Final MGT

62. Some countries make greater use of formalization than others; in turn, this affects _____. A. the day-to-day organizational functioning B. specialization C. the differences between the levels in hierarchy D. quality circles

Answer: A Feedback: Formalization is the use of defined structures and systems in decision making, communicating, and controlling. Some countries make greater use of formalization than others; in turn, this affects the day-to-day organizational functioning.

43. Which of the following types of organizational cultures is power-oriented and headed by a leader who is regarded as a caring parent? A. The family culture B. The Eiffel Tower culture C. The guided missile culture D. The incubator culture

Answer: A Feedback: The family culture is power-oriented and headed by a leader who is regarded as a caring parent and one who knows what is best for the personnel. Fons Trompenaars found that this organizational culture is common in countries such as Turkey, Pakistan, Venezuela, China, Hong Kong, and Singapore

50. A monochronic time schedule is one in which: A. things are done in a linear fashion. B. people tend to do several things at the same time irrespective of the amount of work involved. C. people tend to place higher value on personal involvement than on getting things done on time. D. things are done in a random way.

Answer: A Feedback: A monochronic time schedule is one in which things are done in a linear fashion.A manager will address Issue A first and then move on to Issue B.

57. A(n) _____ multinational corporation (MNC) puts home-office people in charge of key international management positions. A. ethnocentric B. polycentric C. multicentric D. geocentric

Answer: A Feedback: An ethnocentric multinational corporation (MNC) puts home-office people in charge of key international management positions.

69. In an international context, the value of centralization will vary according to: A. the local environment and the goals of an organization. B. the global market and the universal values. C. the job routinization in a host country. D. the vertical specialization and flatter designs.

Answer: A Feedback: Centralization is a management system in which important decisions are made at the top. In an international context, the value of centralization will vary according to the local environment and the goals of an organization.

58. Which of the following statements about distributive negotiation is true? A. It occurs when two parties with opposing goals compete over a set value. B. It focuses on reaching a best-case outcome where everyone benefits. C. It is characterized by overlapping interests. D. It involves cooperation between two groups to integrate interests, create value, and invest in an agreement.

Answer: A Feedback: Distributive negotiations occur when two parties with opposing goals compete over a set value. Integrative negotiation involves cooperation between the two groups to integrate interests, create value, and invest in the agreement.

44. Which of the following is an example of transfer risks? A. Dividend remittance B. Export commitments C. Pressure for local participation D. Abrogation of proprietary rights

Answer: A Feedback: Examples of transfer risks include tariffs on exports and imports as well as restrictions on exports, dividend remittance, and capital repatriation. Transfer risks stem from government policies that limit the transfer of capital, payments, production, people, and technology in or out of the country.

34. The production and distribution of products and services of a homogeneous type and quality on a worldwide basis is called _____. A. global integration B. administrative coordination C. horizontal specialization D. market standardization

Answer: A Feedback: Global integration is the production and distribution of products and services of a homogeneous type and quality on a worldwide basis. To a growing extent, the customers of multinational corporations have homogenized tastes, and this has helped to spread international consumerism

57. If a firm operates production plants in different countries but makes no attempt to integrate its overall operations, the company is known as a(n) _____ firm. A. multi-domestic B. global C. transnational D. international

Answer: A Feedback: If a firm operates production plants in different countries but makes no attempt to integrate its overall operations, the company is known as a multi-domestic. A recent trend has been away from this scattered approach and toward global coordination of operations.

28. Which of the following statements is true about licensing? A. In a typical arrangement, the licensor will allow the licensee to use a patent, a trademark, or proprietary information in exchange for a fee. B. Companies that spend a relatively large share of their revenues on research and development (R&D) are likely to be licensees. C. Licenses are uncommon among large firms seeking to acquire technology to bolster an existing product. D. A license is a very high-cost way of gaining and exploiting foreign markets

Answer: A Feedback: In a typical arrangement, the party giving the license (the licensor) will allow the other (the licensee) to use a patent, a trademark, or proprietary information in exchange for a fee. The licensor typically restricts licensee sales to a particular geographic locale and limits the time period covered by the arrangement.

0. Which of the following is not one of the steps in strategic planning? A. Transferring the successful process used in a developed country to an emerging economy B. Scanning the external environment for opportunities and threats C. Conducting an internal resource analysis of company strengths and weaknesses D. Formulating goals in light of the external scanning and internal analysis

Answer: A Feedback: In international management, strategic planning can be broken into the following steps: (1) scanning the external environment for opportunities and threats; (2) conducting an internal resource analysis of company strengths and weaknesses; and (3) formulating goals in light of the external scanning and internal analysis.

39. In which of the following types of organizational cultures are organizations typically entrepreneurial and provide an environment for the self-expression and self-fulfillment of their members? A. The incubator culture B. The guided missile culture C. The Eiffel Tower culture D. The family culture

Answer: A Feedback: In the incubator culture, organizations are typically entrepreneurial and provide an environment for the self-expression and self-fulfillment of their members. The organizations are often founded by team members who want to be part of an organization where their creative talents will not be stifled.

28. The economies of China, Russia, India, and Vietnam present _____ political risk for multinational companies. A. macro B. micro C. proactive D. relative

Answer: A Feedback: Many other newly emerging economies, besides the big countries China, Russia, and India, also present macro political risks for multinational companies. In Vietnam, the communist government earned a bad name among foreign investors because of all the pitfalls they have to face.

25. A worldwide strategy based on cost leadership, differentiation, and segmentation is referred to as the _____ strategy. A. economic imperative B. political imperative C. quality imperative D. administrative coordination

Answer: A Feedback: Multinational corporations that focus on the economic imperative employ a worldwide strategy based on cost leadership, differentiation, and segmentation.

27. When focusing on the _____ approach to strategic planning, companies typically sell products for which a large portion of value is added in the upstream activities of the industry's value chain. A. quality imperative B. political imperative C. economic imperative D. administrative coordination

Answer: A Feedback: Multinational corporations that focus on the economic imperative employ a worldwide strategy based on cost leadership, differentiation, and segmentation. Many of these companies typically sell products for which a large portion of value is added in the upstream activities of the industry's value chain.

24. A(n) _____ strategy is most likely to be used when a product is regarded as a generic good and therefore does not have to be sold based on name brand or support service. A. economic imperative B. political imperative C. quality imperative D. administrative coordination

Answer: A Feedback: Multinational corporations that focus on the economic imperative employ a worldwide strategy based on cost leadership, differentiation, and segmentation. The strategy is used when the product is regarded as a generic good and therefore does not have to be sold based on name brand or support service.

29. When using the _____ approach to strategic planning, the products sold by multinational corporations often have a large portion of their value added in the downstream activities of the value chain. A. political imperative B. cost imperative C. quality imperative D. economic imperative

Answer: A Feedback: Multinational corporations using the political imperative approach to strategic planning are country-responsive; their approach is designed to protect local market niches. The products sold by MNCs often have a large portion of their value added in the downstream activities of the value chain.

