MGT-3150 Final Study Guide

You are interviewing candidates for a job in a foreign subsidiary. Which of the following is a skill you need to look for with this job? A. Adaptability B. Functional C. Technical D. Managerial E. Individuality

A. Adaptability

Your firm engages in international trade with a few different countries where it supplies products and gains products in return. Often your firm supplies your product first and receives the products from the other firm later. Which form of payment is​ this? A. Counterpurchase B. Credit card C. Payment in advance D. Letter of credit E. Open account

A. Counterpurchase

Which of the following is NOT a way to respond to transaction​ exposure? A. Create a balance sheet hedge B. Go naked C. Buy foreign currency forwards D. Acquire an offsetting asset E. Buy foreign currency options

A. Create a balance sheet hedge

Which of the following resources areas do international operations managers NOT make decisions​ about? A. Determining methods of inventory control B. Where to obtain the resources the firm needs to produce its products C. How to obtain the resources the firm needs to produce its products D. Decisions related to supply chain management E. Decisions related to vertical integration

A. Determining methods of inventory control

Which of the following does NOT influence the make or buy​ decision? A. Factory location B. Scope of operations C. Nature of the product D. Technological expertise E. ​Firm's size

A. Factory location

Which of the following strategies for managing transaction exposure would NOT require outlay of​ capital? A. Go naked B. Buy currency options C. Buy forward currency D. Buy currency futures E. Acquire an offsetting asset

A. Go naked

You are recruiting and interviewing new graduates from colleges and universities for foreign assignments. Which of the following would be an​ advantage? A. Graduates with foreign language skills B. Graduates ready to move to a new country C. Graduates with majors in accounting D. Top students from the parent country E. Foreign students who have permanently moved to the parent country

A. Graduates with foreign language skills

_______________________ affect PCNs on​ long-term foreign assignments. A. Great acculturation challenges B. Higher costs of living C. Financial and compensation challenges D. Lack of contact with fellow​ co-workers in their home country E. Missed opportunities for career advancement

A. Great acculturation challenges

You are in HR in a firm that has foreign subsidiaries. You are in charge of hiring and​ training, which incurs a high cost of developing​ managers' international business skills. Which of the following is a particularly trying problem for​ you? A. High turnover B. Relocation costs C. ​Over-retention D. Language skills E. Paying headhunters

A. High turnover

​____________________________ are affected by the cultural nuances inherent in international​ business, and heighten the complexities in designing those that are effective. A. Human resources strategies B. Sales and revenue strategies C. Marketing strategies D. Quality management strategies E. Global organizational initiatives

A. Human resources strategies

You are an operations manager working on managing information more effectively from one international branch to another. Which of the following should you put in​ place? A. Information system B. Quality management C. Decentralized organization D. Research and development E. Employee involvement

A. Information system

You are trying to cut costs in communication and inventory control in your multiple locations worldwide to improve productivity. Which of the following would be a good area to​ expand? A. Information technology B. Materials management C. Supply chain D. Plant productivity E. Employee training

A. Information technology

Which of the following goods does NOT have a low​ value-to-weight ratio? A. Microprocessors B. Iron ore C. Bulk chemicals D. Cement E. Coal

A. Microprocessors

As the financial officer for an international​ firm, you need to keep a certain balance on foreign currency. You see that the yen is expected to rise again in the future as more plants resume​ production, so you keep a larger supply of the yen on hand than you normally would in anticipation of this. What strategy are you​ using? A. Minimizing foreign exchange risk B. Minimizing economic exposure C. Minimizing currency costs D. Minimizing logistic issues E. Minimizing working capital balances

A. Minimizing foreign exchange risk

When using an ethnocentric staffing​ model, you would primarily use​ ________ to staff​ higher-level foreign positions. A. PCNs B. Expatriates C. MNCs D. HSNs E. TCNs

A. PCNs

From the​ exporter's perspective, which is the safest method of​ payment? A. Payment in advance B. Open account C. Documentary collection D. Credit cards E. Letters of credit

