BUS M 430 Final Independent Study

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Societies in which people are willing to work hard and to blame and reward themselves for outcomes are most accurately characterized by a belief in ________. self-determination low power distance collectivism fatalism

A situation in which an exporter sells products to a foreign country along with its promise to make a future purchase of a specific product made in that country is known as ________. counter purchase. barter. multilateral trade. offset trade.

A hedging instrument that allows one to establish a fixed exchange rate for future transactions where delivery is required is a(n) ________. option forward contract future spot contract investment contract

Increasing globalization is a powerful force of change for competition in an industry because ________. it requires companies to have low costs in order to compete it makes innovation partners more predictable foreign competitors typically have cheaper, higher quality products it increases rivalry among companies in the industry

Licensing companies commonly negotiate a "front-end" payment from licensees to cover ________ transfer costs. copyright employee brand name technology

The two main categories in the balance of payments are the ________. income receipts and payments on assets account and the unilateral transfers account merchandise trade account and the capital account merchandise exchange account and the services account current account and the capital account

A ________ law system is based on tradition, judge-made precedent, and usage, and assigns a preeminent position to existing case law as a guide to dispute resolution. common civil customary theocratic

A business's day-to-day activities are best described as its ________ concerns. operational strategic political cultural

An American company that sets up a manufacturing facility in France in order to serve customers throughout Europe is employing a ________ manufacturing strategy. regional centralized global country-specific

Horizontal differentiation mirrors the logic of ________. the value chain decentralization the unity-of-command principle vertical differentiation

Which of the following best explains why foreign subsidiary managers are often reluctant to propose divestments in the countries where they are working? They are afraid of proposing the elimination of their jobs. Many are in countries where the cultural attribute of power-distance is high. They lack sufficient information to make recommendations to corporate managers. They are usually poorly trained in how to sell units or how to close them down.

"Brain drain" is a term that describes ________. the exportation of high-technology products in exchange for low-technology products a country's loss of educated people who are potentially productive resources the experience of excessive examinations in one day the unauthorized use of patents and technology

A black market exists when ________. a country is running a budget surplus people are willing to pay more for hard currency than the official rate a country produces only black currency a country is experiencing a recession

Which of the following was part of the stability and growth pact that was required for countries to be part of the European Monetary Union? The annual government budget must be no greater than 3 percent of GDP. The annual rate of inflation must remain within 1.5 percent of the three countries with the lowest inflation rates. The annual government budget deficit could be no greater than 60 percent of GDP. none of the above

Which of the following describes a major difference between supply chain management and logistics? Logistics only encompasses the inbound flow of products and materials. Supply chain management focuses more on transportation and the storage of goods. Supply chain management also involves supplier and customer relations. Logistics involves longer distances.

Which of the following is characterized by low dependence on an organization and a desire for personal time, freedom, and challenges? collectivism democracy individualism anarchy

Which of the following is on e of the benefits of using the balanced scorecard approach? It avoids using nonfinancial drivers so that it can focus on financial drivers. It is separate from the strategic management system so that it can focus on financial measures. It helps managers avoid using only one measure of performance. It avoids using financial drivers so that it can focus on nonfinancial drivers.

Which of the following is one of the main purposes of FTZs? forcing countries to pay extra duties discouraging companies to locate in the host country allowing countries to defer duties discouraging companies from using JIT

Which of the following is typically true of an export management company? It is usually a division of a manufacturing company. Most EMCs in the United States are large, representing a wide range of products and large number of companies. It operates on a contractual basis for a manufacturer by helping obtain orders for its clients' products. It usually takes title to products rather than act as an agent.

A company may use gap analysis to ________. estimate market potential over a business cycle compare sales over time determine the best market niches to target compare consumption potential with its own sales

A draft that requires payment to be made when it is received is known as a ________. sight draft if it is paid within thirty days time draft if it is paid in less than sixty but more than thirty days time draft sight draft

Which of the following is the price at which the trader is willing to sell foreign currency? Spread Bid Cross rate Offer

Why might companies sometimes narrow the product line that they sell in a foreign country as compared to the product line they sell at home? Government restrictions often limit how many products a company can sell locally. Selling cost per unit usually increases substantially when a company offers a broad product line. They wish to sell only those products for which there are product line gaps. Not all products have sufficient demand in every market.

________ is a particularly important consideration in the establishment of a transportation network. The kanban system Rationalization ISO 9000 Warehouse configuration

________ is the process of a firm having inputs supplied to it for the production process. External production Offshoring Subcontracting Sourcing

________ is used to link suppliers, manufacturers, customers, and intermediaries. JIT (just-in-time) ERP (enterprise resource planning) TQM (total quality management) EDI (electronic data interchange

________ teaches that "people have a responsibility to do what is right and to avoid doing what is wrong." Moral relativism Cultural relativism Implied normativism Ethics

A problem of using the nation as a reference point for culture is that ________. variations tend to be great within a country self-stereotypes tend to fall along national lines nations fail to mediate the different interests within their boundaries such an approach tends to be polycentric

A virtual organization is ________ of a traditional vertical hierarchy. the antithesis a selective application the latest interpretation an elaboration

A worrisome outcome of chronic inflation is that it tends to ________. erode confidence in a country's currency lead to lower demand, triggering lower prices and eventually lower employment give central banking officials excessive flexibility to manage monetary policy increase the real income of people, thereby inflating their expectations

According to the theory of success and reward expectation, the greatest enthusiasm for work generally occurs when there is a ________ likelihood of success combined with a ________ reward for success compared to the reward for failure. unknown; high high; unknown high; high low; low

An essential part of global cash management is ________. developing good cash budgets and forecasts leaving cash in subsidiaries because they know best how to use the funds convincing governments to revalue their currencies so that dividends are worth more when they are sent to the home office using equity instead of debt to fund local operations so that the subsidiary doesn't have to make interest payments

Applying strategies that try to simultaneously deal with competing pressures for global integration and local responsiveness spurs some MNEs to adopt a(n) ________ structure. matrix functional international division geographic division

As a center for foreign exchange trading, London ________. actually trades more US dollars than are traded in the United States deals primarily in European currencies and is not as active in trading US dollars usually opens up for business as trades are winding down in the United States deals primarily in spot rather than forward trades

As companies expand internationally, they should change their ________ to take advantage of regional trading groups. operating strategies economic integration market opportunities bilateral trade agreements

Because all countries face the questions of what, how much, and with whom they should import and export, international business managers ________. should understand the theories used to answer these questions because policies affect business operations cannot possibly see what their governments' policies are if an invisible hand directs these policies should locate their companies' operations in small countries where they have more access to influencing the policies used to answer these questions should concentrate on production of nontradable goods because they are less affected by government policies

Companies performing turnkey operations are most frequently ________. construction and industrial equipment companies hotels and resort operators airline and rail manufacturers government-owned companies

Contemporary structures aim to support organizations ________. that dismantle horizontal, vertical, or external boundaries that block ideas and relationships that create predictable workplaces with minimal collaboration among subsidiaries in which the location of control in a network alliance is evident that centralize decision-making authority to those who can make informed decisions

Contrary to the product life cycle theory, there has been an increased tendency for companies to ________. introduce products simultaneously in multiple markets and produce them where costs are minimized for serving the multiple markets produce and sell products first in countries where product counterfeiting is high introduce them first in developing countries and later in developed countries sell products only in their home markets throughout the cycle

Countertrade is an alternative means of structuring an international sale when ________. conventional forms of payment are difficult, costly, or nonexistent. an importer is able to raise the cash to settle a bill. an importer is able to obtain a bank loan. an importer does not belong to the World Bank.

