ibm part 2 mc
As of 2008, what percentage of the world's population was living in cities? A) 85 percent B) 50 percent C) 10 percent D) 1 percent
50 percent
Jenna reported to the management team that their proposed investment in Great Britain could be affected by the Brexit announcement. Which aspect of strategic planning does this demonstrate? A) Analyze the company's external environments. B) Analyze the company's internal environments. C) Define the company's business and mission. D) Set corporate objectives.
Analyze the company's external environments
Dissatisfaction with both the purchasing power parity (PPP) and conversions using official exchange rates caused the World Bank to adopt what methodology to derive per capita GNI estimates? A) GINI coefficients B) Atlas conversion factors C) inflation-growth coefficient D) Zurich formula
Atlas conversion factors
What is known to be the most discreet financial institution in the world? A) Bank for International Settlements B) World Bank C) International Monetary Fund D) Federal Deposit Insurance Corporation
Bank for International Settlements
Why is scenario analyses an important tool for managers? A) The objective of the process is to forecast the future. B) The scenario building team identifies the driving forces and "critical certainties" in a decision and prioritizes them. C) By anticipating the future and recognizing the warning signs of turbulence ahead, managers can develop more effective strategies. D) The process extrapolates from past data to build scenarios for guiding decision making.
By anticipating the future and recognizing the warning signs of turbulence ahead, managers can develop more effective strategies.
Which area of the U.S. government enforces U.S. antitrust laws? A) State Department B) Department of Justice C) House of Representatives D) Senate
Department of Justice
An examination of the world's population and predictions for future populations suggests the following: A) The population of developing countries is nearly half of the world's total population. B) The 10 nations predicted to have the largest populations by the year 2050 are all developing countries. C) Developed nations will have a decreased demand for tourism and housing. D) Developed nations will have an increased demand for financial services.
Developed nations will have an increased demand for financial services.
What is one disadvantage of the geographic region structure? A) All managers report to their respective home or host country office. B) It is not appropriate for companies that produce items with low technological content. C) Each region must have its own product and functional specialists. D) It complicates the task of directing worldwide operations.
Each region must have its own product and functional specialists.
What has been the most used central reserve asset in the world since World War II? A) English pound B) U.S. dollar C) gold D) Japanese yen
English pound
What method do companies often use when initially entering a foreign market? This method would create the least amount of risk. A) Export product to the foreign market. B) Acquire an existing business in the foreign market. C) Create a wholly owned subsidiary. D) Build a manufacturing facility in foreign market
Export product to the foreign market.
Incoterms attempt to standardize shipping agreements, and include A) FAS and CIF. B) CED and COD. C) descriptions of portside processes. D) insurance arrangements for international shipments.
FAS and CIF.
A market analyst may determine a country is not a good market by making a simple calculation based on A) GNI/capita, total population, and the size of the hidden economy. B) GNI, total population, and income distribution. C) GNI/capita, population by state or province, and the number of pharmacies. D) pet sales, number of CD players, and per capita lint production.
GNI, total population, and income distribution.
When measuring the value produced in an economy, most international organizations prefer to use A) GNI. B) GDP. C) GNP. D) PPP.
GNI.
________ refers to the total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income from abroad. A) Gross domestic product B) Gross domestic income C) Gross national income D) Net national product
Gross national income
How is the headquarters of an IC affected in a joint venture? A) Headquarters has more control over activities in a joint venture. B) The ability to take action in a joint venture is similar to that of a wholly owned subsidiary. C) Headquarters does not enjoy as much freedom of action in a joint venture. D) In a joint venture, the headquarters of a company is not included in decision making activities.
Headquarters does not enjoy as much freedom of action in a joint venture.
Value chain analysis focuses primarily on what question? A) Who are the company's target customers? B) What does the customer value and how much is the customer willing to pay for this value? C) How will this customer value be created? D) What is the best way for the company to enter a market?
How will this customer value be created?
When comparing controls in international companies to those in domestic operations, it is correct to say that A) domestic operations need more controls than ICs. B) controls are the same for both ICs and domestic operations. C) ICs need more controls than domestic operations. D) ICs and domestic operations rely on totally different controls.
ICs need more controls than domestic operations.
What is a disadvantage of the geographic region organizational structure? A) It creates increased complexity of directing worldwide operations. B) It is inappropriate for use in global companies. C) It creates duplication of area and product specialists. D) It can make product coordination across regions challenging.
It can make product coordination across regions challenging.
How did the Jamaica Agreementaffect IMF members? A) It established the rules for the floating rate currency exchange rate system. B) It led to the free trade agreement in the Caribbean. C) It created guidelines for the gold standard. D) It controlled exchange rates in the South Atlantic region.
It established the rules for the floating rate currency exchange rate system.
What effect has the FCPA had on American business? A) It has hurt American business because managers cannot use bribes anymore. B) It has challenged the creativity of American managers and consultants to develop ways to work around the FCPA. C) It has brought the discussion of bribery into the open, which has, overall, been positive. D) It has resulted in American foreign business going to Japanese and German businesses.
It has brought the discussion of bribery into the open, which has, overall, been positive.
What is a characteristic of a horizontal corporation? A) It often draws teams from different departments to solve a problem or deliver a product. B) It puts greater decision-making responsibility in the hands of managers from outside the company. C) It is considered the most conventional organizational structure. D) It is the same as a "virtual organization."
It often draws teams from different departments to solve a problem or deliver a product.
What is a disadvantage of top-down planning? A) It restricts initiative at lower levels of the organization. B) It is highly sensitive to differences in local conditions. C) It reduces the need for consultation, especially in an international company. D) It has corporate headquarters develop and provide guidelines.
It restricts initiative at lower levels of the organization.
How can the current free floating and managed exchange rate system best be described? A) It seems to be meeting its present challenges, including the 2008 liquidity crisis. B) It is in dire need for redesign due to debt defaults. C) It can continue as is for a while but is holding back international finance. D) It will need to be replaced with a fixed rate system soon.
It seems to be meeting its present challenges, including the 2008 liquidity crisis.
While there may be valid reasons for decisions to always be made at an ICs headquarters, why is it important for some decisions to be delegated to the subsidiary? A) Managers at the subsidiary must have all decisions approved by the parent company. B) Managers at the subsidiary may become hostile and disloyal. C) The subsidiary has more local knowledge. D) The subsidiary is typically on a lower pay scale.
Managers at the subsidiary may become hostile and disloyal.
What typically occurs as the level of a government's debt increases? A) A higher proportion of resources is invested into productive uses. B) Government investments will increase. C) Consumer confidence will rise. D) More resources are redirected toward payment of interest.
More resources are redirected toward payment of interest.
________ is a measure of the number of inhabitants per area unit. A) Market size B) Birthrate C) Population distribution D) Population density
Population density
________ is a measure of how the inhabitants are distributed over a nation's area. A) Urbanization B) Population size C) Population distribution D) Population density
Population distribution
What is predicted to happen with the population of many developed countries? A) Population levels will soar as the result of economic upturn. B) Population levels will fall by mid-century due to low birthrates. C) Population levels will become static as younger generations remain childless. D) Population levels will continue to move upward and downward as a reflection of political involvement.
Population levels will fall by mid-century due to low birthrates
What benefit does population size provide when determining market potential? A) Population size alone is an excellent indicator of economic strength. B) Population size alone is a good predictor of demand for consumer durables. C) Population size alone is an excellent indicator of market potential. D) Population size alone is a poor indicator of market potential.
Population size alone is a poor indicator of market potential.
Who took the United States off the gold system? A) President Eisenhower B) President Kennedy C) the Supreme Court D) President Nixon
President Nixon
When developing and assessing strategic alternatives, companies competing in international markets confront which two opposing goals? A) Reduce investment and increase profits. B) Reduce complexity and improve effectiveness. C) Standardize policies and reduce complexity. D) Reduce costs and adapt to local markets.
Reduce costs and adapt to local markets.
__________ are organizational forms in which product divisions are defined as though they were independent businesses. A) Free-form management units B) Strategic business units C) Matrix overlays D) Virtual corporations
Strategic business units
What is a characteristic of a traditional strategic planning approach? A) The CEO and the head of planning get together to devise a corporate plan, which is then handed to the operating people for execution. B) Interaction with important customers and suppliers is included. C) Governments and other stakeholder activities are direct participants. D) There is a strong and effective responsiveness to differences that occur in local markets.
The CEO and the head of planning get together to devise a corporate plan, which is then handed to the operating people for execution
Jamie lives in a country with oppressive tax rates and overwhelming government red tape that a company must go through to export its products. How might these factors affect the underground economy in this country? A) The underground economy would be neutralized. B) The underground economy would be bigger. C) The underground economy would be smaller. D) The underground economy would not exist.
The underground economy would be bigger.
How was the yen affected after the devastating earthquake and tsunami in Japan in the spring of 2011? A) The yen strengthened. B) The yen reached all-time lows against the dollar and the euro. C) The Japanese monetary authorities allowed the yen to trade against the renminbi. D) The yen stabilized at a 10-year low.
The yen strengthened.
What is a disadvantage of bottom-up planning? A) It restricts initiative at lower levels of the organization. B) It shows some insensitivity to local conditions, particularly when a company's top management team exhibits ethnocentric tendencies. C) There is no guarantee that the sum total of all the affiliates' goals will coincide with those of headquarters. D) Subsidiary directors' hands-on perspective may allow them to recognize potentially innovative opportunities.
There is no guarantee that the sum total of all the affiliates' goals will coincide with those of headquarters.
What occurs when GNI increases faster than the population? A) There probably is an expanding market. B) The market is probably contracting. C) The country where this occurs may be subject to political unrest. D) The market is becoming less attractive for business.
There probably is an expanding market.
What is a characteristic of the FX markets? A) They are largely unregulated. B) They operate from 7:00 am to 7:00 pm even on weekends. C) They are governed by trading partners. D) They tend to be small but highly competitive.
They are largely unregulated.
How have the new directions in planning affected companies? A) They have made strategic planners dominant in the planning process. B) They have brought operating managers into the planning process. C) They have relieved the firm's chief executive officer of the responsibility for strategic planning. D) They have made strategic planning longer term in orientation, typically planning 5 to 10 years into the future.
They have brought operating managers into the planning process
What is an accurate description of an IC's structures and systems? A) Management must avoid changing them over time, to avoid disrupting operations. B) They must be designed before a company can develop its strategy. C) They need to be able to evolve over time. D) They depend on the country in which the IC is headquartered.
They need to be able to evolve over time.
