MGMT International Management Exam 1

61) The difference between social responsibility and ethical behavior is a matter of scope and degree.

TRUE

64) The sales, debts, and resources of some of the largest multinational firms exceed the gross national product, the public and private debt, and the resources, respectively, of some nations.

TRUE

66) Improved customer attraction and retention; improved reputation; and improved employee recruitment, motivation, and retention are business benefits of corporate social responsibility.

TRUE

69) Ethical relativism adopts the local moral code of the country in which it is operating.

TRUE

70) In a globalized market economy, CSR has to be part of modern business.

TRUE

74) The biggest single problem for MNCs in their attempt to define a corporate-wide ethical posture is the great variation of ethical standards around the world.

TRUE

75) The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies from making illegal payments, other gifts, or political contributions to foreign government officials for the purpose of influencing them in business transactions.

TRUE

76) When managing interdependence, international managers must go beyond general issues of social responsibility and deal with the specific concerns of the MNC subsidiary--host country relationship.

TRUE

78) Under governmentalism, the government uses its policy-setting role to favor national interests, rather than relying on market forces.

TRUE

Which of the following subsystems is most likely to underlie both moral and economic norms? A) kinship system B) political system C) religious system D) education system

religious system

Which of the following Hofstede variables is associated with a strong sense of nationalism? A) individualism B) uncertainty avoidance C) masculinity D) femininity

uncertainty avoidance

13) Which of the following creates shared value?

C) reconceiving products and markets

Which of the following will help an international business manager cultivate trust in cross-cultural communications? A) staying away from conflicts that need to be addressed B) making communications as formal as possible and refraining from open communications C) socializing when possible and making friendly contacts with persons involved D) establishing trust and achieving hidden agenda without being conspicuous

C) socializing when possible and making friendly contacts with persons involved

The Topangins are a minority group in the Canary Island, with a set of preferences, attitudes, and taboos, distinct from that of the national culture. Therefore, they are often overlooked when foreign businesses choose to customize their products for the inhabitants of the islands. The Toro-Hessian community is an example of ________. A) cultural universal B) monoculture C) subculture D) stratification

C) subculture

52) Which of the following terms refers to adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today, while protecting, maintaining, and enhancing the human and natural resources that will be needed in the future?

C) sustainability

29) Which of the following is dedicated to monitoring issues of data privacy in Europe?

C) the EU Directive of Data Protection

35) One of the primary complaints about the Foreign Corrupt Practices Act is that the legislation ________.

A) puts U.S. firms at a competitive disadvantage

Which of the following is a characteristic of the Japanese ningensei style? A) reciprocity B) explicitness C) verbal agility D) immediate feedback

A) reciprocity

27) Which of the following is a primary focus of the research that is carried out by Transparency International?

A) relative prevalence of bribery in various spheres of people's lives

20) According to the international codes of conduct, the MNE behavior toward the public is related to ________.

A) technology transfer and environmental protection

Some countries rigorously enforce employee secrecy agreements in order to ________. A) protect a firm's intellectual property B) limit the influence of organized labor C) avoid litigation between competing firms D) strengthen international contract laws

A

The ________ method of analyzing economic risk attempts to measure statistically a country's ability to honor its debt obligation by assigning different weights to economic variables. A) quantitative B) qualitative C) checklist D) objective

A

The term ________ refers directly to the marketing and sales process via the Internet. A) e-commerce B) virtualization C) peer production D) database management

A

Under which law system must the details of the promises be written into a contract in order for it to be enforced? A) common law B) theocratic law C) civil law D) company law

A

Representatives of a multinational firm seek an interview with local government leaders in the Department of Commerce in Argonia with a view to assess the types of policies likely to be implemented. According to Mathis, this is an example of ________. A) qualitative approach B) quantitative approach C) checklist approach D) systemic approach

A

Changing the meaning of words by changing the inflection of your voice is an example of ________. A) paralanguage B) object language C) proxemics D) oculesics

A) paralanguage

Emerson is a global manufacturing company headquartered in St. Louis, Missouri. The company employs almost 130,000 workers at its 250 manufacturing facilities located on five different continents. Emerson manufactures a wide range of products including air-conditioning compressors, garbage disposers, and automotive parts. Emerson's Asian operations employ over 50,000 people at manufacturing facilities in Asia. Emerson needs to build a new manufacturing facility to produce automotive parts for cars manufactured in Detroit. Emerson executives are considering whether to build the new facility in China or in the United States. Which of the following, if true, supports the argument to build a new Emerson facility in China? A) The Chinese courts recently ruled in favor of an MNC in an intellectual property rights lawsuit. B) The Chinese Commonwealth network is investing large amounts of capital in China. C) China has increased Internet controls and blocked most international search sites. D) China is revoking its membership from the World Trade Organization.