Critics of offshoring claim all EXCEPT which of the following? Offshoring reduces the incomes of people in low-wage countries. Cost savings are seldom passed on to final consumers. Workers who have been displaced by offshoring do not have the skills needed for higher-value jobs. Incomes of workers in offshoring countries have gone down as a percentage of national income.

Cultural change imposed by an alien culture is called ________. cultural imperialism creolization ethnocentricity collectivism

Distribution is the course that goods take between ________ and ________. producers; consumers suppliers; producers suppliers; consumers producers; intermediaries

Ethnocentrism in international business refers to the ________. belief that what works best at home should work best everywhere study of ethnic segments within countries study of group ethics comparison of the Protestant ethic with other religious views

Exporters who opt for direct selling in foreign markets most commonly do so ________. by working with a foreign distributor. because they are usually the only ones who really understand the product characteristics. in order to spread the risk. by allowing export management companies to act as agents for them.

Foreign branch income is ________. directly included in the parent's taxable income in the year in which it is earned considered active income and therefore deferred until future years deferred from US taxation until a dividend is remitted to the parent company considered passive income and therefore not subject to US taxation

Foreign direct investment ________. includes partially owned foreign operations as long as the owner has controlling interest in terms of value, is mainly undertaken by small companies is undertaken only by large companies includes the ownership of foreign bonds

From an accounting perspective, countries with strong equity markets and shareholder orientations tend to be _____. micro-based systems law-based systems tax-based systems macro-uniform systems

Grids are a useful method of comparing countries for international business expansion because ________. they can highlight unacceptable conditions and set minimum scores for proceeding further they highlight the interrelationship of operations in different countries they show risk on one axis and opportunity on another they generally show how countries will perform in the future

Growing demand for expatriates stems from which of the following? the emergence of developing countries as high-growth markets the reduced need for localized expatriate assignments the longer-term assignments created in response to the global credit crisis the resurgence of developed countries as high-growth markets

History suggests that if the economic crisis worsens, we are likely to see more people question ________. the legitimacy of communism the correlation between economic freedom and environmental stability the practicality of mixed economies the legitimacy of capitalism

How are marketers affected by exchange rate changes? Exchange rate changes can cause changes in demand for a company's products both at home and abroad. Strengthening of a country's currency value creates problems for importers. Marketers are not affected by exchange rate changes, so there is no need to predict them. Demand for domestic and imported products is not affected by exchange rate changes.

How does arbitrage differ from speculation? A speculator buys or sells foreign currency with the hope that that currency will either weaken or strengthen in the future, resulting in a profit. Arbitrage is another way to speculate for profit or protect against risk. Speculation is the purchase of foreign currency on one market for the immediate resale on another market. Speculation, unlike arbitrage, is never used to protect against risk.

If Toranaga-san, who works for a Japanese trading company that operates in Japanese yen, wanted to purchase Spanish castanets from a company in Barcelona and needed euros to complete the transaction, he would use the ________ to gain access to spot euros. foreign-exchange market stock market export market Philadelphia Stock Exchange

In a representative democracy, ________. the people's elected representatives hold ultimate sovereignty there is little consensus on inalienable freedoms democratic means are used to achieve a gradual transition from capitalism to socialism the extent of personal freedoms varies by class structure

In a(n) ________ system, a single leader advocates a new society where wrongs will be corrected and harmony will prevail. representative pluralistic totalitarian individualist

In the context of manufacturing strategy, the degree of consistency between the foreign investment decision and the company's competitive strategy is known as ________. compatibility coordination control configuration

In which of the following situations would a company most likely benefit from using the international division structure? when the domestic market is much more important than the foreign market when the company's different foreign markets pose significantly different opportunities and threats when the company relies on local managers in foreign operations to make strategic decisions about SBUs when the domestic market is at capacity and the company is looking to strategically expand in foreign markets

In which of the following transactions is one currency swapped for another on one date and then swapped back on a future date? FX swap Outright forward transaction Reverse transaction Spot transaction

Information may pass more rapidly to potential competitors abroad in which type of arrangement? collaborative arrangement wholly owned operation greenfield operation acquisition

Japanese ________ are groups of independent companies that work together to manage the flow of goods and services along an entire value chain. keiretsus kaizen sigmas chaebol

Managers need to identify and assess the potential effect of different types of distances between their home operations and possible locations for foreign operations. The absence of colonial ties and a shared monetary system are both examples of ________ distance. administrative geographic economic cultural

People in ________ have greater economic freedom than those in ________. North America; Asia South America; Europe South America; North America Asia; Europe

Promotion using direct selling techniques is ________. a push strategy a pull strategy a standardized advertising technique necessary where inflation is high

The OECD Convention against bribery is an example of a(n) ________. agreement that targets the supply side of bribery agreement that targets the demand side of bribery bilateral agreement UN Convention dominated by developing countries

The US automobile industry has attempted to counter import competition in all the following ways except ________. lobbying for customs deposits so that importers' costs would be raised concentrating on market niches that initially had less import competition effecting internal adjustments, such as cost efficiencies and improved quality moving production to lower-cost countries and exporting to the United States

The belief in some countries that certain sectors, such as health care or utilities, should be operated as not-for-profit organizations means that ________. foreign companies are sometimes precluded from competing in those sectors licensing standards for personnel in these sectors are stricter than for other sectors governments in these countries encourage service imports in these sectors to help keep costs low exports from these sectors are subsidized

The central bank in the United States is ________. the Federal Reserve System the New York Board of Exchange the Board of Governors the US Treasury

The comparable access argument for trade restrictions says that ________. in industries where steep cost decreases result from higher production levels, a company without comparable access to its competitors' markets will be disadvantaged this is a requirement for export-led development policies to work as intended the terms of trade will deteriorate for countries that have lower import restrictions than their trading partners when a country imposes import restrictions, foreign companies will lower their prices

The industrialization argument for developing countries is based on the assumption that ________. there is disguised unemployment in rural areas; thus little if any agricultural output is lost as people move into industrial jobs it is better to depend on buying the agricultural surpluses from developed countries than to produce these agricultural goods the protected industry will become competitive over time subsidizing production is a better means of protection than limiting imports

The leading cause of expatriate failure is the ________. inability of a spouse and children to adjust to their new environment expatriate's inability to meet the company's performance expectations financial hardship of moving to a new home expatriate's focus on maintaining career mobility

The major trade group in South America involving Brazil, Paraguay, Uruguay, and Argentina is ________. MERCOSUR CAFTA-DR APEC CAN

The most common form of cooperation among unions in different countries is ________. information exchange voting blocs at the International Labor Organization simultaneous strikes lobbying governments

The perspective of ________ holds that as a company gains experience, resources, and confidence, it progressively increases its exports. incremental internalization the born-global theory serendipity export management

The primary duties of the ________ are the assessment and collection of all duties, taxes, and fees on imported merchandise, the enforcement of customs and related laws, and the administration of certain navigation laws and treaties. Bureau of Customs and Border Protection Internal Revenue Service Food and Drug Administration US Secret Service

The process of shifting production from a domestic to a foreign location is known as ________. offshoring licensing joint venturing outsourcing

The relationship between the United Nations and NGOs is that ________. the UN has a committee that discusses issues of importance to NGOs but does not regulate their activities NGOs typically operate in only one country, whereas UN agencies can operate worldwide the UN must license an NGO for it to be able to be involved in relief efforts the UN determines which NGOs can work on humanitarian issues, and which ones can work on relief efforts

The requirement by the US government that its subsidiaries abroad comply with trade restrictions with Cuba is an example of ________. extraterritoriality relative advantage absolute advantage comparative advantage

The shifting of national borders has created which of the following situations for international business? It has made comparisons of historical data on international transactions problematic. It has complicated the understanding of behavioral factors affecting business. It has left most people who reside in rural areas with only the barest connection to the rest of the world. It has slowed communications between a company's headquarters and foreign operations.

