D270 Midterm Exam
1) The broadening set of interdependent relationships among people from different parts of the world is known as ________. A) globalization B) offshoring C) franchising D) outsourcing
Answer: A
31) Safe work environments motivate ________ challenges motivate ________. A) individualists, collectivists B) collectivists, individualists C) non-fatalists, fatalists D) materialists, non-materialists
Answer: B
42) A foreign direct investment occurs when ________. A) a company owns at least 25% of a foreign firm B) a company has a controlling interest in a foreign company C) foreign ownership is in private rather than government securities D) a foreign firm agrees to a licensing agreement with a large conglomerate
Answer: B
43) Evaluating the importance of potential clients or partners by the way they dress is an example of using ________. A) pragmatism B) silent language C) polychronism D) fatalism
Answer: B
45) Premium Manufacturing is planning to expand operations overseas. Executives at the firm are considering a number of different countries. Which of the following countries would most likely have the lowest start-up costs? A) India B) China C) Japan D) Guatemala
Answer: B
56) Which of the following is NOT a common argument for the slowing of future globalization? A) Antiglobalization interests have been successful in electing parties that oppose freer movement of trade or people. B) Technological, transportation, and communication advances will decline in the near future. C) Major countries have either ignored certain international treaties or have refused to sign them. D) The growing split between those who succeed in a global environment and those who do not will foster greater antiglobalization sentiments.
Answer: B
14) Which of the following statements best describes a pluralistic society? A) Multiple segments of society adhere to the same political philosophy. B) Two dominant political parties rule local and federal governments. C) Different ideologies are held by different segments of society. D) Various ethnic groups belong to the official political party.
Answer: C
35) Kevin, marketing manager of the North American Bowling League, has decided to televise major bowling competitions to viewers in multiple countries rather than only in Canada and the U.S. Which of the following goals would this most likely help Kevin accomplish? A) acquiring new resources B) minimizing corporate risks C) increasing sales and profits D) obtaining competitive advantages
Answer: C
47) Ethnocentrism in international business refers to the ________. A) study of group ethics and approaches to corporate social responsibility B) comparison of the Protestant ethic with other religious views C) belief that what works best at home should work best everywhere D) ethnic segmentation of marketing programs within countries
Answer: C
15) ________ refers to a political system in which government is organized by and accountable to the people. A) Totalitarianism B) Fascism C) Socialism D) Democracy
Answer: D
28) Curtailment of logging in the Amazon region is generally viewed as environmentally beneficial for the planet as a whole. However, unemployed Brazilian workers have felt that job creation inside Brazil is more important than climate protection outside Brazil. This example best illustrates which of the following? A) why smaller countries are concerned that large international companies are powerful enough to dictate operating terms B) why globalization is needed to foster uniform standards for combating environmental problems C) how cultural homogeneity threatens the cultural foundation of smaller nations D) how global interests can conflict with a country's local interests
Answer: D
85) Countries with a theocratic legal system encourage precise, detailed contracts whereas countries with a common legal system encourage shorter and less specific contracts. T or F?
Answer: FALSE
86) A widely successful strategy for introducing change into a foreign country is to introduce many changes simultaneously. T or F?
Answer: FALSE
86) The terms multinational corporation and multinational company are frequently used synonyms for strategic alliances. T OR F?
Answer: FALSE
62) Most cultural variables are universal. T or F?
Answer: TRUE
63) Gaining some understanding of international business is important for any business student because global events and competition affect almost all companies. T OR F?
Answer: TRUE
63) In some collectivist systems, such as Venezuela, politicians control media outlets and limit individual property rights in order to acquire power in the business environment. T or F?
Answer: TRUE
68) Globalization of business has been stimulated by institutional developments that aid foreign trade and investment. T OR F?
Answer: TRUE
69) Creolization refers to the mixing of cultural elements that occurs during cultural diffusion. T or F?
Answer: TRUE
69) The recent expansion of technology has contributed to the growth in international business by creating new products that are important in world trade. T OR F?
Answer: TRUE
69) Totalitarianism is a political ideology that typically involves constant indoctrination of the population by agents of the government to eliminate dissent. T or F?
Answer: TRUE
78) Multilateral development banks encourage development in risky environments through financial incentives. T or F?
Answer: TRUE
78) Where future orientation is high, people are more willing to delay gratification by investing. T or F?
Answer: TRUE
79) Critics of offshoring assert that the short-term cost savings derived from offshoring hinder firms from developing more efficient production methods. T OR F?
Answer: TRUE
87) International companies often must customize products to comply with local standards if they are to do business in a particular country. T or F?
Answer: TRUE
12) It is most accurate to say that within most nation's borders, people largely share such essential attributes as ________ and ________. A) work attitudes occupations B) lifestyles; education level C) education level; ethnicity D) values; language
; Answer: D
10) Although there are different views about the purpose of a political system, most analysts agree that an essential task of a political system is to ________. A) integrate the different elements of a society into a functioning unit B) allocate scarce resources among competing users C) develop reasonable attitudes and outlooks within the population D) protect individuals within the country from foreign threats
Answer: A
13) Which of the following best explains why international business has grown rapidly in the past few decades? A) the end of the political schism between the Communist and non-Communist blocs B) greater income equality in most countries C) growing concern about climate change D) increased concerns about terrorism
Answer: A
14) Advanced communication systems have contributed to growth in international business by ________. A) enabling better oversight of global operations B) reducing the effects of global competition C) decreasing the cost of cargo transportation D) reducing export regulations
Answer: A
16) Because consumers want a greater variety of goods and services at lower prices, many governments have ________. A) reduced their restrictions on the international movement of goods and services B) acted to tax most imports at a lower rate than domestic products C) sought to eliminate reciprocal advantages negotiated through international organizations and treaties D) increased their participation in multinational problem-solving efforts
Answer: A
16) In a democracy, ________. A) citizens have the right to participate in the decision-making process B) the opportunity to truly participate in the political process is restricted to a select few C) the court system is directly supervised by the political system D) the rights of the individual are merged with the state
Answer: A
18) ________ peoples account for the largest percentage of global production. A) English-speaking B) Mandarin-speaking C) French-speaking D) Spanish-speaking
Answer: A
2) Which of the following problems in China is blamed for the annual loss of $250 billion by American MNEs? A) intellectual property violations B) environmental hazards C) child labor violations D) embezzlement
Answer: A
21) When a company successfully responds to foreign production and market opportunities, ________. A) other companies will likely emulate its successful practices B) it likely has a long-term advantage over competitors C) it will downsize its domestic operations D) its home government likely raises taxes on the company
Answer: A
22) In which of the following countries would business activity, given its status as a "not free" marketplace, be under the greatest government control? A) Vietnam B) Pakistan C) India D) Brazil
Answer: A
35) Raj, an engineer, works long hours and takes full responsibility for both his good and bad work performance. Raj most likely believes in ________. A) self-determination B) low power distance C) collectivism D) fatalism
Answer: A
37) Which of the following BEST explains how a firm reduces risk by operating internationally? A) taking advantage of business-cycle differences among countries B) buying competitive risk insurance unavailable domestically C) preventing competitors from operating in the countries it has entered D) operating in less competitive environments than those at home
Answer: A
38) A culture that prefers to first settle general principles rather than small issues is most accurately characterized as ________. A) idealist B) polychronic C) high-context D) pragmatist
Answer: A
39) Visible exports and imports are ________. A) merchandise imports and exports B) the sum total of goods and services traded C) international transactions paid for in money rather than barter D) typically a country's least common international economic transactions
Answer: A
40) All of the following are international business translation problems EXCEPT which of the following? A) All written work requires back translation in order to be understood in a second language. B) Because languages and the common meaning of words are constantly evolving, the intended meaning of a word may be different from what the listener or reader understands. C) Some words in one language simply don't have a direct translation into another language. D) Words mean different things in different contexts, thus the wrong context may be translated.
