MGMT e2 5,6,7,8

The _____ was a major stimulus to international trade after it was first ratified in 1948 by 23 countries. a. North American Free Trade Agreement (NAFTA) b. General Agreement on Tariffs and Trade (GATT) c. Preferential Trade Arrangement d. Multilateral Agreement on Investment

General Agreement on Tariffs and Trade (GATT) Correct. The General Agreement on Tariffs and Trade (GATT) was a major stimulus to international trade after it was first ratified in 1948 by 23 countries. The GATT is a trade agreement intended to promote international trade by reducing trade barriers and making it easier for all nations to compete in international markets. See 5-2: The Structure of the Global Economy.

_____ usually cover periods from one to five years and are especially important for middle and first-line managers. a. Contingency plans b. Short-range plans c. Long-range plans d. Intermediate plans

intermediate plans Correct. Intermediate plans usually cover periods from one to five years and are especially important for middle and first-line managers. Thus they generally parallel tactical plans. See 6-3: Organizational Planning.

___ are primary inputs for developing tactical goals. a. Tactical plans b. Strategic goals c. Operational plans d. Operational goals

Strategic Correct. Strategic goals and plans are primary inputs for developing tactical goals. Tactical goals and the original strategic plans help shape tactical plans. See 6-1: Decision Making and the Planning Process.

Which of the following countries remains largely underdeveloped but has a high-potential economy? a. Cuba b. Taiwan c. China d. Japan

China Correct. Even though it is rapidly becoming a major economic force, the People's Republic of China remains largely underdeveloped. But its market potential is enormous. See 5-2: The Structure of the Global Economy.

_____, an extreme of social orientation, is the belief that the group comes first. a. Totalitarianism b. Marxism c. Individualism d. Collectivism

Collectivism Correct. The two extremes of social orientation are individualism and collectivism. Individualism is the cultural belief that the person comes first. Collectivism, the opposite of individualism, is the belief that the group comes first. See 5-3: Environmental Challenges of International Management.

_____ helps an organization perceive, or even generate, new opportunities in its environment. a. Creativity b. Parity c. Integration d. Flexibility

Creativity Correct. Creativity helps an organization perceive, or even create, new opportunities in its environment. Organizations often increase creativity and flexibility by adopting a decentralized organization structure. See 7-4: Implementing Business-Level Strategies.

Which of the following is a basic organizational function that international management has implications for? a. Predicting b. Specializing c. Leading d. Demonstrating

Leading Correct. International management has implications for the basic functions of planning and decision making, organizing, leading, and controlling. See 5-4: Competing in a Global Economy.

Which of the following incentives for international trade is a less-developed country likely to offer? a. Market protection through limitation on other importers b. Minimal tax breaks c. Increased taxes d. Free access to multiple exporters Feedback

Market protection through limitation on other importers Correct. Less-developed countries tend to offer different packages of incentives such as duty-fee entry of raw materials and equipment, market protection through limitations on other importers, and the right to take profits out of the country. See 5-3: Environmental Challenges of International Management.

The _____ is an agreement made by the United States, Canada, and Mexico to promote trade with one another. a. European Union Free Trade Agreement b. General Agreement on Tariffs and Trade (GATT) c. Multilateral Agreement on Investment d. North American Free Trade Agreement (NAFTA)

North American Free Trade Agreement (NAFTA) Correct. The North American Free Trade Agreement (NAFTA) is an agreement made by the United States, Canada, and Mexico to promote trade with one another. See 5-2: The Structure of the Global Economy.

Which of the following is a common pitfall of formal goal setting? a. Employee demotivation b. Decreased communication c. Decreased control d. Poor implementation

Poor implementation Correct. Goal setting occasionally fails because of poor implementation. Perhaps the major problem that can derail a goal-setting program is lack of top-management support. See 6-6: Managing Goal-Setting and Planning Processes.

An apparel manufacturer decides to open a new facility in a different city. Which of the following will it most likely employ? a. Procedure b. Policy c. Program d. Project

Program Correct. The apparel manufacturer will employ a program. A program is a single-use plan for a large set of activities. It might consist of identifying procedures for introducing a new product line, opening a new facility, or changing the organization's mission. See 6-5: Operational Planning.

_____ is a tax collected on goods shipped across national boundaries. a. Carucage b. Tithe c. A tariff d. A fee

a tariff Correct. A tariff is a tax collected on goods shipped across national boundaries. Tariffs can be collected by the exporting country, countries through which goods pass, and the importing country.