The standard-setting organization tasked with the challenge of determining one set of accounting standards that can be used worldwide is the _____. International Accounting Standards Board International Organization of Securities Commissions Financial Accounting Standards Board International Financial Reporting Standards Committee

The top banks in the world in terms of foreign exchange dealing ________. include commercial and investment banks are part of the vast network of ETC (exchange trading centers) include the banks registered with the Philadelphia Stock Exchange include commercial but not investment banks

The use of the Internet to join together suppliers with companies and companies with customers is known as ________. e-commerce electronic data interchange value-added networks private technology exchange

Uneven income distribution ________. exists in almost every country primarily affects people in urban settings is largely a problem for poorer nations is limited to a small share of the world population

What is a key industry? an industry that might affect a very large segment of the economy by virtue of its size or influence on other sectors an industry supported through strategic trade policy as part of an export-led development strategy a turnkey operator specializing in construction an industry that is locked up competitively by domestic producers

What is the most common way of identifying market segments within a country? demographics gap analysis the Internet psychographics

When one firm grants another the use of a trademark and provides operational assistance on a continuing basis, the arrangement is known as ________. franchising appropriability a management contract a trademark convention

When the European Union was formed, the size of the market increased for European companies. This is an example of a ________. dynamic effect static effect trade reflection trade diversion

Which of the following accurately describes a difference between jobs in the home office and jobs in a foreign subsidiary? Employees in foreign subsidiaries typically have broader job responsibilities than employees in the home office. Cultural empathy is essential for employees in the home office, but is not necessary for employees in a foreign subsidiary. Employees in the home office do not need to be familiar with a second language, but employees in a foreign subsidiary must be proficient in the language of the subsidiary's host country. Expatriate executives in foreign subsidiaries are less expensive for a company to employ than executives in the home office.

Which of the following best describes the relationship between product image and product origin? Consumers have different country-of-origin quality images depending on the product. Consumers favor locally made products. Consumers believe that domestically made products are better. Consumers believe that imported products are better.

Which of the following could lead trade in products to become a smaller part of global output and consumption? The growth of nontradable services Greater sentiment against protectionism Greater urbanization The need for greater scale in production

Which of the following describes one of the conditions under which the major problems of cultural collision arise in international business? when a company's employees encounter distress because of difficulty in accepting or adjusting to foreign behaviors when employees disagree on the style of art for decorating the office when companies understand and adjust to the national cultures in which they do business when local people have no expectation that foreigners should adjust to their culture

Which of the following factors, if present, would encourage a firm to start up a new operation rather than acquire an existing one in a foreign country? Labor relations at existing firms are poor and are likely to be difficult to change. The local government places restrictions on the transfer of foreign capital. Existing companies have goodwill and positive brand recognition in their market. The country's currency is weak and stock market prices are depressed.

Which of the following has not been a major force increasing globalization in recent decades? decreasing global competition an increase in and expansion of technology growing pressure from consumers liberalization of cross-border trade

Which of the following is a business objective for pursuing ethical behavior? avoid being perceived as socially irresponsible replace home-country technology with host-country technology reduce profit margins impose home-country behavior in the host country

Which of the following is a problem hampering the accuracy of published information about countries? Poor methodology may be used in data collections. The information includes both market and non-market economic activities. The information includes economic data on illegal activities. Definitions may differ from those used by some other countries.

Which of the following is most economically efficient from a global standpoint? Global free trade and international factor mobility Global free trade and international factor immobility Globally restricted trade and international factor mobility None of the these options

Which of the following is the most accurate statement about culture? Although most cultural variables are universal, the forms these variables take differ from culture to culture. Cultural variables can easily be isolated from other factors such as economic and political conditions. Within a culture, everyone responds to particular cultural variables the same way. We generally expect people from another culture to behave differently than we do.

Why are companies based in developed countries sometimes criticized for exporting to developing countries the same products they sell in developed countries? Many of the products are said to be superfluous to developing country needs. The sales enhance developing country companies' failures. The prices of the products are too low in developing countries. Developing countries need local production rather than imports.

Why have many countries come to believe that an export-led development policy is better than an import substitution policy? Some countries have achieved more economic growth through export-led development policies than other countries have achieved through import substitution policies. Economies diversify more when using export-led development policies. Export-led development policies negate the need to attract foreign investment. When targeting industries to develop, it is easier to identify potentially competitive ones when using export-led development policies.

Without a proven track record in collaborative arrangements, a company may need to ________. negotiate harder with and make more concessions to a partner delegate fewer responsibilities to partners have its home country approve licensing contracts depend more on trust as a control mechanism

________ involves the sale and legal transfer of government-owned resources to private interests. Privatization Renationalization Antitrust legislation Deregulation

A company's value chain is the ________. blueprint it follows to leverage its core capabilities discrete series of steps it takes to move a product from conception to the end-users variable sequence it goes through to convert its vision into shareholder value mixture of activities it takes to define product value standards

A distinct advantage of an international strategy is ________. reaping benefits of global learning transferring core competencies to foreign markets customizing product offerings to local conditions leveraging local managers' knowledge of their markets

A driving factor for the growth in imports is the impact of ________. consumer preferences. the specialization of labor. social trends. government programs.

A foreign exchange exposure which forces a company to decide to continue to manufacture in the domestic market and export to foreign customers or manufacture the products in the foreign market to serve customers there is an example of ________. translation exposure economic exposure transaction exposure sourcing exposure

A major legal challenge that companies face in the global environment often involves which of the following? Dealing with product profitability Dealing with product liability issues Dealing with employee motivation Dealing with cultural issues

A manager who refuses to bribe customs officials in a foreign country, even though it is morally acceptable in that country, is most likely to believe in which of the following perspectives on ethics? existentialism normativism humanism relativism

A situation in the pharmaceutical industry in which companies charge a market price in developed countries and a discounted price in developing countries is known as ________. penetration pricing tiered pricing skimming pricing discount pricing

A(n) ________ ideology is the system of ideas that expresses the goals, theories, and aims of how society should work. legal political economic technological

A(n) ________ interpretative framework sees tinkering with a prized formula just to go overseas as unreasonably risky to protecting and leveraging the company's core competency. monocentric ethnocentric polycentric geocentric

A(n) ________ strategy is well matched with a polycentric staffing policy. global multidomestic transnational international

According to the translation process in the United States, _____. companies first translate their statements into dollars, and then recast their financial statements consistent with U.S. GAAP companies recast their financial statements consistent with U.S. GAAP, and then translate them into U.S. dollars companies only need to worry about the translation process because local operations take place in a local GAAP environment companies translate foreign currency financial statements only if the dollar is weakening against the local currency

All of the following are conditions of the diamond of national advantage except ________. related and supporting industries strategic trade policy firm strategy, structure, and rivalry demand conditions

Although English is referred to as the "international language of business,"________. it is less frequently used than French in international business monolingual English speakers may experience more difficulty in the future in communicating on a worldwide basis there is a growing disagreement over which version of English to use, e.g. British, American, or Australian companies headquartered outside English-speaking countries all use their official language as their operating language

Although critics complain that globalization causes the consumption of too many nonrenewable resources while despoiling the environment, those in favor of globalization counter that ________. economic growth created by globalization is largely in services, which neither use too many nonrenewable resources nor despoil the environment globalization encourages the adoption of uniform and superior standards for combating environmental problems the biggest problem of environmental despoliation occurs in the countries that are least globalized pollution and toxic runoff problems do not increase with economic growth

Although electronic commerce offers companies an opportunity to promote their products globally, doing so brings challenges. Which of the following is not one of the challenges? Setting up and implementing Internet sales is often expensive. The appeals must be differentiated for every country of the world. Switching to Internet sales may upset current distributors. Many households, especially in developing countries, lack access to the Internet.

