Issues In Global Business Misterm

Intelligent Tool Corp. is planning to set up a production plant abroad. It has selected five potential countries based on their population size, stage of economic development, labor costs, and access to world markets. Considering the connection between culture and competitive advantage, which of the following countries would be the best investment site for Intelligent Tool Corp.?

Country B, where education is well-developed and social stratification is lacking.

TimeForce, a U.S.-based company, is planning to expand operations to a foreign country. Considering the factors that make a country attractive as a place in which to do business, which country should TimeForce consider for entry?

Country D, which has democratic institutions and a market-based economic system.

If Kendra was working in the home office in Ohio she never would have agreed to pay the government official to speed up the delivery of the cargo; but since she is working in the company's foreign office, she agrees to the practice since it is considered normal in this country. Which philosophical approach to ethics is Kendra using to make her decision?

Cultural relativism

What organization is often seen as the lender of last resort to nation-states whose economies are in turmoil and currencies are losing value against those of other nations?

International Monetary Fund (IMF)

________ gives employees the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company.

Moral courage

Which institution was established as a result of the Uruguay Round of GATT?

World Trade Organization

A country that has ________ is an unattractive choice for international business.

a closed totalitarian dictatorship

John, an American executive, learns that a foreign subsidiary hired a 12-year-old orphan girl to work on the factory floor. He knows that using child labor is in direct violation of the company's own ethical code. At the same time, he does not think that denying the child her only source of income is right. John is facing

an ethical dilemma.

Corinne has analyzed the overall attractiveness of doing business with three possible countries and has determined that Country A is the best choice based on the potential for huge economic growth that should occur there because of recent advances in technology. Which factor of overall attractiveness is Corinne basing her decision on?

benefits

Jerome knew it was wrong for his company to continue ignoring environmental standards set down by the state. Jerome is able to determine this based on

business ethics.

Grossman and Krueger's study revealed the relationship between pollution levels and income. Which pollutant was the exception to their study?

carbon dioxide

In many of the world's nation-states, there has been a move away from ________ since the late 1980s.

centrally planned command economies

As a judge in France, Maurice is not allowed to interpret the law but relies on a strict set of codes to determine the outcome of a case. Which type of law is in place in France?

civil law system

With increased economic progress, cultures across the world seem to be moving toward some universally accepted values and norms. This is known as the

convergence hypothesis.

The system of values and norms that are shared among a group of people and together create a design for living is known as a

culture.

Which of the following BEST increases a country's competitive advantage and its attractiveness as a location for international business?

education system that is well developed

When Mark Zuckerberg co-founded Facebook, he was acting as a(n) ________ since he was the first to commercialize this innovative new product.

entrepreneur

The labor, energy, land, and capital that a company has access to are known as

factors of production.

One cost-cutting measure used by Garr Tool Corp. is sourcing the parts it uses from companies in Germany, Ireland, and Canada that are more economical than home-country sources. The choice to use these sources is an example of the

globalization of production.

A payment made to expedite or to secure the performance of a routine governmental action is called a

grease payment.

Payments used to ensure receiving the standard treatment that a business ought to receive from a foreign government, but might not due to the obstruction of a foreign official, are called

grease payments.

Within the context of the individual as the basic unit of a social organization, what is an implication of the emphasis on individualism in many Western societies?

high degree of managerial mobility between companies

In the Republic of Nabu, natives are resistant to change and do not like to take risks. They value job security and retirement benefits. In addition, they have a strong need for rules and regulations. Based on this information, the Republic of Nabu demonstrates which cultural dimension identified by Hofstede?

high uncertainty avoidance

When Aristotle said that private property is more highly productive than communal property, he was advocating for

individualism.

The development of new products, processes, organizations, management practices, and strategies is called

innovation.

Daria owns 100 shares of stock in Dow Corning. She would be considered a(n)

internal stakeholder.

James is the warehouse supply manager for a major tool corporation. It is his job to take inventory of the tools the company has available and send orders to make more tools when supplies run low. This supply and demand form of production is an example of a ________ economy.

market

Connor asked the management team to consider how they would feel if they were asked to travel more than 50 miles to get to work—which is what they were asking the management team at the foreign office to do. Connor is relying on ________ to approach this ethical situation.

moral imagination

Gigantic Games., a U.S.-based company that specializes in strategy-based board games, has production facilities in Poland and Spain. Based on this information, Gigantic Games can be classified as what type of enterprise?

multinational

The social rules and guidelines that prescribe appropriate behavior in particular situations are called

norms.