Answer: A
42) The largest percentage of nations, within a contiguous geographic region, that adhere to the rule of man are located in ________. A) Central Africa B) Northern Africa C) Eastern Europe D) Central America
Answer: A
43) Skinner Electronics plans to expand into foreign markets. Top executives want the firm to focus only on locations where the rule of law prevails. Which of the following should most likely be considered by Skinner? A) wealthier, westernized countries B) developing, non-Western countries C) emerging economies experiencing rapid growth D) countries inclined toward totalitarian-style government
Answer: A
45) Ellen, a U.S. citizen, worked for a U.S. firm in Germany for four years and was transferred back to the firm's home office in Chicago two months ago. Ellen feels significant dissatisfaction with her job and life in Chicago, which is most likely a result of ________. A) reverse culture shock B) polycentrism C) culture shock D) ethnocentrism
Answer: A
46) Politics, law, culture, and economy are all examples of ________ factors that can affect the ways in which companies produce and sell their products in foreign markets. A) social B) physical C) competitive D) political
Answer: A
59) Carnival Cruise Lines lowers its taxes by all of the following EXCEPT ________. A) hiring host-country nationals who pay no taxes B) taking advantage of taxation laws in foreign countries C) sailing in international waters outside countries' tax jurisdiction D) paying substantial port fees instead of taxes during stopovers
Answer: A
59) Wharton Enterprises, a U.S. firm, manufactures small kitchen appliances. The firm has recently developed an innovative blender design that Wharton executives anticipate being very profitable. Currently, Wharton has production facilities in the U.S. and China. Wharton executives are trying to determine where the new product should be manufactured. Which of the following best supports a decision to manufacture the new product in the U.S. instead of China? A) Intellectual property rights are strongly protected by U.S. patent laws. B) A strategic marketing plan can be quickly developed in the U.S. C) Contract enforcement is a simple process in the U.S. D) The U.S. is experiencing an economic recession.
Answer: A
7) Businesspeople seeking to understand more about another culture in order to successfully conduct business within that culture would be best advised to do which of the following? A) observing the behavior of people who have gained respect within that cultural environment B) relying on stereotypes, which are based on averages, to gain an understanding of the culture C) avoiding cultural research studies because they perpetuate unjustified stereotypes and behaviors D) memorizing the cultural variations that are typically encountered in a specific cultural environment
Answer: A
11) Certain attitudes can link groups, such as managers, from different nations more closely than managers with labor within a given nation. As a result, international businesspeople should most likely ________. A) assume that there are few significant cultural differences among nations B) examine relevant groups when comparing nations C) adopt universal operating methods D) avoid cultural imperialism
Answer: B
11) In a practical sense, the term political system is meant to signify the ________. A) organization of military power in a country B) working government in a country C) philosophical orientations in a country D) cultural values in a country
Answer: B
16) Cultural change imposed by an alien culture is called ________. A) multicultural ethnocentrism B) cultural imperialism C) collectivism D) high-context
Answer: B
24) Studies indicate a strong correlation between the intensity of religious belief and ________. A) a desire to convert productivity gains into more leisure time B) an adherence to some attributes that lead to economic growth C) the belief that material success is related to salvation D) the degree of ethnocentrism exhibited in a culture
Answer: B
25) The march toward greater political freedoms and more expansive civil liberties, beginning in the 1970s, strongly fueled a sense of ________. A) less predictable operating conditions for companies B) the inevitability of democracy C) different rules for domestic versus international competition D) weaker property rights
Answer: B
29) Although globalization may bring economic growth, critics nevertheless contend that ________. A) the growth is too fast B) the inequality of gains puts some people in a relatively worse economic situation C) this growth is mainly for the future, thus ignoring present economic growth needs D) the cultural foundations of sovereignty are supported by globalization
Answer: B
31) Which of the following statements would most likely NOT be supported by an advocate of offshoring? A) Offshoring increases the number of high-value jobs in the home countries of offshoring companies. B) Offshoring is fundamentally better for workers than the introduction of labor-saving technologies. C) Workers displaced due to offshoring are able to find new jobs as easily as those displaced by technology. D) There are upper limits to offshoring because of the lack of skilled workers willing to work permanently for low wages.
Answer: B
33) Critics of offshoring claim all EXCEPT which of the following? A) Cost savings are seldom passed on to final consumers. B) Offshoring reduces the incomes of people in low-wage countries. C) Incomes of workers in countries whose companies offshored production have gone down as a percentage of national income. D) Many workers who have been displaced by offshoring do not have the skills needed for higher-value jobs.
Answer: B
33) In societies where trust is high, ________. A) people tend to be more future-oriented B) business costs are typically lower C) people tend to be more fatalistic D) family businesses are dominant
Answer: B
34) A system of ________ law sets the framework for the system of government and defines the authority and procedure of political bodies to establish laws and regulations. A) criminal B) constitutional C) civil D) commercial
Answer: B
34) Expatriate managers located in cultures characterized by ________ have noticed that local employees are highly motivated by retirement programs. A) low uncertainty avoidance B) high future orientation C) low masculinity D) high power distance
Answer: B
37) A culture in which people prefer to finish one task before starting another is most accurately characterized as which of the following? A) low-context B) monochronic C) pragmatic D) high power-distance
Answer: B
4) Which of the following ideas holds that a government should NOT interfere in business affairs? A) collectivism B) laissez-faire C) the rule of man D) pluralism
Answer: B
48) Local content regulations are primarily intended to ________. A) address cultural differences between local employees and expatriates B) encourage MNEs to increase production activities in a country C) address contract negotiation difficulties D) assess local tax rates on MNEs
Answer: B
5) Devon, an accounts manager at a large electronics firm, does not have any direct international responsibilities. However, Devon would most likely benefit from studying international business issues so that he can ________. A) conduct better job interviews B) better understand how foreign operations affect the company's competitive position C) supervise and evaluate subordinates who have global assignments D) understand the legalities of importing and exporting products overseas
Answer: B
51) The same automobile company produces Fiats and Ferraris. The company builds an engine plant in China with low production costs for Fiats but not Ferraris. The probable reason is that ________. A) Fiat competes mainly on a focus strategy, whereas Ferrari competes mainly on a mass-market strategy B) Fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy C) Ferrari faces global competitors in China, whereas Fiat competes in China mainly against Chinese competitors D) although Ferrari did not build an engine plant, it will use the same Fiat engines in its models
Answer: B
51) When a company wishes to introduce change in a foreign country, its likelihood of success can most likely be improved by ________. A) introducing many changes simultaneously B) gaining the support of local opinion leaders C) agreeing to make some home-country changes in return D) employing expatriate managers to supervise local workers
Answer: B
53) Which of the following statements referring to intellectual property rights and violations is INCORRECT? A) Richer countries claim looser regulation of intellectual property rights will hinder innovation. B) Companies can register a global patent, trademark, or copyright through the World Trade Organization (WTO). C) The International Anti-Counterfeiting Coalition estimates international trade in counterfeit products at $600 billion a year. D) Developing markets claim tougher regulation of IPRs will slow, if not halt, their economic development.