What is one of the reasons an international company might adopt the horizontal organization format? A) They reduce costs by eliminating middle management. B) They enhance efficiency by increasing the use of vertical decision processes. C) They spark innovation and new product development. D) They enable top management to control processes through centralized approval systems.
They spark innovation and new product development.
Japan has established trade barriers in the form of tariffs against A) Chinese vegetables and fruits, but not rice. B) U.S. beef, citrus, and dairy products. C) European electrical goods. D) European automakers.
U.S. beef, citrus, and dairy products
WIPO is a A) UN agency that administers an intellectual property system. B) WTO group opposed to patent extension and pro-generic. C) part of the Club of Rome that lobbies for longer patent periods. D) research arm of the Fuel Cartel that has been advocating longer patent protection for biofuel processing systems.
UN agency that administers an intellectual property system.
WIPO and TRIPS represent A) patent harmonization agreements in SE Asia and the EU, respectively. B) anti-counterfeiting agreements in Korea and North America, respectively. C) WTO and UN agreements on corruption. D) UN and WTO agencies or programs that focus on IP.
UN and WTO agencies or programs that focus on IP.
The three major taxes governments use to generate revenue are A) VAT, income tax, and withholding tax. B) sales tax, VAT, and income tax. C) property tax, VAT, and sales tax. D) income tax, property tax, and sales tax.
VAT, income tax, and withholding tax.
Trade names are protected under A) national laws in all UN member countries. B) WIPO and TRIPS. C) many local laws in most countries, so that illegal trademark use is a local issue. D) the United Nations.
WIPO and TRIPS.
Patent treatment is becoming standardized owing to A) the WTO. B) the UN Commission on Patents. C) domestic laws in various nations. D) WIPO, TRIPS, and the Paris Union.
WIPO, TRIPS, and the Paris Union.
The Bank for International Settlements is A) a bank for central bankers. B) a last resort for overdue national debt. C) an organized arbitration panel sponsored by the UN. D) an arbitrage clearinghouse for Organisation for Economic Co-operation and Development (OECD) economies.
a bank for central bankers.
Civil law is based on A) a collection of codes. B) precedents found in judgments made by judges. C) the assumption of innocence. D) religious law associated with the area
a collection of codes.
A fixed peg currency arrangement means that A) a country's exchange rates fluctuate around a fixed rate within a narrow band. B) monetary authorities will approve any movement; the peg is national. C) currency relationships are under the control of the central bank. D) allied nations' currencies will move in opposition, creating a balance.
a country's exchange rates fluctuate around a fixed rate within a narrow band.
The balance of payments account is a record of A) the total tangible trade flows of a country over a five-year period. B) a country's transactions with the rest of the world. C) a country's total debt service payments during a one-year period. D) the outstanding balance of a country's debt payments for the fiscal year.
a country's transactions with the rest of the world.
A purchase of foreign goods in the United States (goods that were imported from another country) will be recorded in the BOP as A) an asset in the current account. B) a debit in the current account. C) no record, because the purchase is made in the United States. D) a liability in the foreign transfer account.
a debit in the current account
The rate of growth of GNI/capita may be more important to marketers than just GNI/capita because A) a stable rate indicates low risk for entry. B) a high rate indicates a fast-growing market. C) a high rate indicates economic instability. D) low rates indicate political stability.
a high rate indicates a fast-growing market.
Extraterritoriality refers to A) a nation's attempt to enforce its law beyond its borders. B) added territory as a result of dispute settlements in wars, such as the Sakalin Islands. C) a citizen's claim to government assistance in a foreign environment. D) a taxable condition most international firms attempt to avoid.
a nation's attempt to enforce its law beyond its borders.
The Triffin paradox refers to what occurs when A) a national currency that is also a reserve currency runs a deficit. B) a reserve currency replaces a national currency. C) inflation occurs as the result of a lower currency rating. D) spot exchange rates replace forward exchange rates.
a national currency that is also a reserve currency runs a deficit.
Shayna and her husband have developed a pizza pan that is guaranteed to keep the crust from sticking to the pan and washes clean with just water. They have applied to have exclusive rights to this product. What did they apply for? A) a patent B) a copyright C) a trademark D) a trade name
a patent
International strategy can be described as A) a forecast about the company's future and how to achieve it. B) a vision for what the company will become in the future. C) the basis for a company's mission. D) a plan that guides the way firms makes choices about developing and deploying resources.
a plan that guides the way firms makes choices about developing and deploying resources.
Organizational design is best described as A) a process that deals with how an international business should be organized to ensure that its global business activities are integrated efficiently and effectively. B) management's concern with the size of an organization or the complexity of its business operations. C) something that must remain stable over time to enable the organization to create and exploit competitive advantage. D) an aspect of business that becomes less important as an IC encounters increased environmental and strategic change
a process that deals with how an international business should be organized to ensure that its global business activities are integrated efficiently and effectively.
The potential disadvantages of the virtual corporation concept include: A) greater flexibility than is associated with more typical corporate structures. B) improved organizational efficiency. C) increased job security of long-term employment for employees. D) a reduction in management's control over the corporation's activities.
a reduction in management's control over the corporation's activities.
Trademarks are defined as A) a shape, color, design, sound, phrase, abbreviation by which a product is designated. B) long-standing businesses that represent the hallmarks of an industry. C) new products that have never been placed on the market before. D) the key products that make the most money for a company.
a shape, color, design, sound, phrase, abbreviation by which a product is designated.
The Sarbanes-Oxley Act was passed in the United States in response to A) consumer requests for cleaner air standards. B) human rights violations in Europe. C) deceptive marketing practices in the service industry. D) accounting scandals in the corporate world.
accounting scandals in the corporate world.
A currency exchange arrangement with no separate legal tender is essentially A) adopting the currency of another country. B) allowing the currency to float freely. C) giving up the possibility of holding reserves. D) a stabilized arrangement for maximum monetary control.
adopting the currency of another country
Companies controlled by other companies, in which less-than-majority owners may exercise control by a variety of means, both those involving stock ownership and those involving non-ownership mechanisms, are known as A) international companies. B) affiliates. C) networked organizations. D) subsidiaries.
affiliates.
The Bretton Woods system was in place from A) after World War II to 1971. B) between World War I and World War II. C) from 1952 to 1990. D) World War II to the present.
after World War II to 1971.
In designing the organizational structure, management knows that two concerns, __________ and __________, run counter to each other. A) an effective way to departmentalize; coordinating activities B) earning profits; paying taxes C) hiring employees; gauging client groups D) sales growth; research and design expenditures
an effective way to departmentalize; coordinating activities
Withholding tax isdescribed as A) an indirect tax paid by employers before employees receive salaries. B) a direct tax levied on earned income. C) a 30 percent tax levied on foreign residents. D) an indirect tax levied on passive income.
an indirect tax levied on passive income
In order to strengthen the U.S. dollar, the Federal Reserve might sell yen and buy dollars, in which case the yen functions as A) a stronger currency than the dollar. B) an intervention currency. C) an arbitrage currency. D) none of these alternatives.
an intervention currency.
During the strategic planning discussion, committee members reviewed the current systems in place in the company's manufacturing plant to determine if it could handle the anticipated increased capacity should the company go through with the foreign investment. Which step in the strategic planning process does this reflect? A) quantify goals B) analyze the company's internal environment C) define the company's business and mission D) set corporate objectives
analyze the company's internal environment
Intellectual property includes A) intangibles, which is why it is a difficult area. B) thoughts and ideas, but not tangible products. C) anything that is a result of a creative process that does not have material qualities. D) anything that is the result of creative work that can be protected by legal means.
anything that is the result of creative work that can be protected by legal means.
Regarding a sustainable competitive advantage, the company must have skills or competencies that A) reflect the lowest price possible. B) are easily replicated. C) are difficult to imitate or substitute for. D) can be copyrighted or patented.
are difficult to imitate or substitute for.
When a government requires a permit to purchase foreign currency, the exchange rates A) are market-driven. B) can be negotiated by the firm. C) are unpredictable. D) are often above the free market rate.
are often above the free market rate.
Price and profit allocation decisions are usually best made A) at the subsidiary headquarters. B) at the IC headquarters. C) cooperatively by both subsidiary and IC headquarters. D) at the subsidiary headquarters in the host country with the lowest prices.
at the IC headquarters.
A decision to move production factors from one country to another would be A) unaffected by currency and political stability. B) made cooperatively by subsidiary managers. C) based on tax, labor supply, and market conditions. D) rejected by managers of the host country receiving the new activity.
based on tax, labor supply, and market conditions.
The most important sources of international law are A) the UN International Court of Justice. B) the U.S. Supreme Court and the EU Court of Justice. C) bilateral and multilateral treaties, along with customary law. D) common and civil law.
bilateral and multilateral treaties, along with customary law.
Scenarios are used by managers to A) control the critical elements of the external forces. B) brainstorm various plausible stories about the future. C) prepare budgets. D) understand historical events
brainstorm various plausible stories about the future.
An itemized projection of revenues and expenses for a future time period is a A) sales forecast. B) budget. C) marketing plan. D) strategic plan.
budget
Relative changes in wage rates among nations may cause the multinational firm to A) choose new exchange rates. B) reduce the number of workers. C) change its sources of supply. D) install labor-saving machinery.
change its sources of supply.
The firm's ultimate manager of strategic planning is the firm's A) vice president for planning. B) chief operating officer. C) chief executive officer. D) board of directors.
chief executive officer.
The U.S. current account deficit can be explained partially by A) citizens of other nations wanting to hold dollars, and invest in the United States. B) citizens of other nations wanting to avoid the dollar. C) U.S. citizens exporting more than they are importing. D) a lack of investment opportunities in the United States.
citizens of other nations wanting to hold dollars, and invest in the United States.
During the trial, the judge openly questioned the defendant and her lawyers and often challenged the presented evidence. There wasn't a jury and the judge made the final decision. Which type of legal system would include this scenario? A) common B) civil C) religious D) criminal
civil
The three main approaches to law are A) civil, common, and religious. B) civil, Sharia, and court-based. C) Sharia, Talmudic, and Napoleonic. D) criminal, civil, and common.
civil, common, and religious.
