market. C) Quik Meal country managers report few requests to alter product ingredients. D) Quik Meal products use the same trademark and packaging in every country.
D) Quik Meal products use the same trademark and packaging in every country.
Extra Clean Soap Company has been manufacturing soap products, such as dishwashing liquid, bath soap, and shampoo, for over 20 years from its facility and headquarters in Dublin, Ireland. A recent opportunity allowed Extra Clean to purchase soap companies in Taiwan and India. Extra Clean is now servicing both foreign and domestic markets with its products and manufacturing in all three locations. Recent reports from managers in the foreign facilities indicate that Extra Clean sales in Taiwan and India are low due to a lack of local responsiveness. Extra Clean managers from Ireland, India, and Taiwan are having a teleconference in an attempt to devise a strategy to improve the profitability of Extra Clean. / / Which of the following questions would be most important for Extra Clean managers to evaluate the integration-responsiveness framework?
D) What type of balance is appropriate between headquarters and country managers?
Which of the following questions would be most important for Extra Clean managers to evaluate the integration-responsiveness framework? A) What types of global IT infrastructure and tools should be used in Dublin to maintain efficiency? B) Should the Extra Clean headquarters relocate to Taiwan for six months? C) Would the foreign managers benefit from a training session in Ireland? D) What type of balance is appropriate between headquarters and country managers
D) What type of balance is appropriate between headquarters and country managers?
A culturally diverse team would ________.
D) create a global view inside the firm while remaining in touch with local realities
A culturally diverse team would ________. A) use diverse languages for business communications across various teams across the globe B) follow country-specific ethical standards across the globe C) use local employees, for accountability, for all major company decisions D) create a global view inside the firm while remaining in touch with local realities
D) create a global view inside the firm while remaining in touch with local realities
When developing strategies, managers start by ________.
D) examining the firm's specific strengths and weaknesses
When developing strategies, managers start by ________. A) configuring and coordinating the firm's activities around the world B) deciding which customers to target C) analyzing the particular opportunities and challenges that confront the firm D) examining the firm's specific strengths and weaknesses
D) examining the firm's specific strengths and weaknesses
A ________ strategy is characterized by substantial control over country operations by headquarters in order to increase efficiency and integration.
D) global
A ________ strategy is characterized by substantial control over country operations by headquarters in order to increase efficiency and integration. A) multilocal B) home replication C) multidomestic D) global
D) global
An advantage to firms that use a product structure arrangement is that ________.
D) individual product lines are coordinated and managed globally
An advantage to firms that use a product structure arrangement is that ________. A) it requires a small resource commitment B) duplication of corporate support functions for each product division is avoided C) there is limited possibility for excessive focus on products D) individual product lines are coordinated and managed globally
D) individual product lines are coordinated and managed globally
Managing a firm's value-chain activities on a country-by-country basis to address diverse opportunities and risks is known as ________.
D) local responsiveness
Managing a firm's value-chain activities on a country-by-country basis to address diverse opportunities and risks is known as ________. A) global integration B) global aggregation C) regional coordination D) local responsiveness
D) local responsiveness
Managers who exemplify an open-minded attitude and who appreciate cultural diversity are described as applying a global ________.
D) mind-set
Managers who exemplify an open-minded attitude and who appreciate cultural diversity are described as applying a global ________. A) sensitivity B) standard C) posture D) mind-set
D) mind-set
Which of the following would exert pressure on a U.S.-based clothing company, ZSource Ltd., to become locally responsive?
