INTB CH 1

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

False: A common cause of the added complexity of foreign environments is managers' unfamiliarity with other cultures and is called self-reference criterion, not syndrome.

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

False: China was the world's leading manufacturing country for about 1,800 years, until it was replaced by Britain about 1840. The United States replaced Britain at the end of the 1800s.

As used in the text, the term environment means all the forces influencing the life and development of the firm within the international realm.

False: As used in the text, the term environment means all the forces influencing the life and development of the firm, whether these forces are active in the domestic, foreign, or international realm of activity.

Multinational firms first appeared after World War I, and the level of intracompany trade of multinationals in 1930, as a percentage of overall world trade, was nearly half the level achieved at the end of the 20th century.

False: Multinational firms existed well before World War I, and the level of intracompany trade of multinationals in 1930, as a percentage of overall world trade, may have exceeded the proportion at the end of the 20th century.

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

False: Opponents of globalization argue that globalization has contributed to a decline in environmental and health conditions.

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

False: The United States has only about 5 percent of the world's population, not 10 percent. The vast proportion of most companies' potential customers are still located elsewhere.

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

False: The domestic environment is composed of all the uncontrollable forces originating in the home country. The foreign environment is composed of all the uncontrollable forces originating outside the home country. The international environment is the interaction between domestic and foreign environmental forces or between sets of foreign environmental forces.

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

False: The five major kinds of drivers, all based on changes that are leading international firms to the globalization of their operations, include political, technological, market, cost, and competitive drivers. Geographic drivers are not part of these identified forces.

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

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

The late Professor C. K. Prahalad suggested that the approximately 3 billion of the world's poorest inhabitants who survive on less than $2 per day should be viewed as victims of capitalism.

False: The late Professor C. K. Prahalad suggested that the approximately 3 billion of the world's poorest inhabitants who survive on less than $2 per day should be viewed as a tremendous potential market for the products of multinational companies rather than as victims.

The vast majority of transnational corporations are privately owned, under government ownership.

False: The vast majority of transnational corporations are privately owned, although government ownership represents an important element among the world's international companies.

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

False: Uncontrollable forces are external forces over which management has no direct control, although it can exert an influence.

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

True

If you already have a job, you can enhance your opportunities for international experience by taking additional international business courses and making sure that people in your company know what you are doing.

True

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

True