55. Which of the following terms refers to the process of bargaining with one or more parties for the purpose of arriving at a solution that is acceptable to all? A. Negotiation B. Empowerment C. Propitiation D. Codetermination

Answer: A Feedback: Negotiation is the process of bargaining with one or more parties to arrive at a solution that is acceptable to all. It has been estimated that managers can spend 50 percent or more of their time on negotiation processes

48. A good example of proxemics is _____. A. office layout B. eye gaze C. business structure D. body language

Answer: A Feedback: Office layout is good example of proxemics.In the United States, the more important the manager, the larger the office, and often a secretary screens visitors and keeps away those whom the manager does not wish to see

35. Which of the following statements is true about expropriation? A. Firms at the greatest risk of expropriation are in extractive, agricultural, or infrastructural industries such as utilities and transportation. B. Small firms are more likely targets of expropriation than large firms because more is to be gained by expropriating small firms. C. Expropriation is least likely to occur in non-Western countries that are poor, relatively unstable, and suspicious of foreign multinationals. D. Expropriation of foreign enterprises by developing countries were rare in the old days.

Answer: A Feedback: Often, those at greatest risk of expropriation are in extractive, agricultural, or infrastructural industries such as utilities and transportation because of their importance to the country. In addition, large firms often are more likely targets of expropriation than small firms because more is to be gained by expropriating large firms.

24. _____ reviews major political decisions that are likely to affect all business conducted in a particular country. A. Macro political risk analysis B. Micro political risk analysis C. Standard political risk analysis D. Multidimensional political risk analysis

Answer: A Feedback: One is through macro political risk analysis, which reviews major political decisions that are likely to affect all business conducted in the country.

46. _____ distance is used to handle most business transactions whilecommunicating on a faceto-face basis. A. Social B. Public C. Personal D. Intimate

Answer: A Feedback: Proxemics is the study of the way that people use physical space to convey messages. Social distance is used to handle most business transactions.

21. The process of determining an organization's basic mission and long-term objectives and then implementing a plan of action for attaining these objectives is called: A. strategic management. B. tactical management. C. contingency management. D. functional management.

Answer: A Feedback: Strategic management is the process of determining an organization's basic mission and long-term objectives and then implementing a plan of action for pursuing this mission and attaining these objectives. For most companies, regardless of how decentralized, the top management team is responsible for setting the strategy

48. The Eiffel Tower culture is most commonly found in: A. northwestern European countries, such as Germany, Denmark, and the Netherlands. B. northeastern Asian countries, such as Taiwan, South Korea, and Japan. C. South American countries, such as Brazil, Argentina, and Chile. D. North Atlantic countries, such as England, Ireland, and Canada.

Answer: A Feedback: The Eiffel Tower culture is most commonly found in northwestern European countries. Examples include Denmark, Germany, and the Netherlands.

55. The decision-making control in which local units are given autonomy is characteristic of a(n) _____. A. global area division structure B. international division structure C. global product division structure D. transnational network structure

Answer: A Feedback: The decision-making control in which local units are given autonomy is characteristic of a global area division structure.

The _____ culture is characterized by a strong emphasis on hierarchy and orientation to the person. A. family B. Eiffel Tower C. incubator D. guided missile

Answer: A Feedback: The family culture is characterized by a strong emphasis on hierarchy and orientation to the person. The result is a family-type environment that is power-oriented and headed by a leader who is regarded as a caring parent and one who knows what is best for the personnel.

49. The _____ culture is characterized by a strong emphasis on equality in the workplace and orientation to the task. A. guided missile B. family C. incubator D. Eiffel Tower

Answer: A Feedback: The guided missile culture is characterized by a strong emphasis on equality in the workplace and orientation to the task.This organizational culture is oriented to work, which typically is undertaken by teams or project groups.

The guided missile culture is characterized by _____. A. individual expertise B. a formal hierarchy C. personal orientation D. a paternal relationship with management

Answer: A Feedback: The guided missile culture is characterized by individual expertise. Formal hierarchical considerations are given low priority.

50. The _____ culture is characterized by a strong emphasis on equality and personal orientation. A.incubator B. Eiffel Tower C. family D. guided missile

Answer: A Feedback: The incubator culture is one of the major types of organizational cultures that Fons Trompenaars identified, and it is characterized by a strong emphasis on equality and personal orientation.

46. The _____ approach to formulating compensation packages involves working out a special, ad hoc arrangement that is acceptable to both the company and an expat. A. negotiation B. balance-sheet C. localization D. cafeteria

Answer: A Feedback: The negotiation approach to formulating compensation packages involves working out a special, ad hoc arrangement that is acceptable to both the company and an expat.

40. Oculesics refers to communicating through the use of _____. A. eye contact and gaze B. physical space C. bodily contact D. artifacts and charts

Answer: A Feedback: The nonverbal method of communicating through the use of eye contact and gaze is known as oculesics. In some areas of the world, oculesics is an important consideration because of what people should not do, such as stare at others or maintain continuous eye contact, because it is considered impolite to do these things.

27. Which of the following are the three degrees of communication quantity? A. Elaborate, exacting, and succinct B. Unified, equivocal, and refined C. Succinct, affective, and precise D. Flexible, detailed, and fixed

Answer: A Feedback: There are three degrees of communication quantity—elaborate, exacting, and succinct. In high-context societies, the elaborate style is often very common.

24. Identify a true statement about a nonequity venture. A. It is characterized by one group's merely providing a service to another. B. It provides the most benefits when the need for product specification or differentiation is high. C. It involves a financial investment by a multinational company (MNC) in a business enterprise with a local partner. D. It organizes worldwide operations based primarily on function and secondarily on product.

Answer: A Feedback: There are two types of alliances and joint ventures. One of them is nonequity venture, which is characterized by one group's merely providing a service to another.

25. Identify the two types of joint ventures. A. Equity and nonequity ventures B. Proprietary and public ventures C. Statutory and unofficial ventures D. External and internal ventures

Answer: A Feedback: There are two types of alliances and joint ventures. The first type is nonequity venture, which is characterized by one group's merely providing a service to another. The second type is equity joint venture, which involves a financial investment by the multinational company (MNC) parties involved

25. Identify a true statement about third-country national (TCN) managers. A. They frequently have a deep understanding of a corporation's policies from the perspective of a foreigner. B. They are often incapable of achieving corporate objectives more effectively than expatriates or local nationals. C. They are most effective when they are in charge of subsidiaries located in developing countries or those that relied on a local customer base. D. They are often unable to offer different perspectives that can complement the narrowly focused viewpoints of both local nationals.

Answer: A Feedback: Third-country national (TCN) managers frequently have a deep understanding of a corporation's policies from the perspective of a foreigner and can communicate and implement those policies more effectively to others than can expats. During periods of rapid expansion, TCNs can not only substitute for expatriates in new and growing operations but also offer different perspectives that can complement and expand on the sometimes narrowly focused viewpoints of both local nationals and headquarters personnel.

49. A salient feature of vertical investments is that they: A. include the production of raw materials or intermediate goods that are to be processed into final products. B. are unlikely to be taken over by the government because they are import-oriented. C. provide fewer benefits to the country and greater benefits to a multinational company (MNC) than other investments. D. involve the production of goods or services that are the same as those produced at home.

