Principles of Business Test 2

Which of the following actions must a business take as a result of political factors in the external environment:

Paying taxes

Product standards:

Specifications products must meet before they can be imported into a country

Which of the following is a true statement about business ethics and the law:

The two are not the same thing, but they do overlap.

Which of the following is a true statement about globalization and political barriers:

The world is much more politically open than it used to be.

Which of the following is a main reason for businesses to expand into foreign markets:

To build brand value

Businesses that successfully adapt to current market situations often realize that

change is an opportunity.

Jon makes custom furniture for his customers. He strives to make sure that meeting their needs and wants is his top priority. What "adaptable" strategy is Jon using?

Marketing orientation

Which of the following is a potential consequence of poor business ethics:

Negative public image

Which of the following allows the free movement of goods and services among Canada, the United States, and Mexico:

North American Free Trade Agreement

Priscilla's design company is always willing to consider new ideas, trends, and ways of thinking. This is an example of which of the following characteristics of an adaptable organization:

Open-mindedness

What does a nation develop when its imports are greater than its exports?

trade deficit

A nation that exports more than it imports maintains a

trade surplus

George thinks his culture is superior to all other cultures. This is known as

ethnocentrism.

Which of the following is a true statement about a business's environment:

it is always changing

The biggest communication issue for businesses engaging in international trade is

language

Culture:

language, religion, values, customs, and social relationships of people; the way a society thinks and acts

One of the biggest barriers that separates countries/regions is

language.

Which of the following is a positive effect of government regulation:

legal protection

A restaurant fails to meet government regulations, so it loses its __________ and is no long-er allowed to do business.

license

If a government wants to reduce the volume of imports allowed into its country, it could limit the number of __________ issued to foreign exporters.

licenses

A clothing manufacturer in the United States allows a company in Argentina to use its name and logo in exchange for a fee and royalties. This is an example of

licensing.

Laura is part of a group that is traveling to the state capitol to convince legislators to pass laws that are favorable for small businesses. This is a practice known as

lobbying.

Which of the following government actions is most likely to stimulate the economy:

lowering tax rates

The goals of government are to protect the rights of individuals and businesses and to provide a stable environment, but the main goal of business is to

make a profit

Some people believe that a business's only true ethical obligation is to

make money.

Understanding business ethics can be difficult since

many people aren't sure how to behave ethically.

Which of the following is a tool that can be used to carry out scanning activities:

market research studies

At each organization's core should be a commitment to

meeting customer needs.

A business should research corruption before it engages in trade with a particular country because it

needs to know how corruption will affect its competitiveness there.

Globalization can be a disadvantage for domestic workers when they lose their jobs due to the practice of

offshoring.

Seeing the "big picture" instead of smaller, individual parts is an organizational learning concept known as

systems thinking.

To encourage people to buy domestic goods, a country wants foreign goods to be costlier. It imposes a tax on imported products to increase their selling prices. This tax is known as a(n)

tariff

The two main sources of revenue used to pay the costs of government regulation are

taxes and borrowing

Which of the following is the most rapidly changing category of information included in an environmental scan:

technology

Which of the following is an example of a demographic trend:

the aging of the population

Which of the following examples illustrates how environmental factors are interrelated:

the economy affects what the competitors are doing

Every new business owner must pay attention to forces operating outside the company that affect its chances for success. These forces are referred to as

the external environment.

A business's ethics determine whether or not an action is acceptable for that business, especially if the action

has an effect on others.

A country can often produce goods more cheaply than other nations because it

has easy access to raw materials

Which of the following examples illustrates how environmental factors are dynamic:

high interest rates will eventually get lower

Globalization can be an advantage for businesses because it

can help them to cut costs for certain resources.

One way to determine the importance of an issue or trend is to consider its impact on

demand for your business´s products

A financial adviser receives a bonus for selling a certain mutual fund. Her reason for taking this action, which some consider unethical, might be that the action

it is acceptable within the industry.

A society that focuses on future rewards and values actions such as persistence is known as a(n)

long-term oriented society.

When government sets safety standards for the workplace, it is attempting to

minimize risks to employees

According to Hofstede's dimensions of national cultures, a certain country has a high comfort level with insecurity and avoids having too many rules. This country would have a low score in

uncertainty avoidance.