Answer: B
57) Logan Electronics has a production facility in Bolivia. Recently, the firm was taxed at a significantly higher rate than a local electronics company. Which type of political risk is Logan most likely experiencing? A) systemic B) procedural C) distributive D) catastrophic
Answer: B
8) Most of the world's goods and services are sold ________. A) in international markets B) in the countries where they are produced C) through exports to small countries D) through exports to large countries
Answer: B
9) Political systems based on the ________ paradigm, such as those of Japan and China, accept the principle that government may intervene to ensure that business practices benefit society. A) individualistic B) collectivistic C) pluralistic D) laissez-faire
Answer: B
9) The nation offers a workable reference for studying cultural differences because ________. A) a nation contains only one distinct culture B) similarity among people is both a cause and effect of national boundaries C) the commonality of language within a nation eases the process of conducting surveys D) different groups within the same country always have more in common with each other than with groups in other countries
Answer: B
1) ________ consists of specific learned norms based on attitudes, values, and beliefs of a group of people. A) Ethnology B) Civilization C) Culture D) Doctrine
Answer: C
2) Which of the following best defines international business? A) It includes all economic flows between two or more countries. B) It includes all private economic flows between two or more countries. C) It includes all business transactions involving two or more countries. D) It includes all business transactions in countries other than your home country.
Answer: C
20) All of the following countries have a totalitarian political system EXCEPT ________. A) China B) Russia C) South Korea D) Saudi Arabia
Answer: C
25) What is the most likely reason that governments cooperate with each other through treaties, agreements, and consultations? A) to gain an advantageous division of labor B) to be in compliance with United Nations' requirements C) to attack problems jointly that one country acting alone cannot solve D) to assure that all countries get an equitable share of taxes from multinational enterprises
Answer: C
28) Which of the following types of political risks often is caused by ethnic conflict or civil disorder and includes those random political developments that adversely affect the operations of all companies in a country? A) systemic political risk B) procedural political risk C) catastrophic political risk D) distributive political risk
Answer: C
41) When a company does business in another country whose official language is the same as its home country's, the company should most likely ________. A) assume that communications will go smoothly B) use back-translation on all written documents C) realize that words may have different meanings D) assume that word meanings are the same despite spelling differences
Answer: C
43) Which term refers to two or more companies that share ownership of an FDI? A) turnkey operation B) transnational firm C) joint venture D) franchise
Answer: C
44) The term "cultural distance" refers to the ________. A) physical space between people during communication B) time it takes people to adjust to the language, traditions, and norms of a foreign culture C) degree to which countries differ on cultural dimensions D) preferred relationship between superiors and subordinates in a given culture
Answer: C
46) One of the potential problems for an MNE that practices too much polycentrism is ________. A) demanding that local communication methods be replaced with modern technology B) underestimating the complexity of introducing new management practices C) losing innovative capabilities to less-risky host-country practices D) relying too much on home-country directions and policies
Answer: C
47) Elite Manufacturing seeks a foreign location with a highly favorable business environment and a comprehensive legal code. Which of the following countries would be most suitable for Elite? A) Japan B) Canada C) Singapore D) United Kingdom
Answer: C
48) Although the U.S. film industry depends heavily on revenue in foreign countries, revenue from international markets is usually low for a sports-themed film. This is most likely due to ________ factors. A) political B) geographic C) behavioral D) legal
Answer: C
60) Wharton Enterprises, a U.S. firm, manufactures small kitchen appliances. The firm has recently developed an innovative blender design that Wharton executives anticipate being very profitable. Currently, Wharton has production facilities in the U.S. and China. Wharton executives are trying to determine where the new product should be manufactured. Which of the following questions is most relevant to the decision? A) What selection procedures would be best in China? B) Should expatriates or locals manage the Chinese facility? C) How can the firm guard against counterfeiting in China? D) How would China's individualistic system affect the firm?
Answer: C
8) Which of the following countries has a collectivist orientation? A) Canada B) Australia C) Japan D) Netherlands
Answer: C
8) Which of the following is a common shortcoming of studies examining culture in different countries and regions? A) Cultures are static, which leads researchers to draw false conclusions from old data. B) It is impossible to compare countries because of differences in data. C) Responses are reported in averages, which can lead to a belief in unrealistic stereotypes. D) People are reluctant to complain about their own cultures, so they present only positive opinions to researchers.
Answer: C
10) A problem of using the nation as a reference point for culture is that ________. A) nations fail to mediate the different interests within their boundaries B) self-stereotypes tend to fall along national lines C) such an approach tends to be polycentric D) variations tend to be great within a country
Answer: D
10) Which of the following has NOT been a major force increasing globalization in recent decades? A) liberalization of cross-border trade B) increase in and expansion of technology C) growing pressure from consumers D) decreasing prices of natural resources.
Answer: D
13) A(n) ________ ideology is the system of ideas that expresses the goals, theories, and aims of how society should work. A) technological B) economic C) legal D) political
Answer: D
13) Most people's basic value system is ________. A) modified significantly between childhood and adulthood B) altered during adulthood through imposition C) affected primarily by teenage peer pressure D) acquired mainly during early childhood
Answer: D
17) In a totalitarian political system, ________. A) political power resides with the citizens of the country B) governments direct most economic activity but few social ones C) an individualistic outlook shapes political debate and policy formation D) one agent monopolizes political power
Answer: D
17) Which of the following best explains recent governmental relaxation of restrictions on cross-border trade or resource movements? A) Most countries face shortages of workers, so they seek immigrants who can help them produce more. B) Governments believe that this will decrease the need to make their own companies more innovative. C) Consumers increasingly want to buy goods and services produced in their own countries, making restrictions less necessary. D) Governments believe that domestic producers will become more efficient as a result of foreign competition.