An economic system is the set of structures and processes that ________ in a country. sets the standards of competitive success for companies in the economy guides the allocation of resources and shapes the conduct of business activities directs the movement of specific products to specific consumers stipulates the roles and responsibilities of consumers

An example of a third-country national is a ________. dual citizen (Canadian and US citizenship) working for a Mexican company in Mexico Canadian citizen working for a US company in Mexico US citizen working for a US company in Canada Canadian citizen working for a US company in Canada

As a trading currency, the euro ________. is on one side of seven of the top ten pairs of foreign exchange trades is gaining ground against the US dollar in Eastern European countries is widely traded in London but not in any other major foreign exchange markets in the world has become more widely traded than the US dollar in seven of the top ten currency markets in the world

Coca-Cola has subsidiaries all over the world. The process of combining the results of its far-flung operations into one set of financial statements for investors is known as _____. unification of results consolidation combination translation

Companies need to act responsibly because unethical and irresponsible behavior ________. almost always results in lower profit margins could result in consumer boycotts usually improves employee morale rarely results in legal sanctions

Countries sometimes establish export restrictions to ________. encourage the domestic development of substitutes favor domestic consumers lower prices in foreign markets protect employment in the export-restricted industries

Currencies that respond to supply and demand conditions free from government intervention are known as ________ regimes. floating pegged floating pegged managed fixed rate

Demographers project that the size of what we now consider the working-age population in developed countries will decrease up to the year 2050. Which of the following is a likely result of this trend in those countries? incentive to get people to enter the job market earlier, rather than being students a slower growth in per capita GDP relative to developing countries, where the size of the working population is increasing a decrease in global warming because of fewer people driving to work restrictions on birth control to increase the population

Exporting below-cost or below the home country price is called ________. countertrade dumping an export-led development policy a strategic trade policy

Functional structures for international operations are most likely found among those companies that ________. offer a broad range of products that share few common technologies follow a global or international strategy rely on differentiated production and marketing methods compete in unstable industries

Generally, HRM is more difficult for international companies for all of the following reasons except which? Complications arise due to enduring political, cultural, legal, and economic differences between countries. Leadership styles and management practices are so similar from country to country that it is difficult to create a culture of innovation. Labor markets are dramatically different in the mix of workers, costs, and productivity. Dual career and family obligations make it tough to convince executives to leave the home office to join a foreign subsidiary.

Google essentially views the entire world as one market and assumes that there are no fundamental differences, only limited differences, where some subsidiaries may have limited power to adjust to consumers' preferences. Google is engaging a(n) ________ strategy? international global transnational multidomestic

Host country losses due to FDI include ________. the transfer of capital and technology displacement of local entrepreneurs loss of management experience and process technologies enhanced capacity or capability of existing companies

If a foreign currency is quoted in American terms (the direct quote) and the forward rate is greater than the spot rate, the foreign currency is selling at a ________. forward discount forward premium backward discount discounted premium

In terms of political risk, we can say that ________. it affects all foreign companies about equally returns are usually higher where risk is higher it affects all geographic areas of a country about equally it decreases when government leadership changes

In the United States, U3 is the official unemployment rate. This rate provides a measure of which of the following? those who have stopped looking for work because current economic conditions lead them to believe no work is available those who are not working but are willing and able to work for pay, currently available to work, and actively searching for work all of these options those who want to work full-time but are only able to find part-time employment due to economic conditions

In which of the following circumstances would a company be most likely to shift from exporting to foreign production to serve a foreign market? The foreign country has lowered its import restrictions. The company is nearing capacity utilization in its home country plant. There is little need to alter the product for the foreign market. Transportation costs have become low relative to production costs.

International marketing differs from domestic marketing in that ________. low prices are a more important competitive factor abroad environmental differences often cause managers to apply principles differently consumers prefer domestically made merchandise principles are different

It is easier to predict the ________ of a change than the ________ of a change in exchange rates. depth; length direction; magnitude altitude; magnitude timing; depth

Managers who are knowledgeable about ________ are better able to identify the location, quantity, quality, and availability of the world's natural resources. political factors geographic factors cultural factors competitive factors

Market-share increase and turnover ratios are examples of ________. financial evaluation metrics non-financial evaluation metrics enterprise resource planning (ERP) cost and accounting metrics

Political systems based on the ________ paradigm, such as those of Japan and China, promote the principle that government may intervene to ensure that business practices benefit society. individualistic collectivistic pluralistic laissez-faire

Presently, managers typically find that the rule of law is prevalent in ________. emerging economies experiencing rapid growth wealthier, westernized countries countries inclined toward totalitarian-style government developing, non-Western countries

Studying the cyclical nature of growth and employment as a part of the process to forecast exchange rates is an example of monitoring ________. cultural analyses fundamental analyses the institutional setting technical analyses

The European Union is an example of ________ integration. bilateral regional global relative

The MNE that relies on shared values among all employees to idealize the preferred behaviors and identify performance measures within the company is applying a system of ________. bureaucratic control clan control planning control market control

The United Nations' ________ measures life expectancy, educational attainment, and the standard of living in a given country. Gross National Happiness Human Development Index Happy Planet Index Genuine Progress Indicator

The ________ clause embodied the fundamental principle of GATT—trade without discrimination. nontariff barriers most-favored-nation free rider normal trade relations

The ________ the level of the company at which managers make decisions, the more that organization is ________. lower; centralized higher; centralized higher; unstructured higher; decentralized

The comparative advantage theory holds that a country will gain from trade ________. if it exports goods it can produce more efficiently than other countries and imports goods other countries can produce more efficiently than it can even though it can produce all goods more efficiently than other countries when it exports products for which it has an acquired advantage and imports products for which another country has a natural advantage if it exports products using its abundant production factors in exchange for products for which it has scarce production factors

The increasing number of people with dual citizenship and people who maintain close contact with their home countries even though living abroad suggest that nations in the future will ________. increase efforts to maintain their separate identities accept the transfer of culture both in and out of their boundaries redraw borders to accommodate separate cultures be more subject to cultural imperialism

The methods a country uses to regulate business practices, define how companies conduct business transactions, specify the rights and obligations of those engaged in business transactions, and provide legal redress to those who believe they have been wronged in business transactions are aspects of a country's ________. basis of rule legal system political system philosophical orientations

The notion that "practice makes perfect" underlies ________. logistics the learning curve subsidiary network dynamics the cluster effect

The rationale for NAFTA is ________. similar-sized economies geographic proximity and trading importance the tremendous size of the Canadian economy in comparison to the Mexican economy to create competition for the European Union

The rationale for the infant-industry argument is that ________. a country should give one firm in an industry a monopoly status so that it will grow large enough to be competitive internationally it takes time for an industry to become competitive in world markets, so protection is needed to help this industry pass through the critical period incubator centers in which business, government, and academia cooperate will develop entrepreneurial companies lower restrictions should be placed on products coming from countries where a government has a large sphere of political influence

The stock market is also known as the ________. ownership market equity-capital market capital market bond market

The term globalization is sometimes used to mean the ________. uneven distribution of resources and this distribution's influence on different products and services in different parts of the world integration of world economies through the reduction of barriers to the movement of trade, capital, technology, and people movement of jobs to high-wage countries business being undertaken outside the confines of any nation

The vigor of IPR protection is highly related to a country's stage of ________. cultural heterogeneity economic development standardization of patent regulations natural resource development