A

If a foreign-based firm borrows money from a host country bank as a hedge against being forced out of operation without adequate compensation, the firm is managing political risk with ________. A) local debt financing B) position control C) development assistance D) adaptation

A

Intelligentia is attempting to do business in Bazania, but the Bazanian government purposely delays granting Intelligentia the necessary licenses and permissions required to conduct business in the country. Which of the following best describes this situation? A) creeping expropriation B) nationalization C) barriers to repatriation D) confiscation

A

Which of the following best explains why many foreign companies find operating in China a difficult experience from a business perspective? A) China lacks the financial and legal systems needed to support the country's foreign trade. B) China's local market is not large enough to support its extensive exporting to the United States. C) China's government mandates that workers receive high wages and benefits. D) China's exchange rate changes too frequently for U.S. businesses to compete.

A

Which of the following strategies is a firm most likely to use, if it initiates a joint venture with a local company in a foreign country, as a way of adapting to risk? A) equity sharing B) participative management C) localization of the operation D) development assistance

A

In ________ cultures, people tolerate many things occurring simultaneously and change plans frequently. A) polychronic B) low-contact C) material D) haptic

A) polychronic

________ is the process in which people look for the explanation of another person's behavior. A) Attribution B) Dissonance C) Miscommunication D) Affirmation

A) Attribution

Jerry, representing a U.S firm, is sent to Saudi Arabia to negotiate his company's contracts. Which of the following should Jerry keep in mind when negotiating with the Arabs? A) Business should be conducted personally and not via telephone or email. B) Arabs value time, and deadlines are to be kept at all costs. C) Be explicit and express doubts wherever the subject's feasibility comes into question. D) Get to the point when presenting and negotiating.

A) Business should be conducted personally and not via telephone or email.

________ is the process of translating the received symbols into the interpreted message. A) Decoding B) Transmitting C) Encoding D) Fragmenting

A) Decoding

58) ________ model provides a system for examining, measuring, and managing the drivers of corporate sustainability.

A) Epstein's

Which of the following is the most accurate statement concerning the role of context in cross-cultural communication? A) In high-context cultures, the message is implicit; in low-context cultures, the message is explicit. B) In high-context cultures, there is a low sensory involvement; in low-context cultures, there is a high sensory involvement. C) In high-context cultures, many tasks are handled simultaneously; in low-context cultures, only one task is handled at a time. D) In high-context cultures, work time is flexible; in low-context cultures, work time is not flexible.

A) In high-context cultures, the message is implicit; in low-context cultures, the message is explicit.

Which of the following is true about high-context cultures? A) One has to "read between the lines" and interpret meaning from one's general understanding. B) Communication media is entirely explicit and information is readily available. C) People convey their thoughts and plans in a direct, straightforward communication style. D) People are talkative, obvious, and redundant.

A) One has to "read between the lines" and interpret meaning from one's general understanding.

16) Primo is a multinational enterprise based in California that manufactures and sells affordably priced athletic shoes in retail stores around the world. A Primo manufacturing subsidiary in China employs over 20,000 locals. Primo executives recently learned of human rights violations at the firm's China subsidiary. Workers had been forced to work more than 60 hours each week and minimum wage laws were regularly ignored. As a result, Primo executives need to decide if operations in China should be discontinued. Which of the following, if true, would best support a decision by Primo to remain in China?

A) Primo becomes SA8000 certified.

51) ________ lies at the intersection of financial, social, and environmental health--sometimes described as the "triple bottom line."

A) Sustainability

Brenda is the head of a sports firm in Sweden. In order to communicate effectively with her workers, Brenda should ________. A) build friendly relationships and encourage two-way dialogues B) communicate information in a direct and explicit way C) communicate information with facts and figures D) exchange gifts with her employees frequently

A) build friendly relationships and encourage two-way dialogues

23) According to international codes of conduct, which of the following is related to the MNE behavior toward persons?

A) consumer protection

32) The Foreign Corrupt Practices Act of 1977 was primarily established to ________.

A) distinguish between harmless customs and actual bribery

According to the GLOBE project, workers from countries that ranked low on performance orientation, e.g., Russia or Greece, ________. A) do not take hard facts and figures seriously B) prefer direct and explicit communication C) make avoiding conflict a priority D) do not encourage friendly relationships

A) do not take hard facts and figures seriously

18) According to the international codes of conduct, the MNE behavior toward the host government is related to ________.

A) economic and developmental policies, laws and regulations, and political involvement

In high-context cultures, ________. A) feelings and thoughts are not explicitly expressed B) information is readily shared C) people have high sensory involvement D) nonverbal communication is not important

A) feelings and thoughts are not explicitly expressed

Larry is a top-level manager at Smart-Tech, an American semiconductor firm. Larry is involved in the negotiation procedures between Smart-Tech and a Saudi Arabian financial group. Larry arrives in Saudi Arabia hoping to quickly conclude the business deal. However, to his surprise the Arabs show no great interest in coming to a decision, despite several rounds of discussion. This type of behavior from the Saudi Arabian financial group is most likely attributed towards its ________. A) high-context culture B) monotheistic culture C) monochronic culture D) low-contact culture

A) high-context culture

10) A company subscribing to ethical relativism would implement the morality of the ________.