Which of the following is a similarity between rules and regulations and standard operating procedures (SOPs)? a. Both are relatively narrow in scope. b. Both specify responses to nonrecurring situations. c. Both focus on a large set of activities. d. Both are single-use plans. Feedback

a. Both are relatively narrow in scope. Correct. Rules and regulations and SOPs are both relatively narrow in scope, and each can serve as a substitute for decision making. An SOP typically describes a sequence of activities, whereas rules and regulations focus on one activity. See 6-5: Operational Planning.

Which of the following is an advantage of licensing? a. Increased profitability b. Increased flexibility c. Decreased exploitation d. Decreased competition

a. Increased profitability; Correct. Two advantages of licensing are increased profitability and extended profitability. Licensing is frequently used for entry into less-developed countries where older technology is still acceptable and, in fact, may be state of the art. See 5-1: The Nature of International Business.

Which of the following is true of the BCG matrix? a. It helps managers understand how strategic business units contribute to an overall organization. b. It suggests that slow-growing markets have more stable and attractive business opportunities for an organization's products. c. It helps in restructuring the structure of an organization. d. It divides the market into low-, medium-, and high-growth markets. Feedback

a. It helps managers understand how strategic business units contribute to an overall organization. Correct. The BCG matrix helps managers develop a better understanding of how different strategic business units (SBUs) contribute to an overall organization. By assessing each SBU on the basis of its market growth rate and relative market share, managers can make decisions about whether to commit further financial resources to the SBU or to sell or liquidate it. See 7-6: Implementing Corporate-Level Strategies.

Which of the following is true of a standard operating procedure? a. It outlines the steps to be followed in particular circumstances. b. It is a single-use plan for a large set of activities. c. It specifies an organization's general response to a designated problem. d. It is developed to carry out a course of action that is not likely to be repeated.

a. It outlines the steps to be followed in particular circumstances. Correct. A standard operating procedure is more specific than a policy, in that it outlines the steps to be followed in particular circumstances. It typically describes a sequence of activities. See 6-5: Operational Planning.

Which of the following must occur for an organization to support differentiation? a. Marketing and sales must emphasize the high-value image of an organization's products. b. Organizational culture must limit creativity and innovation. c. Manufacturing must emphasize the reduction of costs. d. Accounting and finance must control funds to discourage the need to develop new products.

a. Marketing and sales must emphasize the high-value image of an organization's products .Correct. In general, to support differentiation, marketing and sales must emphasize the high-quality, high-value image of an organization's products or services. Organizations that have used their marketing function to implement a differentiation strategy include Chanel, Calvin Klein, and Bloomingdale's. See 7-4: Implementing Business-Level Strategies.

Which of the following is a major tool for managing diversification? a. Organization structure b. Ethical congruence c. Synergies d. Mergers

a. Organization structure Correct. However an organization implements diversification—whether through internal development, vertical integration, or mergers and acquisitions—it must monitor and manage its strategy. The two major tools for managing diversification are (1) organization structure and (2) portfolio management techniques. See 7-6: Implementing Corporate-Level Strategies.

The manager of Follicle, a salon and spa, believes that the techniques they have followed for generations are superior to the latest techniques that are scientifically proven to be more effective. He fears that the use of new techniques may lead to failure and continues to use the existing techniques. In this scenario, which of the following barriers to goal setting and planning is most evident? a. Resistance to change b. Improper reward system c. Inappropriate goal setting d. Reluctance to establish goals

a. Resistance to change Correct. In this scenario, resistance to change is most evident. A barrier to goal setting and planning is resistance to change. The reason for this reluctance may be lack of confidence or fear of failure. See 6-6: Managing Goal-Setting and Planning Processes.

Which of the following serves as an environmental challenge faced by managers in a global context? a. The economic environment b. The biotic environment c. The physical environment d. The consumer environment

a. The economic environment; Correct. Managing in a global context both poses and creates three environmental challenges in particular—the economic environment, the political/legal environment, and the cultural environment of international management. See 5-3: Environmental Challenges of International Management.

_____ is essentially the first step in planning. a. Understanding the environment b. Developing marketing strategies c. Distributing authority among jobs d. Evaluating employee satisfaction

a. Understanding the environment Correct. Understanding the environment is essentially the first step in planning. All planning occurs within an environmental context. If managers do not understand this context, they will be unable to develop effective plans. See 6-1: Decision Making and the Planning Process.