Answer: A Feedback: Vertical investments include the production of raw materials or intermediate goods that are to be processed into final products. These investments run the risk of being taken over by the government because they are export-oriented, and governments like a business that helps them generate foreign capital.

37. When the need for national responsiveness is high and the need for global integration is also high, the most appropriate strategy is a(n) _____ strategy. A. transnational B. global C. international D. multi-domestic

Answer: A Feedback: When the need for national responsiveness is high and the need for global integration is also high, the most appropriate strategy is transnational strategy. One good example of a transnational company is Monsanto.

48. Once strategic goals are set, a multinational corporation will develop specific _____ goals and controls, usually through a two-way process at the subsidiary or affiliate level. A. bureaucratic B. operational C. tactical D. contingency

Answer: B . Feedback: When formulating a strategy, once the strategic goals are set, a multinational corporation will develop specific operational goals and controls, usually through a two-way process at the subsidiary or affiliate level. Home-office management will set certain parameters, and the overseas group will operate within these guidelines.

26. Who among the following are the key to stimulating profit growth within a company? A. Sales personnel B. Middle managers C. First-line managers D. Top managers

Answer: B Feedback: Multinational corporations that focus on the economic imperative employ a worldwide strategy based on cost leadership, differentiation, and segmentation. Middle managers are the key to stimulating profit growth within a company, so expanding those efforts on an international level is a necessary tool to learn for today's new managers.

45. Price controls, financing restrictions, export commitments, taxes, and local-sourcing requirements are examples of _____. A. ownership-control risks B. operational risks C. transfer risks D. functional risks

Answer: B Feedback: Operational risks result from government policies and procedures that directly constrain the management and performance of local operations. Examples include price controls, financing restrictions, export commitments, taxes, and local sourcing requirements

47. _____ distance is used when calling across the room or giving a talk to a group. A. Personal B. Public C. Intimate D. Social

Answer: B Feedback: Proxemics is the study of the way that people use physical space to convey messages. Public distance is used when calling across the room or giving a talk to a group.

55. Which of the following describes the ways of thinking and learning in the guided missile culture? A. Process-oriented, creative, ad hoc, and inspirational B. Problem centered, professional, practical, and cross-disciplinary C. Logical, analytical, vertical, and rationally efficient D. Intuitive, holistic, lateral, and error correcting

Answer: B Feedback: The ways of thinking and learning in the guided missile culture is "problem centered, professional, practical, and cross-disciplinary."

38. A structural arrangement in which domestic divisions are given worldwide responsibility for product groups is referred to as a(n) _____. A. international division structure B. global product division structure C. global area division structure D. global functional division structure .

Answer: B Feedback: A global product division is a structural arrangement in which domestic divisions are given worldwide responsibility for product groups

40. Which of the following provides the most benefits when the need for product specification or differentiation is high? A. International division B. Global product division C. Global area division D. Global functional division

Answer: B Feedback: A global product structure provides the most benefits when the need for product specification or differentiation in different markets is high. This often occurs when companies offer a variety of products, the customer base is extremely diverse, or goods must be modified to match local tastes (e.g., food or toys).

57. The following are listed as techniques for responding to political risks except _____. A. relative bargaining power analysis B. realistic bargaining power analysis C. integrative techniques D. defensive techniques

Answer: B Feedback: A multinational company can proactively improve its relationship with governments by means of preemptive political strategies to mitigate risk before it appears. Three related strategies should be considered: (1) relative bargaining power analysis; (2) integrative, protective, and defensive techniques; and (3) proactive political strategies.

58. Which of the following multinational corporations (MNCs) places local nationals in key positions and allows these managers to appoint and develop their own people? A. Globalcentric multinational corporations (MNCs) B. Polycentric multinational corporations (MNCs) C. Regiocentric multinational corporations (MNCs) D. Ethnocentric multinational corporations (MNCs)

Answer: B Feedback: A polycentric multinational corporation (MNC) places local nationals in key positions and allows these managers to appoint and develop their own people.

31. The approach to strategic formulation and implementation utilizing strategies of total quality management to meet or exceed customers' expectations and continuously improve products and/or services is referred to as the: A. value-added imperative. B. quality imperative. C. political imperative. D. economic imperative.

Answer: B Feedback: A quality imperative takes two interdependent paths: (1) a change in attitudes and a raising of expectation for service quality and (2) the implementation of management practices that are designed to make quality improvement an ongoing process. Commonly called total quality management, or simply TQM, the approach takes a wide number of forms, including cross-training personnel to do the jobs of all members in their work group, process reengineering designed to help identify and eliminate redundant tasks and wasteful effort, and reward systems designed to reinforce quality performance.

Answer: A Feedback: There are two types of alliances and joint ventures. One of them is nonequity venture, which is characterized by one group's merely providing a service to another.

Answer: B Feedback: An important feature of an equity joint venture is that it involves a financial investment by multinational company (MNC) parties involved. Many variations of this arrangement adjust the degree of control that each of the parties will have and the amount of money, technological expertise, and managerial expertise each will contribute to the joint venture (JV).

45. In the context of strategy formulation, which of the following identifies the key factors for success that will dictate how well the firm is likely to do? A. Regression analysis B. Internal analysis C. Competitive analysis D. Power analysis

Answer: B Feedback: An internal analysis identifies the key factors for success that will dictate how well the firm is likely to do. A key success factor (KSF) is a factor that is necessary for a firm to compete effectively in a market niche

27. China's government policies regarding investment in the telecommunications industry fall into the _____ political risk category. A. macro B. micro C. integrative D. relative

Answer: B Feedback: China's government policies regarding investment in the telecommunications industry fall into the micro political risk category.

49. Chronemics refers to the way in which _____. A. color is used in a culture B. time is used in a culture C. posture is used to communicate D. touch is used to communicate

Answer: B Feedback: Chronemics refers to the way in which time is used in a culture.When examined in terms of extremes, there are two types of time schedules: monochronic and polychronic.

27. Which of the following statements about third-country nationals (TCNs) is false? A. Third-country nationals (TCNs) can often achieve corporate objectives more effectively than expatriates. B. During periods of rapid expansion, third-country nationals (TCNs) can substitute for expatriates in well-established operations. C. During rapid expansion, third-country nationals (TCNs) can offer different perspectives that can expand on the narrowly focused viewpoints of local nationals. D. In joint ventures, third-country nationals (TCNs) can demonstrate a global image and bring unique cross-cultural skills to the relationship.

Answer: B Feedback: During periods of rapid expansion, third-country nationals (TCNs) can not only substitute for expatriates in new and growing operations but also offer different perspectives that can complement and expand on the sometimes narrowly focused viewpoints of both local nationals and headquarters personnel

34. The seizure of businesses by a host country with little, if any, compensation to the owners is referred to as _____. A. nationalization B. expropriation C. dispossession D. removal

Answer: B Feedback: Expropriation is the seizure of businesses with little, if any, compensation to the owners.

42. Canadians shake hands, Japanese bow, and Middle Easterners of the same sex kiss on the cheek. These gestures are examples of _____. A. chromatics B. haptics C. chronemics D. proxemics

Answer: B Feedback: Gestures are widely used and take many different forms. For example, Canadians shake hands, Japanese bow, and Middle Easterners of the same sex kiss on the cheek. Communicating through the use of bodily contact is known as haptics, and it is a widely used form of nonverbal communication.