A) host country

21) According to international codes of conduct, which of the following is related to the MNE behavior toward persons?

A) human rights

Understanding foreign languages is especially important for international managers because of ________. A) increased diversity in the global workforce B) reduced incidence of outsourcing C) dominance of English in business communication D) decline in the status of the United States as a superpower

A) increased diversity in the global workforce

56) Which of the following concepts requires that an industrial system be viewed not in isolation from its surrounding systems, but in concert with them?

A) industrial ecology

Posture, gestures, facial expressions, and eye contact are examples of ________. A) kinesic behavior B) proxemics C) paralanguage D) object language

A) kinesic behavior

49) Under governmentalism, the government uses its policy-setting role to favor national interests, rather than relying on ________.

A) market forces

Classified and compartmentalized, time serves to order life in a ________. A) monochronic culture B) low-contact culture C) high-contact culture D) polychronic culture

A) monochronic culture

44) Which of the following terms refers to the practice by a country of rallying public opinion in favor of national goals and against foreign influences?

A) nationalism

Anything that serves to undermine the communication of the intended meaning is known as ________. A) noise B) encoded message C) decoded message D) feedback

A) noise

The manner in which people communicate through material artifacts such as architecture, office design, and cars is known as ________. A) object language B) oculesics C) paralanguage D) proxemics

A) object language

The tendency of Americans to look people in the eye contrasts with the tendency of the British to keep looking away while conversing. Such differences are categorized as ________. A) oculesics B) proxemics C) paralanguage D) object language

A) oculesics

43) Which of the following best defines the concept of managing interdependence?

A) the effective management of a long-term, MNC subsidiary-host-country relationship through cooperation and consideration for host concerns

Which of the following characteristics is shared by both openness in communication and resilience in communication? A) tolerance for ambiguity B) extrovertedness C) resourcefulness D) internal locus of control

A) tolerance for ambiguity

To which of the following free-trade agreements do Mexico, Canada, and the U.S. all belong? A. NAFTA B. ASEAN C. CAFTA D. MERCOSUR

A. NAFTA

Which of the following terms refers to the practice by a country of rallying public opinions in favor of national goals and against foreign influences? A. Nationalism B. Privatization C. Protectionism D. Governmentalism

A. Nationalism

In which of the following societies are people more likely to pass on inside information to a friend? A. Particularistic B. Universalistic C. Neutral D. Affective

A. Particularitic

Canada consists of distinct groups such as Anglophones, Francophones, and indigenous Canadiens. This is an example of ___ A. Subculture B. Stereotyping C. Cultural diffusion D. Convergence

A. Subculture

___ lies at the intersection of financial, social, and environmental health - sometimes described as the "triple bottom line." A. Sustainability B. Technoglobalism C. Protectionism D. Privatization

A. Sustainability

Which of the following is an example of a macropolitical risk event? A. a terrorist attack B. forced sale of equity to host-country nationals C. expropriation of corporate assets without prompt and adequate compensation D. barriers to repatriation of funds

A. a terrorist attack

Results from the lessening of trade barriers and the increased flow of goods and services, capital, labor, and technology around the world. A. economic integration B. nationalism C. protectionism D. mercantilism

A. economic integration

Experts suggest that firms wanting to globalize through e-commerce must first localize, which means firms need to ________. A) use local suppliers, vendors, and distributors to manufacture products for the local market B) modify their products and services to meet the needs and interests of local cultures C) sell their products in a brick-and-mortar store before selling them through an e-market D) test their products and services in local markets before selling them over the Internet

B

Expropriation is most likely to occur in a country that has ________. A) numerous MNCs in operation B) constant political upheaval and change C) a capitalistic economic system in place D) stable economic growth and political consistency

B

Expropriation of corporate assets without prompt and adequate compensation is an example of ________. A) economic risk B) political risk C) legal risk D) cultural risk

B

For autonomous international subsidiaries, most of the impact from political risks will be in which of the following areas? A) financial operations B) ownership and control C) marketing and sales operations D) managerial strategy and policy-making

B

In addition to avoidance and adaptation, two other means of risk reduction available to managers are ________ and ________. A) qualitative approach; quantitative approach B) dependency; hedging C) checklisting; blocklisting D) protectionist approach; stability approach

B

Which of the following is a form of protectionist policies? A) patents B) quotas C) foreign direct investment D) bribes

B

Which of the following is analyzed through the quantitative approach, qualitative approach, and the checklist approach? A) the legal risks of a country B) the creditworthiness of a country C) the political risks of a country D) the cultural atmosphere of a country

B

Which of the following means of political risk reduction is best suited for firms that decide a high-risk environment is worth the potential returns? A) avoidance B) adaptation C) hedging D) dependency