D) to meet host government requirements and regulations
Which of the following would exert pressure on a U.S.-based clothing company, ZSource Ltd., to become locally responsive? A) to seek cost reduction through scale economies B) to conduct global sourcing of raw materials, components, energy, and labor C) to monitor and respond to global competitors D) to meet host government requirements and regulations
D) to meet host government requirements and regulations
Which of the following is a driving factor for companies to focus on local responsiveness? A. Offering uniform service to global customers B. Pursuing cost savings through scale economies C. Conducting worldwide sourcing of resources, components, and energy D. Accommodating variances in distribution channels E. Taking advantage of media that reaches buyers in different markets
D. Accommodating variances in distribution channels Channels can vary from market to market and may increase the need for local responsiveness. In Latin America, small stores are the most common type of retailer. Foreign firms that ordinarily distribute their goods through large stores must adapt their approach when doing business there
________ refers to an international business transaction in which full or partial payments are made in kind rather than in cash. A. Importing B. Global procurement C. Global sourcing D. Countertrade E. Exporting
D. Countertrade
In order to become globally competitive, your company is making changes in its manufacturing process to make it more standardized and significantly cheaper. For which of Bartlett and Ghoshal's objectives is your company striving with these changes? A. Learning B. Flexibility C. Decentralization D. Efficiency E. Local responsiveness
D. Efficiency Your managers are trying to lower the cost of the firm's operations and activities on a global scale in pursuit of efficiency.
Raul works for an Argentinian company that buys goods from China and sells them in Argentina. What internationalization strategy is Raul's company using? A. Franchising B. Global strategy C. Exporting D. Global sourcing E. Licensing
D. Global sourcing Raul's company is practicing global sourcing, or importing, which involves buying products and services from foreign sources and bringing them into the home country or a third country.
________ identify or implement initiatives that enhance the long-term direction of a firm in its global industry. A. Export departments B. Multidomestic industries C. Global information systems D. Strategic global teams E. Operational global teams
D. Strategic global teams
________ is a planned set of actions that managers employ to make best use of the firm's resources and core competencies to gain competitive advantage. A. Multinational flexibility B. Globalization C. International business D. Strategy E. Competitive advantage
D. Strategy
Which of the following characterizes the international division structure? A. Decision making is organized according to functional activity, such as marketing. B. Operations are organized according to product line. C. A unit has the task of managing exports. D. The coordination of global operations is centralized. E. Local managers handle operations in their geographic regions
D. The coordination of global operations is centralized.
Which of the following refers to reducing the cost of a firm's global activities? A. Strategy B. Visionary leadership C. Transnational strategy D. Functional structure E. Efficiency
E. Efficiency
________ is the process of bringing together an organization's value-chain activities across different countries to realize global efficiency and synergy to benefit from similarities between countries. A. Visionary leadership B. Global sourcing C. Local responsiveness D. Countertrade E. Global integration
E. Global integration Global integration is the coordination of the firm's value-chain activities across multiple countries to achieve worldwide efficiency, synergy, and cross-fertilization to take advantage of similarities between countries. Firms that emphasize global integration are typically found in global industries.
Which of the following statements is TRUE? A. Managers are visionary and hold a long-term perspective. B. Managers see the big picture and set long-term goals. C. Leaders control and administer specific activities in the company. D. Leaders have a short-term perspective for the firm. E. Managers keep the focus on a company's day-to-day operations.
E. Managers keep the focus on a company's day-to-day operations.
An international cellular phone corporation sells mobile devices, tablets, various networks, and connected home solutions overseas. The corporation separates its company according to each of these separate areas. Which organizational structure does this example describe? A. Export department structure B. International division structure C. Functional structure D. Geographic area structure E. Product structure
E. Product structure
What does a multidomestic industry have in common with local responsiveness? A. They both deal with product competition. B. They both incorporate all of the elements of a firm's value-chain activities. C. They both utilize centralized decision making. D. They both focus solely on domestic sales. E. They both make decisions on a country-to-country basis.