Answer: D
18) A company starting out with a global focus, usually because of the international experience of its founders, is called a ________. A) multinational enterprise B) transnational company C) strategically allied company D) born-global company
Answer: D
19) Under the ________ form of totalitarianism, the regime confines itself to political control of the state. It does not regulate the economic and social structure of society. A) fascist B) communist C) theocratic D) authoritarian
Answer: D
23) The more closed a society is, the more important ________ group membership is. A) acquired B) age-based C) education D) ascribed
Answer: D
27) ________ is the chance that political forces may change a country's business environment in ways that lead investors to lose some or all of the value of their investment or be forced to accept a lower-than-projected rate of return. A) Governmental risk B) Operating risk C) Transaction risk D) Political risk
Answer: D
3) Because people can be grouped or classified in many ways, such as on the basis of nationality, ethnicity, religion, profession, and income level, ________. A) people live in a state of cultural collision B) cultural studies fail to understand behaviors C) identity crises make individual's lives chaotic D) people have more than one cultural group membership
Answer: D
3) Which of the following countries has an individualistic orientation? A) Venezuela B) Japan C) Egypt D) Canada
Answer: D
30) Assume a firm has operations in Tokyo, where there is a collectivist culture. Which of the following would most likely motivate the firm's Japanese employees? A) "employee-of-the-month" programs B) extensive vacation time C) on-the-job challenges D) good health benefits
Answer: D
30) Select the correct order, going from low to high total impact on an MNE, of the following types of political risk: (1) procedural political risks, (2) systemic political risks, (3) distributive political risks, (4) catastrophic political risks. A) 3, 2, 1, 4 B) 1, 2, 3, 4 C) 2, 3, 4, 1 D) 2, 1, 3, 4
Answer: D
32) Barkely Enterprises, a U.S. manufacturer, received assistance from the Overseas Private Investment Corporation when it expanded operations into Saudi Arabia. Which of the following types of support did Barkely most likely receive from OPIC? A) financial capital B) cultural training C) legal guidance D) political risk insurance
Answer: D
49) In addition to understanding the laws affecting business in countries where their companies operate, it is most important for managers to understand the ________. A) methods for appointing local judges B) ethical rationale behind the laws C) history of the local legal system D) degree of law enforcement
Answer: D
50) Organizing work differently to improve productivity will likely fail ________. A) if the work force has a low tolerance for authoritarianism B) if workers participate in planning the improvement C) unless changes are compatible to competitor's practices D) if changes interfere with strongly held value systems
Answer: D
50) ________ refer(s) to the creative ideas, innovative expertise, or intangible insights that give an individual, company, or country a competitive advantage. A) Proprietary goods B) Exclusive ownership C) Restrictive goods D) Intellectual property
Answer: D
52) A computer firm has high foreign sales in Asia and wants to expand sales into Europe. Which of the following statements provides the most appropriate advice for Elway executives? A) Although countries' market sizes differ, companies usually face about the same number of competitors in each national market. B) In most industries, companies face the same competitors in each country where they operate. C) It takes about the same amount of resources to gain national distribution in one country versus another. D) Being a leader in one country does not guarantee market leadership in another country.
Answer: D
59) Assume a U.S. firm plans to expand into either Mexico, Germany, or Japan. Its executives are traveling to each country to meet with local businesspeople in the decision-making process. Which of the following would be LEAST beneficial when the executives make a presentation? A) requesting a translator with technical vocabulary knowledge B) simplifying vocabulary and terminology for the audience C) conducting back translations for written work D) avoiding repetition to prevent boredom
Answer: D
60) The specific learned norms based on attitudes, values, and beliefs of a group of people are known as ethnology. T or F?
Answer: FALSE
61) Globalization refers to all economic transactions among countries. T OR F?
Answer: FALSE
62) Societies that emphasize collectivism place the interests of individuals over the interests of the state. T or F?
Answer: FALSE
63) The lack of cultural guidebooks and research specifically for international managers poses a significant problem for global firms. T or F?
Answer: FALSE
64) The best way of conducting business domestically is also typically the best way to conduct business internationally. T OR F?
Answer: FALSE
65) Cultures do not transcend national boundaries. T or F?
Answer: FALSE
66) Democracy and totalitarianism fall on the same end of the political spectrum. T or F?
Answer: FALSE
66) Most countries' imports account for more than half of their citizens' consumption. T OR F?
Answer: FALSE
67) The fundamental element of democracy is justice. T or F?
Answer: FALSE
67) The lowering of tax rates around the world is one of the seven major forces behind recent globalization. T OR F?
Answer: FALSE
70) Totalitarian countries are favored by MNEs because state governments typically favor foreign investors over local companies. T or F?
Answer: FALSE
76) Supporters of globalization assert that the process helps countries strengthen their sovereignty. T OR F?
Answer: FALSE
77) Political risk insurance is more likely to be purchased by MNEs that apply an active approach to political risk management. T or F?
Answer: FALSE
78) The process of shifting production to a foreign country is known as outsourcing. T OR F?
Answer: FALSE
79) A culture in which people prefer to handle tasks sequentially is a polychronic culture. T or F?
Answer: FALSE
79) The political system of a country refers to the laws that regulate actions, along with the processes by which those laws are enforced and by which redress for grievances is acquired. T or F?
Answer: FALSE
80) A culture with a preference for a problem-solving style that first settles principles is a pragmatic culture. T or F?
Answer: FALSE
81) A civil law system anchors itself in the wisdom of daily experience or, more intellectually, great spiritual or philosophical traditions. T or F?
Answer: FALSE
84) A joint venture is an example of a portfolio investment. T OR F?
Answer: FALSE
86) International law takes precedence over national laws in determining permissible practices in pricing, distribution, advertising, and promotion of products and services in a particular country. T or F?
Answer: FALSE
87) According to experts, stakeholder participation in decision making is effective only in countries with an educated population. T or F?
Answer: FALSE
87) Geographical barriers typically affect distribution channels within countries, but they rarely affect distribution channels between countries. T OR F?
Answer: FALSE
89) The International Anti-Counterfeiting Coalition estimates that international trade in counterfeit products runs less than 5 percent of the value of total world trade. T or F?
Answer: FALSE
90) The protection of intellectual property rights is very similar from country to country. T or F?
Answer: FALSE
91) The view that regionalization, rather than globalization, will prevail in the future is largely based on the use of common languages among countries in a region. T OR F?
Answer: FALSE
61) Many firms gain a global competitive advantage by fostering cultural diversity. T or F?
Answer: TRUE
61) The term collectivism refers to a system that stresses the primacy of societal goals over individual goals. T or F?
Answer: TRUE
62) International business includes all commercial transactions between two or more countries. T OR F?
Answer: TRUE
64) As exemplified in China, the government in a collectivist society is highly connected to and interdependent with business. T or F?
Answer: TRUE
64) Similarity among people is both a cause and effect of national boundaries. T or F?
Answer: TRUE
65) A political ideology is the collection of ideas that expresses the goals, theories, and aims that constitute a sociopolitical program. T or F?
Answer: TRUE
65) It is difficult to compare globalization of business over time because shifting national borders have changed the nature of transactions from domestic to international and vice versa. T OR F?
Answer: TRUE
66) The identity of a nation is typically promoted through symbols, monuments, and museums. T or F?
