INTB 3355 MIDTERM I

The EMU (European Monetary Union or the Economic and Monetary Union) has established the euro, a currency that is used in ...

16 of the member-countries.

The main difference between a free trade area (FTA) and a customs union is that in a customs union, there is ...

A common external tariff.

E. T. Hall suggests that to learn another culture, you have to undergo extensive training or spend ...

A lifetime in the other culture.

As we use frameworks to help us understand culture, it's important to remember that frameworks ...

Are comparative, with our own culture the reference point.

In a free trade area, members drop internal tariffs. External tariffs ...

Are maintained independently by each member.

Hofstede's long-term orientation tends to be found in ...

Asian cultures. Brazil.

The specific-diffuse dimension looks at ...

Attitudes toward public/private lift.

NAFTA Precursor

Canada-US Free Trade Agreement

If people belong to strong, cohesive in-groups that look after them in exchange for loyalty, the culture is likely to be

Collectivist

Another term Hofstede uses to describe long-term orientation is

Confucian dynamism.

Hall's high and low context is based upon communication styles, and specifically on the role of

Context

The WTO exists to ...

Establish and help implement rules of trade among nations in order to increase trade flows.

When you assert that a certain aspect of your own culture is superior, you are probably exhibiting ...

Ethnocentric behavior.

A culture's sense of beauty and taste ...

Expressed in the culture's art and music, and important for international managers to know about.

T/F: "When in Rome, do as the Romans do" is a solid, moral guideline.

False

T/F: A culture's aesthetics is the sense of moral behavior taught to the young.

False

T/F: ASEAN, whose initial goal was political, to foster peaceful relations among members, includes China as its core member.

False

T/F: All the EU members use the euro, and thus have given up part of their national sovereignty to the EU.

False

T/F: Although India is a member of the WTO and has benefited greatly from increased trade as a result of WTO agreements, China is not yet a member.

False

T/F: Although some business areas are affected by culture, accounting and finance are objective, and thus, universal.

False

T/F: Although the EU can influence the practices of businesses located in non-EU member countries, Microsoft has been able to maintain business in the EU much as it conducts business in the U.S.

False

T/F: Among trading blocs, the EU has the largest GDP per capita.

False

T/F: An important assumption that the IMF makes is that a strong organization with rules and penalties for their violation is necessary to support trade.

False

T/F: Anthropologist E.T. Hall suggests that, to learn another culture, you need to spend two weeks in it with a training program.

False

T/F: As discussed in the chapter, institutions are organizations constructed to create jobs for government employment initiatives.

False

T/F: Business makes few costly mistakes in product introductions into foreign markets.

False

T/F: By and large, the UN record of facilitating business transactions has been minor.

False

T/F: Economic cooperation often begins with a common market as in the case of the EU.

False

T/F: We are each born with a unique culture.

False

T/F: When operating in other cultures, if we realize that, underneath it all, we are all the same, we will be fine.

False

This type of institution operates through laws and regulations, with coercion as the regulative mechanism.

Formal

The main deliberative body of the UN is the ...

General Assembly.

Hall suggests the communication tends to be implicit and indirect in

HC/High context.

The only cultural framework we describe in this text that is based on communication styles is

Hall's (high and low context).

At the end of World War II, the UN called for the conference that set up the World Bank and the IMF. This conference was ...

Held at Bretton Woods.

Most developed nations have ...

High individualism.

Economic integration often progresses ...

In stages, from free trade area to customs union to common market.

Two basic ways to understand the role of leadership are as providing direction for a collection of individuals and as ...

Integrating a group.

The World Bank's two major institutions are the International Development Association and the ...

International Bank for Reconstruction and Development (IBRD)

The United Nations is probably the best-known among ...

International organizations.

In high context cultures, face-to-face relationships tend to be important and ...

Knowledge is situational. Decisions focus around personal relationships. Long term.

Monochronic cultures tend to be ...

LC/Low context.

The geographical area that receives the most World Bank lending is ...

Latin America and the Caribbean.

Culture plays a significant role in the disciplines of ...

Leadership, accounting, finance, marketing, human resources, and production.

Is the WTO's idea of "fair competition" really a code phrase for free trade?

Not really. Trade relationships among nations can be exceedingly complex, and the WTO supports fait competition, which may mean freer trade rather than free trade.

Facebook is a(n) ...

Organization based on free association.

In an affective culture (Trompenaars), emotions are seen as ...

Responses to be freely displayed.