E. They both make decisions on a country-to-country basis.
________ is a quality of executive management that provides inspirational guidance and motivation to personnel, leading the firm to a better future. A. Organizational culture B. Organizational process C. Strategy D. Organizational structure E. Visionary leadership
E. Visionary leadership
A(n) ________ is an arrangement in which management of the firm's international operations is organized by activity, such as production and marketing. A. product structure B. global matrix structure C. geographical area structure D. international division structure E. functional structure
E. functional structure
Procter & Gamble (P&G) has a research center in Belgium that instituted water-softening technology to address the hard water problems in Europe. In Japan, P&G developed a laundry detergent for use in cold water because Japanese customers prefer washing their clothes in cold water. These are examples of ________. A. efficiency B. strategy C. diversity D. flexibility E. learning
E. learning
factor conditions
Element in Porter's diamond model describes a nation's position in terms of labor, natural resources, wealth, technology, entrepreneurship, and know-how
Vix is a leader in fare-collection equipment for Australia's transportation industry, having already installed a new, pioneering system in subways and buses in major cities worldwide. In this example, Vix has gained a competitive advantage by ________.
Encouraging innovation
Etwas will have a steady stream of revenue from its international sales.
Etwas is a Germany-based appliance company that is preparing to begin international operations, wherein it plans to open several production facilities and sales centers abroad. The company needs a substantial amount of capital to start its international operations and needs to decide whether to pursue financing by selling bonds in the global market. Which of the following would strengthen the case for Etwas's seeking to acquire capital by selling bonds?
________ refers to the price of one currency expressed in terms of another currency.
Exchange rate
internationalization theory
Explains the method by which corporations obtain and retain value-chain activities, minimize the difficulties of working with external partners, and allow for increased control over operations abroad
A centralized approach means substantial autonomy and decision-making authority are delegated to the firm's subsidiaries around the world
FALSE
A company can be compelled to be locally responsive in individual countries to provide uniform services to global customers
FALSE
A devaluation is an action taken by the international monetary fund.
FALSE
A multidomestic industry is one in which competition takes place on a regional or worldwide basis.
FALSE
All else being equal, the greater the demand for a currency, the lower its price; the lower the demand for a currency, the higher its price.
FALSE
An export department structure requires considerable resource commitment
FALSE
Capital flight from a country enhances its ability to service debt and pay for imports
FALSE
Companies that proactively build a global organizational culture subscribe to subjective ethical and moral standards.
FALSE
Converging buyer characteristics, growing acceptance of global brands, and increased diffusion of uniform technology make it difficult to pursue a global strategy
FALSE
Due to the competition involved in global industries, marketing strategies are determined by the unique needs and regulations of each nation
FALSE
Efficiency refers to emphasizing consensus-based decision making and problem solving, in which managers readily share their knowledge.
FALSE
Global integration is a plan of action that accounts for competition on a country-by-country basis.
FALSE
Global strategy is an approach to internationalization in which headquarters delegates considerable autonomy to each country manager, allowing him or her to operate independently and pursue local responsiveness
FALSE
Headquarters of a firm is the primary contributor to decisions about local market research
FALSE
If an individual buys from a supplier whose currency is depreciating against the individual's currency, the individual will have to pay a larger amount of his own currency to complete the purchase.
FALSE
In a multidomestic strategy, there is maximum pressure on headquarters staff because there is little incentive for decision making by individual managers
FALSE
Momentum trading occurs when investors buy stocks whose prices have been falling and sell stocks whose prices have been rising.
FALSE
One of the advantages of a global matrix structure is that it provides better management of subsidiaries or products, or operations in many foreign markets
FALSE
Organizational culture refers to managerial routines, behaviors, and mechanisms that allow the firm to function as intended.
FALSE
The Bretton Woods Agreement was brought into existence in the late 1960s when the U.S. needed to finance government programs and the Vietnam War.
FALSE
The Central Bank is an international agency that provides loans and technical assistance to low- and middle-income countries, with the goal of reducing poverty.
FALSE
The IMF and the World Bank seldom work together.
FALSE
The Indian rupee is one of the currencies upon which the value of the SDR is based.
FALSE
The floating exchange rate system is also called a pegged exchange rate system.
FALSE
The floating exchange rate system is victim to maximum governmental intervention.
FALSE
The foreign-exchange market is located exclusively in the United States.
FALSE
The global financial system establishes the rules and procedures for exchanging national currencies in international business transactions.