At the end of the trial, the judge stated that his decision for the case was based on a decision made in a similar case twenty years ago. Which form of law is indicated by the use of previous cases? A) international B) civil C) religious D) common
common
Primary reasons for relative changes in labor costs include increases or decreases in A) compensation. B) total output. C) inflation rates. D) hours worked.
compensation
The three factors that contribute to changes in labor costs include A) compensation, productivity, exchange rates. B) education, inflation, recession. C) exchange rates, agriculture, political policy. D) poverty rates, birthrates, death rates.
compensation, productivity, exchange rates
A company's ability to achieve and maintain a unique and valuable competitive position both within a nation and globally, generating higher rates of profit than its competitors, is known as A) international strategy. B) competitive advantage. C) resource leverage. D) comparative advantage.
competitive advantage
Jefferson Materials Corp. has developed a fire-resistant fabric that no one else has been able to replicate. It is used throughout the world in firefighting equipment and supplies. Since it is the only company making the product, customers are willing to pay a premium for the fabric. In this scenario, the fire-resistant fabric has helped the company develop a(n) A) economy of scale. B) competitive advantage. C) purchasing power parity. D) comparative advantage.
competitive advantage.
Action plans to enable organizations to reach their objectives are known as A) competitive strategies. B) policies. C) procedures. D) strategic scenarios.
competitive strategies.
To be effective, a company's international strategy mustbe A) the same as the leaders of the industry. B) consistent among all the functions and activities of the company. C) the same as the company's domestic strategy. D) externally consistent among the company's products and regional units.
consistent among all the functions and activities of the company.
Plans for the best- or worst-case scenarios or for critical events that could have a severe impact on the firm are known as A) scenario plans. B) strategic plans. C) contingency plans. D) tactical plans.
contingency plans
The two main issues for management to consider in designing an international company's structure include: A) departmentalizing to most effectively take advantage of efficiencies gained from specialization of capital. B) integrating functions to achieve lowest possible costs. C) ensuring that policies and procedures can enable continued product innovation. D) coordinating departments' activities to meet the firm's overall objectives.
coordinating departments' activities to meet the firm's overall objectives.
Sanjay has written a cookbook. What form of legal protection can he obtain for his book? A) copyright B) patent C) trademark D) arbitration
copyright
In which type of currency arrangement would a currency be readjusted periodically at a fixed, preannounced rate? A) stabilized B) crawling peg C) managed floating D) conventional fixed-peg
crawling peg
To create a competitive advantage that is sustainable over time, the international company should try to develop competencies that A) create value for customers and for which they are willing to pay. B) are easy to imitate or substitute for. C) are expensive to develop and maintain. D) imitate those of market leaders.
create value for customers and for which they are willing to pay.
The balance of payments account is divided into the following three major subaccounts: A) trade, capital, and debt. B) cash flow, assets, and official reserves. C) services, cash flow, and debt. D) current, capital, and official reserves.
current, capital, and official reserves.
When designing the structure of an IC, the element a company considers while it assesses population groups is A) product and technical expertise. B) functional expertise. C) customer expertise. D) geographical expertise.
customer expertise.
A large international debt may result in A) reduction in the level of component production at the local level. B) decreased levels of foreign exchange available for importing components for local assembly. C) increased numbers of importers. D) growing levels of sales by home country factories that sell to the subsidiary in the indebted nation.
decreased levels of foreign exchange available for importing components for local assembly.
The strategic planning process provides a formal structure in which managers will A) establish a corporate level team to prepare the strategic plan. B) define the company's business and mission. C) formulate scenarios. D) implement strategy.
define the company's business and mission.
To set corporate objectives, management must first A) select a viable market segment. B) quantify them. C) define the firm's mission. D) research the market.
define the firm's mission
Most significantly for the international manager, the balance of payments reveals A) demand for a firm's products. B) a firm's financial position. C) a country's import and export patterns. D) demand for a country's currency.
demand for a country's currency.
The ratio between the number of older people and younger people, on whom elders are dependent to supply the funds to provide social security benefits, is called the A) dependency ratio. B) population distribution. C) population density. D) graying challenge.
dependency ratio.
Currency exchange controls are found most frequently in A) developing countries. B) developed countries. C) countries with pegged exchange rates. D) nondemocratic countries.
developing countries.
Milo Millworks Inc. has maintained a sustainable competitive advantage for its framing style. In order to accomplish this, the framing style must be A) priced low. B) easy to obtain. C) easy to imitate. D) difficult to substitute for.
difficult to substitute for.
Within the international division structure, it is common for A) conflicts to be minimized within the firm. B) fewer power struggles to arise over product designs. C) the challenges of managing the international division to diminish as larger size and scale are achieved. D) disagreements to be had regarding prices charged to the international division by the domestic unit.
disagreements to be had regarding prices charged to the international division by the domestic unit.
During the pretrial period, the law firm worked to find facts relevant to the litigation. What is this process called? A) discovery B) arbitration C) consolidation D) accommodation
discovery
The amount of income left after paying taxes and making essential purchases is known as A) personal savings. B) discretionary income. C) gross income. D) disposable income.
discretionary income.
After the taxes are taken out of her pay, Sharon takes home $1,254 in her paycheck. This dollar amount represents her A) personal savings. B) discretionary income. C) gross income. D) disposable income.
disposable income.
Economies with per capita incomes in the low to middle range that are in a transition toward developed status are known as A) undeveloped economies. B) socialist economies. C) high-income economies. D) emerging market economies.
emerging market economies.
In Sharia law, interest is forbidden, which results in A) severe limitations on working capital. B) equity partnerships, where business risk is shared. C) interest that is usually paid but termed something else. D) limits in the development of international businesses.
equity partnerships, where business risk is shared.
As their overseas operations have increased in importance, larger multinationals have felt the need to A) change from a global structure to an international division. B) establish home country operations that handle all aspects of production and marketing. C) eliminate their domestic operations. D) establish worldwide organizations based on product, customer class, function, or region at the top level.
establish worldwide organizations based on product, customer class, function, or region at the top level
Sir Isaac Newton put England on the gold standard when he A) declared, as master of the English mint, that he would sell gold for 1 pound, 1 shilling, 1 pence, under the law of one price. B) set a market price for gold, the British pound and the U.S. dollar. C) established a fixed equivalency between gold and the British currency. D) brought the matter to Queen Anne, who declared Britain would follow the gold standard.
established a fixed equivalency between gold and the British currency.
In the United States court system, tort claims may result in A) exceedingly large awards. B) lower liability insurance. C) a reduction in strict liability. D) reduced liability insurance costs for foreign companies.
exceedingly large awards.
The Japanese yen is an example of a convertible currency because it can be A) converted to gold at a higher rate. B) assigned an arbitrary value higher than its value in the free market. C) exchanged for other currencies without restriction. D) exchanged at the spot forward rate.
exchanged for other currencies without restriction.
A patent gives the inventor A) property rights for 10 years. B) the right to use the invention until development costs are recouped. C) exclusive right to manufacture, exploit, use, and sell the invention for a given time period. D) the right to keep the patented process but not the product for five years.
exclusive right to manufacture, exploit, use, and sell the invention for a given time period.
Patents are government grants that give the owner A) exclusive rights to use, sell, manufacture, or exploit the invention or process. B) the exclusive right to use the fundamental ideas on which the invention is based. C) the rights to sell the invention, but only beyond the patent-granter's borders. D) rights to the invention but does not prevent others from copying the invention.
exclusive rights to use, sell, manufacture, or exploit the invention or process.
Knowledge that is easy for an individual to express clearly in words, pictures, or formulas is known as A) explicit. B) implicit. C) tacit. D) intangible.
explicit.
Arbitrage functions to A) provide French markets access to other EU markets. B) exploit price differences between markets, so as to profit with no risk. C) create wealth through interest rate swaps. D) create increased trading in commodity markets.
exploit price differences between markets, so as to profit with no risk.
Kylie is a U.S. citizen currently living and working in France. She will have to pay U.S. taxes on her earnings since she is a citizen even though she is not currently a resident. What concept is illustrated by this example? A) arbitration B) extraterritoriality C) intellectual property D) litigation
extraterritoriality
The EU applies its competition policy A) extraterritorially. B) only within EU. C) within the EU and applicant states. D) within the EU and other European nations.
extraterritorially.
The ________ includes all the uncontrollable forces originating outside the home country that surround and influence the firm. A) foreign environment B) international environment C) host country environment D) global environment
foreign environment
The Alien Tort Statute allows non-U.S. nationals to A) sue in the United States courts for residency in the United States. B) file lawsuits in the United States courts for alleged violations of international law, including human rights violations, even when the defendant has no ties to the United States. C) file claims in the United States courts for alleged violations of domestic laws. D) file claims against other foreign nationals for violation of U.S. EEOC law.
file lawsuits in the United States courts for alleged violations of international law, including human rights violations, even when the defendant has no ties to the United States.
Connor works at the headquarters of FiberNet Corp. He receives bimonthly reports that reveal if surplus funds are available. It is then Connor's job to determine how those funds should be allocated. What type of report would provide Connor with this information? A) economics B) technological C) market opportunities D) financial
financial
The types of information an IC needs to have reported by subsidiaries includes A) financial. B) organizational structure and systems. C) cultural. D) staffing.
financial
Taxation is a financial force in that A) firms achieving a lower tax burden than their competitors can generate higher revenues. B) governments enacting taxes are formal institutions that enforce tax law via force. C) businesses are compelled by foreign governments to pay taxes. D) it is not controlled by the firm.
firms achieving a lower tax burden than their competitors can generate higher revenues.
The monetary arrangements made at Bretton Woods resulted in what type of exchange rates assigned to member nations' currencies? A) fixed B) forward C) spot D) floating
fixed
What was originally appealing about the gold standard was its A) flexibility. B) simplicity. C) transportability. D) carrying costs.
flexibility
Cooper Electric locked in today's exchange rate for all trades occurring 60-90 days from now. What rate will the company use in these transactions? A) bid price B) ask price C) forward rate D) spot rate
forward rate
Jason wants to lock in today's exchange rate because he is worried rates might skyrocket in the next few months. He wants to lock in this rate for the shipments he has due in the next 60 days. What type of rate is Jason interested in? A) forward rate B) spot rate C) ask rate D) bid rate
forward rate
The international structural stages model suggests that a typical evolutional path for an international company's structure would be A) from international division to worldwide product division to geographical area division. B) from geographical area division to worldwide product division to global matrix. C) from functional division to horizontal company to virtual corporation. D) from international division to worldwide product division to global matrix.
from international division to worldwide product division to global matrix.
When a company faces strong pressures for reducing costs and limited pressure to adapt products for local markets, it should consider using a A) global strategy. B) multidomestic strategy. C) transnational strategy. D) differentiation strategy
global strategy.
Actions that involve antitrust laws usually involve A) government against citizens. B) government against business. C) country against country. D) citizen against citizen.
government against business.