Answer: TRUE
67) Most people's basic values are acquired during childhood and are not readily changed later in life. T or F?
Answer: TRUE
68) A democracy grants the voting citizenry the power to alter the laws and structures of government. T or F?
Answer: TRUE
68) Cultural change may come by choice or imposition. T or F?
Answer: TRUE
70) English-speaking peoples account for a larger portion of global output than people who speak any other language. T or F?
Answer: TRUE
70) Improvements in transportation and communications enable managers to better oversee foreign operations. T OR F?
Answer: TRUE
71) The Third Wave of Democratization was partially triggered by improved communication systems. T or F?
Answer: TRUE
72) Although countries are similar in terms of having a mandatory retirement age, they differ in what that age is. T or F?
Answer: TRUE
72) Countries have reduced import trade barriers in the expectation that other countries will do the same. T OR F?
Answer: TRUE
72) Research indicates that democracy is declining around the world and that totalitarian regimes are increasing. T or F?
Answer: TRUE
73) Many companies merge with or acquire other companies to gain operating efficiencies that help them compete with or become global leaders. T OR F?
Answer: TRUE
73) There is a strong correlation between the intensity of religious belief and attributes that lead to economic growth, such as obeying laws and thriftiness. T or F?
Answer: TRUE
75) Civil strife, tax discrimination, weak legal systems, and terrorist actions are political risks faced by MNEs operating in foreign countries. T or F?
Answer: TRUE
75) Preference for a consultative management style is prevalent in a society with low power distance. T or F?
Answer: TRUE
76) Managers who take an active approach to political risk management are likely to rely on statistical modeling to quantify the precise degree of political risk. T or F?
Answer: TRUE
77) A criticism of globalization is that as economic growth increases, too many nonrenewable resources are used. T OR F?
Answer: TRUE
77) In societies where trust is high, there tends to be a lower cost of doing business. T or F?
Answer: TRUE
80) A common law system is based on tradition, judge-made precedent, and usage in which the courts assign a preeminent position to existing case law to guide dispute resolution. T or F?
Answer: TRUE
80) Many professional basketball teams recruit tall youngsters in foreign countries into basketball camps where they can develop basketball skills and perhaps become candidates for professional play. This is an example of engaging in international business to acquire resources. T OR F?
Answer: TRUE
81) By operating internationally, a company may take advantage of business-cycle differences among countries and thereby reduce its financial risks. T OR F?
Answer: TRUE
82) The rule of man, a practice that has been in play for millennia, presumes that the law is the will of the ruler, whether the king, czar, raj, or emperor. T or F?
Answer: TRUE
83) A firm that begins operating in a culturally similar foreign country will most likely face few necessary cultural adjustments. T or F?
Answer: TRUE
83) The rule of law holds that governmental authority is legitimately exercised only in accordance with written, publicly disclosed laws that have been appropriately adopted and which are enforced in keeping with established procedure. T or F?
Answer: TRUE
83) When a U.S. citizen flies Japan Airlines, the airline acts as a service exporter for Japan. T OR F?
Answer: TRUE
84) A potential problem of polycentrism is failure to introduce innovative superiority. T or F?
Answer: TRUE
84) Laws on local business activities directly influence the operations of domestic and foreign companies in areas such as hiring and firing workers. T or F?
Answer: TRUE
85) Ethnocentric firms typically use the same business practices in all cultures and markets. T or F?
Answer: TRUE
85) The ownership of foreign bonds is an example of a portfolio investment. T OR F?
Answer: TRUE
25) According to the theory of success and reward expectation, the greatest enthusiasm for work generally occurs when there is a ________ certainty of success combined with a ________ reward for success compared to the reward for failure. A) high
high B) high; low C) low; high D) low; low ; Answer: C
23) Governments have signed treaties to protect foreign-owned property rights, such as investments and patents. A primary reason for doing so is to ________. A) gain reciprocal advantages B) reduce the domestic effects of other countries' economic policies C) deal with areas of concern outside the territory of any one country D) reduce national conflicts leading to violent political demonstrations
Answer: A
23) Which of the following was a notable trend in political systems during the second half of the 20th century and beginning of the 21st century? A) A wave of democratic transformations occurred as countries around the world moved away from totalitarian systems. B) A wave of theocratic revolutions occurred as people around the world looked to spirituality to guide them. C) Socialistic revolutions swept the world as countries aspired toward greater social justice. D) A totalitarian revolution swept the world as people looked to strong state leadership in uncertain times.
Answer: A
26) The term "________ culture" describes a country in which the norm is a money-and-things orientation and a belief that it's better to "live to work" than to "work to live." A) high masculinity B) physiological C) non-fatalistic D) high-femininity
Answer: A
27) Which of the following statements would most likely be made by a supporter of globalization? A) Globalization encourages the adoption of uniform and superior standards for combating environmental problems. B) Economic growth created by globalization is largely in services, which involves the use of few nonrenewable resources. C) Global competition discourages resource-saving technologies, which are costly. D) Air pollution and toxic runoff problems increase with global economic growth.
Answer: A
28) People generally prefer little consultation between superiors and subordinates in cultures where ________ is high. A) power distance B) fatalism C) individualism D) self-actualization
Answer: A
30) The process of shifting production from a domestic to a foreign location is best known as ________. A) offshoring B) outsourcing C) licensing D) joint venturing
Answer: A
31) Which of the following statements about approaches to political risk management is NOT true? A) Passive political risk management discourages managers from fully or partially hedging their bets against exposure to political hazards. B) Passive political risk management assumes that it is difficult, if not impossible, to systematically model political risk. C) Active political risk management assumes that positive and negative political events in any country are neither independent nor random events. D) Active political risk management assumes that political events unfold in observable patterns that statistical methods can detect.
Answer: A
5) Which of the following best describes a result of cultural collision in international business? A) A company implements practices that are less effective than intended. B) Local employees are overlooked for promotions by home country managers. C) Expatriate managers rely too heavily on local employees for negotiating business deals. D) Foreign and domestic companies make adjustments for the local culture and legal environment.
