IB 206 Exam #2 (Ch.6-8, 11&12)
Which term describes family conglomerates in South Korea?
chaeblos
When developing strategies, managers start by ________.
examining the firm's specific strengths and weaknesses
________ is the seizure of company possessions with compensation.
expropriation
Applying home-country laws to people and situations abroad is a practice known as ________.
extraterritoriality
A specific region that is located within a nation is treated as if it were outside the nation's borders. This region is designated to receive imported products intended for assembly and subsequent re-export. Which term best describes this region?
foreign trade zone
Emerging markets are ________.
former developing economies that have achieved substantial industrialization, modernization, and rapid economic growth since the 1980s
Which of the following is a stage of regional assimilation in which member countries decide to remove tariffs and other barriers to trade in goods and services within the bloc?
free trade area
Which of the following primarily focuses on ensuring the reduction of tariffs among certain countries and settling trade disagreements?
general agreements on tariffs and trade
________ 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.
global integration
Two basic screening methods for determining potential country markets are ________ and ________.
gradual elimination; indexing and ranking
Wars, Insurrection, and Violence
- Indirect effects can be disastrous for company activities -The threat or actual use of force or violence to attain a political goal through fear and intimidation.
Totalitarian countries
cuba, north Korea, sudan, guinea, zimbabwe
________ involves limitations on the expenditure of tangible monetary exchanges from a certain nation or on the influx of foreign currencies.
currency control
________ represent locations at the ports of entry in each country where government authorities inspect imported products and levy tariffs.
customs
Which of the following is characteristic of an effective legal system?
systematically enforced laws and regulations
Which of the following best defines maquiladoras?
Export-assembly plants
subsidy effects
Increases the competitive advantage of the grantee while diminishing the competitive advantages of those that do not receive the subsidy
Due to the larger market size of an economic bloc, member country firms are able to reduce their product prices because they can ________.
attain economies of scale
socialist countries
bolivia, china, egypt, india, romania, russia, venezuela
subsidy
Financing or other resources that a government grants to a firm or group of firms, to ensure their survival or success.
Strategy is ________.
a planned set of actions that managers employ to make the best use of the firm's resources and core competencies to gain competitive advantage
A(n) ________ is a group of official organizations that create a government.
Political system
Which of the following is typical of developing economies?
Poor education systems
Which of the following is a driving factor for companies to focus on local responsiveness?
Accommodating variances in distribution channels
Privatization has provided many opportunities for foreign firms to enter transition economies by ________.
purchasing former state enterprises
Which of the following offers an estimate of the likely sales for all firms in a particular business sector in a given period?
Industry market potential
Which of the following refers to a cross-border business alliance whereby two or more firms share resources, expenses, and risks to start a new business?
International collaborative venture
An individual from a country with a high degree of political risk would most likely be from ________.
Iraq
FDI and ownership restrictions effects
Limits how much foreigners can invest in a country, and/or the proportion of ownership that foreigners can hold in firms in the country
Managers who exemplify an open-minded attitude and who appreciate cultural diversity are described as applying a global ________.
Mindset
Government Takeover of Corporate Assets
Confiscation Expropriation Nationalization
Religion-based totalitarian states are called ________.
Theocratic
socialism
-Capital is vested in the state and used primarily as a means of production for use rather than for profit. -Group welfare outweighs individual welfare. -Government's role is to control the basic means of production, distribution, and commercial activity. -Socialism occurs in much of the world as social democracy (e.g., Western Europe, Brazil, India). -Government intervention in the private sector. -Corporate income tax rates are higher.
Embargos and Sanctions
-Governments may respond to offensive activities of foreign countries by imposing embargoes and sanctions. -Sanctions are bans on international trade, usually undertaken by a country, or a group of countries, against another judged to have jeopardized peace and security. -Embargoes are bans on exports or imports that forbid trade in specific goods with specific countries. Example: The U.S. has enforced embargoes against Cuba, Iran, and North Korea, labeled as state sponsors of terrorism.