The potential benefits of the virtual corporation concept include A) greater flexibility than is associated with more typical corporate structures. B) a greater number of employees working on site. C) the opportunity to redesign organizational structures and hierarchy. D) a reduction in management's control over the corporation's activities.
greater flexibility than is associated with more typical corporate structures
A measure of an economy's size based on the market value of goods and services produced within a nation in a year is A) net national income. B) gross domestic product. C) gross national product. D) gross national income.
gross domestic product
Frank is an economist and often measures the overall economic output of a nation even though he realizes it doesn't account for the flows of FDI and income into and out of the nation. What measure is Frank using? A) gross domestic product B) international income debt C) gross national income D) purchasing power parity
gross domestic product
The percentages of household expenditures spent on food and beverages by residents of industrialized nations are ________ the percentages spent by residents of developing nations. A) half B) twice C) equal to D) triple
half
Critics of the FCPA believed that it would A) harm U.S. companies' credibility. B) eliminate necessary competition. C) increase environmental waste. D) lower the costs of production.
harm U.S. companies' credibility.
Companies pursuing a transnational strategy usually A) have less decentralized manufacturing operations. B) have simple organizational structures and processes within and across regions. C) locate most of their activities in developing countries. D) have international subsidiaries develop and share knowledge with company operations worldwide.
have international subsidiaries develop and share knowledge with company operations worldwide.
One expectation by companies that adopt the global organizational form is that this change may A) permit the company to obtain cheaper labor. B) help the company be more capable of developing strategies to confront global competition. C) enable the company to get lower interest rates to finance expansion. D) enable the company to avoid regulations and policies set down by foreign governments.
help the company be more capable of developing strategies to confront global competition.
The use of an international product structure typically A) represents a sharp move away from pre-export department times. B) removes domestic product divisions. C) helps to avoid duplication of product experts. D) suffers from a duplication of area experts.
helps to avoid duplication of product experts.
Companies pursuing a multidomestic strategy typically have A) low operating costs and high efficiency. B) centralized decision making and quick response to changes in local competition. C) tight headquarters control over product strategy. D) high levels of local market customization.
high levels of local market customization.
The World Bank categorizes countries based on GNI per capita, using the following categories: A) undeveloped economies, developing economies, developed economies. B) developed economies, industrializing economies, developing economies. C) developing economies, newly industrializing economies, developed economies. D) high-income economies, middle-income economies, low-income economies.
high-income economies, middle-income economies, low-income economies.
The end result of legal trade obstacles is often A) limited trade, with the recipient of the trade obstacles withdrawing. B) political negotiations between the two countries, to smooth relations and reduce costs. C) higher costs to consumers. D) lower taxes to citizens in the tariff-imposing country due to tariff revenues.
higher costs to consumers.
The bid price is the A) highest-priced buy order currently in the market. B) lowest-priced buy order currently in the market. C) highest-priced sell order currently in the market. D) lowest-priced sell order currently in the market.
highest-priced buy order currently in the market.
The common characteristic of multinationals that are organized by function is a narrow and A) highly integrated product mix. B) highly integrated customer list. C) vertically integrated marketing mix. D) highly concentrated regional focus
highly integrated product mix.
In U.S. accounting law, the Sarbanes-Oxley Act A) holds corporate officers personally responsible for their corporate filings. B) seeks to establish barriers to foreign listings on the U.S. stock exchanges. C) is a response to reduced corporate earnings due to corruption. D) attempts to establish GAAP practices for foreign companies.
holds corporate officers personally responsible for their corporate filings.
High-Rise Boots Corp. plans to expand into the European market where it finds weak pressure to respond to local demands and cost reductions are not necessary. Which competitive strategy should the company use based on these factors? A) multidomestic strategy B) transnational strategy C) differentiation strategy D) home replication strategy
home replication strategy
Which type of company is characterized by lateral decision processes, horizontal networks, and a strong corporate-wide business? A) modular network B) horizontal corporation C) modular corporation D) virtual organization
horizontal corporation
Keller Corp., based in Virginia, has exported its line of luggage and travel products into Europe for the past three years and has decided to create a new division based in Paris to handle all overseas activity. What type of division is the company creating? A) international B) domestic C) global D) regional
international
Madison Enterprises is an international corporation that sells sporting equipment and has had regional units for the past ten years. Recently, the company acquired an international business that specializes in skincare products for athletes. Madison Enterprises has brought that company in and retained its product division setup. What type of structure does Madison Enterprises now use? A) hybrid B) matrix overlay C) virtual D) matrix
hybrid
Nate works for a company that is mostly based on a geographic unit structure but also combines elements of a functional unit structure and product division structure. This company provides an example of which type of structure? A) hybrid B) matrix C) matrix overlay D) virtual
hybrid
The Economist's Big Mac Index suggests that A) if currencies are trading equivalently, the prices of a Big Mac will be similar. B) if a currency is undervalued, the price of a Big Mac in that currency will be up to 50 percent more expensive than the United States dollar price of a Big Mac. C) the dollar price of the Big Mac will always be higher, because it is the home market. D) when the dollar is trading at a historical premium, the price of a Big Mac will be cheaper in the United States.
if currencies are trading equivalently, the prices of a Big Mac will be similar.
Performance measures are done to assess A) the time the company takes to acculturate new employees. B) if the strategy and its implementation are proceeding successfully. C) assumptions about how the strategic lists affect the business. D) whether the strategic forecasts are precise.
if the strategy and its implementation are proceeding successfully.
The per se concept of U.S. law means that a situation is A) only illegal in the United States. B) illegal in and of itself. C) legal regardless of judicial decree. D) only legal outside of the United States.
illegal in and of itself.
Under the FCPA, facilitating payments are allowed for A) patent approvals. B) import approvals. C) building construction. D) production standards.
import approvals.
Exchange rate forecasting is A) important because exchange rates influence many aspects of business. B) important because markets depend on solid information and not estimates. C) unimportant because exchange rate forecasting does not have a theoretical model. D) unimportant because exchange rate movements do not impact international transactions.
important because exchange rates influence many aspects of business.
One response to a large international debt is for a government to A) remove wage controls. B) increase government spending. C) impose price controls. D) reduce debt payments.
impose price controls.
The law of one price says that A) only one price can be charged for an item in a contract deal. B) in an efficient market, one price only is the permissible price. C) in an efficient market, like goods will have like prices. D) the cost to produce a product must reflect the cost at which it is sold.
in an efficient market, like goods will have like prices.
One characteristic of the United States Foreign Corrupt Practices Act is that it A) clearly stipulates terminology and behavior that is illegal on the part of U.S. businesses and foreign business operating in the United States. B) includes uncertainties such as terminology, definitions, accounting standards, and behavior standards. C) applies to only international transactions that occur within the territorial borders of the United States. D) is an attempt to support U.S. businesses by exporting U.S. values that indirectly aid business.
includes uncertainties such as terminology, definitions, accounting standards, and behavior standards.
A measure of how a nation's income is apportioned among its people is called A) purchasing power parity. B) gross domestic product. C) income distribution. D) the Atlas conversion factor.
income distribution.
From comparisons of income distribution studies over time, it generally appears that A) income is more evenly distributed in the richer nations. B) there are few variations in income distribution among developed and developing nations. C) comparisons over time demonstrate that income redistribution changes relatively quickly, so older data have limited value. D) the middle quintiles in most nations are growing at the expense of the bottom 20 percent.
income is more evenly distributed in the richer nations.
As a general rule, the underground economy in a country will be bigger when A) tax rates are lower. B) drug use is higher. C) income levels are low. D) government red tape is oppressive.
income levels are low.
GNI/capita, a crude estimate of purchasing power, must be further refined by A) an examination of the amount of income tax paid. B) a census to determine the total population. C) incorporating data on how the national income is actually distributed. D) determining the amount of discretionary income.
incorporating data on how the national income is actually distributed.
Because ________ consumer expenditures eliminate differences in relative prices, marketers use these data to analyze how the composition of consumption changes with the level of development. A) normalized B) inflation-free C) PPP-based D) historical-cost
inflation-free
When a country experiences a sustained increase in prices, it is feeling the effects of A) a depression. B) inflation. C) recession. D) capital gains.
inflation.
Unrecorded transactions in an economy, such as goods and services that are bartered, are said to be part of which economy? A) developing B) forward C) informal D) developed
informal
What does the international monetary system consists of? A) institutions, rules, procedures, and processes B) treaties among nations in trade blocks C) bilateral legal arrangements among nations and then, belief in the system D) relationships among sellers in the international market
institutions, rules, procedures, and processes
Compared to the traditional process, in the new strategic planning process A) top management is assigning strategic planning to teams of line and staff managers from the same business. B) interaction with important customers and suppliers is included. C) governments and other stakeholder activities are direct participants. D) strategic planning is done by the implementers within the local subsidiaries.
interaction with important customers and suppliers is included.
Changes in the way corporate planning is done today include A) greater use of structured formats to planning. B) the use of advanced computing techniques to make detailed five-year forecasts. C) heavy emphasis on the use of specialized headquarters staff. D) interaction with important customers, distributors, and suppliers.
interaction with important customers, distributors, and suppliers.
The ________ environment includes the interactions between domestic and foreign environmental forces, or between sets of foreign environmental forces when an affiliate in one country does business with customers in another. A) foreign B) international C) host country D) global
international
A division in the organization that is at the same level as the domestic division and is responsible for all non-home-country activities is a(n) A) foreign division. B) global product division. C) regional division. D) international division.
international division.
Malek Inc. has implemented a company structure in which the domestic product division is responsible for all global line and staff operations. In addition, each product division is responsible for the worldwide operation efforts of marketing and production. Which structure does this company use? A) geographic region B) international product C) hybrid D) global functional
international product
Countries maintain reserve accounts in order to A) control imports. B) provide low-interest loans to struggling businesses. C) earn higher interest rates. D) intervene in currency markets when needed.
intervene in currency markets when needed.
The Fisher effect states that the real interest rate A) is the nominal rate plus the recorded inflation rate. B) is the only measure to use in calculating PPP. C) is the nominal rate minus the expected inflation rate. D) is the difference between the nominal rate and the inflation rate.
is the nominal rate minus the expected inflation rate.
Japan is mentioned in the age distribution discussion of the text because A) it is the fastest-graying nation in the industrial world. B) in the future it may have almost as many retirees as children. C) its declining population means that the country's wealth will be spread among a smaller number of people, increasing its overall prosperity. D) its declining population means that the country's social security funds will last longer.
it is the fastest-graying nation in the industrial world.
