MGT 301 Ch 4

The governments of many countries in transition cannot afford all the investment required to develop and upgrade their infrastructure​ system, including​ highways, bridges, and rail networks. Where can these countries find financial​ resources?

Through outside sources such as the World​ Bank, IMF, and the Asian Development Bank

According to your​ textbook, which one of the following sets of countries are classified as newly industrialized​ countries?

​Brazil, India,​ China, and South Korea

​________ is the forced transfer of assets from a company to the government without compensation.

Confiscation

Which one of the following is the largest contributor to unemployment in​ China?

Migrant workers

Importing modern management practices into the culture of a transition country can be difficult. South​ Korea's Daewoo Motors faced a culture clash when it entered Central Europe.​ Korea's management system is based on a rigid hierarchical structure and an intense work ethic. Managers at​ Daewoo's car plants in South Korea arrived early for work to stand and greet workers at the company gates. But problems arose when​ Daewoo's managers did not fully comprehend the culture at its factories in Central Europe. How did the Korean​ company, Daewoo address this​ issue?

By sending Central European workers to staff assembly lines in Korea and sending Korean managers and technicians to work in Central and Eastern Europe

International firms attempt to gather information that will help them predict and manage political risk. Which source should a company use to gain insight into local culture and​ politics?

Current employees who have worked in a country for an extended period

Adaptation is one of the main methods of managing political risks. Which one of the following is a type of adaptation that allows an international business to assist the host country or region in improving the quality of life for​ locals?

Development assistance

Managers must work within the established rules and regulations of each national business environment. Bribes often represent attempts to gain political influence. Which U.S. law forbids U.S. companies from bribing government officials or political candidates in other​ nations?

Foreign Corrupt Practices Act

Which measure does the World Bank use to classify a​ country's level of​ development?

GNI

When PepsiCo first entered the Indian​ market, the company was confronted with a new government mandate to restrict ownership to domestic companies or limit ownership by​ non-domestic firms to a minority stake. This new mandate restricted​ PepsiCo's ownership of local companies to 49 percent when it first entered India. What type of political risk has affected​ PepsiCo?

Policy changes

Which one of the following has​ Russia's annexation of the​ Ukraine's peninsula of Crimea​ created?

Political instability

Using gross product figures to compare production across countries does not account for the different cost of living in each country. Which one of the following indicators helps in adjusting the GDP to reflect the cost of living in each​ country?

Purchasing power parity

​Confiscation, expropriation, and nationalization can have an impact on the economic development of the country. Which one of the following reflects the​ long-term impact on the​ country's economic​ development?

Slower economic development because of foreign investors being more reluctant to invest in the country

Political risk has been defined as the likelihood that a society will undergo political change that negatively affects local business activity. Which one of the following is an example of political​ risk?

The foreign government has announced new laws stipulating that a specified amount of a good or​ service, which is known as local content requirements​, must be supplied by producers in the domestic market.

Political and social problems pose threats to​ China's future economic performance. Which one of the following potential challenges is largely the result of​ China's privatization of its​ industry?

Unemployment

When local social unrest in a country causes disturbances that impair a​ company's ability to manufacture and distribute​ products, obtain materials and​ equipment, and threatens the lives of its​ employees, the company is facing a​ ________ risk.

conflict and violence

Countries that are highly industrialized and highly​ efficient, and whose people enjoy a high quality of life are called​ ________.

developed countries

Nations are commonly classified as being​ developed, newly​ industrialized, or developing based on a quantifiable economic measure. Such measures include figures on​ ________.

national​ production, the portion of the economy devoted to​ agriculture, the amount of exports in the form of industrial​ goods, and overall economic structure

Which one of the following is a method companies can use to manage political risk by incorporating risk into business​ strategies, a ploy known as​ adaptation?

partnerships

Economic transition involves changing a​ nation's fundamental economic organization and creating entirely new​ free-market institutions. Some of the key reform measures to promote economic development include​ ________.

reducing budget​ deficits, allowing prices to reflect supply and demand and expanding credit availability.