Jason runs a manufacturing company. He hires five people based on their physical abilities because they are able to lift heavy boxes in the stockroom and two people based who are able to strategically plan the company's next steps. Jason realizes that people are not equal in physical and intellectual capabilities, an aspect of which cultural dimension identified by Hofstede?

power distance

One root cause of unethical behavior in business is

pressure to meet unrealistic performance goals.

In 2017, the Brazilian government transferred the state ownership of the electric company, the airports, highways, and ports to private investors to stimulate the economy. This is an example of

privatization

Connor was born into a poor family, but he worked hard during high school and went on to receive his master's degree in business. Today, he is considered "upper middle class" and enjoys a comfortable lifestyle. Connor's journey is an example of

social mobility.

The social strata evident in a society is primarily derived from

socioeconomic characteristics.

A ________ is an individual or group that has an interest or claim in what a company does and how well it performs.

stakeholder

Strategies that not only help the multinational firm make good profits, but that do so without harming the environment while simultaneously ensuring that the corporation acts in a socially responsible manner with regard to its stakeholders are called

sustainable strategies.

The base for the adjustment of purchasing power parity is the cost of living in

the United States.

Krisp Systems decides to move production to a developing country where they are free to pump pollutants into the atmosphere without legal restriction. By doing this, the company is contributing to

the global tragedy of the commons.

When considering globalization, what is considered the single most important innovation since World War II?

the microprocessor

The basic position of the Friedman doctrine says that

the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.

A country that has ________ lowers the risk of doing business in that country.

the presence of a strong legal system

The spread of democracy among countries is most likely to lead to

the promotion of greater competition.

A number of employees at Sports Plus Inc., which is headquartered in a country where masculinity and power distance are high, do not behave in an ethical manner. In this context, the roots of unethical behavior can be traced to

the societal culture.

A form of government in which political power is monopolized by a party, group, or individual that governs according to religious principles is called what type of totalitarianism?

theocratic

While it might differ in other countries, in the United States the customary distance apart that should be used in a business discussion is

5-8 feet.

Which scenario best represents a mores violation?

Bribing a government official in a country where bribery is illegal.

Which country has seen their share of world output increase the most from 1960 to today?

China

American company Software Unlimited is planning to expand its operations to the Bangor Republic where the group is the primary unit of social organization. According to this information, what is a likely outcome for Software Unlimited from operating in the Bangor Republic?

Employees will achieve close cooperation with others.

Which of these companies exemplifies the globalization of markets?

Fluffy Pillows, a U.S.-based pillow company, sells the same pillows worldwide.

The merging of national markets that have historically been distinct and separate is the process of

Globalization

According to globalization supporters, what is an advantage of globalization?

Globalization helps create jobs in all countries that participate in the global trading system.

According to globalization opponents, what is a disadvantage of globalization?

Globalization results in companies "exporting jobs" to low-wage nations.

The mother tongue of the largest number of people is

Mandarin.

What occurs according to Moore's law?

The power of microprocessor technology doubles and its cost of production falls in half every 18 months.

What is one criticism regarding Geert Hofstede's research on cultural dimensions?

The research team consisted of only Europeans and Americans.

What is an accurate description of how the political economy of many of the world's nation-states has changed radically since the late 1980s?

There has been a move away from centrally planned and mixed economies and toward a more free market economic model.

People in the West tend to associate a representative democracy with

a market economic system.

Nobel Prize-winning economist Amartya Sen would agree that ________ is/are an important factor in development of a country.

basic health care

An individual's right to do something may be restricted on the grounds that it runs counter to "the good of society" when the political system emphasizes

collectivism.

A ________ economy follows the principles of collectivism as resources are allocated based on "the common good."

command

In the country of Doran, all businesses are owned by the state. The government plans production, fixes commodity prices, and also directs investments to ensure they benefit the nation as a whole and not only a few individuals. What type of economy has the country of Doran adopted?

command

Members of the legal profession would refer to tradition, precedent, and custom in a(n) ________ law system.

common

Shannon works as the executive manager of an international business, while Bob is the executive manager of a purely domestic business. Which of these responsibilities apply to both Shannon and Bob?

dealing with business attacks from competitors

What political system has a government that is by the people, exercised either directly or through elected representatives?

democracy

A country that abolishes laws that regulate private enterprises and removes price controls is in the process of

deregulation.

If a country exercises tight control over prices and output, prohibits private enterprises from operating in most sectors of the economy, and severely restricts foreign direct investment and international trade, it is against the practice of

deregulation.