23. Which of the following statements is true about home-country nationals? A. They are third-country nationals who are assigned to work in the home country. B. They are expatriate managers who are citizens of the country where a multinational corporation (MNC) is headquartered. C. They are managers who are citizens of countries other than the country in which the multinational corporation (MNC) is headquartered. D. They are likely to be used by multinational corporations (MNCs) at the middle- and lowerlevel ranks.

Answer: B Feedback: Home-country nationals are managers who are citizens of the country where a multinational corporation (MNC) is headquartered. In fact, sometimes the term headquarters nationals is used.

52. A true statement about horizontal investments is that: A. they run the risk of being taken over by the government because they are export-oriented, and governments like a business that helps them generate foreign capital. B. they are unlikely to be takeover targets because these investments typically are made with an eye toward satisfying the host country's market demands. C. they are rated as high risk because foreign governments see them as providing fewer benefits to the country and greater benefits to a multinational company than other investments. D. they are high-risk investments in which goods or services produced are dissimilar to those produced at home.

Answer: B Feedback: Horizontal investments are unlikely to be takeover targets because these investments typically are made with an eye toward satisfying the host country's market demands. Horizontal investments involve the production of goods or services that are the same as those produced at home.

61. _____ multinational corporations (MNCs) do all of their training at their headquarters. A. Multicentric B. Regiocentric C. Polycentric D. Ethnocentric

Answer: D Feedback: Ethnocentric multinational corporations (MNCs) will do all training at headquarters, but polycentric multinational corporations (MNCs) will rely on local managers to assume responsibility for seeing that the training function is carried out.

33. In contrast to the contextual style, the personal style is more popular in: A. low-power-distance, collective, high-context cultures. B. low-power-distance, individualistic, low-context cultures. C. high-power-distance, individualistic, low-context cultures. D. high-power-distance, collective, high-context cultures.

Answer: B Feedback: In contrast, the personal style is more popular in low-power-distance, individualistic, low-context cultures. Examples include the United States, Australia, and Canada.

Which of the following statements is true of the Eiffel Tower culture? A. It is well equipped to handle changes. B. Relationships are specific, and status remains with the job. C. Job assignments are flexible, and personnel do whatever it takes to get the job done. D. Replacing the person holding the top position affects work of the organization members.

Answer: B Feedback: In the Eiffel Tower culture, relationships are specific and status remains with the job. Therefore, if the boss of an Eiffel Tower subsidiary were playing golf with a subordinate, the subordinate would not feel any pressure to let the boss win.

57. Which of the following statements about integrative negotiation is true? A. It occurs when two parties with opposing goals compete over a set value. B. It is characterized by overlapping interests. C. It focuses on the individual relationships and is based on a short-term interaction. D. It often results in a win-lose situation.

Answer: B Feedback: Integrative negotiation involves cooperation between two groups to integrate interests, create value, and invest in the agreement. It is characterized by overlapping interests

70. Pushing decision making down the line and getting the lower-level personnel involved is referred to as _____. A. centralization B. decentralization C. horizontal specialization D. vertical specialization

Answer: B Feedback: Many U.S. firms tend toward decentralization, pushing decision making down the line and getting the lower-level personnel involved

32. Multinational companies can minimize their chances of expropriation by _____. A. investing in non-Western countries that are poor and relatively unstable B. acquiring an affiliate that depends on the parent company for key areas of operation C. encouraging the use of high technology D. imposing an embargo on the participation of local partners

Answer: B Feedback: Multinational companies can minimize their chances of expropriation by acquiring an affiliate that depends on the parent company for key areas of the operation, such as financing, research, and technology transfer, so that no practical value exists in seizing the affiliate. They can also limit the use of high technology so that if the firm is expropriated, the country cannot duplicate the technology.

54. A multinational corporation's choice of a specific locale is affected by all of the following factors except: A. desirability of the location for employees coming in from the outside. B. the structure of the organization. C. proximity to competitors. D. the nature of the workforce.

Answer: B Feedback: Once a multinational corporation has selected the country in which to locate, the firm must choose the specific locale. A number of factors influence this choice. Common considerations include access to markets, proximity to competitors, availability of transportation and electric power, and desirability of the location for employees coming in from the outside.

58. Which of the following statements is true about global product divisions? A. A global product division structure prevents line and staff managers within the division from gaining expertise in the technical and marketing aspects of the products assigned to them. B. A global product division structure provides a direct line of communication from the customer to those in the organization who have product knowledge and expertise. C. The products in a global product division are in the maturity stage and require very little promotion and marketing. D. Managers of a global product division depend heavily on corporate headquarters to run the operation.

Answer: B Feedback: One of the advantages of a global product division is that it provides a direct line of communication from the customer to those in the organization who have product knowledge and expertise, thus enabling research and development (R&D) to work on the development of products that serve the needs of the world customer. It also permits line and staff managers within the division to gain expertise in the technical and marketing aspects of the products assigned to them

22. One study found that _____ were most effective in subsidiaries located in developing countries or those that relied on a local customer base. A. IMF placements B. local managers C. expatriates D. third-country nationals

Answer: B Feedback: Richards, in her investigation of staffing practices, found that local managers were most effective in subsidiaries located in developing countries or those that relied on a local customer base.

29. Advantages of alliances and joint ventures include all of the following except _____. A. improvement of efficiency B. collusion or restriction in competition C. access to knowledge D. mitigation of political factors

Answer: B Feedback: Some of the most commonly cited advantages of alliances and joint ventures (JVs) include: 1. Improvement of efficiency: The creation of an alliance or JV can help the partners achieve economies of scale and scope that would be difficult for one firm operating alone to accomplish. Additionally, the partners can spread the risks among themselves and profit from the synergies that arise from the complementary resources. 2. Access to knowledge: In alliances and JVs, each partner has access to the knowledge and skills of the others. So one partner may bring financial and technological resources to the venture while another brings knowledge of the customer and market channels. 3. Mitigating political factors: A local partner can be very helpful in dealing with political risk factors such as a hostile government or restrictive legislation. 4. Overcoming collusion or restriction in competition: Alliances and JVs can help partners overcome the effects of local collusion or limits being put on foreign competition by becoming part of an "insider" group

50. The most common approach to formulating a compensation package of an expat is the _____, which involves ensuring that the expat is "made whole" and does not lose money by taking the assignment. A. regional system approach B. balance-sheet approach C. cafeteria approach D. localization approach

Answer: B Feedback: The most common approach to formulating a compensation package of an expat is the balance-sheet approach, which involves ensuring that the expat is "made whole" and does not lose money by taking the assignment. A second and often complementary approach is negotiation, which involves working out a special, ad hoc arrangement that is acceptable to both the company and the expat.

52. Strategies used to help smooth the adjustment from an overseas to a stateside assignment are referred to as _____. A. readjustment strategies B. transition strategies C. changeover strategies D. progression strategies

Answer: B Feedback: To help smooth the adjustment from an overseas to a stateside assignment, some multinational corporations (MNCs) have developed transition strategies, which can take a number of different forms. One is the use of repatriation agreements, whereby the firm tells an individual how long she or he will be posted overseas and promises to give the individual, on return, a job that is mutually acceptable.

