ib final

Soviet Union and the then-communist states of Eastern Europe

1. Countertrade emerged in the 1960s as a way for the ________ to purchase imports.

A few retailers supply most of the market

1. In a concentrated retail system

follows an ethnocentric staffing policy to maintain a unified corporate culture

10. A Japanese firm prefers expatriate Japanese managers to head its foreign operations because these managers have been socialized into the firm while employed in Japan. This indicates that the firm

location economies.

10. Economies that arise from performing a value creation activity in the optimal location are known as

sogo shosha

10. Japan's ________ have offices all over the world, and they proactively, continuously seek export opportunities for their affiliated companies large and small.

develops standards but has no power to enforce the standards.

10. The International Accounting Standards Board

letter of credit

2. A ________ states that the bank will pay a specified sum of money to a beneficiary, normally the exporter, on presentation of particular, specified documents

price at which goods and services are transferred to a subsidiary.

2. Transfer price refers to the

transnational financing

3. A German firm raising capital by selling stock through the London Stock Exchange is an example of

sight draft

3. A ________ is payable on presentation to the drawee.

it helps international traders engage in trade with trust.

4. Which of the following is a major advantage of using a letter of credit?

Domestic capital markets have more liquidity than global markets.

4. Which of the following is an observation about the cost of capital?

the home currency.

5. Most international businesses require all budgets and performance data within the firm to be expressed in the "corporate currency," which is normally

The Foreign Credit Insurance Association provides coverage against commercial risks and political risks.

5. Which of the following statements is true of export credit insurance

reduce transaction costs between subsidiaries.

6. Multilateral netting is used primarily to

Counterpurchase

6. ________ occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made.

Financial Accounting Standards Board

7. The ________ writes the generally accepted accounting principles (GAAP) that govern the preparation of U.S. firms' financial statements.

Host-country nationals have limited opportunities for advancement beyond senior positions in their subsidiary.

7. Which of the following is a drawback of the polycentric approach to staffing?

Export management companies (EMCs)

7. ________ are export specialists that offer a full menu of services to handle all aspects of exporting, similar to having an internal exporting department within your own firm

Localization Strategy

8. A polycentric approach may be effective for firms pursuing

Projected

8. Of the five combinations, Lessard and Lorange recommend that firms use the ________ spot exchange rate to translate both the budget and performance figures into the corporate currency.

provides finance to facilitate cross-border trade between the United States and other countries

8. The Export-Import Bank

Make sure that the right organization structure is in place to execute its strategy.

8. The basic strategy paradigm suggests that to maximize its profitability, a firm should do which of the following?

increases the earning potential for firms

9. Pooling the cash of all the subsidiaries centrally

It enables the firm to build a cadre of international executives who feel at home working in a number of cultures.

9. What is an advantage of the geocentric staffing policy?

The importer must pay a bank fee for the letter of credit.

9. Which of the following is a disadvantage of using a letter of credit (L/C)?

The amount of value a firm creates is measured by the difference between its costs of production and the value that consumers perceive in its products.

9. Which of the following statements is true?

an inpatriate

A citizen of France who moves to the United States to work at Ford is a(n)

Retail Concentration

A country with high car ownership, a large number of households with refrigerators, and a large number of two-income families tends to have

vertical differentiation

A firm's ________ determines where in its hierarchy the decision-making power is concentrated.

pressure for local responsiveness

A multinational enterprise doing business in Nigeria decided to change the labeling on its product to conform to local customs and preferences. What type of competitive pressure did this company experience?

the firm is selling complex new products.

A push strategy is appropriate when

a differentiation strategy

A strategy that focuses on increasing the attractiveness of a product is referred to as

an international strategy

An ethnocentric approach to staffing is appropriate for firms that are pursuing

can avoid the duplication of activities that occurs when similar activities are carried on by various subunits within the organization.

By centralizing decision making, a firm

mass production of a standardized output.