A. Payment in advance

A key decision is whether to make or buy inputs. Which of the following is NOT one production managers use as decision​ options? A. Tactical issues B. Control C. Flexibility D. Risks E. Investments in facilities

A. Tactical issues

​____________ is the impact on the​ firm's consolidated financial statements of fluctuations in exchange rates that change the value of foreign subsidiaries as measured in the​ parent's currency. A. Translation exposure B. Financial statement correction C. Transaction exposure D. Exchange rate adjustment E. Balance sheet hedge

A. Translation exposure

TQM programs rely on all of the following operational components EXCEPT​ ________. A. benchmarking B. willingness to adopt new and improved methods of getting work done C. willingness to invest in new technology D. scrutinizing materials E. employee involvement

A. benchmarking

A strategy to try to increase net holdings of currencies that are expected to rise in value and to decrease net holdings of currencies that are expected to fall in value is known as​ __________. A. leads and lags B. multilateral netting C. centralized cash management D. working capital manipulation E. bilateral netting

A. leads and lags

Which of the following most likely constrains the hiring practices and compensation systems of international firms operating in foreign locations? A. local laws B. benefits availability C. practices of competing firms D. capital budgeting

A. local laws

After training and development takes place, what comes next in the international human resource management process? A. performance appraisal B. contribution to organizational effectiveness C. compensation and benefits D. labor relations

A. performance appraisal

What is most important in staffing managerial employees? A. strategic and development issues B. political differences C. legal differences D. differences in cultural conditions

A. strategic and development issues

A firm faces​ _________ when the financial benefits and costs of an international transaction can be affected by exchange rate movements that occur after the firm is legally obligated to complete the transaction. A. transaction exposure B. translation exposure C. a balance sheet hedge D. a financial statement correction E. an exchange rate adjustment

A. transaction exposure

What is a disadvantage of using host country nationals to manage foreign operations? A. unfamiliarity with​ firm's practices B. high relocation costs to firm C. loss of key talent from headquarters D. inability to understand local customs

A. unfamiliarity with firm's practices

Which of the following is an advantage of using​ PCNs? A. Many host countries restrict the number of foreign employees that can be transferred into the country. B. They typically share a common culture and educational background with corporate headquarters staff. C. Many host countries mandate that a certain percentage of an international​ firm's payroll must be paid to employees from the host country. D. They typically lack the knowledge of the host​ country's laws,​ culture, economic​ conditions, social​ structure, and political process. E. They are often expensive to relocate and maintain in the host country.

B. They typically share a common culture and educational background with corporate headquarters staff.

You are moving into a new international market and need to set up training for the new managers. You need to assess the training the managers will need in order to meet the needs of this new market. What is the largest barrier to success? A. Complex accounting rules B. Underestimating training needs C. Technical standards D. Lack of foreign partners E. Language Barriers

B. Underestimating training needs

Companies that view themselves as multidomestic are more likely to ________. A. provide visas to third country nationals B. decentralize decision making C. employ parent country nationals D. centralize decision making

B. decentralize decision making

When financing attractive​ investments, corporate finance officers strive to do all of the following EXCEPT​ ________. A. limit political risk B. enter only into U.S.​ currency-based investment transactions C. minimize the​ corporation's total tax burden D. minimize the worldwide cost of acquiring capital E. limit​ foreign-exchange risk

B. enter only into U.S.​ currency-based investment transactions

PDF Enterprises, an MNE, uses a centralized approach to management, so its international managers will most likely be ________. A. third country nationals B. home country nationals C. host country nationals D. primary country nationals

B. home country nationals

Using ________ will most likely improve a subsidiary's ability to adjust to changes in local economic and political conditions. A. third country nationals B. host country nationals C. home country nationals D. parent country nationals

B. host country nationals

A firm's international division is usually located in ________. A. the importing country B. the home country C. the country with the highest foreign sales D. a centrally located country

B. the home country

The method using prices determined in the open market to transfer goods between units of the same corporate parent is called​ __________. A. exchange rate pricing B. ​market-based transfer pricing C. ​open-market based transfer pricing D. ​non-market transfer pricing E. ​free-market based transfer pricing