The WTO is the only international organization designed to establish and help implement ...

Rules of trade among nations.

The IMF initially played a central role in ...

Setting fixed exchange rates among nations' currencies with an established par vale based on gold.

Lack of folklore knowledge is illustrated by ...

Smirnoff's use of a Che Guevara image in Cuba because Che is a national hero there. Apple's use of an image of the Dalai Lama, because it offended China, where the government sees the Dalai Lama as a political dissident.

Because of their close linkage, sociologists often combine the terms ...

Social and cultural.

The characteristics of Hofstede's long-term orientation include

Social order and hierarchical relationships.

The EU's impact on international business is ...

Substantial, since EU standards, especially in the areas of ecology and sustainability.

The common interest of all nations in a workable international exchange rate system transcends their conflicting international interests is the premise of ...

The International Monetary Fund (IMF)

The idea that WTO members treat all members equally is known as ...

The MFN/most favored nation principle.

The UN's International Court of Justice (ICJ) is also known as ...

The World Court.

The EU began as a common market for ...

The coal and steel industries.

Referring to Hall's high and low context framework, in a high context culture ...

The context carries much of the communication.

Strictly speaking, the impact of the EU on the WTO could be said to be negative, since ...

The favored trade relationships among EU members are not extended to non-member countries, so the EU undercuts the WTO.

Latin and Asian countries' scores on Hofstede's power distance dimension are relatively large and relatively low on

The individualism dimension.

The Council of European Union, the primary policy-setting institution of the EU, is composed of ...

The member states' ministers who represents the specific area being discussed.

IDA's purpose is to loan to ...

The poorest nations.

ASEAN began as a defensive alliance of 10 Asian nations concerned about ...

The spread of communism in their region.

T/F: An example of an informal, cognitive institution would be the celebration of Halloween.

True

T/F: Cultural attitudes toward change can influence the acceptance of new production methods.

True

T/F: Facebook is a social institution based on free association.

True

T/F: Institutions are constructed to provide meaning and stability to social life, regulate the relations of individuals to each other; and limit behavior of individuals and firms.

True

T/F: Low context cultures such as the U.S. have explicit communication patterns.

True

Hofstede's measure of the amount of effort a society puts into ordering the environment and avoiding ambiguity is termed ...

Uncertainty avoidance.

The benefits of liberalized trade so far have been ...

Uneven for developing and developed economies.

The Trompenaars dimension that describes a society whose rules regulate behaviors for all members, applied evenly is ...

Universalist.

Monochronic time is best illustrated by ...

University scheduling patterns.

Informal institutions are composed of sets of ...

Voluntary agreements.

In order to really understand another culture,

both the spoken and unspoken languages are important to understand.

According to Trompenaars, a culture's attitude toward the environment can range from ...

control over the environment to harmony with it.

Uncertainty avoidance describes man's search for Truth, according to Hofstede, because ...

it describes how comfortable the culture's members feel in an unstructured situation.

The presence of tattoos suggests social outcasts universally, based on ...

nothing, because this statement is not accurate.

Leadership may be influenced by sociocultural forces, and its model might be ...

paternalistic, heroic, integrative or directive.

An achievement culture is one in which members are ...

rewarded for what they do, what they have accomplished, so what they are.

Kinship and free association are ...

social institutions found in all societies, and categorized by the conditions of their formation.

Gift giving in many cultures is marked by ...

specific etiquette and meaning that may be markedly different from what the international manager knows in the home culture.

That almost everyone in the U.S. self-identifies as middle class suggests that

the U.S. measures small on the power distance dimension.

Accounting controls directly relate to a culture's assumptions about ...

the basic nature of people.

Individualism-collectivism measures ...

the degree to which people in the culture are integrated into groups.

The masculine- feminine dimension is about

the gap between men's and women's roles in the culture.

The Doha Development Agenda is ...

An extended conference of the WTO initially convened in Doha.

While Trompenaars was trained as an economist, Hofstede and Hall were trained as

Anthropologists

Production managers have discovered that their introduction of new production methods across cultures is affected by varying attitudes toward ...

Change.

Trompenaars' particularist dimension describes a culture in which ...

Context is considered when rules are applied. Relationships rather than rules regulate behaviors.

Topography

Creates differences in economics, cultures, politics, social structures, etc.

IMF quotas are determined by the relative size of a nation in the global economy and ...