One characteristic of the geographic regionalized organization is A) it has the advantage that it avoids duplication of product and functional specialists. B) it seems to be popular with companies that have diverse products, each with different product requirements, competitive environments, and political risks. C) it avoids problems with global product planning. D) it has geographic area managers who report directly to domestic operating units.
it seems to be popular with companies that have diverse products, each with different product requirements, competitive environments, and political risks.
The planning method that appears to be becoming more popular is A) top-down. B) bottom-up. C) sequential. D) iterative.
iterative
The practices that organizations and their managers use for identifying, creating, acquiring, developing, dispersing, and exploiting competitively valuable knowledge is known as A) competitive advantage. B) international strategy. C) value analysis. D) knowledge management.
knowledge management
One area of concern for international businesses is that U.S. tort cases may result in A) large monetary awards. B) malfeasance claims against the business. C) personal embarrassment to corporate officers and require apologies. D) exorbitant legal fees that stem from long-term court cases.
large monetary awards
Within a horizontal corporation, the decision-making process is best described as A) virtual. B) hierarchical. C) vertical. D) lateral
lateral.
Companies pursuing a home replication strategy A) usually have low operating costs and high efficiency. B) limit availability of local customization. C) have loose headquarters control over product strategy. D) have local subsidiaries that develop unique country-level capabilities.
limit availability of local customization.
A large international debt may cause a government to impose wage controls, which result in A) limiting consumer purchasing power. B) increasing government spending. C) eliminating price controls. D) expanding to a larger market.
limiting consumer purchasing power.
The Chinese Anti-Monopoly Act seems to support A) the consumer. B) local businesses. C) reducing competition. D) political sovereignty.
local businesses.
Patent trolling is a process of A) looking for loopholes in patent protection and exploiting them. B) recording and registering of patents in foreign countries to protect the firm's IP. C) searching out patents that have expired and negotiating their replacements. D) legal research that uncovers obscure, deceased patent holders and liberates their inventions.
looking for loopholes in patent protection and exploiting them.
Companies pursuing a global strategy typically have A) low operating costs and high efficiency. B) decentralized decision making and quick response to changes in local competition. C) low levels of transportation and tariff costs. D) high levels of local market customization.
low operating costs and high efficiency.
Where are the greatest urban shifts now occurring? A) low- and middle-income countries B) high-income regions C) domestic markets D) developed regions
low- and middle-income countries
If a nation's GNI is small, but a small percentage of its population receives a large percentage of that income, it may be a good market for A) high-priced industrial products. B) high-volume, high-priced consumer products. C) low-volume, high-priced luxury products. D) low-priced, high-volume discretionary goods.
low-volume, high-priced luxury products.
In larger, older organizations, more decisions are A) delegated to the subsidiary headquarters. B) delegated to empowered, decentralized subsidiary managers. C) made at headquarters of the parent company. D) made jointly between the subsidiary and parent company.
made at headquarters of the parent company.
Economic analyses become more complex when a firm enters overseas markets because unlike the situation for a company operating domestically, A) the uncontrollable economic variables must be forecast. B) management must operate in two new environments, foreign and international. C) economists know less about foreign exchange rates. D) analysts must now forecast the values for both socioeconomic and economic variables.
management must operate in two new environments, foreign and international.
The geographic region structure seems to be popular with companies that A) operate in a purely domestic market offering customized products. B) favor licensing as a form of market entry. C) manufacture products with a low technological content. D) manufacture products incorporating high technology in industrialized regions.
manufacture products with a low technological content
Historically, more aspects of ________ have been standardized and coordinated worldwide by companies than has been the case for other value chain activities such as ________. A) research and development; manufacturing B) marketing; manufacturing C) manufacturing; marketing D) marketing; research and development
manufacturing; marketing
Caroline works in Asia for an affiliate of Sheppard Electronics based in Oklahoma. She has learned that a large geographic sector in Asia would benefit from the company's master recharging station and shares that information with headquarters in her monthly report. Which aspect of reporting does this reflect? A) economics B) technological C) market opportunities D) financial
market opportunities
The __________ organization has evolved from management's attempt to mesh product and regional and functional expertise while maintaining clear lines of authority. A) hybrid B) matrix C) global D) network
matrix
An organization in which top-level divisions are required to heed input from a staff composed of experts from another organizational dimension in an attempt to avoid the double-reporting difficulty of a matrix organization but still mesh two or more dimensions is known as a A) hybrid organization. B) matrix organization. C) matrix overlay. D) virtual corporation.
matrix overlay.
One advantage of companies with global structures is that they A) outperform those with international divisions. B) are organized on the basis of geography and not on products or processes. C) are large companies with numerous overseas manufacturing facilities. D) may obtain lower production costs by promoting worldwide product standardization
may obtain lower production costs by promoting worldwide product standardization.
A company would rely on triple-bottom-line accounting to A) assess the value of marketing promotions. B) balance imports and exports. C) measure the company's strategic performance. D) examine economies of scale procedures.
measure the company's strategic performance.
The current account on the BOP has three subaccounts: A) export, import, and capital. B) tangible exports, tariff revenues, and capital. C) fixed assets, current liabilities, and long-term debt. D) merchandise, services, and unilateral transfers.
merchandise, services, and unilateral transfers.
A company might elect to use the horizontal organizational form if it wanted to give more decision-making responsibility to A) the customer. B) middle management. C) stockholders. D) upper management.
middle management.
A broad statement that defines the organization's purpose and scope is known as a A) strategic plan. B) mission statement. C) vision statement. D) value chain.
mission statement.
Patent trolls are A) a record of all patents, recorded by the UN. B) the numerical controls issued on patents, standardized by the Paris Convention. C) the organizing system for patent review that is kept internationally by OECD. D) modern highway robbers who exploit loopholes in IP protection.
modern highway robbers who exploit loopholes in IP protection.
Virtual corporations are also called A) modular networks. B) corporate networks. C) modular corporations. D) anti-organizations.
modular corporations.
With increasing inflation, borrowing becomes A) more attractive because repayment can be made with cheaper money. B) less attractive because repayment is made with dearer money. C) impossible because money has lost its value. D) a moot issue because of liquidity issues.
more attractive because repayment can be made with cheaper money.
Arbitration is a private solution that is more private than litigation A) more private than litigation. B) considered a last resort when settling a dispute. C) only used in common law cases. D) common in religious law systems.
more private than litigation
Incomes measured by the Atlas conversion factor are generally A) more stable over time. B) less stable over time. C) impossible to stabilize. D) not ready to be stabilized.
more stable over time.
Currently, what percentage of the world's total population is found in developing countries? A) more than 75 percent B) around 25 percent C) close to 5 percent D) under 50 percent
more than 75 percent
Generally, because of higher birthrates, developing countries often have A) lower infant mortality rates. B) more youthful populations than do developed nations. C) an increasing demand in products for millennials. D) more highly-skilled medical facilities.
more youthful populations than do developed nations.
The Foreign Corrupt Practices Act has A) moved the discussion of transparency and corruption out into the open. B) impaired American competitiveness abroad. C) jailed legions of corrupt foreign executives in the United States. D) introduced clear, concise terminology into the discussion of corruption.
moved the discussion of transparency and corruption out into the open.
Reengineering of organization forms exemplifies A) a redesign of the company's products to improve their quality. B) disempowerment of employees. C) movement toward lean, fast, and innovative structures and processes. D) increased use of specialization and increased organizational hierarchy.
movement toward lean, fast, and innovative structures and processes.
When there is strong pressure for a company to adapt its products or services for local markets, it should probably rely on a A) home replication strategy. B) multidomestic strategy. C) transitional strategy. D) global strategy.
multidomestic strategy.
According to the World Bank, populations in high-income economies use how much commercial energy per capita as do people in developing economies? A) half as much B) twice as much C) five times as much D) nearly seven times as much
nearly seven times as much
Strict liability requires A) no need for a plaintiff to prove manufacturer negligence. B) the manufacturer to know that the design or manufacture is inferior. C) the buyer to take risks on the purchase of a newly designed product. D) responsibility for the product throughout its life cycle.
no need for a plaintiff to prove manufacturer negligence.
Exchange rate fluctuations are best described as A) not yet fully understood by economists. B) well understood and supported by solid theory. C) random phenomena. D) the result of so many variables that they cannot be explained.
not yet fully understood by economists.
Reductions in birthrates are occurring worldwide because A) governments are scaling back family planning programs. B) of an increased level of urbanization. C) women are experiencing a decline in status. D) governments are encouraging higher levels of marriage and at earlier ages.
of an increased level of urbanization.
Punitive damages are found A) throughout legal systems based on common law. B) only in the United States. C) in the United States, EU, and Asia. D) in both secular and religious-based legal systems.
only in the United States.
Tactical plans are also known as A) strategic plans. B) operational plans. C) global plans. D) contingency plans.
operational plans
After acquiring two new foreign affiliates, Henson Manufacturing created a new organizational chart to indicate where formal authority would lie within the organization. This organizational chart is an indication of A) production development. B) organizational design. C) production logistics. D) organizational structure.
organizational structure.
A value-added tax is actually a sales tax that is A) paid by the firm rather than the consumer. B) paid in stages along the process from raw materials to consumer. C) paid by the government. D) voluntarily paid on exports.
paid in stages along the process from raw materials to consumer.
Proponents of the horizontal corporation would say that this approach A) increases lateral relationships that inhibit innovation and new-product development. B) places more decision-making responsibility in the hands of middle managers and other skilled professionals. C) enhances increased control and supervision by upper management. D) enhances efficiency by increasing the use of vertical decision processes
places more decision-making responsibility in the hands of middle managers and other skilled professionals.
Following the merger of Hintz Corp. and Minor Holdings Corp., the new company issued a list of broad guidelines that managers should use when dealing with problems. These were viewed as general guides that were left to the interpretation of managers. These guidelines are an example of A) procedures. B) policies. C) contingency plans. D) a vision statement.
policies
Trade obstacles are viewed as A) political, financial, and legal. B) political and legal. C) only financial. D) only legal.
political, financial, and legal.
Kellen has been asked to determine how many people live in the 50 square miles surrounding the location of the proposed building project. What does Kellen need to find? A) population density B) birthrate C) population distribution D) age distribution
population density
Parul reminded her coworkers that regardless of the number of consumers living in the target area, they should focus on where people live specifically within the target area. What aspect of the population is Parul concerned with? A) population density B) population distribution C) population shift D) population propensity
population distribution
Jeremiah works for an all-natural breakfast cereal company. He has recommended that the company market their high-cost Oats 'n More Cereal to parts of South America because there are millions of people there that have never heard of their products. Which socioeconomic factor is Jeremiah basing his recommendation on? A) population size B) market activity C) age distribution D) rural-to-urban shift
population size
Balance of payments data is used by countries to A) reveal a country's assets. B) suggest areas of concern in monetary and fiscal policy. C) predict changes in the economic environment. D) show how the country's currency arrangement (fixed, pegged, floating) is valued.
predict changes in the economic environment.