Answer: A
51) ION Software is the registered owner of a program designed to help sort and organize incoming and outgoing e-mail. Which of the following legal conventions does ION most likely have? A) intellectual property right B) trademark credential C) patent certificate D) TRIPS permit
Answer: A
52) Most counterfeit goods are made in markets in which ________ is the basis of the legal system. A) the rule of man B) the rule of law C) religious doctrine D) corporate precedent
Answer: A
53) When companies face the same competitors in almost all countries where they operate, ________. A) what they learn about each other in one country is useful in predicting the other's strategies and actions elsewhere B) the market leader is the same everywhere C) there is less need to understand the physical and societal factors of each country D) they are less likely to enter joint ventures with other companies
Answer: A
54) The fact that an English word such as blue-jeans has entered the Spanish language, while a Spanish word such as macho has come into American English illustrates that ________. A) cultural diffusion is a two-way process B) cultural trends come from emerging nations C) existing national borders are shifting D) material cultures are becoming universal
Answer: A
55) Critics of the view that regionalization will prevail over globalization most likely base their argument on the belief that ________. A) regionalization is a transition stage toward globalization B) neighboring countries are more apt to disagree politically than distant countries C) neighboring countries are too geographically similar to benefit from trade D) business in non-territorial areas is not regional
Answer: A
55) The vigor of IPR protection is highly related to a country's stage of ________. A) economic development B) cultural heterogeneity C) natural resource development D) standardization of patent regulations
Answer: A
57) In the opening case on the Java Lounge in Saudi Arabia, people in the port city of Jeddah were less culturally conservative than people in the interior of the country. The most likely reason for this is that ________. A) people in the port cities have more contact with foreigners B) the coastal area has to trade with countries using different religious holidays C) the coastal area has a culture with a higher uncertainty avoidance D) the coastal area is secular, whereas the interior of Saudi Arabia has a state religion
Answer: A
57) Some observers feel that international institutions and the people working in them cannot adequately handle the complexities of an interconnected world. Based on this, these observers believe that ________. A) globalization will slow in the future B) globalization is nevertheless inevitable C) international business will grow primarily on a regional basis D) private companies will replace international organizations in running the world's economy
Answer: A
58) Assume a firm plans to expand internationally. If its managers wish to avoid pitfalls caused by differences in "silent language," they should consider differences in ________. A) normal proximity during conversations B) degree of detail expected in written contract C) the meaning of slang words during presentations D) importance of adherence to schedules
Answer: A
12) Which of the following has MOST influenced consumers to demand access to foreign-made products? A) Declining global affluence has caused consumers to seek out lower-priced products from abroad. B) Consumers have become more efficient in using media and technologies to compare prices worldwide. C) Fearing that their governments will enact restrictive policies on imports, consumers are stocking up on foreign products before restrictions are put in place. D) Expectations of rising prices of foreign products have caused consumers to seek foreign products before their prices become prohibitive.
Answer: B
15) Creolization refers to ________. A) government efforts to maintain a distinct cultural identity through legislation and language B) the process of mixing elements of an outside culture with those of a national culture C) the use of stereotypes to describe a culture D) changes as cultures evolve over time
Answer: B
17) Which of the following languages has the most native speakers? A) English B) Mandarin C) Spanish D) Hindi
Answer: B
2) Which of the following is NOT true about cultural diversity? A) Companies may gain competitive advantages by bringing together people of diverse backgrounds. B) Cultural diversity is most successful when domestic and foreign firms establish joint ventures. C) Cultural diversity may help a company gain deeper knowledge about products and services. D) The process of bringing people of different national cultures together is often difficult.
Answer: B
20) Assume an enterprise is considering establishment of a foreign production facility. Which of the following best supports this decision? A) Its foreign competitors have higher production costs than it has. B) Its main competitor successfully opened a foreign plant. C) Its suppliers follow an agglomeration strategy. D) None of its competitors have foreign production facilities.
Answer: B
21) International businesspeople need to understand social stratification systems where they do business because ________. A) such systems reflect a culture's willingness to accept new products B) such systems indicate who people in a given culture will likely respect more C) the high similarity among countries lets firms effectively use global hiring practices D) what is an ascribed group membership in one country is an acquired one in another
Answer: B
22) Which of the following is an example of an acquired group membership? A) national origin B) religion C) gender D) race
Answer: B
24) All of the following are areas in which commercial activities take place outside the territory of any nation EXCEPT ________. A) noncoastal areas of the oceans B) the Panama and Suez Canals C) outer space D) Antarctica
Answer: B
24) Recently, the Economist Intelligence Unit investigated the status of democracies around the globe. Relying on 60 indicators that focus on the performance of free elections, civil liberties, government functioning, political participation, and political culture in a country, the study found that ________. A) almost all of the world's democracies are full democracies B) nearly half of the world's democracies qualify as "full" or "flawed" democracies C) less than a quarter of the countries studied are outright authoritarian regimes D) most democracies are hybrid political systems that share theocratic and totalitarian characteristics
Answer: B
29) ________ political risks arise from political actions, such as public corruption or a partisan judicial system, that interfere with transactions between sellers and buyers and that can significantly raise the costs of getting things done. A) Systemic B) Procedural C) Catastrophic D) Distributive
Answer: B
32) A major criticism of offshoring is that it ________. A) increases production costs B) exchanges good jobs for bad jobs C) threatens the sovereignty of larger countries D) allows companies to avoid payment of any taxes
Answer: B
38) 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. A) theocratic B) common C) customary D) civil
Answer: B
41) Reebok pays a royalty to the German Soccer League to use the team's logo on t-shirts that it sells. Reebok and the German Soccer League most likely have a ________. A) turnkey operation contract B) licensing agreement C) portfolio investment D) joint venture
Answer: B
41) Which of the following is most likely a true statement regarding the rule of law? The rule of law is a hallmark of ________. A) a totalitarian government B) a democratic government C) societies that place ultimate power in the hands of one person D) countries that are considered "partly free"
Answer: B
45) The term used by the United Nations as a synonym for multinational enterprise is ________. A) multinational corporation B) transnational company C) international firm D) born-global
Answer: B
46) Countries with a ________ legal system tend to encourage precise, detailed contracts, whereas countries with a ________ legal system tend to encourage shorter and less specific contracts. A) theocratic; mixed B) common; civil C) civil; customary D) customary; common
Answer: B
47) Managers who are knowledgeable about ________ are better able to identify the location, quantity, quality, and availability of the world's natural resources. A) political factors B) geographic factors C) competitive factors D) cultural factors
Answer: B
6) Which of the following is the most accurate statement about culture? A) Cultural variables can easily be isolated from other factors such as economic and political conditions. B) Although most cultural variables are universal, the forms these variables take differ from culture to culture. C) Most cultural variables are superficial and can easily be influenced by environmental factors. D) Within a culture, everyone responds to particular cultural variables the same way.
Answer: B
7) Which of the following is an indication of the increased globalization of business since the end of World War II? A) Foreign trade has largely replaced foreign ownership as a means of conducting international business. B) World trade has grown more rapidly than world production. C) Globally, consumers now depend on foreign output for more than half their consumption. D) Countries have increased their import restrictions to counter the rising tide of imports.
Answer: B
1) Which of the following is a true statement about China? A) The Chinese government's shift from communism to capitalism has led to an increase in FDI. B) China attracts FDI because the government has eliminated elaborate bureaucracies. C) The Chinese government manipulates market activities for political purposes. D) China lacks an educated pool of employees due to slowly developing industrialization.