B. ​market-based transfer pricing

________ workers are production workers.

Blue collar

Pet Comfort Systems is a firm based in Chicago that has just started exporting a small number of pet beds to retail stores in London, Tokyo, and Paris. The export department manager at Pet Comfort Systems is most likely from which country? A. Japan B. France C. United States D. England

C. United States

Why do international HR managers most likely need to adjust hiring, firing, and training methods on a country by country basis? A. ensure compensation equity B. comply with international laws C. adjust for national and cultural differences D. meet requirements of joint venture contracts

C. adjust for national and cultural differences

At which stage in the evolution of a firm's organizational structure are international staffing needs lowest? A. International division B. matrix organization C. export department D. global organization

C. export department

TechWare, an MNE based in Canada, has foreign operations in Singapore and Tokyo. TechWare's foreign offices are managed by parent country nationals. What is the most likely advantage of this staffing policy? A. minimizes costs of relocating managers B. generates innovative ideas C. facilitates communication with headquarters D. develops community ties

C. facilitates communication with headquarters

Human resources managers must​ ___________________to be successful and prosper in the host country environment. A. not stray from their home​ country's business environment B. be able to transfer skills and knowledge from their home country C. not fall prey to their own​ self-referencing criteria D. only select​ non-managerial employees from a​ pre-selected pool of candidates E. try to replicate the type of employee in the foreign country that they have in their home country

C. not fall prey to their own​ self-referencing criteria

Which of the following is not a​ sanction? A. boycotts B. removal of preferential tariffs C. ​high-interest loans This is the correct answer. D. embargoes

C. ​high-interest loans

​________________ is the price paid for goods and services involved in intracorporate transactions between a subsidiary and other branches of the corporate family. A. Currency conversion cost B. A​ market-based price C. Net present value D. A transfer price E. Economic exposure

D. A transfer price

You are exporting to a new country where you have not yet established clients with good pay history. You do not know how the new customers will pay or anything else about them. Which of the following issues are you working​ with? A. Choice of currency B. Form of payment C. Open account D. Credit checking E. Documentary collection

D. Credit checking

Which of the following staffing models puts​ PCNs, HCNs, and TCNs on an equal​ footing? A. Foreign National staffing model B. MNC staffing model C. Polycentric staffing model D. Geocentric staffing model E. Ethnocentric staffing model

D. Geocentric staffing model

Which of the following is FALSE concerning​ productivity? A. Productivity contributes to the​ firm's long-term survival. B. Productivity is defined as the economic measure of efficiency that summarizes the value of outputs relative to the value of the inputs used to create the outputs. C. Productivity helps determine the overall success of the firm. D. Increased productivity has a negative impact on gross domestic product. E. Productivity contributes directly to the overall standard of living within a particular country.

D. Increased productivity has a negative impact on gross domestic product.

Services require operations management just as​ non-services do. The actual management of international service operations involves several basic issues. Of the​ following, which is NOT related to services​ operations? A. Location planning B. Operations scheduling C. Facilities design and layout D. Manufacturing planning E. Capacity planning

D. Manufacturing planning.

Which of the following industries uses the U.S. dollar as its main currency for​ transactions? A. Service B. Grain C. Clothing D. Oil E. Auto

D. Oil

You are new to international​ trade, and your firm is relatively young and financially struggling at this point. You do not want to overextend credit to others and have to wait for money. As​ such, you have decided you need to take payment before shipping the merchandise. Which system are you​ using? A. Letter of credit B. Documentary collection C. Open account D. Payment in advance E. Credit card

D. Payment in advance

Which of the following is NOT an issue that is more complicated when the transaction involves a buyer and a seller from two different​ countries? A. When and how to check credit B. Which form of payment to use C. Which currency to use for the transaction D. Reaching agreement on​ price, quantity, and delivery date E. How to arrange financing

D. Reaching agreement on​ price, quantity, and delivery date

Which of the following is NOT a consideration that international firms must take into account when conducting business in countries other than their​ own? A. Laws B. Financial practices C. Currency conversion D. Revenue potential E. Customs

D. Revenue potential

Which of the following elements is the MOST critical in determining expatriate​ success? A. Has been given a realistic preview of the new job and assignment. B. Has been given a realistic expectation of what their repatriation assignment will be. C. Has a mentor back home who will guard their interests and provide corporate and social support during the assignment. D. Sees a clear link between the expatriate assignment and their​ long-term career path. E. Can freely choose whether to accept or reject the expatriate assignment.