Religious Law
-Strongly influenced by religious beliefs, ethical codes, and moral values, viewed as mandated by a supreme being. -Most important religious legal systems are based on Hindu, Jewish, and Islamic law.
mixed system
-Two or more legal systems operating together. -The contrast between civil and common law has become blurred as countries combine both systems. -Totalitarianism is most associated with religious law and socialist law. -Democracy is associated with common law, civil law, and mixed systems.
Civil Law
-legislative origin -found in western europe and latin america -Based on an all-inclusive system of laws that have been "codified" - clearly written by legislative bodies. Commercial, civil and criminal codes -Laws are more "cast in stone" and not strongly subject to interpretation by courts.
common law
-primary judicial origin -The basis of law is tradition, past practices, and legal precedents set by courts via interpretation of statutes, legislation, and past rulings. - originated in england and spread to canada, USA and australia.
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 global strategy
Quota
A limit placed on the quantities of a product that can be imported
________ refer to post-industrial countries characterized by high per-capita income, highly competitive industries, and well-developed commercial infrastructure.
Advanced Economies
Which of the following tasks should a shoe manufacturing company perform first if it needs to assess the global market opportunity?
Analyze the firm's readiness to internationalize
________ is a process in which an unbiased third party listens to both sides of a case and makes a decision in favor of one party or the other, based on an impartial analysis of facts.
Arbitration
Which of the following is NOT helpful in estimating company sales potential?
Extensive marketing efforts to test the waters
Which of the following represents a method of negotiation in which the objective is to settle any disagreements in a pleasant manner?
Conciliation
Which of the following approaches provides the headquarters of an organization significant power and control over the firm's activities globally?
Centralized structure
Which of the following tasks in the global market opportunity assessment process should be performed directly before the task of estimating company sales potential?
Choose qualified foreign partners
When managers develop and present an ultimate picture of what their company should become, they are exhibiting which trait of visionary leadership?
Communicating a strategic vision
Which diagnostic tool was developed by Tamer Cavusgil to aid managers in auditing their organization's readiness to internationalize?
Company Readiness to Export
Which of the following offers an estimate of the share of annual industry sales that the firm expects to generate in a particular target market?
Company sales potential
________ are the people and organizations that support the political system and receive government resources.
Constitutes
Which term defines the business transactions where payments are made in kind instead of in cash?
Countertrade
Which of the following systematically profiles the political, economic, and commercial environment of about 150 countries?
Country Commercial Guides
Which of the following characterizes country risk?
Country risk is always present, but its nature and intensity vary over time and from country to country.
Restrictions on the outflow of hard currency from a country or on the inflow of foreign currencies is called ________.
Currency Control
________ are checkpoints at the ports of entry in each country where government officials inspect imported products and levy tariffs.
Customs
Which form of government is characterized by private property rights and limited government?
Democratic
Democracy
Economic activity occurs freely, as per market forces Maximum efficiency in allocation of resources
With 28 countries, which of the following is the world's most advanced and largest regional economic bloc?
European union
________ refers to a government measure intended to manage or prevent the export of certain products or trade with certain countries.
Export Control
Which term defines a favorable combination of conditions, places, and timing that offers scenarios for exporting, investing, sourcing, or partnering in foreign markets?
Global market opportunity
Raul works for an Argentinian company that buys goods from China and sells them in Argentina. What internationalization strategy is Raul's company using?
Global sourcing
Totalitarianism
Government controls all economic and political matters. Either theocratic (religion-based) or secular A state party is led by a dictator. Membership is mandatory for those wanting to advance. Power is sustained via secret police, propaganda, regulation of free discussion and criticism. Today: Some countries in the Middle East and Africa; Cuba, North Korea. Ex-totalitarian states tend to have much government intervention and bureaucracy.
How did Muhammad Yunus help address poverty in Bangladesh?
He founded the Grameen Bank that has provided micro loans to millions of people.
Which of the following is characteristic of emerging markets?
High Trade Volumes
In which of the following approaches does an organization view international business as distinct from and ancillary to its domestic business?
Home replication strategy
Which of the following is the most critical asset of any organization?