B

Which of the following terms refers to the integration of systems, processes, organizations, value chains, and entire markets using Internet-based technologies? A) horizontal integration B) e-business C) vertical integration D) technological leapfrogging

B

Which two factors are primarily assessed when using the qualitative approach to measure a country's economic risk? A) the country's natural resources and its long-term national debt B) the competence of the country's leader and the economic policy direction C) the probability of terrorism and the likelihood that the country's debts will be repaid D) the country's purchasing power overseas and the consistency of the country's leadership

B

________ includes the initiation of joint ventures with nationals (individuals or those in firms, labor unions, or government) to reduce political risks. A) Development assistance B) Equity sharing C) Localization of the operation D) Participative management

B

________ is based on a comprehensive set of laws organized into a code. A) Theocratic law B) Civil law C) Common law D) Contract law

B

________ describes the process of sharing meaning by transmitting messages through media such as words, behavior, or material artifacts. A) Ethics B) Communication C) Planning D) Strategy

B) Communication

Which of the following is true about monochronic and polychronic cultures? A) Monochronic cultures experience time in a linear way; polychronic cultures view time as having a past, present, and future. B) Monochronic cultures treat time as a tool for bringing order to life; polychronic cultures tolerate many events occurring simultaneously. C) Monochronic cultures experience time in a nonlinear way; polychronic cultures focus on only one single event at a time. D) Monochronic cultures tolerate many events occurring simultaneously; polychronic cultures treat time as a tool for bringing order to life.

B) Monochronic cultures treat time as a tool for bringing order to life; polychronic cultures tolerate many events occurring simultaneously.

________ refers to how something is said rather than the content—i.e., the rate of speech, the tone and inflection of voice, other noises, laughing, or yawning. A) Proxemics B) Paralanguage C) Object language D) Kinesic behavior

B) Paralanguage

Intercultural communication most likely occurs when ________. A) messages are transmitted between members of the same culture B) a member of one culture sends a message to a member of another culture C) people from one culture migrate to another region D) the communication process between two cultures is hindered

B) a member of one culture sends a message to a member of another culture

According to the GLOBE project, a coworker or subordinate from Sweden, a country ranking low on assertiveness, would most likely prefer ________. A) explicitness in communication B) a two-way dialogue C) a gift exchange before talking business D) a direct approach along with facts and figures

B) a two-way dialogue

Which of the following is a characteristic of a person in a monochronic culture? A) considers time to be flexible B) adheres to plan commitments C) focuses on multiple tasks at a time D) is accustomed to long-term relationships

B) adheres to plan commitments

Which of the following terms is used to refer to the positive or negative evaluations, feelings, and tendencies that individuals harbor toward objects or concepts and effects the communication process? A) customs B) attitudes C) traditions D) values

B) attitudes

According to Hall and Hall, when people experience a failure in communication, they tend to blame the confusion on the other person's stupidity, deceit, or craziness. This process of trying to explain the other person's behavior is known as ________. A) cultural noise B) attribution C) stereotyping D) kinesic behavior

B) attribution

Which of the following is a characteristic of a person from a polychronic culture? A) focuses only on one thing at a time B) changes plans frequently C) adheres to time commitments D) is accustomed to short-term relationships

B) changes plans frequently

25) According to Robertson and Crittenden, which of the following has made integrating an ethical component into international strategic decisions, challenging?

B) cultural constraints

22) According to international codes of conduct, which of the following is related to the MNE behavior toward persons?

B) employment practices

47) Which of the following is most likely a benefit to host countries with MNC operations?

B) export diversification

39) Which of the following is the last step of making an ethical decision?

B) following your own conscience and moral code

6) Which of the following terms refers to an integration of the business environments in which firms currently operate, resulting from a dissolution of traditional boundaries and from increasing links among MNCs?

B) global corporate culture

30) Payments to expedite routine transactions are often referred to as ________.

B) grease money

1) In recent years, which of the following has lessened the criticisms of MNCs?

B) greater emphasis on social responsibility by MNCs

36) Which of the following shows that employees have understood, and signed off on, the legal obligations regarding bribery and corruption in the countries where they do business?

B) having a global compliance system

The executives from Carlo Foods, United States, are in Japan to negotiate with Jeong, the head of a local investment firm. While Jeong listens to their plans, he realizes that there are considerable amounts of calculation errors in the market statistics involved in the plan. He starts showing signs of impatience and folds his hands, with a frown on his face. The executives realize that something is wrong and are confused about it. Jeong most likely belongs to a ________. A) low-contact culture B) high-context culture C) high power-distance culture D) polychronic culture

B) high-context culture

55) If MNCs want to take the lead in dealing with ecological interdependence, then they most likely need to ________.

B) incorporate sustainability goals into strategic planning

2) Which of the following concepts includes the expectation that MNCs should be concerned with the social and economic effects of their decisions?