Answer: C
11) Institutional development of services by business and government has aided the expansion of international business by ________. A) providing a universally agreed upon language for conducting international transactions B) removing immigration restrictions so that global firms can move personnel easily C) developing means to ease the flow of goods among countries D) spurring competition among domestic producers
Answer: C
12) The distinguishing feature of political ideologies along the political spectrum is ________, with some emphasizing its primacy and others opposing it. A) capitalism B) socialism C) freedom D) liberalism
Answer: C
14) Contact among countries brings about cultural change, which is a process called ________. A) cultural collision B) cultural imperialism C) cultural diffusion D) polycentrism
Answer: C
15) Imported flowers are now a stronger competitor to U.S. grown flowers in the U.S. market. Which of the following is likely the MOST important factor for this increase in imports? A) more effective production techniques B) advances in communication systems C) advances in transportation D) cross-national cooperation
Answer: C
18) Which of the following would most likely be used in a totalitarian system to promote unconditional support for the official ideology? A) privately owned media outlets B) a parliamentary system C) state control of the education system D) a representative legislative body
Answer: C
19) In a strategy known as ________, many new companies locate themselves near competitors and suppliers. A) offshoring B) franchising C) clustering D) exporting
Answer: C
19) Which of the following statements about the English language is most likely NOT true? A) The largest portion of global output is in English-speaking countries. B) A large portion of MNEs are headquartered in English-speaking countries. C) English is the official national language in most countries where FDI is encouraged. D) Many MNEs from non-English speaking countries use English as their operating language.
Answer: C
29) Which of the following is characterized by low dependence on an organization and a desire for personal time, freedom, and challenges? A) collectivism B) democracy C) individualism D) anarchy
Answer: C
3) Which of the following is NOT a likely reason to study international business? A) Global events affect almost all companies. B) Differences among countries in physical, social, and competitive conditions may cause companies to alter their operating methods from country to country. C) Business conducted outside the confines of any one country is inexplicably on the decline. D) Firms may be better able to obtain better or less expensive resources by operating internationally.
Answer: C
32) Managers should be more precise in their directions to subordinates when ________. A) the company has a philosophy of geocentrism B) the society believes age equals wisdom C) uncertainty avoidance is high D) power distance is low
Answer: C
34) Assume that company executives at the firm would like to increase sales by expanding into an international market. Which of the following factors, if true, best supports a decision to expand sales globally? A) It can offshore most of its production. B) It can obtain all of its resources for the same price overseas. C) Its costs of making additional sales would not increase disproportionately. D) The foreign market has higher real interest rates.
Answer: C
36) A firm is currently seeking resources from foreign countries. Which of the following is the LEAST likely reason for doing so? A) manufacturing products at a lower cost B) gaining knowledge about a specific market C) following a customer into the global market D) differentiating its products from the competition
Answer: C
36) Ian, a financial manager, is preparing to transfer to Germany where he will serve as an expatriate manager of his employer's European office. With which type of legal system will Ian most likely have to deal with in Germany? A) mixed B) common C) civil D) theocratic
Answer: C
37) A(n) ________ law system is based on a systematic and extensive codification of laws and puts political officials in charge of specifying accessible, detailed, and written law that applies to all citizens. A) customary B) common C) civil D) theocratic
Answer: C
38) An example of a U.S. merchandise import is an automobile made in ________ and sold ________. A) the United States by a Japanese company B) outside the United States C) Japan by a Japanese company; in the United States D) Japan by a U.S. company; outside the United States
Answer: C
39) The attempt to resolve small issues before principles is a characteristic of which of the following? A) relativism B) monochronic behavior C) pragmatism D) uncertainty avoidance
Answer: C
4) In terms of international business, it is most accurate to say that ________. A) there is a universal "best way" to conduct business B) global competition affects large companies but not small ones C) most firms depend either on foreign markets and supplies or compete against companies that do D) government regulation of international business has little effect on a company's profits
Answer: C
4) When divergent cultures come in contact, ________ occurs. A) power distance B) culture shock C) cultural collision D) group membership
Answer: C
40) The pushback against democracy has powered a rise in totalitarianism, a situation that is likely to include which of the following? A) increasing adoption of the principles of the rule of law B) growing demands worldwide for greater fairness and justice in legal proceedings C) increasing adoption of the principles of the rule of man D) suppression of state-control in the direction of legal activities
Answer: C
49) Countries often use local content regulations to determine the proportion of the product that must be made in the local market versus made outside of the local market in order to ________. A) maximize product safety B) ensure a cultural fit C) favor domestic companies D) relieve production pressures on local companies
Answer: C
5) The principle that an individual has the freedom to pursue his or her interests is called ________. A) socialism B) totalitarianism C) individualism D) collectivism
Answer: C
50) Some key ________ factors in a company's international business external environment are its product strategy and access to resources. A) geographic B) political C) competitive D) behavioral
Answer: C
52) If an MNE convinced a popular priest that its vitamin-enriched soft drink would benefit parishioners' health, the MNE would be using ________ to help bring about change. A) participation B) reward sharing C) an opinion leader D) materialistic motivation
Answer: C
56) Garnet Footwear suffered significant financial losses and had to close its foreign operations. The dissolution process took six months and cost four percent of the firm's estate. Where was Garnet's foreign operations most likely located? A) Ecuador B) France C) Japan D) China
Answer: C
6) Proponents of ________ argue that individual interests are not as important as the welfare of the group. A) pluralism B) capitalism C) collectivism D) individualism
Answer: C
6) The shifting of national borders has most likely created which of the following situations for international business? A) It has left rural residents more isolated from technology. B) It has complicated the understanding of behavioral factors affecting business. C) It has increased physical barriers to exporting. D) It has slowed communications between a company's headquarters and foreign operations.
Answer: C
60) A flag of convenience is ________. A) the declaration that a product is made in a country that has easier legal access to a given foreign market B) a designation for products originating within a particular trading group C) the registration of a shipping company in a country that charges low taxes D) the indication that a shipping organization can sail in international waters
Answer: C
20) Although English is referred to as the "international language of business,"________. A) it is less frequently used than French in international business B) there is a growing disagreement over which version of English to use, e.g. British, American, or Australian C) companies headquartered outside English-speaking countries all use their official language as their operating language D) monolingual English speakers may experience more difficulty in the future in communicating on a worldwide basis
Answer: D
21) Which of the following is most likely a characteristic of a "partly free" country, such as Guatemala, Kenya, or Malaysia? A) strict religious constraints B) fair election procedures C) respect for civil liberties D) weak rule of law
Answer: D
22) Which of the following is NOT one of the three main reasons affecting international business for governments to cooperate with each other? A) to attack problems jointly that one country acting alone cannot solve B) to deal with issues that lie outside the territory of any nation C) to gain reciprocal advantages D) to establish a common language
Answer: D
26) Which of the following is a condition that powered the worldwide spread of democracy from 1970 onward? A) Totalitarian regimes delivered acceptable economic progress to their populations. B) Economic advances caused contentment among the working class and minimized the need to push for democratic reforms. C) Many groups were able to successfully challenge the legitimacy of democratic systems. D) Information and communications technologies broke down the ability of the state to control access to uncensored information, especially that from foreign sources.
Answer: D
26) Which of the following is the LEAST likely reason that small countries worry about overdependence caused by globalization? A) A large country on whom they depend may pressure them on political matters. B) A large international firm may dictate its terms of operations in a small country. C) A large company may exploit legal loopholes to avoid tax payments. D) A large country may substantially increase its demand for the small country's production.