FALSE
The monetary authority in each country that regulates the money supply, issues currency, and manages the exchange rate of the nation's currency relative to other currencies is called the World Bank.
FALSE
The official price of gold is used to determine the value of all major currencies in the exchange rate system used for international trade today.
FALSE
Visionary leadership is more complex and important in domestic firms than global firms because corporate headquarters is where major decisions are made
FALSE
When using a home replication strategy, firms delegate autonomy to managers in each foreign unit, allowing them to operate independently and pursue local responsiveness
FALSE
Germany's abundance of employees with strong engineering skills has led to the nation becoming a leader in the international engineering and design industries. This is an example of national competitiveness due to ________.
Factor Conditions
commercial banks
Financing business activity, exchanging foreign currencies, and facilitating adjustments in national money supplies are the most important functions of ________.
Monopolistic advantage theory
Focuses on the resources a corporation possesses compared with others and recommends that corporations that utilize internationalization strategies own or control certain resources that are not readily accessible to competitors
currency risk
For firms engaged in international business, fluctuations in the exchange rate are likely to create ________, which is the potential harm that can arise from changes in the price of once currency relative to another.
What is the most complex entry strategy for engaging in global business?
Foreign Direct Investment
SkiJet USA wants to take its production operations overseas. Which of the following is the LEAST likely reason for SkiJet USA to collaborate with overseas companies?
Foreign partners would give SkiJet USA complete control over production and marketing.
The main reason that firms internalize value-chain activities is to ________.
Gain and sustain competitive advantage
balance of payments
Governments must manage their ________, the annual accounting of all economic transactions of a nation with all other nations.
Argentina had an extended period of double- and triple-digit increases in the prices of its goods and services. This situation refers to ________.
Hyperinflation
Buy their currency in the foreign exchange market.
If a nation's central bank wants to support the value of its currency, which strategy would best achieve that goal?
new product development
In a decentralized organizational structure, a firm's subsidiary carries out all of the following activities EXCEPT ________.
Both Sony and Toshiba are Japanese companies that produce computers and video games. Which of the following could be a reason that these firms have increased their competitive advantage?
Intense Rivalry
capital flight
Investors withdrew a significant amount of rubles from Russia in 2014 when global investors became far less confident in the Russian economy. This is an example of ________.
centralized approach
In a(n) ________, the headquarters of a company has significant authority and control over the company's global activities
SIGs influence elected officials who can change policy.
It has recently been found that special interest groups (SIGs) have unprecedented access to politicians through social events. Why should companies be concerned with the SIGs' access to government officials?
Which of the following best explains the slow nature of internationalization?
Managers have little or no information about foreign markets
______ favors trade achieved by maximizing exports and minimizing or even impeding imports.
Mercantilism
born global firms
Most firms prefer to internationalize in stages, but ________ are an exception to the stages approach because they internationalize a few years after being founded
What is a common feature of national industrial policies?
Offering tax incentives
What is the second stage of the internationalization process model?
Pre-Export
learning
Procter & Gamble (P&G) has a research center in Belgium that instituted water-softening technology to address the hard water problems in Europe. In Japan, P&G developed a laundry detergent for use in cold water because Japanese customers prefer washing their clothes in cold water. These are examples of ________
Factor Propositions Theory
Proposes that countries should export only products that use copious factors of production and import only goods that use limited factors of production
Free trade
Refers to the absence of restrictions to the movement of goods and services among countries
Networks serve as positive, long-term ________ that businesses form with each other for economic benefit
Relationships
global strategy
Samsung Electronics is based in South Korea, where the firm manages global activities from company headquarters. Samsung's expertise is shared among the firm's business units worldwide. Global teams of R&D personnel from Asia, Europe, and the Americas develop electronics with little variation. This is an example of a ________.
multidomestic strategy
Sharon manages a large international computer corporation that has branches in many countries. For each country in which the corporation is located, Sharon allows the local manager to make decisions on product choice and distribution. Based on the integration-responsiveness framework, which of the following strategies does this practice best demonstrate?
active involvement stage
Stage in the internationalization process model consisting of firms exploring their international opportunities and committing time and resources to international success
You work for an electronics firm that wishes to do business in India in the next few years by following the internationalization process model. Why is this model a viable option for getting into a global market?