B) international social responsibility

When encoding a message during cross-cultural communication, it is most effective for senders to ________. A) use idioms and expressions B) make gestures C) rely on personal interpretations D) speak slowly and loudly in their native language

B) make gestures

59) Social responsibility, ethical behavior, and interdependence are important concerns to be built into ________.

B) management control

26) Transparency International is best described as a(n) ________.

B) nongovernmental organization that fights corruption

The term ________ refers to behavior that communicates without words. A) thought patterns B) nonverbal communication C) intrapersonal communication D) cultural noise

B) nonverbal communication

3) Which of the following significantly increases the complexity of social responsibility and ethical behavior of MNCs?

C) additional stakeholders associated with the firm's activities

Which of the following would most likely occur in a low-contact culture? A) colleagues greeting each other by formal touch B) colleagues standing close to each other C) colleagues maintaining a respectful distance while greeting each other D) colleagues greeting each other by giving a peck on the cheek

C) colleagues maintaining a respectful distance while greeting each other

Recognizing that one's knowledge, perceptions, and beliefs are valid only for oneself and not for everyone else is known as ________. A) other-oriented role behavior B) orientation to knowledge C) tolerance for ambiguity D) interaction posture

B) orientation to knowledge

As manager with an international trade firm, John Smith frequently travels between Europe and Saudi Arabia. On John's most recent trip to Saudi Arabia, he noticed that Tariq, his business associate, not only talked about business matters but also talked about several other things, such as upcoming events in Saudi Arabia and the associated impact on the economy. This most likely indicates that Tariq is from a ________. A) low-contact culture B) polychronic culture C) low-context culture D) high power-distance culture

B) polychronic culture

17) Which of the following is one of the standards of SA8000?

B) providing a safe work environment

31) Tokens of appreciation and grease money are considered ________.

B) questionable payments

During a business meeting in the United States, a relaxed posture is acceptable, but in Europe or Asia such body language would most likely be interpreted as ________. A) personal space invasion B) rudeness C) curiosity D) reluctance

B) rudeness

Which of the following is an example of proxemics? A) using facial expressions B) standing close to others C) speaking quickly D) using a translator

B) standing close to others

46) Under governmentalism, the government uses its policy-setting role to favor the interests of ________.

B) the nation

14) The Anti-Sweatshop Code of Conduct requires companies to provide a healthy and safe work environment and ________.

B) to pay the prevailing local minimum wage

Which of the following is one of the reasons that language frequently causes miscommunication during international business situations? A) frequent use of idioms with explanations B) translating a local language too literally C) speaking the local language with a native accent D) conveying information using appropriate body language or symbols

B) translating a local language too literally

28) Which of the following is considered the primary problem for MNCs attempting to define their corporate-wide ethics?

B) variations in ethical standards around the world

54) Which of the following is the main reason why companies dispose hazardous wastes in less developed countries?

B) weak regulations and low costs

The European Union currently consists of how many nations? A. 12 B. 27 C. 34 D. 46

B. 27

According to contingency management, international managers need to ___. A. Transfer home-country business practices to the local environment B. Adapt their management styles to the local setting and people C. Determine the extent to which locals will accept unequal power D. Provide training to locals before transferring new technology

B. Adapt their management styles to the local setting and people

___ is the phenomenom of the shifting of individual management styles to become more similar to one another. A. Parochialism B. Convergence C. Stereotyping D. Particularism

B. Convergence

Which of the following is NOT true about cultural diversity? A. Companies may gain competitive advantage 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.

B. Cultural diversity is most successful when domestic and foreign firms establish joint ventures

___ is the awareness of and an honest caring about another individual;s culture. A. Cultural accommodation B. Cultural empathy C. Cultural sympathy D. Cultural quotient

B. Cultural empathy

Which of the following terms refers to an integration of the business environments in which firms currently operate, resulting from a dissolution of traditional boundaries and from increasing links among MNC's. A. Operative culture B. Global corporate culture C. Corporate integration D. Moral universalism

B. Global corporate culture

According to Hofstede, the extent to which subordinates accept a hierarchical system in a company is known as ___. A. Uncertainty avoidance B. Power distance C. Individualism D. Masculinity

B. Power distance

Tokens of appreciation and grease money are considered___. A. Cultural rewards systems B. Questionable payments C. Sales commissions D. Business expenses

B. Questionable payments

Which of the following terms refers to a society's ideas and convictions about what is good or bad and right or wrong? A. Regulations B. Values C. Rules D. Procedures

B. Values

Which of the following is the main reason why companies dispose hazardous waste in less developed countries? A. International agreements B. Weak regulations and low costs C. Advanced waste disposal plants D. Large amounts of available land

B. Weak regulations and low costs

The ___ approach to analyzing economic risk relies on a few easily measurable and timely criteria believed to reflect or indicate changes in the creditworthiness of the country. A. qualitative B. checklist C. quantitative D. systemic

B. checklist

Past court decisions serve as precedents to the interpretation of the law under? A. civil law B. common law C. theocratic law D. contract law