What is a quota? a bilateral agreement calling for mutual access to markets a quantitative limit on the amount of a product that can be imported or exported a prohibition on trade a countertrade arrangement

When a company cannot obtain country-by-country sales figures on the type of product it wishes to sell, it should estimate sales potential of countries by ________. calculating future inflation rates examining the sales history of a similar type of product for which sales figures are available comparing countries' dependence on imports comparing the percentage of workers who are unionized

When a company transfers specialized personnel abroad for a fee to work for another organization's operation, the activity is known as ________. a joint venture a management contract franchising a turnkey operation

When a company wishes to introduce change in a foreign country, its likelihood of success can be improved by ________. agreeing to make some home-country changes in return gaining the support of opinion leaders informing local people that the company would not be there if it did not know what was best introducing many changes simultaneously

When selecting the best supplier, a manager needs to ________. only consider short-term implications establish clear performance expectations and evaluate them continuously maintain the same type of relationship with every supplier focus mainly on purchase price

Which of the following applies to MNEs looking to do business in the EU? Growth is possible only through new product lines. Companies located in Europe have many opportunities to expand and grow, including mergers and spinoffs. It is impossible to expand market presence in Europe. Mergers, acquisitions, and takeovers are not likely to work in Europe.

Which of the following begins with a company defining critical success factors and specifying objective targets and hard deadlines? coordination by intervention coordination by plan coordination by consensus coordination by standardization

Which of the following best defines international business? It includes all public economic flows between two or more countries. It includes all business transactions involving two or more countries, whether the transactions are conducted by private or governmental organizations. It includes all business transactions in countries other than your home country. It includes all private economic flows between two or more countries.

Which of the following is a difficulty for dismantling developed countries' agricultural subsidies? The subsidies are at the consumer, rather than producer, level, and everyone benefits from the lower prices. Rural areas in the United States, the European Union, and Japan are disproportionately represented in their governments. Developing countries put pressure on developed countries to maintain the subsidies so that they receive food products at a lower price. The subsidies are used to counter the commodity agreements set up mainly by developing countries.

Which of the following is a reason that governments cooperate through treaties, agreements, and consultations? to be in compliance with United Nations' requirements to attack problems jointly that one country acting alone cannot solve to assure that all countries get an equitable share of taxes from multinational enterprises to gain a division of labor, such as by performing research and development in one country and production in another

Which of the following is an element for an MNE to consider in the make-or-buy decision? stabilizing employee morale capabilities of existing suppliers compared to its own capabilities increased operational control through outsourcing the possibility of offending current customers

Which of the following is an example of interest arbitrage? selling US dollars for Swiss francs, then selling Swiss francs for British pounds, then selling British pounds for US dollars investing in debt instruments in different currencies or different countries an American investing in a London-based company investigating different commercial banks to find the best exchange rate

Which of the following is the most important constraint on the power of the IO paradigm? Most industries have many firms that each have small market shares. Many industries are imperfectly competitive. Many companies are locally but not internationally competitive. Most customers have perfect knowledge of the products they select.

Which of the following is the theory that states that the country with the higher interest rate should have the higher inflation? Forward rate theory Interest Rate Inflation Theory International Fisher Effect Fisher Effect

Which of the following is unique to foreign project assessment in the capital budgeting decision? Project cash flows must be determined. Local tax issues affect the determination of free cash flows and the remittance of earnings. Inflation is not an issue, because companies use the same inflation rate in both the domestic and international setting in order to make the analysis more comparative. Parent cash flows and project cash flows are the same.

Which of the following is usually not a factor that triggers companies to look to exports to boost total sales? Response to the market entry of a foreign rival Promote economic development in underdeveloped markets Maturity of the domestic market Potential to leverage their core competency in foreign markets

Which of the following organizational structures is particularly popular among companies that market a diverse portfolio of products? geographic division structure product division structure international division structure functional division structure

Which of the following statements about China is true? It is the largest trading country in the world. It has the most foreign-exchange reserves in the world. It is not growing as fast as the industrial countries are. It is the third most populous nation in the world.

_______ is a form of locking the value of a country's currency onto another currency. Managed floating Dollarization Monetarization Floating

________ are the two basic strategies for creating value and attaining a competitive advantage in an industry. Customer satisfaction and product innovation Cost leadership and differentiation Industry leadership and market dominance Cost minimization and profit maximization

A ________ results when free mobility of factors of product is added to a customs union. free trade agreement customs union common market regional trade agreement

A bond issued by a Brazilian company in British pounds in London is a(n) ________. local bond global bond foreign bond Eurobond

A company's overall geographic strategy should be flexible enough to ________. export anywhere in the world from a single production location implement concentration strategies instead of diversification strategies respond to new opportunities and withdraw from areas with poorer performance outlooks import from anywhere in the world to a single production location

A disadvantage of the ________ strategy is that firms that adopt this strategy tend to decentralize too much autonomy to national subsidiaries. transnational international multidomestic continental

A guideline for responsible action by a firm in its operations worldwide is a(n) ________. education program honor code code of conduct corporate monitoring policy

A letter of credit that provides an exporter with the guarantee of another bank in addition to the importer's bank is called ________. an amendable letter of credit a time draft letter of credit a confirmed letter of credit a cash in advance letter of credit

A major force leading to convergence of accounting standards is _____. a shareholder orientation the global separation of capital markets MNEs' needs for foreign capital the need to increase accounting and reporting costs due to accounting differences worldwide

A multinational enterprise (MNE) is one that is ________. among the world's five hundred largest companies licensed to operate by the United Nations Transnational Center willing to consider market and production locations anywhere in the world owned and managed by companies whose headquarters are split among different countries

A system in which individuals, rather than the government, make the majority of economic decisions is commonly referred to as a ________. centrally planned economy command economy market economy mixed economy

As firms gain more experience internationally, there is usually a tendency for them to ________. locate a larger portion of their resources at home handle their foreign operations through fewer types of operating forms deepen their mode of commitment to foreign operations move from wholly owned foreign direct investments to non-equity arrangements

Because the size of the market increases when trade barriers fall, companies can increase their production, which will result in lower costs per unit. This phenomenon is known as ________. increased competition diseconomies of scale economies of scale trade creation

British companies follow which type of financial statement format? fixed assets - net current assets = liabilities + capital reserves assets + liabilities = shareholders' equity fixed assets + current assets - current liabilities - noncurrent liabilities = capital and reserves assets = liabilities + shareholders' equity

Chrysler granted South East Motor (a company in China) rights to produce its Grand Voyager minivan for sale in China in exchange for a fee. This is an example of a(n) ________. acquisition turnkey operation licensing agreement technology appropriation

Commodity agreements ________. are effective in regulating the price of grains but not minerals were disbanded by the United Nations for being non-competitive were initially established to attempt to stabilize commodity prices are effective in regulating the prices of both grains and minerals

Communism champions a ________ system built on state ownership of all economic factors of production and control of all economic activity. publicly planned competitively planned centrally planned market-planned

Countries that produce manufactured goods and services competitively have ________ in either product or process technology. a natural advantage a patent an acquired advantage a compared advantage

Diversity of international markets, currency instability, and companies' strength with suppliers have the greatest effect on ________. promotion branding pricing R&D

Downsizing and delayering are two ways that companies have ________. formalized their workplace organizations solidified the social contract between employee and company restructured their workplace organizations followed the example of the Internet as a design standard

Due to conflicting reasons for setting transfer prices, _____. it is important for companies to establish prices at the headquarters level so that local managers cannot influence them it is always best to set prices that permit funds to travel from headquarters to the local countries it is difficult for top management to select the correct prices it is best to set prices that permit funds to travel from the local countries to headquarters where better decisions can be made over their use