The international Fisher effect says that interest rate differentials A) predict exchange rate movement. B) can be used to determine purchasing power parity. C) are an example of the law of one price. D) illustrate production levels.
predict exchange rate movement.
In terms of quantifying objectives and goals, most top managers A) prefer nonquantifiable, directional goals. B) prefer nonquantifiable, but verifiable goals. C) prefer verifiable objectives. D) have no preference as to quantifiable and nonquantifiable goals.
prefer verifiable objectives.
A strategic plan is used by a company to A) guarantee how the firm's goals will be met. B) present sales forecasts and budgets. C) create a firm's vision statement. D) analyze a contingency plan.
present sales forecasts and budgets
International law that is used to govern the transactions between companies that cross international borders is called A) public international law. B) jurisdiction law. C) private international law. D) territorial law.
private international law.
Once a company's overseas operations have achieved satisfactory levels, the company might decide to eliminate the international division and incorporate a worldwide structure. These structures are usually based on one of four things, including A) processing. B) product. C) media availability. D) tariffs.
product
Butter Babies Inc. was held responsible in court for failing to indicate on their labels that their baby bath wash contained traces of mercury and could potentially harm infants. Which type of law is playing a part in this scenario? A) patent B) product liability C) common D) trade name
product liability
Most strategic business units are organized based on A) geographic region. B) functional area. C) customer class. D) product line.
product line.
Unit costs of labor will decrease even though the firm is required to pay more to workers, provided A) management compensation decreases significantly. B) productivity increases fast enough. C) advertising costs are proportional. D) interest rates rise slowly.
productivity increases fast enough
Along with using tax benefits to decrease their tax rates, companies might also employ two basic strategies: tax inversion and A) the gold standard. B) a greenfield investment. C) purchasing power parity. D) profit shifting.
profit shifting.
The Foreign Corrupt Practices Act (FCPA) is U.S. legislation that A) outlines bribery practices that are allowed abroad but not in the United States. B) prohibits bribery by American companies abroad. C) allows bribery in foreign dealings when culturally sanctioned. D) outlines and prohibits foreign bribery practices by foreign nationals in foreign nations.
prohibits bribery by American companies abroad.
Scenarios allow a business to A) project possible outcomes of business decisions. B) extrapolate from past data to make predictions. C) create a company's vision statement. D) analyze competitor actions and functions.
project possible outcomes of business decisions.
International economic analyses should A) provide data to governments regarding a company's traditional markets. B) provide economic data on actual and prospective markets. C) be focused on economic conditions of nations in which a company's major competitors are located. D) rely on published government data for input.
provide economic data on actual and prospective markets.
If the United States and Italy fell into a trade dispute, which form of international law would govern the situation? A) litigation B) public C) civil D) private
public
The settlement awarded $2 million to each of the four hundred individuals harmed by the effects of groundwater emissions created by manufacturing processes at Mission Corp. The award money is an example of A) a voluntary restraint agreement. B) punitive damages. C) antitrust law. D) product liability.
punitive damages.
Historically, gold has been used as a way for people to store value because of its A) purity and scarcity. B) high transportation and security costs. C) lack of interest-earning ability. D) accessibility and convenience.
purity and scarcity.
To develop a strategy for reaching corporate objectives, management must first try to A) select a viable market segment. B) quantify them. C) define the firm's mission. D) develop scenarios.
quantify them.
Arbitration is often preferred when the contract stipulates U.S. law and one of the litigants is foreign because it is A) easier to influence an arbiter than a judge. B) quicker, cheaper, and more private than litigation. C) more discreet, although more costly than litigation. D) less term-41bureaucratic than litigating in any country.
quicker, cheaper, and more private than litigation.
U.S. responses to foreign tariffs are likely to A) raise the cost of the imported goods for U.S. consumers. B) force a reduction in tariffs. C) create equity across markets, which is the goal. D) establish the fundamental rule of power rather than principle.
raise the cost of the imported goods for U.S. consumers.
In general, with regard to exchange controls, developed countries A) rarely use them. B) use them only to discourage foreign investment. C) use them when needed to implement monetary policy. D) use them secretly.
rarely use them.
A spot exchange rate is the A) rate for exchange within two business days. B) best rate in the market for exchange within 10 days. C) rate for preferred exchanges among central bankers. D) rate established by the BIS.
rate for exchange within two business days.
A company can use the inflation rate to determine the A) capital structure of the firm. B) growth rate of sales. C) real cost of borrowing in capital markets. D) equilibrium point.
real cost of borrowing in capital markets.
The intent of the Foreign Corrupt Practices Act is to A) reduce corruption and thereby make the costs of doing business transparent. B) function as a barrier to trade by giving U.S. businesses an advantage of transparency. C) penalize developing economies, where functionaries often compensate for their poor salaries by levying small personal taxes. D) export cultural arrogance by asserting that the U.S. practice of business is more transparent than in other countries.
reduce corruption and thereby make the costs of doing business transparent.
Smaller nations would like patent protection to be A) extended, to allow for them to build their competitive advantage. B) extended, so that they can recoup development costs. C) reduced, so that they can make money sooner. D) dissolved, so that they can increase their profits.
reduced, so that they can make money sooner.
Carlton Office Systems Inc. needs to improve overall organizational efficiency. To accomplish this, the company has implemented a complete redesign of all business systems and reporting hierarchies. During this process, significant cuts were made in middle management staff. What organizational trend is taking place at this company? A) virtual corporation B) reengineering C) horizontal corporation D) downsizing
reengineering
The Qur'an is associated with Islam and indicates the presence of which form of law? A) international B) civil C) religious D) common
religious
Marketers are interested in knowing the trend of women entering the workforce because this may A) result in larger family income. B) provide a smaller market for consumer durables. C) be responsible for a baby boom. D) reduce the rate of rural-to-urban shift.
result in larger family income.
Income distribution studies confirm the belief that, generally, income is more evenly distributed in the A) richer nations. B) developing nations. C) newly industrialized nations. D) Pacific Rim nations.
richer nations.
CISG has been ratified by many countries and provides a set of uniform rules governing A) foreign direct investment. B) sales contracts. C) foreign exchange rates. D) advertising and promotion.
sales contracts.
What part of the strategic plan provides managers with an estimate of future revenue to be received and the units to be sold, and also serves as the basis for planning in the other functional areas? A) sales forecast B) budget C) marketing plan D) contingency plan
sales forecast
During the meeting, David mentioned two possibilities for the future of the new product line. It could do well initially but then be undercut by competitor challenges or supplier pricing changes. Or, it could fail immediately if marketing promotions aren't effective in the European market. What is David using in his strategy formulation? A) policies B) procedures C) contingencies D) scenarios
scenarios
In his book, The Art of the Long View, Peter Schwartz identified the process of constructing multiple stories of what could happen next as an important step for companies to take. What was the author referring to? A) scenarios B) a vision statement C) a mission statement D) sales forecasting
scenarios
Multiple, plausible stories that managers consider for what might happen in the future are known as A) vision statements. B) contingency plans. C) scenarios. D) strategies.
scenarios
The strategic planning report presented at the meeting included two goals the company wished to achieve: (1) expand into profitable, related businesses and (2) select markets to enter that have not experienced their products. Which part of the strategic planning process does this demonstrate? A) set corporate objectives B) implement strategies. C) analyze external environments D) quantify the objectives
set corporate objectives
Which aspect of strategic planning helps a company maintain itself within the boundaries of the mission and vision statements? A) analyzing the internal environment B) implementing tactical plans C) setting corporate objectives D) analyzing the external environment
setting corporate objectives
When creating a worldwide organizational structure, one criteria that companies do not rely on as the basis for organizational subdivisions at the second, third, and still lower levels is A) size of company B) national subsidiary C) region. D) function
size of company
Collin's company is interested in the divorce rate in parts of Europe. His company produces single-serving meal kits that might be of interest to people who were married but are now single. Which type of factor is Collin's company analyzing? A) economic B) psychosocial C) political D) socioeconomic
socioeconomic
The present floating exchange rate system is not a totally free float because A) free floating exists in theory only. B) some governments refuse to manage their free float. C) some central banks from time to time intervene in the market to buy or sell large amounts of currency. D) fixed exchange rates limit the amount of transactions that affect the currency.
some central banks from time to time intervene in the market to buy or sell large amounts of currency
SDR refers to A) a special deposit for corporate reimbursement. B) special drawing rights, an international reserve asset. C) a special deficit refund, made to compensate for currency devaluation. D) a paper credit issued by the Bank for International Settlements.
special drawing rights, an international reserve asset.
A company would create proceduresin order to A) specify how certain activities will be carried out. B) assure that all scenarios will be the same. C) provide input for strategic plans. D) demonstrate general guidelines for common activities
specify how certain activities will be carried out.
Fordham Fresh Foods relies on an exchange rate that is based on trade for delivery within two business days. What type of exchange rate does the company use? A) spot rate B) ask rate C) bid rate D) forward rate
spot rate
The ISO and the IEC both promote A) harmonization in international accountancy. B) standardization in technology-related fields through specifications. C) union membership in fields that are technology intensive. D) shared bankruptcy standards across the globe.
standardization in technology-related fields through specifications.
Problems of the gold standard include A) storage cost, weight, doesn't earn interest. B) nations' willingness to agree to it. C) its interference in the jewelry market. D) its purity levels.
storage cost, weight, doesn't earn interest.
The organizational form at Luscious Chocolate Company includes separate groups organized by specialization, including candy bars, baking chocolate, and premium chocolates. Each of these groups are defined as distinct, independent businesses with clearly defined markets. What is this an example of? A) a matrix overlay B) strategic business units C) a hybrid structure D) a geographic region
strategic business units
According to a survey by Bain & Company, since 1993 the management tool most commonly used among global executives is A) value chain analysis. B) industry and competitor analysis. C) strategic planning. D) environmental analysis.
strategic planning
The process by which an organization determines where it is going in the future, how it will get there, and how it will assess whether and to what extent it has achieved its goals is known as A) value chain analysis. B) scenario analysis. C) strategic planning. D) international strategy.
strategic planning.