B. common law

Expropriation occurs when a local government seizes and provides inadequate compensation for the foreign-owned assets of an MNC, when no compensation is provided, it is? A. privatization B. confiscation C. private action D. repatriation

B. confiscation

Which of the following means of adaptation to political risk requires that a firm actively involve nationals in the management of its subsidiaries? A. equity sharing B. participative management C. localization of the operation D. development assistance

B. participative management

Emerson is a global manufacturing company headquartered in St. Louis, Missouri. The company employs almost 130,000 workers at its 250 manufacturing facilities located on five different continents. Emerson manufactures a wide range of products including air-conditioning compressors, garbage disposers, and automotive parts. Emerson's Asian operations employ over 50,000 people at manufacturing facilities in Asia. Emerson needs to build a new manufacturing facility to produce automotive parts for cars manufactured in Detroit. Emerson executives are considering whether to build the new facility in China or in the United States. Which of the following, if true, undermines the argument to build a new Emerson facility in China? A) China has committed over $500 billion to infrastructure projects. B) U.S. firms continue outsourcing service jobs despite the economy. C) Fuel costs in China have risen sharply and are not expected to drop. D) China is the world's largest exporter of manufactured goods.

C

For global corporations, the primary impact of political risks is likely to be on the firm's ________. A) ownership and control B) hiring and recruiting policies C) transfers of money or products D) managerial strategy and policy-making

C

Robert is a technology officer in an Umerian firm and he manages the firm's operations at its facility in Elador. Robert is considering the idea of installing new technology in the facility that would significantly improve productivity and reduce labor costs. Which of the following undermines the argument that Robert should install the new technology? A) Elador's government leaders encourage firms to install the most modern machinery available. B) The high school graduation rate in Elador is higher than in neighboring countries. C) Elador is currently experiencing a very high rate of unemployment. D) The firm's competitors recently installed the same technology.

C

The Paris Union was established for the purpose of ________. A) enforcing contract laws B) reducing trade barriers C) protecting patents D) reducing pollution

C

Which of the following is a form of hedging? A) expatriate control in key positions B) development assistance C) local debt financing D) localization of the operation

C

Which of the following is a true statement about China? A. The Chinese gov's shift from communism to capitalism has led to an increase in FDI. B. China attracts FDI because the gov has eliminated elaborate bureaucracies. C. The Chinese gov manipulates market activities for political purposes. D. China lacks a educations pool of employees due to slowly developing industrialization.

C

Which of the following is an advantage of e-business? A) lower cost of production B) easy availability of technology C) convenience in conducting business worldwide D) increased availability of information

C

Which of the following terms refers to an agreement by the parties concerned to establish a set of rules for governing a business transaction? A) charter B) policy C) contract D) license

C

Which type of country is most likely to use its investment laws to acquire appropriate technology? A) post-industrial country B) newly industrializing country C) less-developed country D) highly developed country

C

15) Which of the following is a policy of the Electronic Industry Code of Conduct (EICC)?

C) Contract manufacturers should follow some basic environmental requirements.

________ is one of the elements of nonverbal communication. A) Ethnicity B) Gender C) Kinesic behavior D) Language

C) Kinesic behavior

Which of the following tips is most likely to lead to effective intercultural communication? A) Avoid being culturally sensitive over the Internet, as it might result in discrimination. B) It is always better to use long and descriptive sentences. C) Messages need to be encoded carefully. D) Communication processes should be made quicker by removing feedback systems.

C) Messages need to be encoded carefully.

Which of the following is a true statement about polychronic cultures? A) Time serves to order life into compartments. B) People in polychronic cultures focus on only one task at a time. C) Polychronic people focus on relationships rather than material systems. D) Polychronic people are highly driven to complete tasks by assigned deadlines.

C) Polychronic people focus on relationships rather than material systems.

Larry is a top-level manager at Smart-Tech, an American semiconductor firm. Larry is involved in the negotiation procedures between Smart-Tech and a Saudi Arabian financial group. Larry has recently arrived in Saudi Arabia for the purpose of negotiating the final terms of the contract. Which of the following statements undermines the argument that Larry should adhere to a strict agenda when negotiating with the Arabs? A) Both Saudi Arabia and the United States are low-contact cultures. B) Both Saudi Arabia and the United States are high-contact cultures. C) Saudi Arabia is a polychronic culture. D) Saudi Arabia is a monochronic culture.

C) Saudi Arabia is a polychronic culture.

________ and ________ are personality traits categorized as openness. A) Persistence; resourcefulness B) Proper orientation to knowledge; internal locus of control C) Tolerance for ambiguity; extrovertedness D) Empathy; external locus of control

C) Tolerance for ambiguity; extrovertedness

Interaction posture is best defined as the ________. A) tendency to contradict the beliefs of others B) understanding and modeling of local proxemics C) ability to respond to others in a nonjudgmental way D) capacity to be flexible to promote group communication

C) ability to respond to others in a nonjudgmental way

42) Which of the following MNC subsidiary activities is blamed for rising interest rates in host countries?