An organization has a _____ when it is not implementing valuable strategies that are being implemented by competing organizations. a. competitive disadvantage b. strategic redundancy c. distinctive incompetency d. competitive parity

a. competitive disadvantage Correct. An organization has a competitive disadvantage when it is not implementing valuable strategies that are being implemented by competing organizations. Organizations with a competitive disadvantage can expect to attain below-average levels of performance. See 7-2: Using SWOT Analysis to Formulate Strategy.

A fire broke out in a well-reputed hospital in a city. Despite the fire fighters arriving within ten minutes of the occurrence, over a hundred people were severely injured. This was due to insufficient equipment necessary to evacuate people during an emergency. This was clearly a case of the hospital management's faulty _____. a. contingency planning b. tactical planning c. strategic planning d. operational planning

a. contingency planning Correct. This was clearly a case of the hospital management's faulty contingency planning. Contingency planning involves the determination of alternative courses of action to be taken if an intended plan of action is unexpectedly disrupted or rendered inappropriate. See 6-3: Organizational Planning.

Decentralizing power in the hands of a local subsidiary: a. may make it difficult to transfer learning from one subsidiary to another. b. allows single units of a firm to accept lessons from other units. c. promotes the unbridled pursuit of global efficiency and multimarket flexibility. d. prevents the subsidiary from rejecting outside information. Feedback

a. may make it difficult to transfer learning from one subsidiary to another. Correct. A decentralized structure may make it difficult to transfer learning from one subsidiary to another. Local subsidiaries may be disposed to automatically reject outside information as not being germane to the local situation. See 7-7: International and Global Strategies.

The _____ is an international strategy in which a company attempts to combine the benefits of global scale efficiencies with the benefits and advantages of local responsiveness. a. transnational strategy b. global strategy c. multidomestic strategy d. home replication strategy F

a. transnational strategy Correct. The transnational strategy is an international strategy in which a company attempts to combine the benefits of global scale efficiencies with the benefits and advantages of local responsiveness. To do so, the transnational corporation does not automatically centralize or decentralize authority. Rather, it carefully assigns responsibility for various organizational tasks to the unit of the organization best able to achieve the dual goals of efficiency and flexibility. See 7-7: International and Global Strategies.

Weather Watches, a watch manufacturing company, faces a lot of problems while planning and setting goals as its competitors' technology is constantly developing. It too has to upgrade the technology it uses to keep up with its competitors. Which of the following barriers to goal setting and planning does Weather Watches face? a. An improper reward system b. A dynamic and complex environment c. Resistance to change d. Reluctance to establish goals

b. A dynamic and complex environment Correct. The barrier to goal setting and planning faced by Weather Watches is its dynamic and complex environment. Rapid change, technological innovation, and intense competition can all increase the difficulty of an organization's accurately assessing future opportunities and threats. See 6-6: Managing Goal-Setting and Planning Processes.

Which of the following is true of operational plans? a. They are used in the event of a disaster or other unexpected calamity. b. They are determined by tactical plans. c. They are developed to implement specific parts of a strategic plan. d. They are long-range plans.

b. They are determined by tactical plans. Correct. Operational goals and the appropriate tactical plans determine operational plans. Goals and plans at each level can be used as input for future activities at all levels. See 6-1: Decision Making and the Planning Process.

Which of the following is a purpose served by goals? a. They allow other aspects of planning to progress independently. b. They provide an effective mechanism for evaluation and control. c. They help everyone work toward different objectives. d. They discourage hierarchical segregation in organizations.

b. They provide an effective mechanism for evaluation and control. Correct. Goals provide an effective mechanism for evaluation and control. This means that performance can be assessed in the future in terms of how successfully today's goals are accomplished. See 6-2: Organizational Goals.

Decision making is the process of: a. monitoring day-to-day activities and progress of an organization. b. adopting one course of action as opposed to others. c. reviewing the finances of an organization. d. carrying out multiple courses of action as opposed to one.

b. adopting one course of action as opposed to others. Correct. The process of decision making is the process of adopting one course of action as opposed to others. Decision making is the catalyst that drives the planning process. See 6-1: Decision Making and the Planning Process.

The _____ establishes the corporate mission and strategy. a. planning task force b. board of directors c. executive committee d. line management

b. board of directors Correct. The board of directors establishes the corporate mission and strategy. In some companies the board takes an active role in the planning process. See 6-3: Organizational Planning.