Starting slow with smaller operations will allow the company to tread cautiously while monitoring progress in the new markets.
A company can be compelled to globally integrate its activities to seek cost reduction through scale economies.
TRUE
All else being equal, the greater the supply of a currency, the lower its price; the lower the supply of a currency, the higher its price.
TRUE
An increase in a nation's rate of inflation is caused by an oversupply of money and this eventually leads to a decrease in the value of the nation's currency.
TRUE
By standardizing international operations as much as possible yet being adaptable to the needs of local markets, a firm is utilizing a transnational strategy of globalization
TRUE
Central banks are categorized at the international organization level of the global monetary and financial system.
TRUE
Companies have a tendency to prefer handling international business transactions with their own country's currency rather than with the currency of another country.
TRUE
Decisions about local products that will be sold in only one country are typically the joint responsibility of corporate and country-level managers, with the latter taking the lead role
TRUE
During the recent global financial crisis, efficiency and flexibility became particularly important to the success of multinational firms
TRUE
Firms that want to become globally competitive must seek simultaneously three strategic objectives—efficiency, flexibility, and learning.
TRUE
Geographic area structure is an organizational design in which management and control are decentralized to the level of individual geographic regions
TRUE
Global IT infrastructure and tools such as intranets, the Internet, and electronic data interchange ensure that distant parts of the global network share knowledge and learn from each other.
TRUE
In most high-inflation nations, interest rates are increasing while the purchasing power of the national currency is plummeting.
TRUE
In order to facilitate shared decision-making between headquarters and country managers, corporate representatives should often visit subsidiary locations.
TRUE
Investment banks underwrite (guarantee the sale of) stock and bond issues and advise on mergers.
TRUE
Merchant banks provide capital to firms in the form of shares rather than loans.
TRUE
Organizational structure describes the reporting relationships inside the firm that specify the links between people, functions, and processes.
TRUE
Sourcing inputs from large-scale, centralized suppliers allows firms to obtain economies of scale, more consistent quality, lower costs, and generally more efficient operations
TRUE
Strategic global teams identify or implement initiatives that enhance the long-term direction of the firm in its global industry.
TRUE
The French franc is one of the European currencies which was taken out of circulation and replaced by the euro
TRUE
The International Monetary Fund is part of the global financial system.
TRUE
The International Monetary Fund was created through the Bretton Woods Agreement as a way to monitor the foreign exchange systems and lend money to developing economies.
TRUE
The home replication strategy is often employed as a means of extending a product's life cycle in a foreign market and to replicate home-market success
TRUE
The integration of international financial and monetary activity can be attributed to the growing role of single-currency systems, such as the euro.
TRUE
The largest proportion of government debt results from national pension and healthcare programs.
TRUE
The most universally accepted currencies for international business transactions are the European euro, the U.S. dollar, and the Japanese yen, which are all considered hard currencies.
TRUE
The recent global financial crisis was contained in part because some countries use fixed exchange regimes
TRUE
When using a multidomestic strategy, products and services are carefully adapted to suit the unique needs of each country
TRUE
With a global strategy, headquarters seeks substantial control over its country operations in order to minimize redundancy and achieve maximum efficiency, learning, and integration worldwide
TRUE
organizational culture
The Korean automobile firm Hyundai emphasizes the importance of science and technology throughout its organization and allocates funds for the research and development of innovative automobile features. Which of the following dimensions of a successful international firm is best demonstrated by Hyundai?
Sanctions punish unwanted activities by foreign countries.
The United States has implemented trade sanctions on Iran and Syria. What is the purpose of sanctions?
international organizations
The World Bank, the WTO, and the United Nations Conference on Trade and Development are examples of (blank)
Which organization or outlet in a country is responsible for money, credit, and managing the exchange rate of its currency?