Answer: D
27) Based on the hierarchy-of-needs theory, in which of the following would fulfillment of lower-order needs be the best motivator? A) wealthy countries B) Protestant countries C) high femininity countries D) very poor countries
Answer: D
33) The ________ of a country specifies the rules that regulate behavior, the processes by which laws are enforced, and the procedures used to resolve grievances. A) political system B) political philosophy C) philosophical orientation D) legal system
Answer: D
35) Which of the following is NOT a component of modern legal systems? A) constitutional law B) criminal law C) commercial law D) private law
Answer: D
36) 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. A) pragmatic B) idealistic C) fatalistic D) high-context
Answer: D
39) A U.S. firm with manufacturing facilities in Nigeria will most likely be faced with a ________ legal system. A) civil B) common C) customary D) mixed
Answer: D
40) An example of a Japanese service export is a visit by a ________. A) Japanese citizen to Disneyland in the United States B) Japanese citizen to the Japan Pavilion at Epcot Center in the United States C) U.S. citizen to the Japan Pavilion at Epcot Center in the United States D) U.S. citizen to Tokyo Disneyland in Japan
Answer: D
42) Jack, an American accounts manager, is preparing a presentation for a group of Japanese businesspeople. Jack's presentation would be most effective if he ________. A) told an opening joke to put everyone at ease B) used slang to create an informal atmosphere C) used long words to impress his counterparts D) budgeted extra time for translation and clarification
Answer: D
44) A multinational enterprise (MNE) is best defined as a firm ________. A) that is a member of the Fortune 500 B) with foreign business partners C) involved in global franchising D) with foreign direct investments
Answer: D
44) Rockwall Enterprises is planning to expand the firm by establishing operations outside of the U.S. In which of the following countries would Rockwall most likely be able to establish operations most quickly? A) Japan B) Brazil C) Germany D) Australia
Answer: D
48) The approach a company takes when it bases foreign operations on an informed knowledge of its organizational culture along with home- and host-country needs, capabilities, and constraints is called ________. A) polycentrism B) ethnocentrism C) neocentrism D) geocentrism
Answer: D
49) A firm that concentrates on national cultural differences in terms of averages is more likely to ________. A) underestimate market demands B) increase political risks C) seek cultural collision D) overlook outliers
Answer: D
53) U.S. companies monopolize much of the international entertainment media, which largely portrays U.S. products and lifestyles as glamorous and appealing. This situation would most likely be used as an example of ________. A) the stronger work ethic typical of developed countries B) the spread of high-context cultures C) cultural fragmentation D) cultural imperialism
Answer: D
54) All of the following are reasons piracy has occurred EXCEPT ________. A) technology allows copyrighted material to be reproduced cheaply without much loss of quality B) some countries offer little protection for certain products C) in some cultures, people see little morally wrong in buying counterfeit goods D) the protection of intellectual property rights varies little from country to country
Answer: D
54) The view that globalization is inevitable is most likely based on the belief that ________. A) international organizations will replace nation-states B) protesters against globalization will be persuaded to change their views C) people want more global homogeneity of cultures D) technical advances in transportation and communications are highly pervasive
Answer: D
55) American hamburgers, Japanese sushi, Italian pizza, Mexican tacos, and Middle Eastern pita bread are now commonly found in most countries. This best supports the argument that ________. A) although visible expressions of culture are becoming homogenized, basic differences in societal values remain strong B) globalization fulfills lower order needs in Maslow's hierarchy C) cultural imperialism is increasingly widespread D) cultural hybridization is occurring
Answer: D
56) In the opening case on the Java Lounge in Saudi Arabia, Saudi businessmen engaged in chit-chat while drinking coffee at a café during the conduct of business. Which of the following was the most likely reason for their behavior? A) They are fatalistic, believing that the business outcome was predetermined. B) Their religious convictions kept them from discussing business over alcoholic drinks. C) They come from a polychronic culture that prefers to multitask. D) They come from a high-context culture in which small talk and seemingly unrelated information is important to decision making.
Answer: D
58) Harmon Clothing has a production facility located in Venezuela. Recently, Harmon has been unable to arrange for overseas loans due to the burdensome regulatory policies of the Venezuelan government. Which type of political risk is Harmon most likely experiencing? A) catastrophic B) distributive C) procedural D) systemic
Answer: D
58) The owner of a U.S. football team and the owner of a Canadian hockey team purchase a British soccer team. This is an example of a ________. A) royalty B) portfolio investment C) turnkey operation D) joint venture
Answer: D
7) In a country that emphasizes collectivism, ________. A) the interests of the individual are more important than the interests of the state B) one person or political party exercises absolute control over the political and economic systems C) the needs of society and the needs of individuals are treated as equally important D) the needs of society take precedence over individual freedoms
Answer: D
9) According to the A.T. Kearny/Foreign Policy Globalization Index, countries ________. A) tend to be ranked similarly on all four dimensions B) are more globalized on the political dimension than on personal contact C) that are large in land mass and population are less globalized than small countries D) sometimes rank high on one dimension and low on another
Answer: D
71) Import restrictions are becoming less important because consumers increasingly want to buy goods and services produced in their own countries. T OR F?
Answer: FALSE
71) National origin is an acquired group membership. T or F?
Answer: FALSE
73) According to EIU research, 37% of the world's population live in full democracies. T or F?
Answer: FALSE
74) In a country with a high masculinity score, people have a tendency to feel sympathy towards individuals who are unemployed or homeless. T or F?
Answer: FALSE
74) It is rare for a new company to locate its operations near competitors and suppliers. T OR F?
Answer: FALSE
74) The Washington Consensus promotes democracy, freedom, the rule of man, and human rights. T or F?
Answer: FALSE
75) Governments primarily cooperate through treaties to create a global division of labor. T OR F?
Answer: FALSE
76) In collectivist cultures based on kinship, security and social needs are met more effectively in the workplace than at home. T or F?
Answer: FALSE
81) When dealing in business with people from another county, it is good to use slang and tell jokes to put everyone at ease. T or F?
Answer: FALSE
82) The production of goods by a French company in Italy for sale in Italy is an example of an Italian merchandise import. T OR F?
Answer: FALSE
82) When a company does business in another country whose official language is the same as the company's home country, employees can assume that although some spellings are different that words will mean the same thing. T or F?
Answer: FALSE
88) Change agents intentionally cause or accelerate social and cultural change. T or F?
Answer: TRUE
88) Intellectual property refers to the creative ideas, innovative expertise, or intangible insights that give an individual, company, or country a competitive advantage. T or F?
Answer: TRUE
88) Managers need to understand not only the laws of countries where they operate, but also how those laws are enforced. T OR F?
Answer: TRUE
89) A company with limited resources is more likely to achieve national distribution within a small country than within a large country. T OR F?
Answer: TRUE
89) Geocentrism is the preferred approach to international business practices for most global firms. T or F?
Answer: TRUE
90) The fact that a company is the market leader in one country is no guarantee that it will be the leader in another country. T OR F?
Answer: TRUE