Direct investment is advantageous because managerial control: a. lowers uncertainty. b. is more complete. c. is free from complexities. d. has low political risk.

b. is more complete.; Correct. In direct investment, managerial control is more complete, and profits do not have to be shared as they do in joint ventures. Purchasing an existing organization provides additional benefits in that the human resources and organizational infrastructure (administrative facilities, plants, warehouses, and so forth) are already in place. See 5-1: The Nature of International Business.

Which of the following areas does a well-conceived strategy address? a. Motivation approaches b. Resource deployment c. Financial capability d. Management dynamics

b. resource deployment

Unlike people who exhibit aggressive goal behavior, people who adopt passive goal behavior place a higher value on: a. material possessions. b. social relationships. c. assertiveness. d. money. Feedback

b. social relationships. Correct. People who exhibit aggressive goal behaviors tend to place a high premium on material possessions, money, and assertiveness. On the other hand, people who adopt passive goal behavior place a higher value on social relationships, quality of life, and concern for others. See 5-3: Environmental Challenges of International Management.

The board of directors of a footwear company decides to introduce leather in all its products. Following the steps of collaborative goal setting and planning, which of the following should be the next step? a. Managers should meet with their subordinates on a one-to-one basis to arrive at a set of goals and plans for each subordinate. b. The goals should be refined to be as verifiable as possible and a time frame should be specified for their accomplishment. c. Managers should tell their subordinates what organizational and unit goals and plans top management has established. d. The plans developed to achieve the goals need to be as clearly stated as possible and directly related to each goal.

c. Managers should tell their subordinates what organizational and unit goals and plans top management has established. Correct. Collaborative goal setting and planning involves a series of distinct steps. In the first step, managers tell their subordinates what organizational and unit goals and plans top management has established. See 6-6: Managing Goal-Setting and Planning Processes.

_____ refers to the set of processes involved in creating or determining the strategies of an organization. a. Strategy enunciation b. Strategy assimilation c. Strategy formulation d. Strategy implementation

c. Strategy formulation Correct. Strategy formulation is the set of processes involved in creating or determining the strategies of an organization. The formulation stage determines what the strategy is. See 7-1: The Nature of Strategic Management.

Which of the following is a function of a planning staff? a. To take a narrower view than individual managers b. To increase the workload of individual managers c. To go beyond pet projects and particular departments d. To select a competent chief executive officer

c. To go beyond pet projects and particular departments Correct. A planning staff can reduce the workload of individual managers, help coordinate the planning activities of individual managers, bring to a particular problem many different tools and techniques, take a broader view than individual managers, and go beyond pet projects and particular departments. Organizations might use a planning staff for a variety of reasons. See 6-3: Organizational Planning.

Unlike a reaction plan, an action plan is: a. is a plan developed to answer an unforeseen circumstance. b. a long-range plan which has a time frame of five years or more. c. a plan that operationalizes any other kind of plan in an organization. d. is a general plan outlining decisions of resource allocation

c. a plan that operationalizes any other kind of plan in an organization. Correct. An action plan operationalizes any other kind of plan in an organization. An action plan is a short-range plan that has a time frame of one year or less. See 6-3: Organizational Planning.

A program is: a. a single-use plan of minimal scope and complexity. b. a standing plan outlining steps to be followed in particular circumstances. c. a single-use plan for a large set of activities. d. a standing plan developed for activities that recur regularly.

c. a single-use plan for a large set of activities. Correct. A program is a single-use plan for a large set of activities. It might consist of identifying procedures for introducing a new product line, opening a new facility, or changing the organization's mission. See 6-5: Operational Planning.

Unlike multidomestic firms, global corporations: a. concentrate decision-making responsibilities in a handful of local companies. b. have home-country biases. c. assume that customers are the same regardless of nationality. d. produce goods that are highly diversified.

c. assume that customers are the same regardless of nationality. Correct. Whereas the multidomestic firm believes that its customers in every country are fundamentally different and must be approached from that perspective, a global corporation assumes that customers are fundamentally the same regardless of nationality. See 7-7: International and Global Strategies.

weakness of the single-product strategy is that the: a. firm using it will require excessive capital. b. marketing of a product is poor. c. firm using it will suffer if its product is replaced by a new one. d. cost of production is high.

c. firm using it will suffer if its product is replaced by a new one. Correct. The single-product strategy has one major weakness. Because it has staked its survival on a single product, an organization works very hard to make sure that the product is a success. Of course, if the product is not accepted by the market or is replaced by a new one, the firm will suffer. See 7-5: Formulating Corporate-Level Strategies.