Central to the concept of economies of scale is the idea that the best way to achieve high efficiency, and hence low unit costs, is through the

the product serves universal needs

Concentration of production is appropriate when

fragmented

Countries with ________ retail systems tend to have long channels of distribution.

volatility in key exchange rates is expected.

Decentralization of production is appropriate when

Global Matrix Structure

In a ________, all roles are viewed as integrating roles.

inability of the spouse to adjust.

In a seminal study, R.L. Tung found that among American multinationals, the biggest impediment to expatriate success was the

cultural differences

In the 1960s, the Swedish vacuum manufacturer Electrolux successfully marketed vacuums in the United Kingdom with the slogan "Nothing sucks like an Electrolux." The informal United States meaning of the word sucks was well known in the United Kingdom at the time, and the company hoped the slogan, with its possible double entendre, would gain attention. When this slogan was used in the American market, it was a catastrophe. This is an example of

economies of scale.

It has been suggested that learning effects are important only during the start-up period of a new process and that they cease after two or three years. Any decline in the experience curve after such a point is due to

more significant when a technologically complex task is repeated

Learning effects tend to be

The establishment of integrating mechanisms to coordinate the activities of subunits.

Organizational structure includes several elements. Which of the following is one of them?

country of origin

The "Swiss Made" label has leveraged several watchmakers (for example, TAG Heuer) for decades now. This is an example of a ____ effect.

A long channel exists

The Duchess and the Duke sells through an import agent, a wholesaler, and a retailer. In this case,

diminishing returnS

The efficiency frontier has a convex shape because of

minimum efficient scale of output

The level of output at which most plant-level scale economies are exhausted is referred to as the

mass customization

The term ________ has been coined to describe the ability of companies to use flexible manufacturing technology to reconcile the goals of low cost and product personalization.

core competence

The term ________ refers to skills within the firm that competitors cannot easily match or imitate and that may exist in the firm's value creation activities.

server factory

This type of factory—often with the same standards as the top factories in the global firm's system—is set up to overcome intangible and tangible barriers in the global marketplace

An ethnocentric staffing approach may be more expensive compared to a polycentric staffing approach.

What is the difference between an ethnocentric and a polycentric staffing approach?

it is often difficult for a new firm to get access to shelf space in supermarkets.

When a channel is exclusive

produce the product in multiple locations close to major markets.

When a company's product has a low value-to-weight ratio, the company should

Transnational

When the firm simultaneously faces both strong cost pressures and strong pressures for local responsiveness, the ideal strategy to follow is the ________ strategy

Environmental factors also contribute to ROI of firms and these factors differ

Which of the following is a disadvantage of comparing managers in different countries only on the basis of return on investment (ROI)?

This structure makes it difficult to realize location and experience curve economies.

Which of the following is a potential drawback of the worldwide area structure?

the heads of foreign subsidiaries are not given as much voice in the organization as the heads of domestic functions or divisions.

Which of the following is a problem that arises due to an international division structure?

Standardized advertising lowers the costs of value creation by spreading the fixed costs of developing the advertisements over many countries.

Which of the following is an argument that supports global advertising?

to change an established organizational culture

Which of the following is more difficult for a leader?

It permits greater flexibility.

Which of the following is one of the five main arguments favoring decentralization?

Almost all managers share a relatively consistent set of values and norms that have a clear impact on the way work is performed.

Which of the following is true of a strong corporate culture?

Pharmaceuticals

Which of the following products will most likely have high value-to-weight ratios?

a geocentric staffing policy

Which of the following staffing approaches will be most effective for a firm that is pursuing a transnational strategy?

In a product divisional structure, each product division is set up as a self-contained, largely autonomous entity with its own functions

Which of the following statements is true about a product divisional structure?

Their transportation accounts for a very small percentage of the total costs

Which of the following statements is true of products with high value-to-weight ratios?

Relative factor costs should be considered when selecting a country for production.

Which of the following statements is true of the country factors that govern international business?

Direct selling may be the only way to reach consumers in poor nations with low literacy levels.

Which of the following statements is true?

Perceptual ability

________ is the ability to understand why people of other countries behave the way they do.