German companies like Deutsche Bank and Daimler Chrysler have been relatively optimistic and transparent in their financial reporting compared with many Germanic companies because _____. most of their revenues are from the United States and United Kingdom German accounting standards have always been optimistic and transparent. they adopted U.S. Generally Accepted Accounting Standards they do not have to adopt International Accounting Standards

Historically, the geographic division structure is associated with companies pursuing ________ strategies. global international multidomestic transnational

How would you classify the accounting values of companies from the United States and the United Kingdom in terms of their measurement and disclosure of financial information? conservative and optimistic secret and transparent transparent and optimistic secret and conservative

If a Brazilian company has operations in Canada during a period when the Canadian dollar is falling against the Brazilian real, ________. the gains or losses on translated earnings would not affect earnings per share and stock prices translated earnings would be lower than before the strengthening of the dollar translated earnings would be lower after the fall in the dollar translated earnings would be higher than when the Brazilian real was worth more

If a British company exports to a German company and the export is denominated in euros, which of the following is true? Exports result in translation exposures but not transaction exposures. The British company would not experience a gain or a loss because the sale is denominated in euros, not pounds. The British company would experience a gain if the euro strengthens against the pound. The German company would experience a loss if the euro strengthens against the pound.

In a ________, all dimensions of economic activity, including pricing and production decisions, are determined by a central government plan. mixed economy market economy command economy democracy

In a diversification strategy for international expansion, a company would move ________. quickly into a regional foreign market but build up its resources in only a few of the countries in the region into one foreign country and fully expand its product lines in that country before moving to another country rapidly into many foreign countries, and then gradually increase its presence in those countries rapidly into a few foreign countries with many of its products and most of its resources

In a(n) ________ culture, people tend to regard seemingly peripheral information as pertinent to decision making and infer meanings from things that people say either indirectly or casually. pragmatist fatalistic high-context idealist

In designing an export strategy, managers typically do all of the following except ________. evaluate the fit of current resources with long-term needs target promising markets look to extend customary forms of financial support to new markets assess their products' potential for export sales

In foreign exchange markets, reporting dealers are ________. hedge funds and pension funds controlled by the Bank for International Settlements the large money center banks whose transactions are so large that they influence market prices located only in New York City since US dollars are the most widely traded currency in the world

In the international environment, firms use an international strategy, a multidomestic strategy, a global strategy, or a ________ strategy. regional locational transnational standardization

International businesspeople need to understand social stratification systems where they do business because ________. what is an ascribed group membership in one country is an acquired one in another the high similarity among countries lets companies effectively use uniform hiring and promotion practices globally such systems indicate who people in a given culture will respect more such systems reflect the willingness of the local society to accept product innovations

Long production runs lower per unit costs as a plant's marginal cost of production decreases as the plant's operation increases. The plant is benefiting from ________. the cluster effect location economies economies of scale digitization

Most world trade takes place ________. among developing countries between raw material exporters and manufacturing exporters among developed countries between developed countries and developing countries

Non-tradable goods are ________. goods vital for national defense factors of production products and services that are impractical to export, mainly because of transportation costs products and services that comprise a portion of the functions or components going into a final product or service

Offshore manufacturing is most often a major element of a(n) ________ strategy. flexibility dependability efficiency/cost innovation

Problems often faced in repatriating an executive from foreign assignments to his or her home nation include which of the following? There may not a good replacement in the foreign facility. The firm must increase compensation substantially. The returning expatriate has less social status and autonomy than when abroad. Different departments compete excessively to hire the repatriated manager.

The CFO's function in a company focuses on ________. improving distributor relationships accounting issues acquiring and allocating financial resources among the company's activities and projects providing financial statements according to international financial reporting standards

The Human Capital Index, based on a comprehensive global study of more than two thousand companies, found that superior human capital practices were ________ correlated with a firm's financial returns and were a(n) ________ indicator of increased shareholder value. insignificantly; timely weakly; accurate positively; leading negatively; lagging

The IMF's major objectives include ________. establishing a unilateral system of payments prohibiting expansion and balanced growth of international trade promoting exchange rate stability discouraging international monetary cooperation

The ________ of compensation bases an expatriate's compensation on the prevailing pay scales in the locale of the foreign assignment. headquarters-based method home-based method host-based method culturally based method

The ability of the production process to make different kinds of products and to adjust the volume of output is known as ________. dependability quality control flexibility innovation

The entry into a foreign country to prevent competitors' advantages is known as ________. concentration strategy the liability of foreignness oligopolistic reaction a harvesting strategy

The most common type of tariff is the ________ tariff. transit export import ad valorem

The most internationally mobile factor of production is ________. long-term capital management short-term capital labor

The principle by which the tax authorities allow firms to reduce their tax liability by the amount of income taxes paid to foreign governments is known as ________. passive income reductions lag strategies in tax planning a tax credit transfer pricing

The recent expansion of technology has contributed to growth in international business through ________. reducing the effects of global competition the liberalization of regulations of movements of resources across borders the creation of new products that are important in world trade the tabulation of international transactions that previously did not appear in statistics

The self-handling of business activities abroad, as opposed to contracting the activities out for another company to perform, is known as ________. internalization equity alliance independencia comprehensive ownership

U.S.-based MNEs are more likely to use _____ as the most important measure of performance evaluation. return on debt market share return on investment net investment as a percentage of inventory turnover

What are the three levels of quality standards? company, international, and industry-specific employee, company, and customer general, industry-specific, and company general, international, and domestic

What is the gray market? selling of counterfeit merchandise a legal black market selling and handling goods through unofficial distributors sales targeted to senior citizens

When a company does business in another country whose official language is the same as that of the company's home country, the company ________. should use back-translation on written documents can assume that although some spellings are different that words will mean the same thing may encounter differences in meanings of the same words can assume that communications will go smoothly

When a government imposes import restrictions to help an industry at home that may suffer from import competition, it may also ________. lower the prices the protected industry can charge shift import purchases from one country to another hurt another of the nation's industries lead consumers to organize boycotts so that sales of the protected industry decline

When planning international geographic expansion, managers use scanning to ________. assure the compatibility between the mode of operation and the country for international expansion decide whether to use a concentration or a diversification strategy reduce the number of options available to a manageable number for further detailed analysis assure that all countries within a region have similar investment climates

When selling a commodity for which there is little possibility of product differentiation, a company would likely use which of the following orientations internationally? strategic marketing orientation sales orientation production orientation customer orientation

Which of the following is the best explanation for why an MNE's investment is initially favorable to the host country but later more favorable to the home country? Although MNEs increase employment in the host country, they do not transfer any technology or capital to the host country. MNEs fear host-country restrictions on capital outflow, which increases capital inflows and discourages capital flight. Nearly all foreign investors plan eventually to have their subsidiaries remit dividends back to the parent company in excess of what they sent abroad. MNEs usually remain in the host country for only four to six years before removing their operations and returning home.

Which of the following refers to the purchase of goods or services produced by a company based in one country from sellers that reside in a different country? Freight forwarding Countertrading Importing Exporting

Which of the following stakeholders groups wants additional sales and increased productivity, which result in higher profits and larger returns going to them? customers government shareholders society at large

Which of the following statements about approaches to political risk management is not true? Active political risk management assumes that political events unfold in observable patterns that statistical methods can detect. Passive political risk management assumes that it is difficult, if not impossible, to systematically model political risk. Passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards. Active political risk management assumes that positive and negative political events in any country are neither independent nor random events.

Which of the following statements about the euro is true? It was adopted by all existing EU members when it was first initiated. It must be adopted by countries as a precondition to joining the European Union. It was designed to help eliminate currency as a barrier to trade in the EU. It cannot be used by countries that are not members of the EU.