It is difficult to imitate a distinctive competence because: a. its application will lead to competitive parity. b. it will lead to a competitive disadvantage. c. its nature might not be understood by competing firms. d. it might not be applicable to a competing firms' products.

c. its nature might not be understood by competing firms .Correct. A distinctive competence might be difficult to imitate because its nature and character might not be known or understood by competing firms. Procter & Gamble, for example, considers that its sustained competitive advantage is based on its manufacturing practices. Large sections of Procter & Gamble's plants are screened off to keep this information secure. See 7-2: Using SWOT Analysis to Formulate Strategy.

A _____ is an economy based on the private ownership of business and allows factors such as supply and demand to determine business strategy. a. gift economy b. command economy c. market economy d. traditional economy

c. market economy; Correct. A market economy is based on the private ownership of business and allows market factors such as supply and demand to determine business strategy. Mature market economies include the United States, Canada, Japan, the United Kingdom, France, Germany, and Sweden. See 5-2: The Structure of the Global Economy.

An organization that implements a defender strategy focuses on: a. increasing costs to improve the performance of its current products. b. enhancing creativity and innovation. c. protecting its market from new competitors. d. taking numerous risks to enhance sales.

c. protecting its market from new competitors. Correct. An organization implementing a defender strategy attempts to protect its market from new competitors. It tends to downplay creativity and innovation in bringing out new products or services and to focus its efforts instead on lowering costs or improving the performance of current products. See 7-4: Implementing Business-Level Strategies.

Tactical plans are an organized sequence of steps designed to execute _____. a. operational plans b. contingency plans c. strategic plans d. short-term plans

c. strategic plans Correct. Tactical plans are an organized sequence of steps designed to execute strategic plans. Tactical plans must be consistent with a strategic plan. See 6-4: Tactical Planning.

Managers are most likely required to have a broad-based understanding of _____ issues to plan and make decisions in a global economy. a. cognitive b. metaphysical c. competitive d. expatriate

competitive Correct. To effectively plan and make decisions in a global economy, managers must have a broad-based understanding of both environmental issues and competitive issues. They need to understand local market conditions and technological factors that will affect their operations. See 5-4: Competing in a Global Economy.

Which of the following is a pure type of property ownership? a. Communal ownership b. Joint tenancy c. Complete private ownership d. Complete open access

complete privacy ownership Correct. There are two pure types of property ownership—complete private ownership and complete public ownership. In systems with private ownership, individuals and organizations—not the government—own and operate the companies that conduct business. In systems with public ownership, the government directly owns the companies that manufacture and sell products. See 5-3: Environmental Challenges of International Management.

_____ is the catalyst that drives the planning process. a. Goal setting b. Decision making c. Process planning d. Policy making

decision making Correct. Decision making is the catalyst that drives the planning process. An organization's goals follow from decisions made by various managers. See 6-1: Decision Making and the Planning Process.

_____ refers to an organization's beginning of the business activities formerly conducted by its customers. a. Related diversification b. Backward vertical integration c. Unrelated diversification d. Forward vertical integration

d. Forward vertical integration Correct. Forward vertical integration refers to an organization's beginning the business activities formerly conducted by its customers. Many firms are also employing forward vertical integration today, as they use the Internet and social media to market their products and services directly to consumers. See 7-6: Implementing Corporate-Level Strategies.

Which of the following is true of culture in a global economy? a. Group processes are independent of cultural background. b. Leadership roles remain the same across cultures. c. Communication is uniform across cultures. d. Motivational processes vary across cultures.

d. Motivational processes vary across cultures. Correct. Managers must understand how cultural factors affect individuals, how motivational processes vary across cultures, how the role of leadership changes in different cultures, how communication varies across cultures, and how interpersonal and group processes depend on cultural background. See 5-4: Competing in a Global Economy.

Which of the following is an organizational strength? a. Impersonal relations among workers b. A strong trade union c. A large number of middle-men d. Surplus capital

d. Surplus capital Correct. Organizational strengths are skills and capabilities that enable an organization to conceive of and implement its strategies. Strengths may include such things as a deep pool of managerial talent, surplus capital, a unique reputation and/or brand name, and well-established distribution channels. See 7-2: Using SWOT Analysis to Formulate Strategy.

____ exists among a set of businesses when the businesses' economic value together is greater than their economic value separately. a. Parity b. Integrity c. Congruence d. Synergy

d. Synergy Correct. Synergy exists among a set of businesses when the businesses' economic value together is greater than their economic value separately. McDonald's is using synergy as it diversifies into other restaurant and food businesses. For example, its McCafe premium coffee stands in some McDonald's restaurants allows the firm to create new revenue opportunities while using the firm's existing strengths in food-product purchasing and distribution. See 7-5: Formulating Corporate-Level Strategies.