Determine the weight of the nation's voting in the IMF. Determine how much a nation can borrow from the IMF. Are the nation's "dues" to the IMF.

The first principle of the WTO's five basic principles is trade without ...

Discrimination.

The purpose of the International Financial Corporation (IFC) is to invest in companies and financial institutions in developing countries in order to build ...

Domestic capital markets.

T/F: Culture include everything objective, and religion contains values, and is thus, not a part of culture.

False

T/F: Low context cultures tend to be polychronic, with a lot going on at one time.

False

For countries where people are relatively loosely connected and tend to focus on themselves and their immediate family, Hofstede would describe them as ...

Individualistic.

Culture is a group of shared world views, social rules, and interpersonal dynamics that is ...

Learned, interrelated, and shared.

Climate

Meteorological conditions (temperature, precipitation, wind) Climatic conditions: explain differences in human and economic development.

The IBRD is a major institution of the World Bank whose function is to loan to ...

Middle income and creditworthy poor nations.

In HC cultures, time tends to be ...

Polychronic

In developing economies, informal institutions tend to play a greater role than in developed economies, possibly because ...

The developing economies have more ambiguity and lack formal institutions by definition, so informal institutions step into the breach. Informal instituions émerge to give order to the instructed, chaotic environment.

T/F: Material culture includes all human-made objects.

True

T/F: When we use cultural frameworks to build our understanding of another culture, we use our own culture as an implicit reference point.

True

T/F: Your neighbor's business is cutting down an acre of first-growth, virgin forest and planting a lawn and garden beds at their HQs. You are likely to be in an Anglo culture where domination of nature seems normal.

True

Hofstede's masculinity-femininity dimension suggests that, as an international manager, you might well ...

find men and women equally ready to assume leadership roles in a feminine culture.

In a small power distance culture,

first names are likely to be used in the office because the ideal is equality.

The WTO has made progress on trade-related intellectual property rights (TRIPS). An example of this progress is:

An agreement that property tights should not take precedence over public health.

The Chinese concept of guanxi is an example of ...

An informal, cognitive institution.

Location

Builds political and trade relationships

T/F: Examples of informal, normative institutions would include local town/city governments and the U.S. government.

False

T/F: Feminine cultures in Hofstede's dimensions care about relationships and are not focused on business success. It is quality of life that matters.

False

T/F: Formal institutions operate through laws and regulations. They require members to make a written commitment.

False

T/F: Gift giving across cultures is a simple kindness and need not be complicated with attempts to understand. The act of generosity says everything in and of itself.

False

T/F: Hofstede's framework is based on social science theory.

False

T/F: In Hall's use, context is the irrelevant environment in a communication act.

False

T/F: In Human Resources, the American employee protection laws allow an American company to be successful on the cultural front in all foreign labor markets.

False

T/F: Informal cognitive institutions are not important to international managers because such managers localize their hiring, and so they can draw on local talent.

False

T/F: Leadership is universal; all people want to be led.

False

T/F: Leadership traits may vary by some culture, but underneath, they build on the idea that all people want to be led and directed.

False

T/F: Permanent members of the UN Security Council vote on Security Council measures and only the Security-General of the UN, Ban Ki-moon, has veto power.

False

T/F: Recently, regional trade agreements have grown a trend that may be seen to strengthen the WTO, according to the text.

False

T/F: Religion is not an important aspect of culture in countries that are secular and split the church from the state.

False

T/F: Spoken language does not demarcate culture, but body language does.

False

T/F: The Bretton Woods Conference established the European Union currency, the euro.

False

T/F: The Doha Development Agenda is an extended development plan for Doha, Qatar.

False

T/F: The EU has been unsuccessful at harmonizing customs and tax formalities within their borders.

False

T/F: The EU is administered by the European Commission, a group composed of 27 commissioners, elected at the EU-level.

False

T/F: The International Court of Justice (ICJ) handles all cases brought forward by any person or organization.

False

T/F: The UN General Assembly is the main staff organization responsible for the UN administration.

False

T/F: The WTO supports trade with discrimination as a basic right of trading nations.

False

T/F: The World Bank funds infrastructure projects in developed countries.

False

T/F: The World Bank is made up of one large institution, IBRD.

False

T/F: The family is the basic unit of institutions based on free association.

False

T/F: The following is an area in which the UN plays a significant role for international business: loaning seed money for entrepreneurial start-ups in developed nations.

False

T/F: The specific-diffuse dimension has to do with social patterns for child rearing.