What is the government doing when it buys wheat to keep the price high enough for farmers to make a profit?

using price supports

Which of the following is the most likely policy that a government would follow to avoid a trade deficit:

protectionism

Government can prevent unqualified persons from operating a business by

refusing to grant them a license

Government tries to protect competition by

regulating monopolies

A business should conduct environmental scans on a continuous basis so it can

respond to opportunities and threats quickly

12. Nic's company is making some quick changes in response to shifting market conditions. The ability to easily realign its people and resources appropriately is called

scalability.

Jodi needs $10,000 per month to operate her photography business. Last month, she made $13,000. The extra $3,000 are called

slack resources.

Online chats, forums, and communities that enable businesses to learn about the wants and needs of their worldwide target market have created a new form of

social relationships.

Changing attitudes about family roles is an example of a shift in

society and culture

Millie deals with customers from a certain country on a regular basis. When she meets people from this country in a social setting, she assumes they will be just like all her customers. This is an example of

stereotyping

Kyle is part of a group of employees who are close friends and like to spend their lunch hours together, eating or playing cards. This group is considered a(n)

subculture

Why should a business practice good ethics?

An ethical business contributes toward its own success.

How have industry structure changes affected the current business environment?

Business now moves faster than ever.

Which of the following is a true statement about the external factor of competition:

Businesses cannot control their competition.

Which of the following is a true statement about how technology affects the external business environment:

Businesses must look for updated technology all the time.

The law that requires businesses to hire, train, transfer, and promote employees without regard to race, color, gender, religion, or national origin is the __________ Act

Civil Rights

Kelley makes sure her business runs smoothly and all employees have fast access to important information and the latest technologies. This is an example of which of the following characteristics of an adaptable organization:

Cohesiveness

Which of the following examples best demonstrates the cultural dimension of indulgence v. re-straint:

Companies from certain cultures make time for fun.

Which of the following is a way that businesses can plan proactively for environmental changes:

Conducting research on a new market

Which of the following is a true statement about consumer demands:

Consumers want new product features

Protectionism:

Countries attempt to control their trade with other countries

Trade surplus

Country's exports are larger than imports

Trade deficit

Country's imports are larger than exports

Which of the following factors affects society's basic values and behaviors that influence their buying decisions:

Cultural

What characteristic has the globalization trend made it necessary for adaptable organizations to display?

Cultural intelligence

Which of the following is a true statement regarding the process of preparing employees to deal with people from other cultures:

Cultural training is a good way to teach employees the basic guidelines.

Which of the following is an example of increased financial risk for a company with poor business ethics:

Decreased company value

Which of the following is an example of how a business or industry has a unique relationship with its environment:

Demand for skilled nursing care rises as the population ages.

Which of the following is a factor that would encourage businesses to start a business at a particular location:

Easy access to natural resources

Which of the following is one of the four pillars of a business's social responsibility:

Economic responsibility

Which of the following industries is part of the fast-growing services-producing sector of the economy:

Education

Companies that operate at the international level should be aware of political factors that affect trade, such as civil unrest or

Embargoes

Of the following methods of entering a foreign market, which is the least risky:

Exporting

Which of the following is an example of a governmental regulatory agency:

Federal Aviation Administration (FAA)

Which of the following regulatory agencies would be concerned with price fixing and unfair competitive practices:

Federal State Commission

The Polar Bear Publishing Company, a publisher of children's books, has made adjustments to its promotion and pricing strategies to suit the current market. This is an illustration of which of the following characteristics of an adaptable organization:

Flexibility

Which of the following actions illustrates the strong leadership needed in an adaptable organization:

Focusing on maximizing resources

Government uses some of the tax money it collects from individuals and businesses to sup-port public welfare programs. What is the benefit of these welfare programs to businesses in a private enterprise economy?

Funds received by recipients are spent in businesses.

Which of the following situations represents an absolute advantage for the United States:

Germany produces cars at $14,000, while the U.S. produces cars at $12,000.

Which of the following is a result of globalization:

Higher productivity

Which of the following is the best action for businesses to take in order to adapt to changing markets:

Implement innovative strategies and ideas

What type of property is a business protecting when it registers its trademark?