D. Sees a clear link between the expatriate assignment and their​ long-term career path.

Your firm manufactures Christmas ornaments in large quantities. They are not​ high-quality ornaments and are designed to be sold at low prices. Manufacturing costs and shipping costs are kept to a minimum. What is the process called related to the acquisition of resources needed to create the​ ornaments? A. Resource allocation B. Operations management C. Quality management D. Supply chain management E. Manufacturing management

D. Supply chain management

MNC'S strive to minimize​ company-wide cash holdings often using​ ___________________________, which is coordinated by corporate treasury staff to monitor worldwide cash flows. A. lags and leads strategies B. multilateral netting C. foreign exchanges D. centralized capital management E. bilateral netting

D. centralized capital management

What is the first step in the international human resource management process? A. training and development B. performance appraisal C. compensation and benefits D. define business skills necessary for the job

D. define business skills necessary for the job

The early return of an expatriate manager to the home country because of an inability to perform is called​ ________. A. MNC failure B. repatriation C. acculturation D. expatriate failure E. culture shock

D. expatriate failure

Statutory law is primarily based on​ ________. A. religious beliefs B. historic precedents C. moral judgments D. legislative actions

D. legislative actions

Who typically heads up an international division? A. primary country nationals B. third country nationals C. host country nationals D. parent country nationals

D. parent country nationals

Ballston Manufacturing, an MNC, adheres to an ethnocentric staffing approach when filling senior level positions for its foreign locations. As a result, Ballston most likely devotes significant resources to A. distributing products B. determining compensation for local employees C. building effective supply chains D. selecting and training expatriate managers

D. selecting and training expatriate managers

Because productivity can be low when moving facilities to areas where traditionally​ low-cost labor can​ found, a critical element for an international business that wants to take full advantage of locating production abroad is​ _______________________. A. technology B. a diverse workforce C. a good location for manufacturing D. training E. ​low-cost labor

D. training

Which of the following is NOT an issue that domestic manufacturers operating in the United States must​ address? A. Being subject to one set of government regulations B. Competing in a relatively homogenous market C. Shipping their goods relatively short distances D. Dealing with local suppliers E. Considering the predictability of a​ country's legal system

E. Considering the predictability of a​ country's legal system

Which method of trade payment occurs when a firm accepts something other than money for goods or​ services? A. Open account B. Futures C. Credit cards D. Letters of credit E. Countertrade

E. Countertrade

Which of the following would be produced in a single location or a handful of locations based on the​ value-to-weight ratio? A. Raw sugar B. Iron ore C. Coal D. Cement E. Diamonds

E. Diamonds

Which of the following documents may be required for politically sensitive​ goods, such as nuclear​ fuels, or for​ high-technology goods that may have military​ uses? A. Irrevocable letter of credit B. Certificate of product origin C. Inspection certificate D. Revocable letter of credit E. Export license

E. Export license

Which of the following are residents of the host country? A. Expatriates B. MNCs C. PCNs D. TCNs E. HCNs

E. HCNs

Which of the following companies does NOT engage in much vertical​ integration, choosing instead to buy and produce from local​ businesses? A. Ford B. Sony C. GM D. Fiat E. Heineken

E. Heineken

You are staffing a new foreign operation and need to hire a​ middle-level manager. You want someone who can deal with the​ country's laws and culture while also avoiding supplemental wages. Which of the following should you​ hire? A. Parent company national B. International staffing consultant C. Third country national D. ​Multi-cultural national E. Host country national