68. Which of the following statements is true about vertical specialization? A. Examples of vertical specialization include jobs in areas such as customer service, sales, recruiting, training, purchasing, and marketing research. B. It is characterized by distinct differences between the levels in hierarchy such that those higher up are accorded much more status than those farther down. C. When there is a great deal of vertical specialization, personnel will develop functional expertise in one particular area. D. It assigns jobs so that individuals are given a particular function to perform, and people tend to stay within the confines of this area.

Answer: B Feedback: Vertical specialization is characterized by distinct differences between the levels in hierarchy such that those higher up are accorded much more status than those farther down, and the overall structure usually is quite tall. Vertical specialization can be measured by the amount of group activity, such as in quality circles.

38. When the need for national responsiveness is high and the need for global integration is low, a(n) _____ strategy is appropriate. A. transnational B. multi-domestic C. international D. global

Answer: B Feedback: When the need for differentiation is high but the concern for integration is low, the most appropriate strategy is multi-domestic strategy. In this case, niche companies adapt products to satisfy the high demands of differentiation and ignore economies of scale because integration is not very important.

26. Which of the following routes is a multinational company (MNC) likely to choose in order to quickly expand resources or construct high-profit products in a new market? A. Franchising B. Licensing agreements C. Mergers and acquisitions D. Basic export and import operations

Answer: C Feedback: Multinational companies (MNCs) may choose mergers and acquisitions in order to quickly expand resources or construct high-profit products in a new market. Purchasing a majority interest in another company is an expedient way to expand.

47. In the _____ culture, jobs are well defined, employees know what they are supposed to do, and everything is coordinated from the top. A. guided missile B. family C. Eiffel Tower D. incubator

Answer: C Feedback: The Eiffel Tower culture is characterized by a strong emphasis on hierarchy and orientation to the task. Under this organizational culture, jobs are well defined, employees know what they are supposed to do, and everything is coordinated from the top.

60. A(n) _____ multinational corporation (MNC) seeks to integrate diverse regions of the world through a global approach to decision making. A. polycentric B. ethnocentric C. geocentric D. unicentric

Answer: C Feedback: A geocentric multinational corporation (MNC) seeks to integrate diverse regions of the world through a global approach to decision making. Assignments are based on qualifications, and all subsidiary managers throughout the structure are regarded as equal to those at headquarters. IBM is an excellent example of an MNC that attempts to use a geocentric approach.

46. A key success factor is a factor that is necessary for a firm to compete effectively in a(n): A. international market. B. highly restricted market. C. market niche. D. broad market domain.

Answer: C Feedback: An internal analysis identifies the key factors for success that will dictate how well the firm is likely to do. A key success factor (KSF) is a factor that is necessary for a firm to compete effectively in a market niche

21. Which of the following statements is true of the impact of domestic and international political developments on multinational companies? A. Multinational companies are well protected from the hazards that originate directly from variation and unpredictability in political and governance systems around the world. B. The state and its various institutions and agencies protect multinational companies by refraining from making policy shifts in taxation or regulation. C. As government policies change, it is imperative that multinational companies be willing and able to adjust their strategies and practices to accommodate new perspectives. D. A majority of geographic areas and regions carry less political risk than they did in the past because governments are more stable.

Answer: C Feedback: As government policies change, multinational companies must be willing and able to adjust their strategies and practices to accommodate the new perspectives and actual requirements. Moreover, in a growing number of geographic regions and countries, governments appear to be less stable; therefore, these areas carry more risk than they did in the past.

49. At the center of a _____ are nodes, which are units charged with coordinating product, functional, and geographic information. A. cross-cultural matrix structure B. worldwide divisional structure C. transnational network structure D. global product division structure

Answer: C Feedback: At the center of a transnational network structure are nodes, which are units charged with coordinating product, functional, and geographic information

65. Benefits of proactive political strategies include all of the following except _____. A. enhancing government relations in unstable and transitional policy environments B. mitigating risk before it becomes unmanageable C. providing support for national and sub-central governments in transitional economies D. counteracting competitors' efforts to influence government policy

Answer: C Feedback: Because government policies can have a significant impact on business activities and many governments face competing pressures from a range of stakeholders, corporations must adopt various proactive political strategies both to affect government policy and to respond to competitors' efforts to influence that policy. Comprehensive strategies are especially important in unstable and transitional policy environments. These strategies are designed, in part, to develop and maintain ongoing favorable relationships with government policy makers as a tool to mitigate risk before it becomes unmanageable.

64. Which of the following findings regarding the base of the pyramid (BOP) strategy has significant implications for the globalization-national responsiveness framework? A. Building relationships directly and at the local level contributes to the reputation and fosters the trust necessary to overcome the lack of formal institutions such as the rule of law. B. The BOP may be an ideal environment for incubating new, leapfrog technologies. C. Business models forged successfully at the base of the pyramid have the potential to travel profitably to higher-income markets. D. The BOP strategy brings focus to those who are too poor to be viable customers for multinational companies.

Answer: C Feedback: Business models forged successfully at the base of the pyramid have the potential to travel profitably to higher-income markets because adding cost and features to a low-cost model may be easier than removing cost and features from high-cost models. This finding has significant implications for the globalization-national responsiveness framework.

36. The transmission of information from manager to subordinate is referred to as: A. lateral communication. B. upward communication. C. downward communication. D. horizontal communication.

Answer: C Feedback: Downward communication is the transmission of information from manager to subordinate. The primary purpose of the manager-initiated communication flow is to convey orders and information.

24. Which of the following statements is true about expatriates? A. Historically, multinational corporations (MNCs) have refrained from staffing key positions in their foreign affiliates with expatriates. B. They are individuals from a host country who are assigned to work in the home country. C. They are those who live and work outside their home country. D. Multinational corporations (MNCs) find it advantageous to use expatriates because their salary and benefit package is less than that of host-country nationals.

Answer: C Feedback: Expatriates are those who live and work outside their home country. They are citizens of the country where the multinational corporation (MNC) is headquartered.

51. Which of the following is a salient feature of horizontal investments? A. They are export-oriented investments which are unlikely to be takeover targets. B. They are designed with an eye toward satisfying the home country's market demands. C. They involve the production of goods or services that are the same as those produced at home. D. They are high-risk investments in which goods or services produced are dissimilar to those produced at home

Answer: C Feedback: Horizontal investments involve the production of goods or services that are the same as those produced at home. These investments typically are made with an eye toward satisfying the host country's market demands

33. Laws that require that nations hold a majority interest in the operation are known as _____. A. commercial laws B. appropriation laws C. indigenization laws D. expropriation laws

Answer: C Feedback: In addition, some takeovers were caused by indigenization laws, which required that nationals hold a majority interest in the operation.

51. In choosing a location, a primary consideration for a multinational corporation investing in a foreign country would be a decision based on: A. corporate culture. B. business ethics. C. specific locale. D. operating norms.

Answer: C Feedback: In choosing a location, today's multinational corporations has two primary considerations: the country and the specific locale within the chosen country. Quite often, the first choice is easier than the second, because there are many more alternatives from which to choose a specific locale.