Which of the following is true of strategic goals? a. They are set by and for middle managers. b. They are set by lower-level managers. c. They are concerned with short-term issues. d. They focus on broad, general issues.

d. They focus on broad, general issues. Correct. Strategic goals focus on broad, general issues. They are set by and for top management of the organization. See 6-2: Organizational Goals.

A theoretical advantage of unrelated diversification is that: a. corporate managers will focus on the future performance of the business. b. corporate managers will have a great understanding of a business. c. a business will have high performance at the outset. d. a business will have a stable performance over time. Feedback

d. a business will have a stable performance over time .Correct. In theory, unrelated diversification has two advantages. First, a business that uses this strategy should have stable performance over time. During any given period, if some businesses owned by the organization are in a cycle of decline, others may be in a cycle of growth. See 7-5: Formulating Corporate-Level Strategies.

Management by objectives (MBO) refers to: a. a process of management that focuses on optimization. b. a formal process by which the success of a plan is evaluated. c. a process of management involved in overcoming crisis situations. d. a formal goal-setting process involving collaboration between managers and subordinates.

d. a formal goal-setting process involving collaboration between managers and subordinates.' Correct. Management by objectives (MBO) refers to a formal goal-setting process involving collaboration between managers and subordinates. The extent to which goals are accomplished is a major factor in evaluating and rewarding subordinates' performance. See 6-6: Managing Goal-Setting and Planning Processes.

A(n) _____ is a pattern of action that develops over time in an organization in the absence of mission and goals or despite mission and goals. a. assimilative strategy b. recursive strategy c. deliberate strategy d. emergent strategy

d. emergent strategy Correct. An emergent strategy is a pattern of action that develops over time in an organization in the absence of mission and goals or despite mission and goals. Implementing emergent strategies involves allocating resources even though an organization has not explicitly chosen its strategies. See 7-1: The Nature of Strategic Management.

Horizontal consistency of goals means that: a. goals should have a definite timeline. b. strategic, tactical, and operational goals must agree with one another. c. goals should be agreed upon by all levels of management. d. goals should be consistent from one department to the next.

d. goals should be consistent from one department to the next. Correct. Horizontal consistency means that goals should be consistent across the organization, from one department to the next. Goals should be consistent both horizontally and vertically. See 6-6: Managing Goal-Setting and Planning Processes.

A(n) _____ is a business that is based primarily in a single country but acquires some meaningful share of its resources or revenues (or both) from other countries. a. racketeering business b. domestic business c. intranational business d. international business

d. international business; Correct. An international business is a business that is based primarily in a single country but acquires some meaningful share of its resources or revenues (or both) from other countries. Most large firms today are either international or multinational companies. See 5-1: The Nature of International Business.

The first stage of the product life cycle is the _____. a. maturity stage b. growth stage c. decline stage d. introduction stage

d. introduction stage Correct. The product life cycle is a model that shows how sales volume changes over the life of products. The cycle begins when a new product or technology is first introduced, which is termed as the introduction stage. See 7-3: Formulating Business-Level Strategies.

During the maturity stage of the product life cycle, the: a. product differentiation concerns are negligible. b. overall demand for the product increases. c. number of new firms producing the current product increases. d. number of established firms producing the product declines.

d. number of established firms producing the product declines. Correct. During the maturity stage, overall demand growth for a product begins to slow down, and the number of new firms producing the product begins to decline. The number of established firms producing the product may also begin to decline. See 7-3: Formulating Business-Level Strategies.

A basic goal of the World Trade Organization (WTO) is to: a. restrict animal trade between countries. b. promote international trade flow by adopting discriminatory trade policies. c. take the first step toward the formation of a North American economic community. d. reduce trade barriers through multilateral negotiations.

d. reduce trade barriers through multilateral negotiations.; Correct. The WTO has three basic goals: (1) To promote trade flows by encouraging nations to adopt nondiscriminatory and predictable trade policies (2) To reduce remaining trade barriers through multilateral negotiations (3) To establish impartial procedures for resolving trade disputes among its members. See 5-2: The Structure of the Global Economy.

The focus of _____ is on how to operationalize actions necessary to achieve the strategic goals. a. operational goals b. short-term goals c. long-term goals d. tactical goals Feedback

d. tactical goals Correct. The focus of tactical goals is on how to operationalize actions necessary to achieve the strategic goals. They are set by and for middle managers. See 6-2: Organizational Goals.