What was the motivation for non-U.S. firms to begin investing across national borders in the 1970s?

desire to disperse production activities to optimal locations

The two caveats of the Sullivan principles are first, a company should not obey the apartheid laws in its own South African operations and second, a company should

do everything possible to abolish apartheid laws.

The main reason that gross national income figures can be misleading is because they

don't consider differences in the cost of living.

Shayla is from South Africa and believes that the customs and beliefs of her culture are superior to those she has encountered during her trip to America. Shayla's attitude is an example of

ethnocentrism.

A country that has lax intellectual property laws will find that

firms will be reluctant to enter into such a country.

MaryAnne is always late to meetings and she knows she needs to be better about being on time because it is expected by almost everyone living in the United States. This attitude toward time is an example of a

folkway.

California-based Urban Health Source has invested resources in business activities in Italy. What type of business activity does this represent?

foreign direct investment

Which of these is not used to determine culture?

geography

Economist Robert Reich advocates that the outsourcing of productive activities to different suppliers results in the creation of

global products.

In a pure command economy, the prices at which goods and services are sold are planned by the

government

Technology is indicated as having a major impact on the declining share of national income enjoyed by labor. If this is the case, what is a logical solution to this problem?

increasing society's investment in education

Canadian company Yummy Snacks exports a number of products to consumers in Peru, Chile, and Argentina. According to this information, Yummy Snacks is most likely involved in

international trade.

U.S.-based Centra Corporation is hesitant about entering into a licensing agreement with Fission, Inc., a company from another nation, due to the likelihood that Fission will break a contract or expropriate property rights. What specific type of risk is Centra Corporation trying to avoid?

legal

What is one of the three measures used to determine the Human Development Index (HDI) of a country?

life expectancy at birth

According to Geert Hofstede, what dimension captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors?

long-term versus short-term orientation

HealthWise Corporation has developed a new diet supplement to assist with weight loss. Which type of legal protection grants HealthWise Corporation exclusive rights for a defined period to the manufacture, use, or sale of this new diet supplement?

patent

ABC Company is hesitant about entering Ukraine, because the country has been experiencing social unrest in recent years. Based on this information, what type of risk is ABC Company trying to avoid?

political

Marietta told the management team that the company would have to find a new way to produce the vitamin because the Food and Drug Administration had recently banned "nofon," the key ingredient in their product. The standard set by the FDA is a type of

product safety law.

Economist Hernando de Soto believes that the benefits of capitalism will not be achieved until

property rights are better protected.

The state senator was found guilty of ________ when she tried to extort money from an international business that wanted to open a manufacturing plant in her state.

public action

Julie asked her assistant to determine the gross national income of three different countries by evaluating the GNI against the cost of living in the United States. What measure is Julie asking her assistant to use?

purchasing power parity

In the United States, citizens have the right to elect officials who make decisions on behalf of the public. This practice is the reason the United States is a

representative democracy.

The United Nations Convention on Contracts for the International Sale of Goods (CISG) was introduced to

resolve disputes that arise in international trade regarding which country's laws to apply.

Which philosophical approach is typically associated with managers from developed nations, and claims that a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries?

righteous moralism

It has been noted that there is a connection between individualism that is fostered by Protestantism and

the extent of entrepreneurial activity in a nation.

During the second stage of the ethical decision-making process, managers must determine whether a proposed decision would violate

the fundamental rights of any stakeholders.

Why was the World Trade Organization established?

to police the international trading system

Saturn Systems Inc., which is headquartered in the United States, has its production plant located in a less-developed country where working conditions are poor. For example, employees work 15-hour shifts, are exposed to toxic chemicals, and are forced to work overtime. What type of behavior is Saturn Systems Inc. exhibiting?

unethical

Jacques relies on a cost-benefit analysis to decide if moving operations overseas is better than increasing the size of the current manufacturing facility in the United States. He is using the ________ approach to ethics to determine his answer.

utilitarian

The ________ approach to ethics holds that the moral worth of actions or practices is determined by their consequences and is committed to the maximization of good and the minimization of harm.

utilitarian

Which ethical approach typically focuses on the attainment of fair and equitable distribution of economic goods and services?

utilitarian approaches

AllSpice Incorporated plans to do business with a company located in the Leone Republic, a common law country. The companies have agreed to draft the business contract in the Leone Republic. Since the contract will be drafted under a common law framework, what best characterizes the contract?

very detailed with all contingencies spelled out

Communists believed that socialism could only be achieved through

violent revolution.