IB ch.1

A global company is:

D. an organization that attempts to standardize operations worldwide.

A multidomestic company is

D. an organization with multicountry affiliates.

__________ was the world's leading manufacturing country for about 1,800 years, until it was replaced by Britain in about 1840.

E. none of the above.

The level of service exports worldwide increased more than _______ between 1980 and 2010

C. 10-fold

The worldwide stock of outward FDI is estimated to have increased _______ between 1990 and 2010.

C. 9-fold

_______ refers to the transportation of any domestic good or service to a destination outside a country or region.

C. Exporting

International business really began:

C. before the time of Christ.

According to the text, the tendency toward an international integration of goods, technology, information, labor, and capital, or the process of making this integration happen, is called:

C. economic globalization.

The domestic environment is composed of all the uncontrollable forces originating in the __________ that surround and influence the life and development of the firm.

C. home country

Decision making in the international environment is __________ it is in a purely domestic environment

C. more complex than

Unconscious reference to one's own cultural values when judging behavioral actions of others in a new and different environment is called:

C. self-reference criterion.

International business differs from domestic business in that a firm operating across borders must deal with:

C. the foreign environment. D. the international environment. E. the domestic environment.

A business whose activities are carried out across national borders is known as an international business.

true

A global company is an organization that attempts to standardize and integrate operations worldwide in most or all functional areas.

true

According to the text, the domestic environment is all of the uncontrollable forces originating in the home country that surround and influence the firm's life and development.

true

According to the text, the level of intracompany trade of multinationals in 1930, as a percentage of world trade, may have exceeded the proportion at the end of the 20th century.

true

All managers need to have a basic knowledge of international business.

true

Changing the method of going abroad from exporting to overseas production is often necessary to protect foreign markets.

true

Expanded international trade is linked with the creation of more and better jobs.

true

External forces in the international business environment are commonly called uncontrollable forces.

true

Foreign business refers to the operations of a company outside its home or domestic market

true

Globalization has produced uneven results across nations and people

true

Greater profits may be obtained by either increasing total revenue or decreasing the cost of goods sold.

true

Importing refers to the transportation of any good or service to a destination into a country or region, from a foreign origination point.

true

Internal environmental forces are commonly referred to as controllable.

true

One variable commonly used to measure where and how fast internationalization takes place is the increase in total foreign direct investment.

true

Opponents of free trade point out that globalization has contributed to a decline in environmental and health conditions.

true

Supporters of globalization generally argue that it is the best strategy for advancing the world's economic development.

true

That free trade is the best strategy for advancing the world's economic development is one of the few propositions on which almost all economists agree.

true

The Ottoman Empire's powerful location raised the cost of Asian trade for the Europeans and resulted in a search for sea routes to Asia.

true

The United Nations uses the term transnational to describe an enterprise doing business in more than one country.

true

The tendency toward an international integration of goods, technology, information, labor, and capital, or the process of making this integration happen, is referred to as economic globalization.

true

The term international company refers to both global and multidomestic companies.

true

The world stock of outward foreign direct investment was $19 trillion at the beginning of 2010, which was more than nine times what it was in 1990.

true

There are five major kinds of globalization drivers, all based on changes that are leading international firms to the globalization of their operations.

true

There are many outstanding international career opportunities for people with desirable interpersonal and language skills that are not in mainstream business but may require basic business expertise.

true

While international business as a discipline is relatively new, international business as a business practice is not.

true

A common cause of the added complexity of foreign environments is managers' unfamiliarity with other cultures and is called self-reference syndrome.

false

A company headquartered in another country is known as a foreign business.

false

A multidomestic company is an organization that attempts to standardize and integrate operations worldwide in all functional areas.

false

According to the definitions in the text, a multidomestic firm is an organization that attempts to standardize operations worldwide in all functional areas.

false

According to the text, environmental elements over which management does have some control—including competitive, labor, and financial forces—are called internal forces.

false

According to the text, the international environment is all of the uncontrollable forces originating outside the home country that surround and influence the firm.

false

According to the text, the self-absorption criterion is probably the biggest cause of international business blunders.

false

An examination of the 2009 Human Development Report shows that only 23 of the 182 countries for which data were available had average annual GDP per capita growth rates that were higher than the U.S. growth rate for the period 1990-2007.

false

An international company is an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences

false

As the term is used in the text, foreign business is business whose activities are carried out across national borders.

false

Britain was the world's leading manufacturing country for about 1,800 years, until it was replaced by the United States at the end of the 1800s.

false

Critics of large global firms compare these firms' sales with nations' total sales to illustrate the tremendous size of these firms

false

Exporting refers to the transportation of any good or service to a destination inside a country or region.

false

External environmental forces are commonly referred to as controllable.

false

In organizing their international activities, there are five dimensions along which management can globalize or standardize these activities.

false

International business differs from domestic business in that a firm operating across borders must deal with the forces of two kinds of environments—domestic and foreign.

