INTB 1203

The problem with the Hofstede framework is that it often relies on generalizations.

True

There are different levels of economic integration, with the simplest and most common being the "Free Trade Area."

True

A firm's organizational culture has no impact on whether employees behave ethically or unethically.

False

As companies engage in international business activities, they increasingly interact with different economic areas and cultures, making it optional to understand and deal with foreign cultures.

False

Common law systems rely on detailed written codes, while civil law systems are based on tradition, precedent, and custom.

False

Culture is a static concept. Additionally, cross-cultural literacy involves understanding how cultural differences across and within nations can impact business practices.

False

Dumping occurs when a company or country sells goods in a foreign market above their cost of production or above their "fair" market value.

False

Economic growth rates provide a static picture of development, while GNI and PPP data provide a dynamic picture.

False

Ethics refers to accepted principles of right or wrong that only govern individual behavior, not organizations.

False

Foreign Direct Investment occurs when a company exports goods or services to consumers in another country.

False

In a Market Economy, the production of goods and services, as well as the quantities in which they are produced, are determined by only supply in a centralized system.

False

In a Mixed Economy, the government does not interfere with the market.

False

In class, we analyzed three eras of globalization: Globalization 1.0: Driven by multinational companies as the primary force of change. Globalization 2.0: Centered around countries, with an emphasis on the deployment of resources like horsepower, wind power, and steam power. Globalization 3.0: Our current era, centered on the convergence of personal computers, fiber-optic Internet connections, and software, enabling small groups and even individuals to go global.

False

In countries with high levels of corruption, foreign direct investment and international trade decrease, while economic growth increases.

False

In the competitive business environment of the 21st century, improvements in operational effectiveness are considered examples of strategy.

False

Leaders have no impact on establishing the culture of an organization.

False

Multinational enterprises cannot be engines of cultural change.

False

One of the disadvantages of a Wholly-Owned Subsidiary (WOS) is having total control of the business unit.

False

Socialism advocates for private ownership of the means of production for the common good of society.

False

Specific tariffs are levied as a proportion of the value of an imported good, while Ad Valorem tariffs are levied as a fixed charge for each unit of an imported good.

False

The "Customs Union" increases trade barriers between member countries and adopts a common external trade policy.

False

The Gravity Equation in international trade is one of the most robust empirical findings in economics: bilateral trade between two countries is proportional to their respective economic size (measured by their GDP) and directly proportional to their geographic distance.

False

The Group of Twenty (G20) became a forum for coordinating policy responses to the financial crisis of 2008 and 2009. The G20 represents 10% of global GDP.

False

The International Monetary Fund (IMF) supports development projects by providing low-interest loans.

False

The Nordic theory, or Uppsala model, suggests the internationalization of firms occurs due to the technological cycle of products.

False

The roles of subsidiaries do not change regarding their global integration and local responsiveness.

False

Training focuses on preparing a manager for a long-term career with the firm, while management development focuses on preparing the manager for a specific job.

False

An export ban is a government policy that restricts the sale of certain goods abroad to ensure domestic supply.

True

Art and Architecture are visible aspects of Culture, while Ideas about justice and Rules of collaboration are invisible aspects of Culture.

True

Collectivism is a system that prioritizes collective goals over individual goals.

True

Common ethical issues in business include (i) employment practices, (ii) human rights, (iii) environmental regulations, and (iv) moral obligations.

True

Economies of Scale refer to reductions in unit cost achieved by producing a large volume of product.

True

Globalization can be defined as "a shift toward a more integrated and interdependent world economy." It has two key aspects: Globalization of markets (demand side) and Globalization of production (supply side)

True

Globalization of Markets (demand side): This occurs when historically distinct and separate national markets merge into a single global marketplace. In many markets, consumer tastes and preferences across different nations converge on global norms, creating a global market. Examples include companies like Coca-Cola, McDonald's, IKEA, Starbucks, and Apple.

True

Globalization of Production (supply side): This occurs when goods and services are sourced from different locations around the world to take advantage of national differences in the cost and quality of production factors such as labor, energy, land, and capital.

True

Human Resource Management (HRM) is more complex in international business due to differences in labor markets, culture, legal systems, and economic systems between countries.

True

Import tariffs reduce the overall efficiency of the world economy.

True

In Low-Income countries, industrialization is limited.

True

In a Command Economy, the government plans and controls the production, quantities, and prices of goods and services.

True

In the "Common Market" model, there are no barriers to trade between member countries, a common external trade policy, and the free movement of factors of production (such as people, equipment, capital, and knowledge).

True

In the "Economic Union" model, member countries commit to the free flow of products and factors of production, adopt a common currency, harmonize tax rates, and pursue a common external trade policy. This model involves sacrificing a significant amount of national sovereignty.

True

In the Network Model of International Expansion, relationships formed through network activities allow the firm to access resources and markets. As the firm's internationalization efforts grow, the number and the strength of these relationships increase, providing greater access to resources and markets.

True

In the pre-Covid world, supply chains focused on efficiency, while in the post-COVID world, supply chains focus on resilience.

True

Innovation cycles are becoming shorter compared to the past.

True

Managing ethical dilemmas is challenging because cultural perspectives can vary significantly.

True

Multinational enterprises (MNEs) in countries with high masculinity and high power distance are less likely to promote ethical behavior.

True

Multinationals deal with institutional voids in three ways: (1) shape/change and context; (2) adapt, and (3) withdraw/stay away.

True

One benefit of establishing the EURO is the comparability of prices across Europe.

True

One of the advantages of franchising is the low development costs.

True

One of the challenges of globalization is the managerial difficulty of coordinating a globally dispersed supply chain.

True

One of the disadvantages of franchising is the dependence on the licensee/franchisee.

True

Some key drivers of globalization include: More companies are spreading out their production processes across different regions. National economies are becoming increasingly intertwined. The world is becoming significantly wealthier.

True

Strategic trade policy involves government intervention to help domestic firms acheive first-mover advantages in industries with entry barriers.

True

Tariffs are generally pro-producer and anti-consumer.

True

Tariffs, subsidies, import quotas, and local content requirements are some of the instruments of international trade policy.

True

The Eclectic Paradigm (or OLI framework) explains the internationalization process through ownership advantages (O), location-specific advantages (L), and internationalization advantages (I).

True

Administrative trade policies are bureaucratic rules designed to make it difficult for imports to enter a country. These policies can harm consumers by denying them access to potentially superior foreign products.

True

A subsidy is a government payment to a domestic producer; generally, subsidies help domestic producers compete against low-cost imports and gain export markets.

True

A Local Content Requirement (LCR) mandates that a certain portion of a good must be produced domestically. This requirement can be specific in physical terms or value terms.

True

A Tariff Rate Quota is a combination of a quota and a tariff; a lower tariff is applied to imports within the quota, while a higher tariff applies to those exceeding the quota.

True

A characteristic of High-Income countries is that households typically have high ownership levels of basic products, and the service sector contributes more than 50% of the Gross National Income (GNI).

True