Companies controlled by other companies (known as parent companies) through ownership of enough voting stock to elect a majority of the voting members on the company's board of directors are known as A) affiliates. B) virtual organizations. C) networked organizations. D) subsidiaries.
subsidiaries.
Sanjay works for Betton Pharmacies, which is controlled by the parent company of Grayson Labs. In other words, Sanjay works for a(n) A) subsidiary. B) affiliate. C) virtual corporation. D) horizonal corporation.
subsidiary
If the Securities and Exchange Commission learns that a business might be involved in corruption, it will look at other businesses in the same industry to assess if they might also be involved. What is this process called? A) phishing B) ghosting C) tagging D) sweeping
sweeping
Knowledge that an individual has but that is difficult to express clearly in words, pictures, or formulae, and therefore difficult to transmit to others is known as A) explicit. B) implicit. C) tacit. D) intangible.
tacit
Timmerman Holding Corp. created a business recovery center 20 miles from its headquarters where employees could work if anything should happen to their main office. This would allow the company to continue doing business without interruption in the wake of a critical event. The business recovery center is an example of a A) scenario. B) mission statement. C) tactical plan. D) contingency plan
tactical plan
As a way to decrease their tax rate, Shiller Supply Corp. moved its profits out of the United States to a location with lower tax rates. What strategy is the company using? A) tax conversion B) profit sharing C) tax inversion D) profit shifting
tax inversion
Greenway Farm Equipment Co. is a subsidiary of Tuppin Manufacturing Group. Recently, the production team at Greenway learned that a developer had automated a faster process for attaching component parts and advised Tuppin about the innovation. What type of reporting does this reflect? A) economics B) technological C) market opportunities D) financial
technological
In terms of reporting, it is important that all operating units of an IC provide timely and complete reports regarding finances, market opportunities, political and economic activities, and A) culture. B) economies of scale. C) factors of production. D) technology.
technology
The International Monetary Fund would characterize a developing economy as one in which A) technology is not as developed. B) political activism is tempered. C) there is a fair distribution of income. D) the economy is more dependent on agrarian production than manufacturing.
technology is not as developed.
The arithmetic average of the current exchange rate and the exchange rates in the two preceding years, adjusted by the ratio of domestic inflation to the combined inflation rates of the euro zone, Japan, the United Kingdom, and the United States, is known as A) the GINI coefficient. B) the Kolgorov coefficient. C) the Zurich formula. D) the Atlas conversion factor.
the Atlas conversion factor.
A measure of the degree to which family income within a country is distributed equally is called A) gross national income. B) the GINI index. C) gross domestic product. D) the Atlas conversion factor
the GINI index
In situations where ICs are setting transfer prices A) host governments are generally unaware of the actions by ICs operating within their borders. B) management must demonstrate they are not making profits on the sales. C) the IC should show that other companies are charging comparable prices for the same or similar products. D) the home country is usually more concerned than the host country, especially if the home country's tax rates are lower.
the IC should show that other companies are charging comparable prices for the same or similar products.
The fixed exchange rates set up at Bretton Woods were based on gold and A) the Japanese yen. B) the British pound. C) the Mexican peso. D) the U.S. dollar.
the U.S. dollar.
Punitive damages in product liability cases can be awarded in A) Japan. B) Japan and the EU. C) the United Kingdom. D) the United States.
the United States.
According to the text, what is the primary value of scenario planning efforts? A) the transformation in strategic thinking that results B) the strategic plans that are created C) the ability to control external forces that impact the firm D) the ability to eliminate uncertainty that arises
the ability to control external forces that impact the firm
The balance part of the BOP is explained by A) the accounts being double-entry, so they are always balanced. B) imbalances showing immediately. C) actions governments take to achieve the balance. D) equal payments being made to all parties.
the accounts being double-entry, so they are always balanced.
The time horizon of a strategic plan will vary according to A) the size of the company and the size of its industry. B) the age of the firm and the stability of its market. C) the geographic scope of the company. D) the diversity of a company's operations.
the age of the firm and the stability of its market.
The legal system of a country is composed of A) the collection of governing principles, and the legislation and regulations enacted to provide for the welfare of the country. B) the laws and their interpretation by citizens, but not noncitizens. C) local laws that are interpreted for federal use. D) a collection of folkways, rules, and regulations whose goal is to support civil harmony.
the collection of governing principles, and the legislation and regulations enacted to provide for the welfare of the country.
When the international company's planning committee has completed the internal audit aspect of strategic planning, it is ready to examine A) external variables. B) internal production standards. C) the company's mission and vision. D) the company's international strategy.
the company's mission and vision.
In a managed float currency arrangement, the currency fluctuates while A) the country's monetary authority intervenes on the currency market without making its goals and targets public. B) the currency uses the currencies of trading partners as ballast. C) a group of nations decide to manage their currencies jointly and publicly, relying on the market. D) gold is used to stabilize the currency values, hence, managed.
the country's monetary authority intervenes on the currency market without making its goals and targets public.
A business would rely on the GINI Index to understand A) the growth rate in production of competitor industries. B) the degree to which family income is distributed equally within a country. C) the relationship between income and expenses in a nation. D) how industry is developed based on factors of endowment.
the degree to which family income is distributed equally within a country.
The three main approaches to exchange rate forecasting are A) the efficient market approach, the fundamental approach, and the technical analysis. B) the efficient market approach, the random walk hypothesis, and the pragmatic approach. C) the random walk hypothesis, the pragmatic approach, and the fundamental approach. D) guesswork, estimation, and approximation.
the efficient market approach, the fundamental approach, and the technical analysis.
The international Fisher effect says that the interest rate differentials in any two currencies reflect A) the ratio of their inflation rates minus COL. B) arbitrary differences in the two economies. C) PPP differences in the two economies. D) the expected change in their exchange rates.
the expected change in their exchange rates.
A hybrid organization may result from A) the firm's acquiring a company with distinct products and distribution channels. B) management's attempt to mesh product and regional expertise. C) the consistent use of a geographic unit structure. D) a firm's use of SBUs.
the firm's acquiring a company with distinct products and distribution channels.
Unit labor costs will not rise in unison with wage rates if A) the governments institute wage and price controls. B) productivity decreases faster than wages increase. C) the gains in productivity are greater than wage increases. D) interest rates rise less than wage rates.
the gains in productivity are greater than wage increases.
Bretton Woods led to an exchange rate agreement known as the Bretton Woods System or A) the floating rate system. B) the India Accord system. C) the gold exchange standard. D) the French rate system.
the gold exchange standard.
In 1717, Sir Isaac Newton took Britain from the silver standard to A) floating exchange rates. B) fixed exchange rates, using silver. C) the gold standard, with fixed rates. D) pegged rates
the gold standard, with fixed rates.
Because of the importance of economic information to the control and planning functions at headquarters, the collection of data and preparation of reports are usually the responsibility of A) the home office. B) national agencies. C) economic consultants. D) the international affiliate.
the home office.
Organizational designers in the IC must be aware that the gain achieved from increased specialization of labor may sometimes be nullified by A) the increased cost of geographic expansion. B) the increased cost of coordination. C) the increased cost of product development. D) increased costs from unionization.
the increased cost of coordination
It is sensible for an IC to direct or allocate as much profit as reasonably possible to subsidiaries in countries with A) problematic labor relations. B) the most currency controls. C) higher taxes. D) the least social unrest.
the least social unrest.
What are two important differentiators of strategic plans? A) the size of the company and the plan's time horizon B) what nation and culture the company is from and the organizational structure of the company C) the company's organizational structure and the company's competitive strategy D) the level of the organization for which it is made and the plan's time horizon
the level of the organization for which it is made and the plan's time horizon
A currency arrangement that is based on free floating exchange rates relies on A) income from tariffs. B) the markets. C) the government. D) reserve funds.
the markets.
Generally, we can assume that the higher the GNI/capita value A) the lower the tax rate. B) the smaller the population. C) the larger the population. D) the more advanced the economy.
the more advanced the economy.
The rural-to-urban shift is a reflection of A) varying government standards on birthrates and population. B) a change from industrialization to agricultural efforts. C) property tax differences between geographic areas. D) the movement of the population from rural areas to cities.
the movement of the population from rural areas to cities.
In Japan, product liability requires that A) the plaintiff prove design or manufacture negligence. B) the plaintiff meet with the defendant to reach an agreement and present it to the judge. C) harm be done with foreknowledge. D) in high-tech cases, the plaintiff establish a pattern of malfeasance.
the plaintiff prove design or manufacture negligence.
Purchasing power parity is a way to compare A) the purchasing power between two currencies. B) the cost savings of economies of scale. C) the impact of financial aid in several economies. D) meals in different economic systems, via the Big Mac Index.
the purchasing power between two currencies.
The extent to which an IC relies on subsidiary management to make decisions would most likely depend on A) the location of competitor ICs. B) the availability of virtual networks. C) the size of the IC. D) the costs of reengineering.
the size of the IC.
When an international manager is considering where to do business, one of the first considerations is A) whether the country has a democratically elected government. B) the dominant religion in the country. C) the size of the economy. D) whether the country has a manufacturing sector.
the size of the economy.
Headquarters is more likely to rely on subsidiary management if: A) subsidiary managers are from another country. B) conditions in the host country are very similar to those in the home country. C) the subsidiary is located far away from headquarters. D) the host country has similar institutions and politics to those in the home country.
the subsidiary is located far away from headquarters.
Michelle has been tasked with the job of analyzing the economy of three South American countries to determine if they have business potential. In her final report, she makes note of national income that may not be reported because it involves illegal activity. This indicates that Michelle is accounting for what? A) shadow production B) litigation and arbitration C) the gray market D) the underground economy
the underground economy
Countries put limitations on the convertibility of their currency when they are concerned that A) there is too much domestic spending. B) foreigners will hold control of their monetary policy. C) their foreign reserves could be depleted. D) there is not enough domestic spending.
their foreign reserves could be depleted.
Miscellaneous foreign laws can cause difficulties for the uninformed businessperson because A) these laws may not be obvious or in accord with laws at home. B) they are ambiguous enough that they can be applied to the foreigner at almost any time. C) they may violate them and be arrested, yet ignorance of the law is an acceptable defense. D) they are aimed to take advantage of the foreigner's ignorance, a trade barrier.
these laws may not be obvious or in accord with laws at home.
Financial forces such as inflation and taxation are considered uncontrollable because A) only developing nations have to deal with them. B) they are external forces beyond the influence of the firm. C) they are easily avoided. D) they are predictable.
they are external forces beyond the influence of the firm.