The central bank
domestic focus
The first stage in the internationalization process of a firm, where the firm acquires business at home
Which of the following has NOT facilitated the worldwide integration of financial and monetary activity?
The holding of the value of one country's currency against the U.S. dollar
International Monetary Fund
The institution that attempts to stabilize currencies by monitoring the foreign exchange systems of member countries is the ________.
Which of the following refers to the institutional structures, rules, and processes that manage how national currencies are exchanged for one another?
The international monetary system
The technology for television sets was invented in the United States, and production began in the 1940s. Sales grew until TVs became standardized. Then production shifted overseas, and now the United States imports its television sets. This is an example of ________.
The international product life cycle
national pension and healthcare programs
The largest proportion of government debt results from ________.
institutional investors
The most significant participants in national stock and bond markets are _____.
foreign exchange
The term ________ represents all the forms of money that are traded internationally, including bank deposits, checks, and electronic transfers.
home replication strategy
The ________ refers to an approach in which a firm views international business as separate from, and secondary to, its domestic business.
undervalue its currency
To keep the value of its currency artificially high, a government would most likely ________.
To keep the value of its currency artificially high, a government would most likely ________.
Undervalue its currency
They both make decisions on a country-to-country basis.
What does a multidomestic industry have in common with local responsiveness?
Single-currency systems have taken on an increasingly important role.
What is a cause of the growing integration of global financial and monetary systems?
Codified rules
What is the basis of civil law?
Tradition, previous cases, and legal precedents
What is the basis of common law?
Assessing potential threats to the firm
What is the benefit of environmental scanning?
Expropriation
What kind of government seizure compensates foreign-owned businesses?
supply and demand
When the value of a nation's currency is allowed to fluctuate, the most important factor determining its exchange rate is ________.
Private property rights
Which of the following best characterizes a democracy?
It ensures stability based on laws.
Which of the following best describes a political system?
The coordination of global operations is centralized
Which of the following characterizes the international division structure?
Applying home-country laws to persons outside national borders
Which of the following characterizes extraterritoriality?
Global financial system
Which of the following consists of the collective financial institutions that facilitate and regulate flows of investment and capital funds worldwide?
A currency that can be easily exchanged for other currencies
Which of the following describes a convertible currency?
Rule of law
Which of the following describes a legal system with clear rules that are publicly disclosed, enforced fairly, and respected by individuals, organizations, and the government?
Firms are prohibited from offering bribes to foreign firms to obtain business.
Which of the following describes the Foreign Corrupt Practices Act (FCPA)?
Another name for the fixed exchange rate system is the pegged exchange rate system.
Which of the following describes the fixed exchange rate system?
The origins of Islamic law date back to Roman law and the Napoleonic Code.
Which of the following does NOT describe Islamic law, also known as sharia law?
In an attempt to stabilize foreign exchange, the World Bank provides nations with short-term loans.
Which of the following does NOT describe the World Bank?
New product ideas have been brought to Africa by foreign banks.
Which of the following indicates a solution to the banking problems in Africa?
European Union (EU)
Which of the following is a regional trade organization?
Maintaining a strict adherence to ethical behavior
Which of the following is a strategy managers can employ to manage country risk?
Private MNEs such as Unilever and Coca Cola
Which of the following participants is LEAST likely to transform a nation's political and legal system?
efficiency
Which of the following refers to reducing the cost of a firm's global activities?
exporting
Which of the following represents a low-control strategy?
Firms prefer to pay for many product variations for individual markets despite the sharp increase in costs.
Which of the following statements about local responsiveness is FALSE?
Collective welfare outweighs individual welfare.
Which of the following statements best describes socialism?
Managers keep their focus on a company's day-to-day operations
Which of the following statements is true?
If a nation faces a trade deficit, the fixed exchange rate system allows for a more natural correction. (TRUE ANSWERS: Governments achieve the flexibility to adjust monetary policy because of the floating system. Supply and demand set daily exchange rates. World exchange markets allow global currencies like the dollar to float on exchange markets. Market forces establish currency values.)