false

Only those companies that have foreign operations need to be aware of what is occurring globally in foreign markets and their industry.

false

Opponents of globalization argue that globalization has contributed to an improvement in environmental and health conditions.

false

The United States has only about 10 percent of the world's population, so the vast proportion of most companies' potential customers are located elsewhere.

false

The forces in the international environment are the same as those in the domestic environment except that they occur in foreign nations.

false

The international environment is composed of all the uncontrollable forces that surround and influence the firm's life and development

false

The reasons international firms enter foreign markets are all linked to either (1) the desire to increase profits or (2) the desire to increase sales.

false

The term international business is used to describe an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences.

false

Transnational corporations account for approximately 25 percent of total global output and nearly 50 percent of world trade.

false

Uncontrollable forces are external forces over which management cannot exert any influence.

false

Which of the following are identified in the text as being drivers of globalization?

A. Technological

As stated in the text, an international business is:

A. a business whose activities involve crossing national borders.

An international company is:

A. a global company. B. amultidomestic company.

The increased internationalization of business requires __________ to have a basic knowledge of international business.

A. all managers

A survey of CEOs of the 162 largest firms on Fortune's list of the 500 largest American corporations found that the CEOs strongly believed that:

A. an international orientation should be an important part of college business education. C. the importance of international business skills and knowledge for promotion to senior executive positions was higher for companies anticipating an increased level of importance of international activities in the next five years.

A survey of CEOs of the 162 largest firms on Fortune's list of the 500 largest American corporations found that the internationally oriented courses that were viewed as being the most important for early career positions included topics related to:

A. an introduction to international business. B. international strategy and competitiveness. C. international legal and political issues.

Examples of the kinds of uncontrollable forces listed in the text are:

A. competitive. B. technological.

Environment as used in the textbook is the forces surrounding and influencing the life and development of the firm and is classified as:

A. controllable or uncontrollable. C. internal or external.

According to supporters of the globalization of trade and investment, free trade

A. creates more and better jobs.

Firms that have substantial operations in more than one country are called:

A. global companies. B. multidomestic firms.

According to opponents of the globalization of trade and investment

A. globalization has produced uneven results across nations and people. B. globalization has had harmful effects on labor and labor standards. C. globalization has contributed to a decline in environmental and health conditions.

Management has no direct control over the external environment of the firm but can exert influence by

A. heavy promotion of new products to change cultural attitudes. C. lobbying.

The forces over which management does have some command are called:

A. internal. B. controllable.

Foreign subsidiaries must obey the local laws. If they don't, according to the text they are subject to

A. legal action by the host country. C. seizure by the host government.

If you already have a job, you can enhance your opportunities for international experience by:

A. making your boss and the human resource management department personnel aware of your interest. B. meeting people in the home office who work with the company's foreign subsidiaries. C. taking additional international business courses and making sure that people in your company know what you are doing.

According to the text, the dimensions along which management can globalize (standardize) their company's international activities include

A. markets. B. competitive strategy.

According to the text, political drivers of globalization include

A. preferential trading agreements. B. reduction of barriers to trade and foreign investment.

According to the text, the reasons international firms enter foreign markets are linked to:

A. the desire to increase profits and sales. C. the desire to protect profits and sales from being eroded by competitors.

The international environment is the interactions between:

A. the domestic environmental forces and the foreign environmental forces. C. the foreign environmental forces of two countries when an affiliate in one country does business in another country.

The international business manager can choose to

A. transfer a management practice intact. B. transfer and adjust a management practice. C. not transfer a management practice at all.

The major globalization drivers include all of the following except:

B. cultural.

Opponents of globalization argue that globalization has produced

B. deleterious effects on labor and labor standards. C. uneven results across nations and people.

Historically, international business

B. existed before the time of Christ. D. was influenced by the rise of the Ottoman Empire.

Environmental forces can be classified as:

B. external. C. uncontrollable. D. internal.

Foreign environmental forces often operate differently than domestic environmental forces because:

B. force values are different. C. changes are difficult to assess.

According to the text, personnel working in a foreign subsidiary are working in the international environment

B. if they are responsible for the subsidiary's exports. C. if they are also responsible for the management of another foreign subsidiary.

Due to the expanding importance of foreign-owned firms in local economies, host governments have made their policies toward these companies:

B. more liberal.

The major globalization drivers include all of the following except:

B. social.

Foreign business denotes

B. the domestic operations within a foreign country.

The kinds of forces in the foreign environment are __________ those in the domestic environment except that they occur in foreign nations.

B. the same as

UNCTAD, an agency of the United Nations, estimates there are __________ international firms in the world.

D. 82,000

Reasons for international firms to enter into foreign markets are linked to which of the following desires

A. Increased sales and reduced costs B. Protecting sales and profits from being eroded by competitors C. Creation of new markets.

International business differs from domestic business in that a firm operating across borders must deal with what environmental forces?

A. International B. Foreign