International Management Quizzes

Debt financing can add value to a firm because ________. Select one: a. some governments allow firms to deduct interest payments from their taxable income b. it increases the cash flow toward the company compared to equity financing c. it limits the risk of bankruptcy d. it enables investors and firms to develop long term relationships through a joint business endeavor

a

Economic exposure results from exchange-rate fluctuations that affect ________. Select one: a. product pricing b. tariffs and duties c. brand identity d. research and development (R&D) strategies

a

International human resource management (IHRM) is usually more complex than domestic human resource management because ________. Select one: a. IHRM managers are required to demonstrate greater involvement in employees' personal lives b. IHRM managers are required to both hire and retain talent c. IHRM managers usually encounter routine situations akin to those present at home d. IHRM managers typically have a low exposure to risks

a

Which of the following is a typical advantage of franchising to the franchisee? Select one: a. Use of a well-known, recognizable brand name with the associated successful business model b. Minimum initial investments or royalty payments are usually applicable c. Franchisee holds superior bargaining power over the franchisor d. Reduced expenses as the franchisor provides supplies, equipment, and products

a

Which of the following is typically provided by the licensor in a licensing agreement? Select one: a. A combination of intellectual property and technical information and assistance b. A monetary down-payment plus royalties for all products sold locally c. A combination of a lump-sum payment and the intellectual know-how d. A storefront or facility and any marketing assistance to sell the product

a

________ tends to worsen culture shock. Select one: a. Inadequate cross-cultural skills b. The ability to speak more than one language c. The ability to effectively adapt to a new business environment d. Proximity to family

a

In which of the following situations is the employee considered a host-country national (HCN)? Select one: a. A Chinese MNE employs a Chinese citizen for its subsidiary in Singapore b. A Mexican MNE employs a Cambodian citizen for its subsidiary in Cambodia c. A French MNE sends a French employee to work in its Canadian subsidiary d. A Japanese MNE sends an American employee to work at its Hong Kong subsidiary

b

Under which of the following circumstances would an MNE most likely hire a parent-country national? Select one: a. When the host country environment is complex b. When the MNE wants to maintain strong control over its foreign operations c. When the MNE wants to benefit substantially from specialized knowledge available in the host country d. When the MNE wants to transfer specific knowledge or corporate culture from third countries to host-country operations

b

Which of the following is an example of licensing? Select one: a. A South-Korean consumer electronics manufacturer produces the screens for its brand of television and sends orders to a factory in China to manufacture the casing for the television. b. An American electronics firm has given the right to use a new process for manufacturing eBook readers to an electronics manufacturer in Canada. c. A U.K-based motorcycle manufacturer produces limited-edition customizations of its flagship model and sells them to customers around the world. d. An Indian automobile manufacturing company buys engines from a Japanese manufacturer for its environment-friendly cars.

b

Which of the following is characteristic of cross-border contractual relationships? Select one: a. They are governed by a contract that provides the focal firm with no control over the foreign partner. b. When compared to FDI, they are less susceptible to volatility and risk and tend to bring both parties a predictable stream of revenue. c. The focal firm attains maximum control by establishing a physical presence, and ownership of key assets, in the foreign market. d. They attract high attention and criticism to the focal firm because of the local perception of foreign entities.

b

Which of the following statements is true of international leasing? Select one: a. It is an arrangement in which a contractor supplies managerial know-how to operate a hotel, hospital, airport, or other facility in exchange for compensation. b. A major advantage for the focal firm (the lessor) is the ability to gain quick access to target markets, while putting assets to use in earning profits. c. It is a high-risk and high-cost method of entering a foreign market. d. The lessor transfers ownership of the property in exchange for a lump-sum payment.

