MGT 3120 - Chapter 4

True or false: Currently, the United States exports more than it imports. True False

False

True or false: It is always profitable for a company to expand internationally when it has the means to do so. True False

False

Many fast-food chains have operations in foreign countries because these restaurant corporations allow a foreign company to pay a fee to use the name of the fast-food restaurant. The foreign company would also need to pay a share of the profits to the fast-food corporation. What type of situation does this describe? Joint venture Countertrade Franchising Licensing

Franchising

In order to expand internationally, Bolt Energy Corp. based in Houston, decides to build a new energy plant in Finland rather than purchase an existing company. What format is this company using to expand internationally? Franchise Licensing venture Partially owned subsidiary Greenfield venture

Greenfield venture

Select all that apply Which businesses would be categorized as "multinational organizations," as opposed to "multinational corporations"? (Choose every correct answer.) Exxon Mobil International Red Cross Johnson & Johnson World Health Organization

International Red Cross World Health Organization

Select all that apply Which of the following are among the most-imported goods in the United States? (Choose every correct answer.) TVs Cell phones Auto parts Pharmaceuticals

TVs Cell phones Pharmaceuticals

A company that allows a foreign company to pay it a fee to make or distribute its products or services is engaging in _____. licensing countertrading a joint venture franchising

licensing

Licensing is most common for _____ companies. online nonprofit manufacturing service-based

manufacturing

A nonprofit organization that has operations in several countries is called a(n) _____ organization. international conglomerate multinational corporation

multinational

A company that has operations in several countries is called a(n) ______. dual partnership multinational corporation foreign venture sole proprietorship

multinational corporation

Wal-Mart is an example of a(n) ______ because it is a business with operations in multiple countries. dual partnership multinational organization international partner multinational corporation

multinational corporation

Polycentric managers believe that ______. managers should use whatever techniques are most effective regardless of where they come from their native country, culture, and practices are superior to all others and should always be followed. native managers in foreign offices should understand native personnel and practices and be left alone by the home office

native managers in foreign offices should understand native personnel and practices and be left alone by the home office

Another way to describe ethnocentrism is as a narrow view in which people see things solely through their own perspective. This is called _____. geocentrism individualism collectivism parochialism

parochialism

Managers who are ______ believe that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone. geocentric monochronic ethnocentric polycentric

polycentric

The United States government has put a limit on the number and types of olives that can be imported. This limit is an example of an import _____. tariff barter quota license

quota

When a country places a tariff on an imported product, it is _____. removing any additional taxes from the import requiring a fee be paid on the import limiting the quantity of the import banning the product from importation

requiring a fee be paid on the import

Athletic wear made by Under Armour is undergoing a change as the manufacturer focuses on a "local for local" initiative as it finds ways to bring manufacturing jobs back to the United States. The actions taken by Under Armour demonstrate the concept of _____. licensing reshoring franchising offshoring

reshoring

Another name for a joint venture is a ______. strategic alliance greenfield venture wholly owned subsidiary multinational franchise

strategic alliance

Select all that apply What two things are credited with creating the "global village?" (Choose every correct answer.) Electronic media Corporate sustainability Convenient air travel Assembly line production

Electronic media Convenient air travel

Select all that apply What are reasons for global outsourcing, or offshoring, to a foreign supplier? (Choose every correct answer.) It has resources not available in the U.S. It has a longer supply chain than your current supply chain. It has labor that is cheaper than American labor. It has higher tariffs than the U.S. It has special expertise.

It has resources not available in the U.S. It has labor that is cheaper than American labor. It has special expertise.

There is currently a trend known as "reshoring" in the fashion industry. What is occurring with this trend? Manufacturers are moving production of garments back to the US to respond more quickly to consumer trends. Garment suppliers are decreasing in number, requiring remaining suppliers to produce new component parts. More retailers are stocking "second-hand" or "resale" products in direct competition with new items. Manufacturers are importing all component parts, such as zippers and snaps, from developing nations.

Manufacturers are moving production of garments back to the US to respond more quickly to consumer trends.

Select all that apply What are companies involved in a franchise deal required to do? (Choose every correct answer.) Place a limit on the amount of goods that can be imported Pay a fee to use the brand name of a company Provide a share of the profits to the brand name company Exchange goods for goods and not goods for money

Pay a fee to use the brand name of a company Provide a share of the profits to the brand name company

Of the many reasons companies decide to expand internationally, what do all the reasons have in common? They all foster sustainability. They help the company make or save money. They increase offshoring capabilities. They make the company more attractive to consumers.

They help the company make or save money.

What is outsourcing? Locating portions of your business in a foreign country Using suppliers outside the company to provide goods and services Selling products to customers in a foreign country Using internal employees to manufacture goods and provide services

Using suppliers outside the company to provide goods and services

Which statement best describes geocentric managers? We know best, and we should follow our customs. What's best is what's effective, regardless of origin. They know best, and we should follow their customs.

What's best is what's effective, regardless of origin.

Refer to Figure 4.1 in the text. Which method of international expansion is likely to hold the highest risk and investment for the organization? Licensing and franchising Importing, exporting, and countertrading Global outsourcing Wholly owned subsidiaries

Wholly owned subsidiaries

Adieu Enterprises, based in Toronto, decides to expand into the South American market. To do so, it establishes a separate operation in Brazil that is owned and controlled in its entirety by Adieu. Which form of expanding internationally does this represent? Wholly owned subsidiary Joint venture Global outsourcing Licensing

Wholly owned subsidiary

A US company that chooses to use suppliers outside of the United States to provide labor, goods, or services, is practicing _______. importing global outsourcing exporting trade protectionism

global outsourcing

What is an appropriate synonym for countertrading? licensing bartering warehousing exporting

bartering

E-commerce is the ______. shrinking of time and space as air travel and electronic media make it easier for people around the world to communicate transportation of electronic information in the global village buying and selling of products and services through computer networks manufacture and exchange of computer processors and other electronic merchandise

buying and selling of products and services through computer networks

If the currency exchange rate is not conducive for business, a US-based company may decide to exchange goods for goods rather than goods for money. This is known as _____. arbitration outsourcing countertrading franchising

countertrading

The process of buying and selling products and services through computer networks is called _____. the global village social networking the World Wide Web e-commerce

e-commerce

Managers who are ______ believe that their native country, culture, language, and behavior are superior to all others. ethnocentric polychronic geocentric polycentric

ethnocentric

Managers who are ______ accept that there are differences and similarities between home and foreign personnel and practices. These types of managers believe that they should use whatever techniques are most effective to get the job done. polycentric ethnocentric geocentric monochronic

geocentric

The "shrinking" of time and space as air travel and the electronic media make it easier for people of the world to communicate with one another refers to _____. the World Wide Web the global village e-commerce social networking

the global village