Trade obstacles are considered to be legal forces because A) customs is controlled by a country's national police or army. B) their compliance is costly to the firm and the consumer. C) they are protected by the courts. D) they often are based on legislation.
they often are based on legislation.
If two English multinational companies had a dispute arising in New York City, and there were no choice of law or choice of forum clauses in their contract, it is likely that A) a New York court would hear their complaint. B) they would bring their dispute to an English court. C) the dispute would not get heard in court, but rather, in the boardrooms. D) they would reach an agreement informally and develop an off-the-books settlement.
they would bring their dispute to an English court.
Managers of international companies that are attempting to develop a competitive advantage face a formidable challenge because A) time, talent, and money are scarce. B) there are an abundance of resources. C) there are few or no alternative ways to use the company's scarce resources. D) the company's mission is constantly changing.
time, talent, and money are scarce.
According to the book, what is the purpose of economic analyses? A) to anticipate political developments within and across countries B) to forecast exchange rates C) to assess the overall outlook for the economy and the impact of economic changes on the firm D) to compare the rate of economic and political change in order to determine financial variances
to assess the overall outlook for the economy and the impact of economic changes on the firm
What is the goal of value chain analysis? A) to enable managers to identify which set of activities it will do itself and which it will outsource B) to enable managers to identify whether to enter foreign markets or remain with domestic markets C) to enable managers to identify the true value of the company's stock D) to enable managers to identify the underlying values and belief of the company and its culture
to enable managers to identify which set of activities it will do itself and which it will outsource
The concept of strict liability, as found in the U.S. legal system, applies A) to harm done by the designer/manufacturer without the need to prove negligence. B) to harm done within narrow limits, considering the design of the product. C) to children harmed by products in both the United States and the EU. D) strictly to harm caused by the designer/manufacturer, so no penalties outside of damages can be awarded.
to harm done by the designer/manufacturer without the need to prove negligence.
The text predicts that in the future, managers in many ICs can expect A) to increase the use of structures based on function in order to gain economies of scale. B) to revert to more traditional organizational structures. C) to see expanded headquarters organizations in order to manage increased international scope of operations. D) to make greater use of the dynamic network structure.
to make greater use of the dynamic network structure.
International firms have found it necessary to institute formal global planning A) to eliminate the practice of informal planning. B) to provide top management with a means to identify threats and opportunities worldwide. C) to promote different courses of action among the firm's managers worldwide. D) to serve as an input for scenario building.
to provide top management with a means to identify threats and opportunities worldwide.
Camille is frustrated at work. The company headquarters is based in the UK and she works in the New York office. Headquarters is constantly changing the directives the company is taking and isn't interested in her thoughts on what's happening in the U.S. market. She knows that the new directives won't help in the U.S. market, but no one will listen to her. Which method of planning does her company use? A) bottom-up B) scenario C) iterative D) top-down
top-down
Examples of socioeconomic data are A) GNI, GNI/capita, income distribution. B) total population, production density, and population distribution. C) GNI/capita, total population, and population distribution. D) total population, age distribution, and population density and distribution.
total population, age distribution, and population density and distribution.
In regard to strategic planning, there has recently been a decided move among many firms A) to use advanced statistical techniques to help produce voluminous and detailed strategic plans. B) toward a less-structured format and a shorter plan. C) to concentrate on factors that can be easily quantified. D) to avoid including issues that are vague and uncertain.
toward a less-structured format and a shorter plan.
Sudsy Soap Company sells face soap in the United States as "Fresh Face" but in Europe the same soap is sold as "Shiny Clean." These two different soaps represent types of A) trademarks. B) trade names. C) patents. D) copyrights.
trade names.
Madison Foods Corp. is frustrated in its efforts to sell products in Europe because several countries are demanding that the company label products in the specific language associated with the country. These demands are examples of a A) trade name. B) trade obstacle. C) trademark. D) trade role.
trade obstacle.
When a government sets a quota on the amount of sugar that can be imported, it is implementing a A) trade obstacle. B) copyright. C) trademark. D) qualitative tariff.
trade obstacle.
Keith's favorite restaurant sells sandwiches that have a "kicker sauce." Everyone loves the sauce, but the company won't reveal what's in it. This sauce is an example of a A) trade secret. B) trademark. C) patent. D) copyright.
trade secret.
Nora knew her package had arrived because she saw the truck with the Amazon logo pull into her driveway. The logo she recognized is an example of a A) patent. B) trademark. C) trade name. D) copyright.
trademark
Most of the transactions in the foreign currency market are OTC which means that A) they can take place in the domestic or foreign market. B) trades are done electronically. C) that its categories are quite general and easy to apply. D) trades are conducted on a trading floor.
trades are done electronically.
Pricing established for transactions between members of the enterprise is called A) internal pricing. B) market pricing. C) transfer pricing. D) resettlement pricing.
transfer pricing.
Lexon Corp. produces high-nutrition breakfast products. As it enters into foreign markets, it faces strong pressures for both reducing costs and adapting products for local markets. Based on this, the company should use a A) global strategy. B) multidomestic strategy. C) transnational strategy. D) home replication strategy
transnational strategy.
An agreement between nations is called a A) treaty. B) constitution. C) demographic. D) regulation.
treaty.
The price of gold since about 1200 AD has been A) trending downward. B) flat, keeping its value. C) wildly fluctuating. D) trending upward.
trending upward.
The percentages of household expenditures spent on consumer durables by residents of industrialized nations are ________ the percentages spent by residents of developing nations. A) half B) twice C) equal to D) triple
twice
The percentages of household expenditures spent on transportation, communication, and health care by residents of industrialized nations are ________ the percentages spent by residents of developing nations. A) half B) two-thirds C) equal to D) twice
twice
Problems with the matrix structure include: A) two or more managers must agree on decisions. B) special divisions often must be established to serve heterogeneous customer segments. C) global branding and production coordination are hindered. D) functional concerns are ignored.
two or more managers must agree on decisions.
FCPA includes A) uncertainties that make its application problematic. B) specific explicit rules with clear definitions of terms that U.S. companies must follow in their foreign operations. C) all accounting processes, including the accounting of transfer payments. D) foreign tax liabilities and other adjustments specific to business outside of the home country.
uncertainties that make its application problematic.
The part of a nation's income that, because of unreporting or underreporting, is not measured by official statistics is known as the A) hidden economy. B) gray market. C) barter system. D) underground economy.
underground economy.
Stanton Construction Corporation was recently acquired by another company. With this merger, the newly formed company created a description of the businesses' desired future position. What type of statement did it create? A) values statement B) vision statement C) strategic statement D) mission statement
vision statement
According to the text, commercial energy use per capita is related to the size of what set of modern sectors? A) commercial buildings, agriculture, transportation B) housing, agriculture, industry C) manufacturing, agriculture, housing D) urban areas, industry, motorized transport
urban areas, industry, motorized transport
A vehicle currency is a currency A) used to trade in the transportation sector, usually dollar, euro, or yen. B) whose value lies in its function in transfer pricing. C) specifically used in arbitrage deals as a trading medium only. D) used for international trade or investment.
used for international trade or investment.
Some ways that an IC can exercise control over a subsidiary's activities include all of the following EXCEPT A) retaining control of technology. B) writing up a management contract. C) retaining control of the finances. D) using its ownership to outvote its partner.
using its ownership to outvote its partner.
An assessment conducted on the chain of interlinked activities of an organization or set of interconnected organizations, intended to determine where and to what extent value is added to the final product or service is known as A) economic value added. B) internal analysis. C) value chain analysis. D) SWOT analysis.
value chain analysis.
A clear, concise description of the fundamental beliefs and priorities expected of the organization's members, reflecting how they are to behave with each other and with the company's customers, suppliers, and other members of the global community is known as a A) strategic plan. B) mission statement. C) vision statement. D) values statement.
values statement.
When the law of one price is applied to interest rates, it suggests that A) interest rates do not differ much across national borders. B) inflation is not affected by interest rates. C) inflation and interest rates do not follow the law of one price. D) varying interest rates take into account anticipated differences in inflation rates.
varying interest rates take into account anticipated differences in inflation rates.
Jala works for a diamond importer. The company uses the U.S. dollar for international trade deals. In this instance, the U.S. dollar is acting as a(n) A) vehicle currency. B) spot currency. C) intervention currency. D) reciprocal currency.
vehicle currency.
Harrison Electric Corp. previously outsourced all the component parts it needed for its lighting products but now produces those parts in-house to use in the manufacture of these items. What concept did Harrison Electric Corp. adopt? A) economies of scale B) vertical integration C) purchasing power parity D) parallel exchange
vertical integration
New York Shoe House Inc. wants to sell its new line of summer sandals in Europe for just one season. The company does not currently sell in Europe. To accomplish this, the company plans to build a network of European suppliers and distributors and will break ties with them after this season. Most communication will take place through computer applications. What organizational trend does this demonstrate? A) virtual corporation B) strategic business units C) horizontal corporation D) reengineering
virtual corporation
An organization that coordinates economic activity to deliver value to customers using resources outside the traditional boundaries of the organization is known as a A) modular network. B) horizontal corporation. C) strategic business unit. D) virtual corporation.
virtual corporation.
A description of the company's desired future position if it can acquire the necessary competencies and successfully implement its strategy is known as a A) strategic plan. B) mission statement. C) vision statement. D) values statement.
vision statement
In Japan, antitrust legislation A) was introduced by the United States and did not harmonize well with Japanese values. B) developed out of a samurai code of ethics. C) has been influenced by Chinese and Korean approaches to monopoly markets. D) does not exist.
was introduced by the United States and did not harmonize well with Japanese values
When managers are analyzing the corporate controllable variables, the three key questions they must address about their business include A) who are the company's target customers? B) what will be the costs that the company will incur in delivering value to its target customers? C) how much will the company be able to charge? D) where should the company's production facilities be located?
who are the company's target customers?
One major difference between U.S. and Japanese trust-busting is A) who initiates it. B) who is at fault. C) why it occurs. D) where it takes place.
who initiates it.
A company in which the parent company has 100 percent ownership is known as a(n) A) affiliate. B) greenfield venture. C) wholly owned subsidiary. D) acquisition.
wholly owned subsidiary.
Reductions in birthrates are occurring worldwide because A) governments are scaling back family planning programs. B) of a reduced level of urbanization. C) women are gaining an enhanced status. D) governments are supporting alternatives to marriage.
women are gaining an enhanced status.
When the IC headquarters decides which subsidiary would get to fill an order for a customer abroad, IC management would consider all of the following EXCEPT: A) production costs. B) working relationship. C) tax rates. D) currency restrictions
working relationship.