E. Host country national

Of the​ following, which is NOT a function of human resource management​ (HRM)? A. Providing compensation B. Providing benefits C. Recruiting and selecting managers and​ non-managers D. Appraising performance E. Implementing quality initiatives

E. Implementing quality initiatives

You are trying to produce a solid budget for the next five years and are worried about some new projects that are just starting. You want to calculate how long it will take to break even from these projects. What are you looking​ at? A. Sources of capital B. Interest rate of return C. Perceived cash flow D. Risk adjustment E. Payback period

E. Payback period

Your firm makes complicated copy machinery that customers normally have to be trained to use effectively. In response to​ this, you offer consultation and training to help them learn the different features. Which service characteristic are you taking care​ of? A. Services require customer participation. B. Services are not storable. C. Services are intangible. D. Services are​ short-term. E. Services are tied to the purchase of other products.

E. Services are tied to the purchase of other products.

Your firm pays a large amount in taxes in some of the foreign countries you deal with. You decided to do something about this by opening a small subsidiary in the Cayman Islands and using it to conduct monetary transactions. What would the Cayman Islands be used as in this​ case? A. Tax center B. Tax write off C. Tax subsidiary D. Tax shelter E. Tax haven

E. Tax haven

You are having problems with managing quality and have explored options that go into quality​ in-depth as opposed to services that hit the surface only. Which of the following programs would be​ helpful? A. Defect control B. Product deviation control C. Manufacturing process controls D. Establishing policies and procedures E. Total quality management

E. Total quality management

International businesses account for​ _______________ by adjusting either the discount rate upward or the expected cash flows downward. A. different investment vehicles B. differences in the exchange rate C. longer rates of returns D. delays in payback E. a higher level of risk

E. a higher level of risk

Human resources managers must design a human resources strategy that also aligns with​ _________________________________ in the same way other corporate functions do. A. financial objectives B. manufacturing and distribution strategies C. marketing goals D. sales and revenue objectives E. corporate and business strategies

E. corporate and business strategies

The minimum rate of return the firm finds acceptable for its capital investments is called the​ ________. A. internal rate of return B. net present value C. risk adjustment D. payback period E. hurdle rate

E. hurdle rate

Firms increasingly​ ___________________ as a result of the increasing globalization of business. A. recruit from the host country B. hire from their home countries C. focus on skills and background D. value education over nationality E. value performance more than nationality

E. value performance more than nationality

Which of the following is a form of differential compensation allowance paid to expatriate managers to offset expenses in their assigned​ country? A. Compensation adjustment B. Bonus C. Commission payment D. Performance pay E. ​Cost-of-living adjustment

E. ​Cost-of-living adjustment

MNCs commonly use which method of transfer​ pricing? A. Exchange rate pricing B. ​Open-market based transfer pricing C. ​Market-based transfer pricing D. ​Free-market based transfer pricing E. ​Non-market transfer pricing

E. ​Non-market transfer pricing

HR managers must provide​ __________ training for corporate executives chosen for overseas assignments because international businesses also have complex training and development needs and challenges. A. technology B. compensation C. linguistics D. quality management E. ​cross-cultural

E. ​cross-cultural

Decentralized firms tend to prefer home country nationals in international assignments.

False

European MNCs are more likely to follow an ethnocentric approach to staffing than either Japanese or U.S. firms.

False

If a firm is at the export department stage of internationalization, its manager is likely to be a host country national.

False

In a geocentric staffing model, the firm will prefer host country nationals to either parent country nationals or third country nationals.

False

Parent country nationals (PCNs) are commonly used to fill lower level jobs abroad.

False

The initial step in the international human resource management process is identifying training and development needs.

False

The primary advantage of using a host country national is that the manager already understands the local laws, culture, and economic conditions.