36. Which of the following strategies is appropriate when the need for national responsiveness is low and the need for global integration is high? A. International strategy B. Multi-domestic strategy C. Global strategy D. Transnational strategy

Answer: C Feedback: In terms of economies of scale, when the need for integration is high and the need for awareness of differentiation is low, global strategies based on price competition are appropriate

36. Which of the following strategies is appropriate when the need for national responsiveness is low and the need for global integration is high? A. International strategy B. Multi-domestic strategy C. Global strategy D. Transnational strategy

Answer: C Feedback: In terms of economies of scale, when the need for integration is high and the need for awareness of differentiation is low, global strategies based on price competition are appropriate.

61. _____ techniques are designed to help the overseas operation become part of the host country's infrastructure. A. Protective B. Defensive C. Integrative D. Statutory

Answer: C Feedback: Integrative techniques are designed to help the overseas operation become part of the host country's infrastructure. The objective is to be perceived as "less foreign" and thus unlikely to be the target of government action

44. _____ is the strategic planning process that helps a firm evaluate its current managerial, technical, material and financial strengths and weaknesses. A. Environmental scanning B. Administrative coordination C. Internal resource analysis D. Corporate governance

Answer: C Feedback: Internal resource analysis helps the firm to evaluate its current managerial, technical, material, and financial resources and capabilities to better assess its strengths and weaknesses. This assessment then is used by a multinational corporation to determine its ability to take advantage of international market opportunities

25. China's decision regarding restrictions on foreign exchange transactions is a _____ political risk because it affects all multinational companies. A. micro B. standard C. macro D. multidimensional

Answer: C Feedback: Macro political risk analysis reviews major political decisions that are likely to affect all business conducted in a country. For example, China's decision regarding restrictions on foreign exchange transactions represents a macro political risk because it affects all multinational companies

30. The _____ approach to strategic planning is used by multinational corporations that need a country-centered or multi-domestic strategy. A. quality imperative B. administrative coordination C. political imperative D. economic imperative

Answer: C Feedback: Multinational corporations using the political imperative approach to strategic planning are country-responsive. The products sold by MNCs often have a large portion of their value added in the downstream activities of the value chain. Industries such as insurance and consumer packaged goods are examples. Typically, these industries use a country-centered or multi-domestic strategy.

47. Foreign ownership limitations, pressure for local participation, confiscation, expropriation, and abrogation of property rights are examples of _____. A. transfer risks B. functional risks C. ownership-control risks D. tactical risks

Answer: C Feedback: Ownership-control risks are embodied in government policies or actions that inhibit ownership or control of local operations. Examples include foreign-ownership limitations, pressure for local participation, confiscation, expropriation, and abrogation of proprietary rights

47. Foreign ownership limitations, pressure for local participation, confiscation, expropriation, and abrogation of property rights are examples of _____. A. transfer risks B. functional risks C. ownership-control risks D. tactical risks

Answer: C Feedback: Ownership-control risks are embodied in government policies or actions that inhibit ownership or control of local operations. Examples include foreign-ownership limitations, pressure for local participation, confiscation, expropriation, and abrogation of proprietary rights.

45. Which of the following "distances" is used for talking with family and close friends? A. Intimate B. Social C. Personal D. Public

Answer: C Feedback: Proxemics is the study of the way that people use physical space to convey messages. Personal distance is used for talking with family and close friends.

66. Specialization in an international context can be classified into _____. A. diagonal and vertical specializations B. vertical and parallel specialization C. horizontal and vertical specializations D. diagonal and parallel specializations

Answer: C Feedback: Specialization in an international context can be classified into horizontal and vertical specialization.

54. Which of the following describes the attitude toward authority in the Eiffel Tower culture? A. Status is achieved by individuals exemplifying creativity and growth. B. Status is achieved by project group members who contribute to a targeted goal. C. Status is ascribed to superior roles that are distant yet powerful. D. Status is ascribed to parent figures that are close and powerful.

Answer: C Feedback: The characteristic of attitude toward authority in the Eiffel Tower culture involves ascribing status to superior roles that are distant yet powerful.

29. Which of the following statements is true about inpatriates? A. One of the most common reasons for a multinational corporation (MNC) to use inpatriates is to start up operations. B. Inpatriates are also referred to as headquarters nationals. C. Multinational corporations (MNCs) are increasingly using inpatriates to help them better develop their global core competencies. D. Multinational corporations (MNCs) mostly use inpatriates to staff key positions in their foreign affiliates.

Answer: C Feedback: The growing use of inpatriates is helping multinational corporations (MNCs) better develop their global core competencies. As a result, today a new breed of multilingual, multiexperienced, so-called global managers or transnational managers is truly emerging

42. The _____ culture is a project-oriented culture. A. family B. Eiffel Tower C. guided missile D. incubator

Answer: C Feedback: The guided missile culture is a project-oriented culture.

38. Which of the following types of organizational cultures is most likely egalitarian and project oriented? The family culture B. The Eiffel Tower culture C. The guided missile culture D. The incubator culture

Answer: C Feedback: The guided missile culture is egalitarian and task-driven. All team members are equal (or at least potentially equal), and they treat each other with respect

47. Which of the following statements is true about localization as an approach to formulating compensation packages? A. According to Mercer's findings, localization is practiced in Latin America and Asia Pacific more than Europe and North America. B. Localization is a direct consequence of increasing corporate growth and profitability, as well as a stable economic environment. C. The increasing trend toward localization reflects companies' efforts to either tap into the local talents or to offer less generous packages to locally hired foreign workers. D. The trend toward localization failed in emerging markets because the local compensation and benefits packages are more generous than home-country plans.

Answer: C Feedback: The increasing trend toward localization reflects companies' efforts to either tap into the local talents or to offer less generous packages to locally hired foreign workers. This localization approach was quite consistent among regions and countries around the world, including for companies operating in emerging markets (such as China, India, and Vietnam), where the local compensation and benefits packages are less generous than home-country plans

49. Which of the following approaches to formulating a compensation package is most commonly used with individuals early in their careers who are being given a long-term overseas assignment? A. Lump-sum method B. Cafeteria approach C. Localization approach D. Balance-sheet approach

Answer: C Feedback: The localization approach to formulating a compensation package is most commonly used with individuals early in their careers who are being given a long-term overseas assignment. This approach involves paying the expat a salary that is comparable to the salaries of local nationals.

48. An approach to developing an expatriate compensation package that involves giving the expat a predetermined amount of money and letting the individual make his/her own decisions regarding how to spend it is referred to as the _____. A. localization approach B. cafeteria approach C. lump-sum method D. balance-sheet approach

Answer: C Feedback: The lump-sum method of formulating a compensation package involves giving an expat a predetermined amount of money and letting the individual make his or her own decisions regarding how to spend it.

43. _____ risks stem from government policies that limit the transfer of capital, payments, production, people, and technology in or out of a country. A. Operational B. Bureaucratic C. Transfer D. Expropriation

Answer: C Feedback: Transfer risks stem from government policies that limit the transfer of capital, payments, production, people, and technology in or out of the country

38. The primary purpose of subordinate-initiated upward communication is to: A. convey orders and information. B. let individuals know what is to be done and how well they are doing. C. provide feedback, ask questions, or obtain assistance from higher-level management. D. facilitate the flow of information to those who need it for operational purposes.