b

Cross-licensing often occurs in dynamic industries such as semiconductor and pharmaceutical industries mainly in order to ________. Select one: a. divide the costs of production and marketing between competing firms b. decrease the likelihood of industrial spying and theft among firms c. avoid research duplication and build on each other's innovations d. protect the inventions and designs of small firms from large MNEs

c

Transaction exposure occurs when ________ are denominated in foreign currencies. Select one: a. wages and salaries b. bank loans c. accounts receivable d. financial reports Feedback

c

Which of the following best describes an expatriate? Select one: a. An employee who is a host-country national b. An employee hired on a temporary basis by an MNE c. An employee who is assigned to live and work in a foreign country for an extended period d. An employee who returns to his home country after a foreign assignment

c

Which of the following best summarizes the goal of cross-cultural awareness training for expatriates? Select one: a. It enables expatriates to cope with reverse-culture shock. b. It enables expatriates to significantly upgrade their technical skills. c. It enables expatriates to effectively communicate with local customers and employees and be sensitive to the host-country's culture. d. It enables expatriates to learn factual knowledge of the host-country

c

Which of the following is an example of franchising? Select one: a. A German automobile manufacturer opens an office in the Philippines for its customer care operations. b. A U.S.-based animation company allows factories in China to use their famous cartoon character on mugs and stationery. c. A U.S-based quick-service restaurant gives rights to another business to use its entire business system in exchange for compensation and royalties. d. An Italian clothing company opens manufacturing factories in China and Bangladesh to reduce manufacturing costs.

c

Which of the following statements is true of the global money market? Select one: a. A disadvantage for investors in the global money market is the ability to access a wide range of investment opportunities. b. It refers to the collective financial markets where firms and governments raise long-term financing. c. It refers to the collective financial markets worldwide where firms and governments raise short-term financing. d. The maturity period for the funding obtained from the global money market is over ten years.

c

Which of the following terms is used to refer to compensation paid to the owner of intellectual property? Select one: a. Dividend remittance b. Commission fee c. Royalty payment d. Trade credit

c

Debt financing comes from ________. Select one: a. selling shares of stock to investors b. capital contributed by the firm's founders c. personal savings of the firm's founders d. loans from financial intermediaries

d

Global equity market refers to ________. Select one: a. collective financial markets where firms can borrow money from banks or other financial intermediaries, or sell corporate bonds to individuals or institutions, to raise capital b. the international marketplace in which bonds are bought and sold, primarily through bond brokers c. the conversion of illiquid financial instruments, such as bank loans, into tradable securities, such as bonds d. stock exchanges worldwide where investors and firms meet to buy and sell shares of stock

d

Multilateral netting would enable an MNE with numerous subsidiaries to ________. Select one: a. transfer goods and services within the firm without paying host-country taxes b. channel funds from small subsidiaries to large ones without paying interest c. charge its subsidiaries as they exchange goods and services with the parent company d. consolidate intracorporate cash transfers and reduce transaction fees

d

________ are typically the largest proportion of workers hired abroad and usually work in manufacturing, assembly, basic service activities, clerical work, and other nonmanagerial functions. Select one: a. Parent-country nationals b. Third-country nationals c. Home-country nationals d. Host-country nationals

d

________ is a fee paid periodically to compensate a licensor for the temporary use of its intellectual property, often based on a percentage of gross sales generated from the use of the licensed asset. a. Duty b. Residual c. Tariff d. Royalty

d

________ is a formal process for assessing how effectively employees perform their jobs. Select one: a. Performance planning b. Performance guarantee c. Performance management d. Performance appraisal

d

Equity financing comes from either of two sources: (1) loans from banks and other financial intermediaries, or (2) the sale of corporate bonds to individuals or institutions. Select one: True False

false

MNEs with a global mindset encourage an ethnocentric orientation among managers and employees working abroad. Select one: True False

false

The purpose of capital budgeting is to defer payment for goods and services received from the parent firm. Select one: True False

false

Firms prefer host-country nationals when the host-country environment is complex and their specialized knowledge or local connections are required in the local marketplace. Select one: True False

true

In a master franchising agreement, the master franchisee has the right to sub-franchise to other independent businesses and thus assume the role of the local franchisor. Select one: True False

true

Turnkey contracting is an arrangement in which the focal firm or a consortium of firms plans, finances, organizes, manages, and implements all phases of a project abroad and then hands it over to a foreign client after training local workers. Select one: True False

true