True

________ workers are office staff.

White collar

Which of the following help shape a​ firm's scope of​ internationalization, level of​ centralization, and staffing​ philosophy? A. Determine the number of managers and​ higher-level executives needed B. Determine the skills and abilities its international managers need C. Set the number of managers needed D. Direct the training and development needs of managers E. Determine the educational requirements of managers

B. Determine the skills and abilities its international managers need

Porsche and Rolex compete by producing goods that are clearly different from those of the​ company's competitors. What strategy are these firms​ implementing? A. Supply chain B. Differentiation C. ​Value-adding D. Cost leadership E. International incentive

B. Differentiation

Which of the following is NOT a form of​ countertrade? A. Barter B. Balance sheet hedge C. Counterpurchase D. ​Buy-back E. Offset purchase

B. Balance sheet hedge

You work in a large agricultural firm that ships grain overseas to foreign markets. They take the grain and make quality baked goods that they send back to you for sale in lieu of payment. Which type of system is​ this? A. Payment in advance B. Buy-back C. Open account D. Counterpurchase E. Barter

B. Buy-back

Of the​ following, which is NOT a characteristic of services that create special challenges for firms selling services in the international​ marketplace? A. Services are intangible. B. Services are generally not storable. C. Services can also be tangible. D. Services often require customer participation. E. Many services are tied to the purchase of other products.

C. Services can also be tangible.

You are an operations manager looking for some new ways to improve productivity. You have improved operations and spent more money on research and development of new products. Which area should you look at​ next? A. Local incentives B. Technological breakthroughs C. Employee involvement D. Marketing E. Financing

C. Employee involvement

You have a computer component business and have found that it is cheaper to locate a plant in Canada than it is to pay the high export tax. Which part of the location​ decision-making process does this fall​ under? A. ​Country-related issues B. Logistic issues C. Government trade policies D. Organizational issues E. ​Product-related issues

C. Government trade policies

When using a polycentric staffing​ model, you would primarily use​ ________ to staff​ higher-level foreign positions. A. TCNs B. Expatriates C. HCNs D. MNCs E. PCNs

C. HCNs

Which of the following is NOT likely one of the factors related to managers being successful at an overseas​ assignment? A. Has a mentor back home who will guard their​ interests, and provide corporate and social support during the assignment. B. Can freely choose whether to accept or reject the expatriate assignment. C. Has been given extraordinary compensation and benefits. D. Has been given a realistic preview of the new job and assignment. E. Has been given a realistic expectation of what their repatriation assignment will be.

C. Has been given extraordinary compensation and benefits.

________ is the set of activities directed at attracting, developing, and maintaining the effective workforce necessary to achieve a firm's objectives. A. Employee development B. Labor selection C. Human resource management D. Strategic operations implementation

C. Human resource management

Which of the following is FALSE regarding information​ systems? A. In a domestic​ firm, information is almost certain to be in a common language. B. Larger firms today almost always use a computerized system to manage their information. C. Information systems have to be computerized. D. In an international​ firm, information is likely to be in different languages and subject to different legal contexts. E. Managing information is more complex for an international firm.

C. Information systems have to be computerized.

Which of the following approaches would estimate cash flows generated by each project and then calculate the interest that makes the net present value of the project just equal to​ zero? A. Payback period B. Net market value C. Internal rate of return D. Open account E. Risk adjustment

C. Internal rate of return

Which area of international operations management is concerned with modes of transportation and methods of inventory​ control? A. Location B. Supply chain management C. Logistics D. Resources E. Vertical integration

C. Logistics

Which of the following is FALSE in regard to appraising​ performance? A. A successful subsidiary in a mature and stable foreign market will have different goals than a​ start-up operation in a growing but unstable market. B. A firm may consider profit margin when assessing performance. C. Managers of foreign subsidiaries that serve as cost centers must be judged by the same standards as those used for managers of profit centers. D. A firm may consider sales when assessing performance. E. A firm may consider market share growth when assessing performance.

C. Managers of foreign subsidiaries that serve as cost centers must be judged by the same standards as those used for managers of profit centers.

Your firm does NOT want to deal with the political problems in one of the countries where you manufacture component parts. You have decided to manufacture in another country rather than continue to manufacture in that country. Which of the following areas of supply chain management are you working​ with? A. Control B. Technology investment C. Risk D. Flexibility E. Facility investment

C. Risk