Intellectual

International Trade

International trade takes place when a product is produced in one country and consumed and in another.

How has globalization affected consumers?

It has given them a bigger and better variety of products to choose from.

How has the ability to travel more freely contributed to globalization?

It helps enable the spread of culture and ideas.

How does technology affect a business's customers?

It influences what they want and need.

Which of the following is a true statement about globalization:

It involves the flow of ideas across national borders.

Which of the following is a true statement about innovative management:

It is more participative than traditional management.

Which of the following is a true statement about breaking the law:

It may have different consequences than breaching ethics.

Quotas:

Limits set on the amount of exports or imports that move into or out of a country

Which of the following actions describes proactive management:

Planning in advance for change

Antitrust laws are created to keep competition fair. Which of the following external factors are these laws a part of:

Political

Which of the following is an environmental factor that affects the performance of businesses that market products on a global level:

Political risk

Which of the following is an example of a business's ethical obligation to its stakeholders:

Providing safe working environments for employees

Which of the following are methods that countries use to control their trade with other nations:

Quotas, tariffs, and subsidies

Embargoes:

Requirements to suspend all import-export trade with another country

Which of the following is a situation that might make business people from other countries feel uncomfortable and impact their ability to conduct business:

Standing very close to others during conversations

Avoiding the use of slang falls under which guideline for dealing effectively with people from different cultures?

Strive to communicate clearly.

Tariffs:

Taxes on certain imported goods

The technology that has had the most influence on globalization has been

The internet.

Which of the following situations would most likely indicate the need to adapt to changes in the business environment:

The supply of materials used in manufacturing a product has decreased

Which of the following is a reason a company might organize itself under the laws of a different country than those of its "home" country:

To save on taxes

True or false: Certain industries are more sensitive to specific environmental changes than others.

True; some environmental factors have a greater impact on certain industries.

Brain drain occurs when

a country loses talented employees to better opportunities in other countries.

A country that values qualities such as assertiveness and status is known as a(n)

a. "masculine" society.

The U.S. produces widgets faster and cheaper than Switzerland. In this example, the U.S. has a(n) _________ advantage.

absolute

The main way that economic factors influence the external business environment is by

affecting customers' ability to spend.

An organization that has the ability to adapt quickly is

agile.

Forming a joint venture reduces risk by

allowing costs to be shared.

Which of the following is a benefit of global trade:

an improved standard of living

Environmental scanning is sometimes called environmental

analysis

One difference between business ethics and the law is that business ethics

are often unwritten.

How do nations track the flow of money coming in and going out of their countries?

balance of payments

Which of the following terms describes the difference between the exports and imports of a nation:

balance of trade

The most common form of corruption affecting international trade is

bribery

A business can create a wholly owned subsidiary by building a facility in a foreign market or by

buying an existing firm in the market.

A company goes bankrupt because of its unethical accounting practices. The reason for this unethical behavior is that the action is

committed by unethical employees.

Which of the following occurs when a country can produce goods at a relatively more efficient rate than another country:

comparative advantage

Levels of inflation and unemployment are factors that affect __________ in the world mar-ket

competition

one of the main principles of the private enterprise system is

competition

Striving to get new products to the market first and win scarce customer dollars is an "adaptable" strategy often called

competitive aggression.

Since Amie deals with people from many different countries, she attempts to become sensitive to differences in their customs and traditions. Amie is developing

cultural intelligence.

When people from one country/region eat and dress differently from people in another country/region, it is due to differences in

culture.

Businesses are affected by social factors in the external environment because

customer needs are affected by these factors as well.

A country with a weak currency value tends to

decrease its imports and increase its exports.

A business with poor ethics causes internal problems for itself by

decreasing productivity.

Some businesses sell their goods and services to individuals, businesses, or governments in other countries. This is an example of

exporting

A business cannot control its

external environment

A large trade deficit in a nation often leads to __________ opportunities

fewer job

You pay Burger King for the right to set up a location in Barcelona under the corporate head-quarters' guidance and regulation. This is an example of

franchising.

Japan and the U.S. buy and sell each other's goods and services. This is an example of

global trade

Amie talks to customers and suppliers from all over the world on a daily basis. Her company's involvement with people in so many different countries is due to the trend of

globalization.

