IB chapter 2

Technological advances have helped make internationalization affordable for all sizes of firms.

True

The 2011 "Arab Spring" in the middle east was facilitated in large part by social media.

True

The initial phase of globalization was triggered by the introduction of railroads and ocean transport.

True

globalization of production activities and services is a dimension of market globalization.

false

Firms expand abroad mainly as a reaction to market globalization.

False

Industrialization implies that emerging markets are increasing their dependence on low-cost labor.

False

Nationalization refers to the gradual integration and growing interdependence of national economies.

False

The Great Depression marked the beginning of the second phase of globalization.

False

The Internet has increased the cost of transmitting voices, data, and images.

False

The end of the Cold War in 1989 hindered the forces of market liberalization in Eastern Europe.

False

The third phase of globalization was triggered by the development of personal computers, the internet, and Web browsers.

False

While the number of containers transported internationally has decreased, the cost of transportation has increased dramatically.

False

Falling trade barriers are facilitated by the WTO

True

Firms are sometimes motivated to enter new markets because of unfavorable conditions in the home market, such as regulation or declining local industry sales.

True

Firms often internationalize proactively, in order to pursue new markets, find lower-cost inputs, or obtain other advantages.

True

Stella manages the production team at Camden Inc., a manufacturer of heavy industrial machinery in the United States. She needs to decide if her firm should export finished products or manufacture abroad. Which of the following would most likely help her evaluate the best alternative in this instance? A. What is the gross national income of the United States? B. What are the costs of transporting raw materials, components, and finished products? C. Is employee empowerment culturally favored in the United States? D. What is the average annual rate of employee turnover in the manufacturing industry?

B. What are the costs of transporting raw materials, components, and finished products?

As market globalization intensifies, ________. A) the gap between the rich and the poor shrinks rapidly B) the distance between consumers worldwide expands C) individual firms respond to the challenges and new advantages that it brings D) firms internationalize solely as a reaction to it

C) individual firms respond to the challenges and new advantages that it brings

________ refers to the sequence of value-adding activities performed by the firm in the course of developing, producing, marketing, and servicing a product. a) a value chain b) a supply chain c) value gap d) value migration

a value chain

Early multinationals from the third phase of globalization originated in _______ a) Japan b) China c) India d) Brazil

a) Japan

________ are the most transformative technology in developing economies. a) Mobile phones b) Televisions c) Intranets d) E-mails

a) Mobile phones

Which of the following drivers of market globalization is Lavonne's research most likely to recognize as the factor responsible for the company's expansion to Japan? a) integration of world financial markets b) the highly conservative nature of the Japanese economy c) the rise of monopoly markets in Japan d) reduction of barriers to investment

a) integration of world financial markets

Which of the following statements is true of technological advances? a) it provides a means for globalization to happen b) It discourages internationalization c) it inhibits the growth of new products and services. d) it helps consolidate traditional values among consumers worldwide.

a) it provides a means for globalization to happen

The third phase of globalization was triggered by a) the end of WWII b) the invention of electricity c) the end of WWI d) the Great Depression

a) the end of WWII

Which of the following is an example of a supranational institution? a) The World Intellectual Property Organization b) the UNICEF c) the Red Cross d) the World Trade Organization

d) the World Trade Organization

The representative from Business C is most like from a) Italy b) Brazil c) US d) France

b) Brazil

Internationalization Conference (Scenario) At a conference on business internationalization, representatives of three different businesses meet to discuss a joint venture between their companies. Business A is located in a country that internationalized during the second phase of globalization. Business B is based in a country that internationalized in the third phase of globalization. Business C is located in an emerging market country. The representative from Business A is most likely from a) China b) Uk c)Mexico d) Brazil

b) Uk

Firms that are more successful at global competition display each of the following qualities EXCEPT a) identifying foreign market opportunities aggressively b) approaching internationalization from a reactive standpoint c) actively pursing partnerships with foreign firms d) focusing intensively on building organizational capacities

b) approaching internationalization from a reactive standpoint

Companies strive to drive down prices ________, among other strategies. a) by centralizing manufacturing and procurement to a single source b) by standardizing what they sell c) by thwarting the growth of supranational institutions d) by discouraging competition

b) by standardizing what they sell

The globalization of finance ______________. a) enables companies to minimize offshoring b) contributes to firm's abilities to develop and operate world-scale production and marketing c) discourages Innovation d) discourages free international exchange of goods and services

b) contributes to firm's abilities to develop and operate world-scale production and marketing

Government have facilitated economic integration by _________________ a) increasing barriers to international trade and investment b) creating supranational institutions to further reduce trade barriers c) adopting different monetary and fiscal policies within the same regional economies integration blocs d) standardizing consumer lifestyles and preferences

b) creating supranational institutions to further reduce trade barriers

The science and process of creating and using information resources is known as _______________. a) information design b) information technology c) psychographics d) demographics

b) information technology

The __________ phase of globalization began around 1900 and was associated with the rise of electricity and steel production. a) first b) second c) third d) fourth

b) second

___________ marked the end of the 50 year Cold War and smoothed the integration of former command economies into the global economy. a) The end of WWII b) The Bolshevik Revolution in Russia c) Free-market reforms in China and the former Soviet Union d) China's move to join the WTO

c) Free-market reforms in China and the former Soviet Union

which of the following reflects the major contributions of GATT to globalization? a) It instituted strict controls on international currencies. b) It simplified patent and copyright laws. c) It reduced barriers to international trade and investment d) It eliminated the divide between the rich and the poor.