Which of the following statements is true concerning the competitive environment of international business? Although countries' market sizes differ, companies usually face about the same number of competitors in each national market. It takes about the same amount of resources to gain national distribution in a large country as in a small one. Being a leader in one country doesn't guarantee you'll be a leader in any other country. In most industries, companies face the same competitors in each country where they operate.

Which of the following types of political risks often is caused by ethnic conflict or civil disorder and includes random political developments that adversely affect the operations of all companies in a country? systemic political risk distributive political risk catastrophic political risk procedural political risk

Which of the labor issues identified by the Ethical Trading Initiative (ETI) receives the most attention? Freely chosen employment The provision of regular employment Child labor The right to collective bargaining

A differentiation strategy works well when ________. buyers are highly sensitive to price a company designs a universal product for a broad market buyers believe differences in competing products do not create meaningful value a company can continually develop products that have unique features

A foreign exchange contract that is an agreement between two parties to buy or sell a particular currency at a particular price at a particular date in the future as specified in a standardized contract to all participants in the specified market is known as a ________. equity currency contract spot contract forward contract futures contract

A freight forwarder, the so-called "travel agent of cargo," performs which of the following functions? Taking title to the goods it moves from country to country Acting as a sales representative in a foreign market Concentrating activity on moving exports and imports within a company's global supply chains Arranging the fastest and cheapest transportation of products to and from foreign suppliers

A go-no-go decision means ________. management reviews existing information and decides whether additional individualized feasibility studies are warranted projects are ranked in comparison to each other, and projects are approved from the top of the list down until available resources are exhausted projects are approved or disapproved based on the potential ease of divestment an individual project decision is based on whether the project meets threshold criteria

A major problem with MNEs using offshore financial centers is that ________. in order for the center to function properly, the MNEs must be locally owned and operated in the center all of their activities are illegal OFCs allow companies to avoid taxes, but it is very difficult to move money from one country to another OFCs may give unfair tax advantages to companies, which is a concern to the OECD

A(n) ________ grants the registered owners of a particular invention, literary or artistic work, symbols, names, images, or designs the right to determine the use of their ideas. TRIPS permit patent certificate trademark credential intellectual property right

A(n) ________ is the right but not the obligation to buy or sell a foreign currency within a certain time period or on a specific date at a specific exchange rate. offer forward rate bid option

According to the PLC theory, in the introductory stage of the product life cycle, the production and sales are primarily in the same country because ________. companies lack sufficient capacity to serve foreign markets as well there has not been time to patent the products in multiple countries there has not been time to negotiate tariff reductions for sales in other countries there is a need to produce close to consumers in order to get quick feedback on needed product alterations

According to the research described in your text, which of the following is among the factors that would increase a firm's probability of exporting? High R&D demands Low domestic productivity High domestic labor costs High level of efficiency

All of the following are generally true about trade-displaced workers except which one? They spend their unemployment benefits on living rather than on retraining. In many cases, they have difficulty finding new work because of educational deficiencies or because of training for jobs that do not materialize. They earn less in their new jobs than they earned in their old ones. They move into industries with substantial import protection.

An argument against limiting exports to unfriendly countries is that ________. markets cannot be regained after the countries become friendly the unfriendly country tends to lose its sense of self-identity that binds its citizens together as a nation one country's essential product is superfluous to another the costs of the sanctions are borne by innocent people rather than by the leaders

An exchange rate variance results from _____. translating the budget and actual performance at the forecast exchange rate setting the budget at the actual exchange rate at that time and final performance at the rate used when the budget was set translating the budget using the current-rate method and actual results at the new current-rate method translating the budget at the projected exchange rate and final results at the actual exchange rate

As companies initiate their activities in export markets with a preference for an indirect selling strategy, they tend to ________. use freight forwarders to act as distributors in foreign markets. use the International Trade Administration to handle their exports. establish a small cadre of export professionals to handle the specialized functions of exporting. use external specialists to assist in the export process.

Assume that a U.S.-based MNE has operations in Germany and the the revenues and expenses are mostly incurred in euros. Which translation method is the MNE most likely to use? temporal method consolidation method translate-restate method current-rate method

Companies might provide financial information in the annual reports in more than one currency because _____. different countries enforce different reporting requirements the home currency of the country is usually not as important as other currencies it is important to provide footnotes as well as the actual financial statements they are trying to provide information to users from different countries

Companies using a sales orientation find their greatest ability to sell the same product in more than one country when ________. promotional programs are identical in each country the product has a low price relative to incomes the product is a household item consumer characteristics are similar

Critics of the view that regionalization will prevail over globalization base their argument on the belief that ________. neighboring countries are more apt to disagree politically than countries that are distant from each other neighboring countries are too geographically similar to have many different goods to trade with each other business in non-territorial areas is not regional regionalization is a transition stage toward globalization

For which of the following is cost savings through global standardization potentially greatest? branding promotion distribution products

How do U.S. companies recognize transaction gains and losses in the financial statements? Gains are recognized in the income statement, but losses are not. They are recognized as gains and losses in owners' equity. Losses are recognized in the income statement, but gains are recognized in owners' equity. They are recognized as gains and losses in the income statement.

How has the Kyoto Protocol affected US companies operating in Europe? Because the United States is not a party to the Kyoto Protocol, US companies may not operate in European countries that have signed the Kyoto Protocol. The Kyoto Protocol has not affected US companies with subsidiaries in Europe because the United States has not signed the Kyoto Protocol. Before US companies can open any more European subsidiaries, the US government must sign the Kyoto Protocol. Companies are changing the way they do business in order to comply with new emissions standards in Europe.

If inflation in the United States is relatively higher than inflation in Japan, and the Japanese government wants to keep the exchange rate fixed between the yen and the dollar, it can ________. allow its currency to fall against the dollar allow its currency to float against the dollar allow its currency to rise against the dollar increase the supply of yen in the market

In a ________ economy, certain sectors of the economy are left to private ownership and free market mechanisms, while other sectors have significant state ownership and government planning. market state-directed command mixed

In computing GNI, the value of a Ford car that is manufactured in Mexico using capital from the United States would ________. be added to the GNI of the United States as well as the GNI of Mexico not be added to the GNI of the United States but would be added to the GNI of Mexico only affect the computation of GDP and have no bearing on GNI be added to the GNI of the United States but not the GNI of Mexico

In the demand-pull and supply-push view of the market, which of the following is best classified as a push dynamic that drives supply in the global market? converging consumer preferences the intrinsic functions of money access to common media standardization

MNEs often use offshore debt markets or borrow in foreign currencies ________. since debt in foreign countries is always cheaper than in the home country market to hide their cash from tax authorities because investors don't like to invest in companies that only raise capital in their home markets to take advantage of their ability to access capital in different countries

Managers should understand the effect of trade protectionism because ________. trade protectionism requires the payment of high insurance rates to transport goods internationally trade protectionism may limit the number of people permitted to practice a specific profession trade protectionism may prevent companies' enactment of merger and acquisition agreements trade protectionism may make it difficult for a company to buy what it needs from foreign suppliers

Most counterfeit goods are made in markets in which ________ is the basis of the legal system. judge-made precedent religious doctrine the rule of law the rule of man

Neighboring countries tend to ally for which of the following reasons? The distances that goods need to travel between such countries are wide. Consumers' tastes are usually very dissimilar. Distribution channels are not easily established in adjacent countries. Neighboring countries may be more willing to coordinate their policies.