False

T/F: The unspoken language cannot tell the international manager something that the spoken language does not.

False

T/F: There are few cultural misunderstandings in the discipline of marketing.

False

T/F: There are three main classes of social institutions, based on the conditions of their formation: family, kinship and free association.

False

T/F: Trading blocs always bring cost savings to international firms.

False

T/F: Trompenaar's achievement vs. ascription dimension describes social status based on what one does or who one is. The U.S. is a culture in which people build who they are through work, so its social status tends to be based on ascription.

False

T/F: Trompenaars' dimension of individuals vs. communitarianism differs greatly from Hofstede's individualism-collectivism dimension.

False

T/F: Trompenaars' dimension of universalism vs. particularism measures whether rules or rewards regulate behaviors.

False

Regional trade agreements such as NAFTA impact the WTO ...

Negatively, because they undercut the non-discrimination principle of the WTO.

The major function of the World Bank is to serve as a ...

Non-profit banking cooperative for its members to meet development needs.

Under new institutional theory, institutions can be categorized as formal and informal, and the informal institutions can be further categorized as ...

Normative and cognitive.

When the context is considered, when we consider relationships as we make decisions about the application of rules, we are in a ...

Particularist.

The extent to which members of a society expect and accept power to be distributed unequally is termed by Hofstede as ...

Power distance.

T/F: Cognitive institutions are important to the international manager because these institutions help the manager understand the schema operating in their international environments and are easily missed or misunderstood by the non-native, so can easily lead to misunderstandings.

True

T/F: Hall's high and low context framework is based upon communication styles.

True

T/F: Hofstede describes his Confucian dynamism dimension as dealing with Virtue regardless of Truth.

True

T/F: Hofstede's individualism-collectivism dimension measures the degree to which people tend to be integrated into groups.

True

T/F: Human resources are influenced by cultural values because values are the foundation of motivation and evaluation.

True

T/F: In a customs union, common external tariffs are added to an existing FTA, as found in the Southern African Customs Union and Mercosur.

True

T/F: In high context cultures, people tend to form long-lasting relationships that endure over time.

True

T/F: International business managers need to be able to communicate across cultural borders, even if they don't speak foreign languages.

True

T/F: International institutions provide nations the opportunity to build multilateral solutions, and thus make significant contributions to international stability.

True

T/F: Kofi Annan, former Secretary General of the UN, observed that we can master our common destiny only if we face it together, and that is why we have the UN.

True

T/F: Material culture describes how people make things, who makes what, and why.

True

T/F: New institutional theory suggests that institutions be understood as collections of ruled and codes of conduct that limit behavior.

True

T/F: One of the significant differences between formal and informal institutions is how they gain compliance.

True

T/F: Some think that renewed focus on exchange rates would be a good path forward to the IMF, which is struggling with core issues related to its purpose.

True

T/F: The EU is a supranational body that has become, essentially, a regional government.

True

T/F: The International Finance Corporation (IFC) acts as an investment banker, arranging private risk ventures in developing countries.

True

T/F: The U.S. and Canada are small-power-distance countries because they expect a level playing field, socially, at least at the ideal level.

True

T/F: The UN Environment Program laid the groundwork for the Climate Change Convention, which led to the Kyoto Protocol.

True

T/F: The UN International Court of Justice hears cases that involve disputes between national governments.

True

T/F: The United Nations operates with voluntary agreements, so is essentially an informal institution.

True

T/F: The WTO has negotiated a TRIPS agreement whereby property rights do not take precedence over public health.

True

One danger of using the culture frameworks introduced in Chapter 4 is that if we apply them prescriptively, ...

We'll limit rather than enrich our perceptions. Our perceptions will become stereotypes, however sophisticated.

The Treaty of Rome, signed in 1957, established a common market for coal and steel for ...

West Germany, Belgium, the Netherlands, France, Luxembourg, and Italy.

In low context cultures ...

What you say tends to be what you mean, in that communication tends to be explicit.

Most African nations have their main trade relationships ...

With developed nations, often built on former colonial ties.

NAFTA maintains restrictions on the movement of labor, so it is ...

Within the scope of a free trade area.

In high context cultures, relationships tend to be

long term

Understanding the religious beliefs of foreign markets is ...

useful, because religions affect attitudes and beliefs across cultures.

Material culture includes ...

what people in the culture make, such as tools, art, everything material.

Musical tastes vary across cultures ...

which is why they need to be understood by marketers who use music in commercials.