C) raising capital from local sources

Which of the following terms refers to any cultural variables that undermine the communication of intended meaning? A) cultural ethics B) cultural empathy C) cultural noise D) cultural attribution

C) cultural noise

7) Moral universalism is the need for a moral standard that is accepted by all ________.

C) cultures

12) Creating Shared Value(CSV) creates ________.

C) economic value by creating social value

Trust improves cross-cultural communication by ________. A) making sure that all of the business transactions are based on arm's-length relationships B) replacing formal legal contracts for global firms C) encouraging the open exchange of ideas and information D) helping people plan for known circumstances

C) encouraging the open exchange of ideas and information

9) McDonald's, a fast food chain headquartered in the United States, applies the morality it practices in the United States to all foreign countries in which it operates. McDonald's is adhering to ________.

C) ethnocentrism

41) The profitability of individual companies depends on a cooperative and constructive attitude toward ________.

C) global interdependence

A ________ culture is characterized by people standing close together and touching a great deal. A) low-contact B) monochronic C) high-contact D) polychronic

C) high-contact

In ________ cultures, communication occurs within an extensive network of close personal and business relationships. A) high-contact B) monochronic C) high-context D) low-contact

C) high-context

In ________ cultures, people expect others to understand unarticulated moods, subtle gestures, and environmental clues. A) high-contact B) low-contact C) high-context D) monochronic

C) high-context

5) Which of the following is a business benefit from corporate social responsibility?

C) increase in brand value

53) In recent years, the export of hazardous wastes from developed countries to less developed ones has ________.

C) increased significantly

Al Razim, a construction engineer, recently traveled to Germany in order to find investors for his real-estate project. While he finally succeeded in getting an investor, he was surprised by the explicitness of the Germans. Sometimes all he got was a direct "No." This is because Germans are a ________ culture. A) polychronic B) high-context C) low-context D) high-contact

C) low-context

4) Sundew, an American soda company, opened a number of manufacturing units in a developing country. It employed people from the host country to work in the new units. This move radically lowered the poverty rate in the developing country. In this scenario, Sundew is ________.

C) making a foreign investment

The Japanese preference for humanity, reciprocity, and analytic logic is known as ________. A) kieretsu B) ringi-sho C) ningensei D) allogato

C) ningensei

Phil sent an email requesting Mel to join him in the conference room at 2 P.M. and to bring the final report on the building's floor plans. However, Mel's personal secretary skips reading the entire email and just informs Mel to join Phil in the conference room at 2 P.M. This is an example of ________. A) ambiguity B) divergence C) noise D) feedback

C) noise

The considerable variation between Americans and Chinese in the use of silence during meetings is an aspect of ________. A) proxemics B) haptics C) paralanguage D) object language

C) paralanguage

What is the best method for avoiding miscommunication? A) taking detailed notes of the messages B) learning foreign phrases and idioms C) practicing projective listening D) relying on technology to interpret meanings

C) practicing projective listening

45) Which of the following terms refers to a country's use of tariff and nontariff barriers to partially or completely close its borders to various imported products that would compete with domestic products?

C) protectionism

Tom manages a U.S. pharmaceutical subsidiary located in Ireland. In order to communicate effectively with Irish employees and improve their productivity, Tom should ________. A) emphasize achieving objective end results B) challenge the employees to perform better C) provide positive support to employees D) address conflicts during group meetings

C) provide positive support to employees

11) Which of the following often forces the MNC to act in accordance with ethnocentric value systems?

C) public pressure in the home country

48) Primo is a multinational enterprise based in California that manufactures and sells affordably priced athletic shoes in retail stores around the world. A Primo manufacturing subsidiary in China employs over 20,000 locals. Primo executives recently learned of human rights violations at the firm's China subsidiary. Workers had been forced to work more than 60 hours each week, and minimum wage laws were regularly ignored. As a result, Primo executives need to decide whether to continue operations in China. Which of the following is MOST relevant to the decision by Primo to remain in China?

C) the benefits that the local Chinese community might have

37) The FCPA allows "grease" payments to facilitate business in a foreign country, if ________.

C) those payments are lawful in that country

34) Which of the following was the primary purpose of the Organization for Economic Cooperation and Development Convention on Bribery?