Answer: C Feedback: Upward communication is the transfer of information from subordinate to superior. The primary purpose of this subordinate-initiated upward communication is to provide feedback, ask questions, or obtain assistance from higher-level management.

67. When _____ occurs, group participants believe that their ideas and actions are correct and that those who disagree with them are either uninformed or deliberately trying to sabotage their efforts. A. group cognitive inertia B. group reverse vigilance C. groupthink D. static decision making

Answer: C Feedback: When groupthink occurs, group participants come to believe that their ideas and actions are correct and that those who disagree with them are either uninformed or deliberately trying to sabotage their efforts

39. When the need for national responsiveness is low and the need for global integration is also low, which of the following strategies would be appropriate? A. Globalization strategy B. Transnational strategy C. International strategy D. Multi-domestic strategy

Answer: C Feedback: When the need for national responsiveness is low and the need for global integration is also low, the most appropriate strategy is an international strategy. Both the potential to obtain economies of scale and the benefits of being sensitive to differentiation are of little value. It is a mixed approach characterized by increased international standardization of products and services

41. Haptics refers to communicating through the use of _____. A. eye contact and gaze B. physical space C. bodily contact D. artifacts and charts

Answer: C bodily contact

67. The assignment of jobs so that individuals are given a particular function to perform, who tend to stay within the confines of this area, is referred to as _____. A. diagonal specialization B. parallel specialization C. vertical specialization D. horizontal specialization

Answer: D Feedback: Horizontal specialization assigns jobs so that individuals are given a particular function to perform, and people tend to stay within the confines of this area. Examples include jobs in areas such as customer service, sales, recruiting, training, purchasing, and marketing research.

44. Which of the following "distances" is used for communicating very confidential messages? A. Social B. Public C. Personal D. Intimate

Answer: D Feedback: Proxemics is the study of the way that people use physical space to convey messages. Intimate distance is used for very confidential communications.

48. Which of the following statements is true of a conglomerate investment? A. It runs the risk of being taken over by the government because it is export-oriented. B. It is typically made with an eye toward satisfying the host country's market demands. C. It includes the production of raw materials or intermediate goods that are to be processed into final products. D. It is a type of high-risk investment in which goods or services produced are different from those produced at home.

Answer: D Feedback: A conglomerate investment is a type of high-risk investment in which the goods or services produced are not similar to those produced at home. This type of investment is usually rated as high risk because foreign governments see them as providing fewer benefits to the country and greater benefits to the MNC than other investments

43. Which of the following organizes worldwide operations based primarily on function and secondarily on product? A. International division structure B. Global product division structure C. Global area division structure D. Global functional division structure

Answer: D Feedback: A global functional division organizes worldwide operations based primarily on function and secondarily on product.

59. A(n) _____ multinational corporation (MNC) relies on local managers from a particular geographic region to handle operations in and around that area. A. ethnocentric B. geocentric C. ultracentric D. regiocentric

Answer: D Feedback: A regiocentric multinational corporation (MNC) relies on local managers from a particular geographic region to handle operations in and around that area. For example, production facilities in France would be used to produce goods for all EU countries. Similarly, advertising managers from subsidiaries in Italy, Germany, France, and Spain would come together and formulate a "European" advertising campaign for the company's products. A regiocentric approach often relies on regional group cooperation of local managers. The Gillette MNC uses a regiocentric approach.

53. An agreement whereby the firm tells the individual how long she or he will be posted overseas and promises to give the individual, on return, a job that is mutually acceptable is a _____. A. strategic plan B. human resource plan C. labor-contract agreement D. repatriation agreement

Answer: D Feedback: A repatriation agreement tells an individual how long she or he will be posted overseas and promises to give the individual, on return, a job that is mutually acceptable. This agreement typically does not promise a specific position or salary, but the agreement may state that the person will be given a job that is equal to, if not better than, the one held before leaving

22. Identify a true statement about alliances and joint ventures. A. They prevent partners from achieving economies of scale and scope that would be easy for a firm operating alone to accomplish. B. They are likely to be less favored as a means of doing business in emerging countries. C. They fail to help partners overcome the effects of local collusion or limits being put on foreign competition. D. They have become popular in recent years because of the significant operational benefits they offer to both multinational companies (MNCs) and their local partners.

Answer: D Feedback: Alliances and joint ventures (JVs) have become very popular in recent years because of the significant operational benefits they offer to both parties. The creation of an alliance or JV can help the partners achieve economies of scale and scope that would be difficult for one firm operating alone to accomplish.

65. As an organizational characteristic, _____ is the assigning of individuals to specific, welldefined tasks. A. interpretation B. concentration C. formalization D. specialization

Answer: D Feedback: As an organizational characteristic, specialization is the assigning of individuals to specific, well-defined tasks

52. Change in the incubator culture is: A. slow and calculated. B. almost nonexistent. C. moderate and methodological. D. fast and spontaneous

Answer: D Feedback: Change in the incubator culture often is fast and spontaneous.All participants are working toward the same objective.

68. Identify a potential problem associated with diversity. A. It limits idea generation. B. It tends to increase groupthink. C. It deteriorates customer relationships. D. It tends to cause a lack of cohesion.

Answer: D Feedback: Diversity may cause a lack of cohesion that results in a unit's inability to take concerted action, be productive, and create a work environment that is conducive to both efficiency and effectiveness. These potential problems are rooted in people's attitudes

54. In which of the following multinational company (MNC) structures is tight process bureaucratic control used to maintain product quality and consistency? A. Transnational network structure B. Global area division C. Matrix structure D. Global product division

Answer: D Feedback: In a global project division, tight process bureaucratic control is used to maintain product quality and consistency.

61. The significant economies associated with early-entry positioning include all of the following except: A. capturing learning effects important for increasing market share. B. achieving scale economies. C. developing alliances with the most attractive local partner. D. making technological advancements.

Answer: D Feedback: In general, in particular industries and economic environments, significant economies are associated with first-mover or early-entry positioning—being the first or one of the first to enter a market. These include capturing learning effects important for increasing market share, achieving scale economies that accrue from opportunities for capturing that greater share, and development of alliances with the most attractive (or in some cases the only) local partner.

41. Many large multinational corporations work to combine the _____ approaches to strategic planning. A. economic, environmental, political, and administrative B. global, environmental, economic, and quality C. political, administrative, regional, and environmental D. economic, political, quality, and administrative

Answer: D Feedback: Many large multinational corporations work to combine the economic, political, quality, and administrative approaches to strategic planning. For example, IBM relies on the economic imperative when it has strong market power (especially in less developed countries), the political and quality imperatives when the market requires a calculated response (European countries), and an administrative coordination strategy when rapid, flexible decision making is needed to close the sale. Of the four, however, the first three approaches are much more common because of the firm's desire to coordinate its strategy both regionally and globally.