Political, legal, economic, monetary, and institutional forces are among the forces that comprise the ________ of international business that sets the context for managers' actions. threat culture competition environment

Practical predeparture training for the expatriate ________. is to foster an appreciation for the host country's culture consists of profiles of political structures, job design, and compensation norms in the new market consists of ways to bypass the challenges of culture shock aims to gradually familiarize the expatriate and family with the routines of life in the host country

Proponents of the ideal of ________ argue that individual interests are not as important as the welfare of the group. capitalism individualism pluralism collectivism

Research has shown that past exchange rates are an accurate predictor of future exchange rates ________. only during times of economic calm only in the long run only during times of economic crisis only in the very short run

Studies report a(n) ________ link between organization culture and the financial performance of the firm. negligible spurious occasional significant

The FCPA applies ________. only to foreign firms quoted on any stock exchange in the United States only to US companies with foreign subsidiaries only to companies registered in the United States to companies registered in the United States and to foreign firms quoted on any stock exchange in the United States

The Japanese approach to quality is total quality management (TQM), which stresses which of the following principles? employee involvement, continuous improvements, and commitment to international quality standards customer satisfaction, continuous improvements, and warranties employee involvement, commitment to international standards, and customer satisfaction customer satisfaction, employee involvement, and continuous improvements

The ability to compare production costs among countries in an effort to determine where to locate production is hampered by ________. restrictions on the remission of earnings different tax rates restrictions on the international flow of data the number of ways the same product can be made

The benefits of network structures include ________. higher competition among members for resources and rewards difficulty in switching suppliers, no matter where in the world they are located developing core competencies in a broad range of value activities maintaining a strong sense of organization in the face of dynamic partnerships

The best way for a Euroequity to get a listing in the United States is to issue a(n) ________. Domestic Depositary Receipt European Depositary Receipt Global Depositary Receipt American Depositary Receipt

The concept of liquidity preference in international operations refers to ________. a company's willingness to accept lower rates of return in poor countries that really need the investments investors' preference for foreign stocks over foreign bonds because of the larger market for them management's need to maintain sufficient funds, preferably in local currency, in each country of operation to ensure meeting daily cash needs a company's willingness to accept a lower rate of return on investments in countries where it can more easily sell them and convert the proceeds at a favorable rate

The distinct disadvantage of the transnational strategy is its ________. lack of local market responsiveness failure to transfer knowledge from unit to unit inability to leverage core competencies challenge in terms of day-to-day implementation

The free trade theories of specialization assumed that ________. although the specialization would lead to some unemployment, the production gains would more than compensate for job losses resources can move internationally from the production of one good to another countries had objectives other than economic efficiency resources can move domestically from the production of one good to another

The purchasing power parity theory claims that a change in relative ________ between two countries must cause a change in ________ in order to keep the prices of goods in two countries fairly similar. exchange rates; inflation interest rates; exchange rates interest rates; inflation inflation; exchange rates

The term cultural distance refers to ________. the preferred relationship between superiors and subordinates in a given culture the normal space between people in a society when communicating the time it takes people to adjust to a different culture the degree to which countries' cultures are separated by attributes such as language, ethnicity, and religion

The three major responsibilities of the ________ are legislative power, control over the budget, and supervision of executive decisions. European Council European Commission European Court of Justice European Parliament

The trade theory that says countries should concentrate production on those products using their most abundant production factors is the ________. theory of absolute advantage theory of comparative advantage theory of non-tradable goods factor proportions theory

The transition to a different economic system follows a(n) ________ process in every country. random identical systematic different

US companies generally put earlier and more emphasis on countries ________. where governments give operating incentives with the largest economies with high tariff rates where operating conditions seem similar to those at home

Under NAFTA, rules of origin ensure that ________. only American products may be shipped to Canada and Mexico duty-free all members have the same external tariffs the members of NAFTA may import products from only neighboring members only goods that were produced mostly within the North American region are eligible for the more liberal tariff conditions created by NAFTA

Under mercantilism, governments sought to influence trade by ________. limiting exports establishing bilateral trading agreements with other countries encouraging the development of manufacturing in their colonies limiting imports and subsidizing exports

What is an international consortium? an agreement between two or more governments to provide for reciprocal foreign investment protection an agreement signed by most governments to protect intellectual property rights the ownership of a company by a government and a foreign company an international joint venture owned by at least three organizations

When a large company and a small company enter a collaborative arrangement, ________. the small company is more likely to view the collaboration's expansion as competition to itself the large company is expected to contribute more to the arrangement the large company is likely to be more active in the venture the small company is likely to be disadvantaged if legal action is necessary to solve a dispute

When proponents of MNE activities claim that an increase in the collection in tax revenues in a host country is a result of FDI, they are using which type of generalization about the impact of FDI? Micro consequences of macro decisions Individual and aggregate effects Stakeholder tradeoffs Cause-and-effect relationships

Which of the following best describes globally standardized advertising? a campaign that is identical in all markets a campaign that meets the legal and ethical standards of all countries a campaign that depends primarily on push rather than pull promotion a campaign that is similar but not identical from market to market

Which of the following is a characteristic of the Eurocurrency market? The Eurocurrency market is a retail, rather than wholesale, market. Private borrowers, such as corporations and individual lenders, are the major players in the Eurocurrency market. The interest rates in the Eurocurrency market are about the same as in domestic markets. The Eurocurrency market is both short and medium term.

Which of the following is a drawback of the polycentric approach? Host-country nationals become more committed to company headquarters than to their local colleagues. Local managers study international business and cultural practices in other markets in preparation for international assignments at the expense of not fully investing in understanding the host country. Local units depend too much on headquarters for resources and innovations, with little incentive to develop their own. Successful local units may function independently and pay little attention to headquarters.

Which of the following is a major pitfall of exporting? Relying too much on exports when demand in the domestic market booms An over-commitment by top management to exporting A willingness to modify products to meet other countries' regulations or cultural preferences Reacting to orders from around the world rather than designing a purposeful sales strategy

Which of the following is a reason for recent governmental relaxation in restrictions on cross-border trade or resource movements? Most countries face shortages of workers, so they seek foreign workers who can help them produce more. Consumers increasingly want to buy goods and services produced in their own countries, making restrictions less necessary. Governments believe that this will decrease the need to make their own companies more innovative. Governments believe that domestic producers will become more efficient as a result of foreign competition.

Which of the following is an argument for using a collaborative agreement? to maintain better control to preserve a concentration strategy to prevent problems caused by minority shareholders to secure vertical and horizontal links

Which of the following is an example of barter? A beverage maker in England provides production equipment to a state-owned bottling plant in Russia while agreeing to take payment in the form of future output generated by the Russian plant. An aircraft exporter partners with a company in the importing country to manufacture components that will then to be used in the assembly of the aircraft. The US exports goods to China and then invests in a Chinese business that is unrelated to those goods. Indonesia supplies Thailand with agricultural supplies in exchange for rice grown in Thailand.

Which of the following is not a factor driving pressures for local responsiveness among global firms? cross-national differences in product standards cross-national differences in distribution channels diverging consumer tastes and preferences host government support of freer international trade

Which of the following most accurately describes the current state of HRM efforts to staff international operations? Fewer women are accepting international assignments. Third-country nationals are quickly being replaced by localized expatriates. More middle-aged executives are offered international assignments than any other age group of employees. There are historic shortages of executive talent for international assignments.

Which of the following statements best explains a reason why companies use the foreign exchange market? To get currency with which to bribe foreign officials To increase their presence on the black market To diversify their expenses from other sources To convert money for use in financial transactions

Which of the following statements describes a limitation of the Big Mac Index? The theory of PPP incorrectly assumes that there are barriers to trade and that transportation costs are unmeasurable. The Big Mac represents all possible commodities and services. Taxes have no effect on Big Mac prices. Profit margins vary by the strength of competition, which affect relative prices.

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