c) It reduced barriers to international trade and investment

Overtime, the GATT evolved into the ______ a) World Bank b) International Monetary Fund c) World Trade Organization d) World Intellectual Property Organization

c) World Trade Organization

technological leapfrogging is defined as a) adopting new technology late in the hype cycle b) adopting new technology as soon as it is released c) bypassing certain stages of technology to come up with a radical innovation when upgrading to new products d) boosting demand artificially by postponing the sale of new technology in the market

c) bypassing certain stages of technology to come up with a radical innovation when upgrading to new products

Which of the following is characteristic of globalization of markets? a) lack of skilled labor b) conservatism c) declining trade barriers d) diminishing gap between the rich and the poor

c) declining trade barriers

In terms of international business, market globalization can be viewed as a ________. a) consequence of a strong emphasis on traditional values worldwide b) consequence of the loss of national sovereignty c) driver and consequence of firm-level internationalization d) prime cause of rising diseconomies of scale in emerging economies

c) driver and consequence of firm-level internationalization

Which of the following is a driver of globalization? a) greater emphasis on proactive internationalization b) internationalization of firm's value chain c) integration of world financial markets d) globalization of services

c) integration of world financial markets

Global Operations Report (Scenario)As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with preparing a comprehensive report on the company's global operations over the past twenty years. Deva assigns three strategists to collaborate on the History portion of the report, which details the rationale behind Pax's decisions to expand operations in particular areas. Rashid Ahl focuses on early expansion to China, which occurred after China began to make its market more accessible to foreign companies. Markus Teller focuses on Pax's expansion to Eastern Europe, which was motivated by increased industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan, which happened when the company's commercial bank expanded its service network to Asia. To Which of the following drivers of market globalization is Marcus most likely to attribute his company's expansion to Eastern Europe? a) advances in technology b) integration of world financial markets c) market liberalization d) industrialization

c) market liberalization

In describing the main driver behind Pax's expansion to China, Rashid is most likely to emphasize _______ a) high rate of employee attrition in China b) advances in technology c) reduction of barriers to trade d) integration of world financial markets

c) reduction of barriers to trade

The free movement of capital around the world is also known as _________________ a) bond-based debt financing b) contagion c) the globalization of capital d) common market arrangement

c) the globalization of capital

Convergence of consumer preferences has led to an enhanced emphasis on standardization which implies that ______________ a) the consistently rising prices of consumer goods have led to a demand vacuum in the market b) the distance between consumers worldwide has increased with the advent of technology c) the raw materials, parts, and components sourced by professional buyers are very similar in design and structure d) the globalization of services has adversely affected the quality of service worldwide

c) the raw materials, parts, and components sourced by professional buyers are very similar in design and structure

The fourth phase of globalization is characterized by ________. a) the rise of railroads and ocean transport b) the reduction of barriers to trade by Western industrialized countries c) the initiation of the Marshall Plan to reconstruct Europe d) the enormous growth of cross-border trade and investment

d) the enormous growth of cross-border trade and investment

Which of the following benefits of IT is specific to smaller firms? a) It mitigates organizational anarchy b) It creates competitive advantages by encouraging organizational leadership c) It aids in the consolidation of market monopolies d) It allows firms to design and produce customized products they can target to narrow, cross-national market niches.

d) It allows firms to design and produce customized products they can target to narrow, cross-national market niches.

The representative from Business B is most like from a) Panama b) Hungary c) Uganda d) Japan

d) Japan

Financial market integration makes it easier for internationally active firms to ____________ a) nationalize manufacturing industries b) minimize offshoring c) increase tariffs on the import of automobiles and industrial machinery d) engage in foreign currency transactions

d) engage in foreign currency transactions

The fourth phase of globalization ___________ a) is characterized by the rise of electricity and steel production b) is characterized by the rise of MNEs from Japan c) witnessed the Bretton Woods Conference of twenty-three nations in 1947 that led to the General Agreement on Tariffs and Trade d) facilitated the globalization of the service sector in such areas as banking and retailing

d) facilitated the globalization of the service sector in such areas as banking and retailing

the first phase of globalization was characterized by the a) rise of steel production b) rise of SMEs c) dominance of MNEs in the agricultural industry d) growth of railroads

d) growth of railroads

Regional Economic Integration blocks______________ a) reduce trade and investment barriers b) reduce private investments c) adopt a hostile stance toward the private sector d) hinder the cross-border flow of factors of production

d) hinder the cross-border flow of factors of production

Which of the following is a societal consequence of market globalization? a) greater emphasis on proactive internationalization b) internationalization of firm's value chain c) new risks and instant rivalry from foreign competitors d) offshoring and the flight of jobs

d) offshoring and the flight of jobs

Technological advances have contributed to manufacturing by a) promoting traditional lifestyles and values b) reducing cross-border flow of factors of production c) promoting nationalization d) reducing production costs

d) reducing production costs

A value chain is _______________ a) the sequence of administrative policies implemented to promote economic integration by a government b) the process of relocating manufacturing and production to valuable and cost-effective locations abroad c) the process of integrating national economies during a financial crisis d) the sequence of value-adding activities performed by a firm in the course of developing, producing, marketing, and servicing a product

d) the sequence of value-adding activities performed by a firm in the course of developing, producing, marketing, and servicing a product

Offshoring and the flight of jobs are prime drivers of market globalization.

false