Imports

goods and services bought from producers in other countries

The French-Canadian culture relies heavily on nonverbal communication to get messages across. This means it is a(n)

high-context culture.

Which of the following would be done first in an environmental scan:

identify participants and responsibilities

Which of the following is a factor that relates to the government category of an environmental scan:

import/export regulations

A business that buys goods and services from a company in another nation is performing which of the following activities:

importing

Which of the following is a likely result of a strong or highly valued currency

increased imports

Environmental degradation occurs because of

increased production.

Economic factors can affect a business's operations by

increasing or decreasing costs.

A society in which group ties are very loose is known as a(n)

individualist society.

Which of the following is a public good that is provided by government:

interstate highways

Unethical business practices may lower a company's stock prices because

investors prefer companies they perceive to be ethical.

A business suddenly moves its operations to a new town, leaving its current employees jobless. Its reason for taking this action, which some consider unethical, might be that the action

is not illegal.

Which of the following is a true statement about the term "environment":

it consists of your surroundings

An important factor that has a significant effect on the general business environment is

organization.

Sonja works at a company with a very relaxed atmosphere among all the employees. This atmosphere is part of the company's

organizational culture.

A large tech company donates a portion of its proceeds to charity. This is an example of __________ responsibility.

philanthropic

A main reason that environmental scanning is important is so that businesses can be aware of

potential threats

In Hofstede's dimensions of national cultures, a country's acceptance of inequality is measured by its score in

power distance

Comparative Advantage

when a country can produce a product at which it is relatively more efficient (less cost) than another country

Absolute Advantage

when one country has the ability to produce a good or service with less resources than another country. Countries tend to specialize in producing products they can make at a lower cost than another country

Which of the following groups is most likely to share the same demographics:

working mothers

Which of the following is a true statement about carrying out scanning activities:

you must only focus on relevant information

Government provides protection to business owners' property through the use of

zoning laws

What actions are consumers most likely to take when the economy is poor?

Restrain their spending

A business with poor ethics is likely to

lose customers.

Domestic Trade

A transaction that occurs within the geographic boundary of one's own country

Which of the following "adaptable" strategies seeks to strengthen an organization by bringing employees together as well as by empowering them as individuals:

Organizational learning

Which of the following is an action a business might take to address the issue of religion in another culture:

Paying attention to holidays when scheduling meetings

Businesses must gather information about the competition during an environmental scan. Which of the following is an example of brand competition:

Pepsi vs. Coke

Licenses:

Permits that countries use to regulate the amount of imports or exports into or out of their country; becomes a trade barrier when the number of permits issued to foreign exporters is limited

Which of the following is a true statement regarding the impact of religion on international trade:

Religion is more important in some cultures than in others.

Which of the following is an example of nonverbal communication that might have a different meaning to business people in other parts of the world:

Shaking hands when greeting a customer

Wyatt's laptop is only a couple of years old, but he'd already like to replace it with a newer, updated model. What characteristic of the current business environment does this illustrate?

Shrinking product life cycles

Free exchange of ideas contributes to

greater business innovation.

Which of the following is a true statement about the social factor of lifestyle and fashion trends:

They change quite frequently.

Which of the following is a true statement about ethical business practices:

They do not guarantee positive outcomes.

What is one reason why the federal government awards patents to businesses that have invented new products or manufacturing processes?

To encourage research

Which of the following is a reason that a U.S. company would decide to offer its products in other countries:

To expand to new, untapped markets

A business's philanthropic responsibility involves its contributions to

charity.

Jonathan has some extra money to spend this month, so he purchases an iPad. He doesn't need this product, but he wants it, making it a

discretionary item.

Industry associations differ from regulatory agencies in that they

don't have government authority.

Inflation is a factor involved in which category of an environmental scan?

economy

Businesses keep track of external changes as part of a process called

environmental scanning.

The highest level of involvement in international business is

establishing a multinational firm.

You decide not to take a certain action because you know it's the wrong thing to do. You have made this decision based on your

ethics.

In some cultures, creating relationships during business negotiations is key; in other cultures, negotiators want a signed contract. This illustrates cultural differences in negotiating

goals

Exports

goods and services that domestic businesses sell to other countries