Friendly Faces, a not-for-profit organization, sets a target to feed 100 children every day for one year. Rehaan, the local resources manager, is given the responsibility of achieving this goal. In keeping with the guidelines of tactical planning, Rehaan plans to first identify 100 children who could benefit from this project. Rehaan's plan is an example of a _____. a. single-use plan b. contingency plan c. long-range plan d. tactical plan

d. tactical plan Correct. Rehaan's plan is an example of a tactical plan. Tactical plans are developed to implement specific parts of a strategic plan. A manager needs to recognize that tactical planning must address a number of tactical goals derived from a broader strategic goal. See 6-4: Tactical Planning.

Wenton and Wenton, an apparel store, decides to focus on summer-friendly clothes. Syler, the manager of the store, plans to do so by introducing a new line of shirts that absorbs sweat quickly from the body. He allocates activities to each of the departments of the store and sets a time frame within which the activities should be completed. Syler's plan is an example of a _____. a. long-range plan b. contingency plan c. single-use plan d. tactical plan

d. tactical plan Correct. Syler's plan is an example of a tactical plan. Tactical plans specify resources and time frames. Tactical plan must specify precisely what activities will be undertaken to achieve a goal. See 6-4: Tactical Planning.

While performing the function of organizing in a global economy, managers should: a. avoid change. b. eliminate the responsibility of local managers. c. deal with human resources. d. promote organizational inflexibility

deal with human resources Correct. Managers in an international business must address the basic issues of organization structure and design, managing change, and dealing with human resources. See 5-4: Competing in a Global Economy.

A(n) _____ is a business that acquires all of its resources and sells all of its products or services within a single country. a. domestic business b. global business c. multinational business d. international business

domestic buisness; Correct. A domestic business is a business that acquires all of its resources and sells all of its products or services within a single country. Most small businesses are essentially domestic in nature; this category includes local retailers and restaurants, agricultural enterprises, and small service firms such as dry cleaners and hair salons. See 5-1: The Nature of International Business.

A _____ is a strategy in which an organization concentrates on a specific regional market, product line, or group of buyers. a. overall cost leadership strategy b. reactor strategy c. focus strategy d. prospector strategy

focus strategy Correct. A focus strategy is a strategy in which an organization concentrates on a specific regional market, product line, or group of buyers. This strategy may have either a differentiation focus, whereby a firm differentiates its products in the focus market, or an overall cost leadership focus, whereby a firm manufactures and sells its products at low cost in the focus market. See 7-3: Formulating Business-Level Strategies.

n import/export operation is advantageous because it: a. adapts a product to local conditions easily. b. is subject to low transportation expenses. c. is an easy way to enter a market with a small outlay of capital. d. involves paying low taxes and tariffs to the government. Feedback

is an easy way to enter a market with a small outlay of capital Correct. An import/export operation is the easiest way of entering a market with a small outlay of capital. Because the products are usually sold "as is," there is no need to adapt the product to the local conditions, and little risk is involved. See 5-1: The Nature of International Business.

Smiles and Rainbows, a not-for-profit organization, defines the reason for its existence as follows: "To provide effective vocational education for underprivileged children throughout the United States." This is an example of an organization's _____. a. operational goal b. short-term goal c. mission d. vision

mission Correct. This is an example of an organization's mission. The mission outlines the organization's purpose, premises, values, and directions. See 6-1: Decision Making and the Planning Process.

International managers: a. have a minimal understanding of environmental issues. b. are not required to develop control mechanisms. c. need to organize to implement their plans. d. do not interact with those who are lower in the hierarchy. Feedback

need to organize to implement their plans Correct. International managers need to have a clear view of where they want their firm to be in the future; they have to organize to implement their plans; they have to motivate those who work for them; and they have to develop appropriate control mechanisms. See 5-4: Competing in a Global Economy.

A line manager at a brewery sets a target for the minimum number of beer cartons that have to be shipped out by the end of each day. This is an example of a(n) _____ goal. a. synergistic b. operational c. strategic d. contingency

operational Correct. This is an example of an operational goal. Operational goals are set by and for lower-level managers. Their concern is with shorter-term issues associated with the tactical goals. See 6-2: Organizational Goals.

Which of the following is an area of focus for tactical plans? a. Environment b. Resources c. People d. Mission

people Correct. Strategy focuses on resources, environment, and mission, whereas tactics focus primarily on people and action. Tactical plans are to battles what strategy is to a war: an organized sequence of steps designed to execute strategic plans. See 6-4: Tactical Planning.