Human Capital
Which of the following was formed by three countries to increase market entrance, remove barriers to trade, establish investment standards, and encourage bidding on government contracts within the three countries participating in it?
North American Free Trade Agreement (NAFTA)
Which of the following identifies the reporting relationships in an organization?
Organizational structure
Which of the following refers to an often-used form of nontariff trade barrier?
Quota
________ involves a legal system where instructions are clarified, publicly imposed, justly applied, and valued by all.
Rule of Law
________ fundamental tenet is that capital and wealth should be vested in the state and used primarily as a means of production rather than for profit.
Socialism's
Creeping Expropriation
The most common expropriation today. The government gradually modifies regulations and laws after foreign M N Es have made big local investments in property and plants.
In emerging markets, why do successful firms develop close community relationships?
To tailor goods to specific developing market necessities
boycots against firms and nations
Voluntary refusal to engage in commercial dealings with a nation or a company
In a(n) ________, barriers to trade within a participating country are reduced or eliminated, shared external barriers are established, and unrestricted movement of goods, services, and factors of production is permitted.
common market
exposure to potential loss or adverse effects on company operations and profitability caused by developments in a countries political and or legal environments is _____________
country risk
Which of the following comprise the largest group of countries and include Bangladesh and Zaire?
developing economies
Which term refers to exported goods being priced lower than their average value whether in home-country markets or foreign markets?
dumping
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?
efficiency
________ include countries that have attained significant modernization, industrialization, and rapid economic growth since the 1980s.
emerging economies
Companies help address poverty around the world in many ways. If a foreign firm in an emerging market modernizes local roads and bridges and creates jobs for workers in the community, the firm is ________.
encouraging economic growth
Regional integration enables member countries to gain bargaining power in world affairs by ________.
establishing a stronger political position as a united bloc
Government intervention and trade barriers imposed by developed countries raise ______ for developing economies that supply them.
ethical concerns
When determining the international market potential for goods such as laundry detergent, international managers should realize that ________ typically make decisions about purchasing such products.
homemakers
One of the goals that firms most likely want to attain from internationalizing is ________.
increase their sales and profits
In which of the following industries have Brazil's manufacturing firms enjoyed considerable success producing for foreign clients?
iron ore and processed food
Which term refers to a method of understanding and administering laws, regulations, and rules that are used to establish standards for conduct?
legal system
A business arrangement where one company grants another the right to use intellectual property for a stated period of time in exchange for royalties is called ________.
licensing
A ________ depends on the interactions of supply and demand in order to determine prices for products and services.
market economy
A product or service with the best international prospects is most likely to ________.
meet a universal need
Democratic Countries
most european countries, United states, japan, canada
Which term refers to acquiring certain value-chain activities, including the production of finished products, from independent suppliers?
outsourcing
Which challenge of emerging markets is associated with corruption and weak legal frameworks that discourage business investments?
political instability
Transition economies were once socialist states but have been largely transformed into capitalism-based systems, partly through ________.
privatization of state-owned industries
________ represents cost alterations that indicate the amount of products that customers are able to purchase in their own country, using their own monetary system, in accordance with their standard of living.
purchasing power parity
Which of the following is used by managers to analyze data to estimate market potential in a certain location?
purchasing power power parity
Which of the following includes organizations like NAFTA, the EU, and ASEAN?
regional trade organizations
FDI and ownership restrictions
rules that limit the ability of foreign firms to invest in certain industries or acquire local firms
________ is considered a gateway country to Southeast Asian markets.
singapore
________ include establishments such as OPEC and OECD that work to improve the development of specific communities.
special interest groups
Which term defines a planned set of activities in which managers engage to best utilize the firm's resources and core capabilities to gain a competitive lead?
strategy
________ are taxes placed on imported goods that increase the final purchase price for consumers.
tariffs
Which term refers to official propositions prepared by a purchaser to procure specific goods or services?
tenders
The three major types of current political systems are ________.
totalitarianism, socialism, and democracy
Top managers who provide inspirational direction and motivation to employees in an attempt to take a company to a better future are exhibiting ________.
visionary leadership