29. _____ risk issues often take forms such as industry regulation, taxes on specific types of business activity, and various restrictive local laws. A. Macro B. Standard C. Direct D. Micro

Answer: D Feedback: Micro risk issues often take such forms as industry regulation, taxes on specific types of business activity, and restrictive local laws. The essence of these micro risk issues is that some multinational companies are treated differently from others, thus increasing the cost of doing business for some.

21. There are four basic sources that multinational companies (MNCs) can tap for positions. These are: A. host-country nationals, third-country nationals, United Nations placements, and International Monetary Fund (IMF) placements. B. home-country nationals, International Monetary Fund (IMF) placements, inpatriates, and multipatriates. C. home-country nationals, host-country nationals, International Monetary Fund (IMF) placements, and multipatriates. D. home-country nationals, host-country nationals, third-country nationals, and inpatriates.

Answer: D Feedback: Multinational companies (MNCs) can tap four basic sources for positions: (1) homecountry nationals, (2) host-country nationals, (3) third-country nationals, and (4) inpatriates.

59. To respond to risks in emerging markets, multinational corporations must do all of the following except: A. limiting equity investments. B. avoiding joint ventures. C. collaborating with a local partner. D. engaging in shared ownership structures.

Answer: D Feedback: Multinational corporations must adjust their strategy to respond to the exceptional risks posed by emerging economies. For example, in these risky markets, it may be wise to engage in arm's-length or limited equity investments or to maintain greater control of operations by avoiding joint ventures or other shared ownership structures. In other circumstances, it may be wiser to collaborate with a local partner who can help buffer risks through its political

28. Multinational corporations using the _____ approach to strategic planning are countryresponsive; their approach is designed to protect local market niches. A. administrative coordination B. economic imperative C. quality imperative D. political imperative

Answer: D Feedback: Multinational corporations using the political imperative approach to strategic planning are country-responsive; their approach is designed to protect local market niches. The products sold by these multinational corporations often have a large portion of their value added in the downstream activities of the value chain.

41. Political risks can be broken down into three basic categories. These are: A. transfer risks, ownership risks, and labor risks. B. ownership risks, operational risks, and economic risks. C. operational risks, bureaucratic risks, and transfer risks. D. transfer risks, operational risks, and ownership-control risks.

Answer: D Feedback: Political risks can be broken down into three basic categories: transfer risks, operational risks, and ownership-control risks.

26. Researchers have found that the contextual style of communication is often associated with: A. low-power-distance, collective, high-context cultures. B. low-power-distance, individualistic, high-context cultures. C. high-power-distance, individualistic, low-context cultures. D. high-power-distance, collective, high-context cultures.

Answer: D Feedback: Researchers have found that the contextual style is often associated with high powerdistance, collective, high-context cultures.Examples include Japan, India, and Ghana

46. The _____ culture is characterized by a strong emphasis on hierarchy and orientation to the task. A. incubator B. family C. guided missile D. Eiffel Tower

Answer: D Feedback: The Eiffel Tower culture is characterized by a strong emphasis on hierarchy and orientation to the task.Under this organizational culture, jobs are well defined, employees know what they are supposed to do, and everything is coordinated from the top.

56. The four basic philosophical positions that multinationals can assume and influence a company's training program are: A. polycentric, geocentric, multicentric, and ultracentric positions. B. ethnocentric, globalcentric, regiocentric, and unicentric positions. C. multicentric, globalcentric, geocentric, and unicentric positions. D. ethnocentric, polycentric, regiocentric, and geocentric positions.

Answer: D Feedback: The four basic philosophical positions of multinational corporations that can influence the training program are ethnocentric, polycentric, regiocentric, and geocentric positions.

35. Which of the following types of organizational cultures can be considered a fulfillmentoriented culture? A. The family culture B. The Eiffel Tower culture C. The guided missile culture D. The incubator culture

Answer: D Feedback: The incubator culture can be considered a fulfillment-oriented culture. This culture is based on the premise that the role of organizations is to serve as incubators for the selfexpression and self-fulfillment of their members.

28. _____ are managers who are citizens of countries other than the one in which a multinational corporation (MNC) is headquartered or the one in which they are assigned to work by the multinational corporation (MNC). A. Multipatriates B. Home-country nationals C. Inpatriates D. Third-country nationals

Answer: D Feedback: Third-country nationals (TCNs) are managers who are citizens of countries other than the country in which a multinational corporation (MNC) is headquartered or the one in which they are assigned to work by the multinational corporation (MNC).

44. When it works well, the _____ culture can catalyze and multiply the energies of the personnel and appeal to their deepest feelings and aspirations. A. incubator B. guided missile C. Eiffel Tower D. family

Answer: D Feedback: When it works well, family culture can catalyze and multiply the energies of the personnel and appeal to their deepest feelings and aspirations.

7. Offshore outsourcing is made possible by the increasing organizational and technological capacity of companies to separate, coordinate, and integrate geographically dispersed human resources across distant geographic borders. TF

Answer: True Feedback: Offshore outsourcing is made possible by the increasing organizational and technological capacity of companies to separate, coordinate, and integrate geographically dispersed human resources—whether employed directly by the firm or contracted out—across distant geographic borders. The development of this capacity can be traced to the earlier growth of international subcontracting as well as to the international diffusion of lean production systems (which originated with Japanese auto manufacturers) to other manufacturing and service sectors.

10. Upward communication is the transfer of information from subordinate to superior. TF

Answer: True Feedback: Upward communication is the transfer of information from subordinate to superior. The primary purpose of this subordinate-initiated upward communication is to provide feedback, ask questions, or obtain assistance from higher-level management.

52. In the United States, it is common to wear black when one is in mourning, while in some locations in India people wear white when they are in mourning. This is an example of: A. chronemics. B. chromatics. C. proxemics. D. haptics.

B. chromatics

According to a study by the Diagnosing Organizational Culture for Strategic Application (DOCSA) group published in 1995, unlike Americans, Europeans: A. were perceived as being very open in their communications. B. were viewed as preferring very loose control. C. saw themselves as somewhat pragmatic in their conduct. D. were seen as having a slight identification with their own organization.

C. saw themselves as somewhat pragmatic in their conduct.

There are three aspects of organizational functioning that seem to be especially important in determining an MNC's organizational culture. They are: A. the general views that employees hold about the MNC's purpose, destiny, goals, and their places in them; the age of the organization; and the degree of cultural diversity among the members of the organization. B. the general relationship between the managers and the rank-and-file employees in the organization, the degree of cultural diversity among the members of the organization, and the hierarchical system of authority that defines the roles of managers and subordinates. C. the degree of cultural diversity among the members of the organization, the age of the organization, and the strength of the organization's leadership. D. the general relationship between the employees and their organization; the hierarchical system of authority that defines the roles of managers and subordinates; and the general views that employees hold about the MNC's purpose, destiny, goals, and their places in them.

D. the general relationship between the employees and their organization; the hierarchical system of authority that defines the roles of managers and subordinates; and the general views that employees hold about the MNC's purpose, destiny, goals, and their places in them.

Organizational climate is reflected by: A. the degree of cooperation between management and employees. B. common language, terminology, and rituals. C. high product and service quality. D. the way employees interact with each other.

D. the way employees interact with each other.