Which statement about a floating exchange rate system is FALSE?
Command economy
Which type of economic system is associated with totalitarianism?
Excessive government spending has led to increased debt.
Why has debt substantially increased in major advanced economies?
The main objective of the ________ is to reduce global poverty by providing loans to low- and middle-income nations.
World Bank
visionary leadership
________ is a quality of executive management that provides inspirational guidance and motivation to personnel, leading the firm to a better future.
global integration
________ is defined as the coordination of a firm's worldwide value-chain activities to obtain synergy, efficiency, and cross-fertilization.
Country Risk
________ refers to the possibility of loss or adverse effects on company operations and profitability as a result of changes in a country's political and/or legal environment.
Political systema
a collection of official organizations that create a government, including legislative groups, political parties, lobbying groups, and trade unions
The most likely reason that companies engage in international business is to have ________
a competitive advantage in terms of lowering costs
local content requirements
a form of government intervention in trade that dictates that a company's exports must contain a certain amount of home-country inputs
providing security for intellectual property
a function of a legal system
assuring stability established by laws
a function of a political system
totalitarianism
a governmental system that attempts to control most aspects of its citizens' conduct both publicly and privately, including their values and beliefs
Civil law
a legal system that is based on a comprehensive structure where laws are clearly written, accessible, and divided into categories: commercial, civil, and criminal
reducing trade barriers
a major factor in the growth of a global commerce and in rising incomes worldwide
legal system
a method of understanding and administering laws, regulations, and rules that are used to establish standards for conduct
scanning
as a way to anticipate risk, management participates in (blank), which is used to evaluate possible risks and threats to the company
socialism
based on a collectivist mentality and requires that all capital be put back into the state and used as a source of production and not profit
market forces and the ability to easily implement commercial activities
characteristic of economic freedoms
attain economies of scale
due to the larger market size of an economic bloc, member country firms are able to reduce their product prices because they can (blank)
maquiladoras
export-assembly plants
developing a stronger defensive posture
gaining political power in world affairs has enabled the EU to compete more effectively with the US by (blank)
ethical concerns
government intervention and trade barriers imposed by developed countries raise (blank) for developing economies that supply them
common market
in a (blank), barriers to trade within a participating country are reduced or eliminated, shared external barriers are established, and unrestricted movements of goods, services, and factors of production is permitted
expropriation
is the seizure of a companies possessions with compensation
common law
legal system that is based on traditions, former cases, and legal models set by courts through the clarification of statutes, legislation, and previous rulings
According to the eclectic paradigm, a factor in deciding whether a firm will internationalize via FDI is the _________.
presence of location-specific advantages
The factor proportions theory rests on the premise that ________
products differ in amount of labor, natural resources, and capital required for production
Foreign trade zones ....
receives goods meant for export
establishing a stronger political position as a united bloc
regional integration enables member countries to gain bargaining power in world affairs by (blank)
Conciliation
represents a method of negotiation in which the objective is to settle any disagreements in a pleasant manner
import authorization
represents government approval given to a company that allows it to bring in certain products from foreign countries
economic union
the stage of regional integration in which member countries strive to have common fiscal and monetary policies
confiscation
type of government seizure involves acquiring company possessions without any form of payment
GATT
was the first major effort to systematically reduce trade barriers worldwide
Political and legal systems are interdependent
which of the following is true of political and legal environments in IB?
Which of the following is NOT a limitation of the absolute and comparative advantage theories?
Large-scale production provides economies of scale
strategic global teams
________ identify or implement initiatives that enhance the long-term direction of a firm in its global industry.
Strategy
________ is a planned set of actions that managers employ to make best use of the firm's resources and core competencies to gain competitive advantage.
Litigation
________ occurs when one party files a lawsuit against another.
countertrade
________ refers to an international business transaction in which full or partial payments are made in kind rather than in cash.
Investment banks
__________ underwrite (guarantee the sale of) stock and bond issues and advise on mergers.