A _____ is the most general form of a standing plan that specifies an organization's general response to a designated problem or situation. a. policy b. regulation c. rule d. procedure

policy Correct. A policy is the most general form of standing plan that specifies an organization's general response to a designated problem or situation. A policy is also likely to describe how exceptions are to be handled. See 6-5: Operational Planning.

Grandpa's Special is a culinary arts training center. Due to its popularity, a large number of people want to join the center. Since Grandpa's Special will not be able to train a large number of people due to insufficient resources, it decides to grant admission only to ladies between the ages 18 and 25. This is an example of a _____. a. project b. policy c. program d. rule

policy Correct. This is an example of a policy. A policy is the most general form of standing plan that specifies an organization's general response to a designated problem or situation. See 6-5: Operational Planning.

_____ goals are goals set by and for an organization's top management. a. Strategic b. Operational c. Short-range d. Tactical

strategic Correct. Strategic goals are set by and for an organization's top management. They focus on broad, general issues. See 6-2: Organizational Goals.

The board of directors of Senolandt, a company that manufactures toys for infants, decides to widen its customer base to include young adolescents as well. This is an example of a _____. a. reaction plan b. single-use plan c. strategic plan d. operational plan

strategic plan Correct. This is an example of a strategic plan. A strategic plan is a general plan outlining decisions of resource allocation, priorities, and action steps necessary to reach strategic goals. These plans are set by the board of directors and top management, generally have an extended time horizon, and address questions of scope, resource deployment, competitive advantage, and synergy. See 6-3: Organizational Planning.

The board of directors of Hither Here Thither, an international cosmetics brand, decides to expand its markets in South Africa in two years. Ronan, the regional manager of South Africa, decides to expand markets by increasing the advertisement budget by 20 percent. The goal set by Ronan is an example of a(n) _____ goal. a. contingency b. operational c. tactical d. long-term

tactical Correct. The goal set by Ronan is an example of a tactical goal. Tactical goals are set by and for middle managers. Their focus is on how to operationalize actions necessary to achieve the strategic goals. See 6-2: Organizational Goals.

In order to further an organization's goal of increasing sales by a large margin, the managers coordinate the acquisition of a number of retail outlets in smaller cities. These acquisitions represent the implementation of a(n) _____ plan. a. operational b. contingency c. tactical d. single-use

tactical Correct. These acquisitions represent the implementation of a tactical plan. Tactical plans are developed to implement specific parts of a strategic plan. A manager needs to recognize that tactical planning must address a number of tactical goals derived from a broader strategic goal. See 6-4: Tactical Planning.

Which of the following is a primary challenge presented by developing countries to those interested in international business? a. The lack of wealth of potential consumers b. The lack of distribution systems c. The lack of economic potential d. The lack of foreign direct investment laws

the lack of wealth of potential consumers; Correct. The primary challenges presented by the developing economies to those interested in conducting international business there are potential consumers' lack of wealth and an underdeveloped infrastructure. Developing economies have enormous economic potential, but much of it remains untapped. See 5-2: The Structure of the Global Economy.

Which of the following is a guideline for tactical plans? a. They must be based on operational goals. b. They must specify resources and time frames. c. They must be independent of the strategic plan. d. They must be independent of the long-term goal.

they must specify resources and time frames Correct. Although strategies are often stated in general terms, tactical plans must specify resources and time frames. A strategy can call for being number one in a particular market or industry, but a tactical plan must specify precisely what activities will be undertaken to achieve that goal. See 6-4: Tactical Planning.

Which of the following is true of Multinational Corporations (MNCs)? a. Their employees are not accountable to a central authority. b. They transfer capital and information from one market to another. c. They do not give their managers discretion to address regional issues. d. Their primary goal is to expand within the domestic market.

they transfer capital and information from one market to another Correct. MNCs transfer capital, technology, human resources, inventory, and information from one market to another. They actively seek new expansion opportunities wherever feasible. See 5-4: Competing in a Global Economy.

A global business: a. buys raw materials and sells finished products to a single country. b. restricts its trade operations to within the home country and its neighboring countries. c. transcends national boundaries and is not committed to a single home country. d. borrows money from a single country to manufacture and sell its products and services.

transcends national boundaries and is not committed to a single home country Correct. A global business is a business that transcends national boundaries and is not committed to a single home country. Although no business has truly achieved this level of internationalization, a few are edging closer and closer. See 5-1: The Nature of International Business.