C) to combat corporate corruption

Which of the following is an element of paralanguage? A) hand gesture B) body posture C) yawning D) personal touch

C) yawning

___ consists of specific learned norms based on attitudes, values, and beliefs, of a group of people. A. Ethnology B. Civilization C. Culture D. Doctrine

C. Culture

Creating Shared Value (CSV) creates ___. A. Economic value by creating shared value B. Social value by increasing shared value C. Economic value by creating social value D. Social value by increasing market value

C. Economic value by creating social value

In recent years, the export of hazardous wastes from developed countries to less developed ones has ___. A. Decreased considerably B. Remained about the same C. Increased significantly D. Been banned by the EU

C. Increased Significantly

Which of the following terms refers to adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today, while protecting, maintaining, and enhancing the human and natural resources that will be needed in the future? A. Privatization B. Protectionism C. Sustainability D. Technoglobalism

C. Sustainability

In which of the following groups of trade blocs does most of today's world trade take place? A. Middle East, China, India B. North America, Africa, Canada C. Western Europe, Asia, Americas D. Saudi Arabia, Western Europe, The Gulf

C. Western Europe, Asia, Americas

Micropolitical risk events are those that affect A. multiple industries and companies B. several other nations in the same region C. one industry or company or a few companies D. domestic industries or companies

C. one industry or company or a few companies

A country's ability or intention to meet its financial obligations determines its ________. A) technological risk B) legal risk C) political risk D) economic risk

D

An international agreement which regulates international business by spelling out the rights and obligations of the seller and buyer is known as ________. A) Agreement to Technical Barriers to Trade B) International Standards on Accounting and Reporting C) General Agreement on Tariffs and Trade D) Contracts for International Sale of Goods

D

Emerson is a global manufacturing company headquartered in St. Louis, Missouri. The company employs almost 130,000 workers at its 250 manufacturing facilities located on five different continents. Emerson manufactures a wide range of products including air-conditioning compressors, garbage disposers, and automotive parts. Emerson's Asian operations employ over 50,000 people at manufacturing facilities in Asia. Emerson needs to build a new manufacturing facility to produce automotive parts for cars manufactured in Detroit. Emerson executives are considering whether to build the new facility in China or in the United States. Which of the following questions is LEAST relevant to Emerson's decision regarding where to build a new facility? A) How will China's underdeveloped infrastructure affect Emerson's ability to manufacture and ship products? B) How is China's political and economic agenda likely to affect Emerson's investment? C) What is the likelihood of expropriation occurring to Emerson if it builds in China? D) How will e-commerce affect Emerson's ability to export products from China?

D

In the context of doing business in Asia, what is meant by the phrase "the contract is in the relationship, not on the paper"? A) Asian contracts are not legally binding for MNCs. B) Contracts are ceremoniously destroyed after they are written. C) Managers risk being offensive to Asians by requiring contracts. D) Managers should nurture the relationship to ensure the reliability of the contract.

D

Political risk insurance and local debt financing are both forms of ________. A) input control B) adaptation C) equity sharing D) hedging

D

Recently, the level of ________ in Europe, for example, was a great concern around the world, in particular regarding concerns in the eurozone brought about by debt problems in Greece. A) legal risk events B) political risk events C) cultural risk events D) economic risk events

D

The appropriability of technology is best defined as ________. A) the potential of a firm's technology to become obsolete within a few years B) the likelihood that a firm's technology will generate long-term debts C) the degree of ease with which new technology can be learned and used by host-nation employees D) the ability of a firm to protect its technology from competitors and to profit from that technology

D

The government of Jonovia seizes all assets of Refresh, a world-famous, soft-drink brand in Jonovia, and offers compensation to the company. This action by the government of Jonovia is an example of ________. A) private action B) repatriation C) privatization D) expropriation

D

Which is the fourth largest trading bloc after the EU, NAFTA, and ASEAN and established in 1991? A) SAARC B) ASEAN C) NAFTA D) MERCOSUR

D

Which of the following best describes nationalization? A) outsourcing of governmental functions to private entities B) hiring preferences given to locals rather than expatriates C) government's gradual and subtle actions against a firm D) forced sale of an MNC's assets to local buyers

D

Which of the following countries is today known as the world's services supplier, providing highly skilled and educational workers to foreign companies? A. China B. Brazil C. Mexico D. India

D

Which of the following is a method of hedging? A) home country debt financing B) localization of the operation C) political risk insurance D) maintaining control over technology

D

Zagreb Inc., a transnational energy company, negotiates a multimillion-dollar contract with the government to provide electricity to Pilladia. The government is voted out of power shortly after. The new government cancels all contracts it has with all oil companies but not contracts with firms in other industries. This is an example of ________. A) barriers to repatriation B) protectionism C) confiscation D) micropolitical risk

D

________ 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

D

________ poses a severe and random political risk to company personnel and assets, and interrupts the conduct of business. A) Plagiarism B) An election C) Privatization D) Terrorism

D

Which of the following is most likely a characteristic of low-context cultures? A) Work and social relationships are inseparable. B) Individuals base meaning on subtle gestures. C) Individuals must read between the lines. D) Feelings and thoughts are expressed in words.

D) Feelings and thoughts are expressed in words.

33) Which of the following prohibits U.S. companies from making illegal payments or other gifts or political contributions to foreign government officials for the purposes of influencing them in business transactions?

D) Foreign Corrupt Practices Act

57) ________ is a systems view in which one seeks to optimize the total materials cycle from virgin material, to finished material, to component, to product, to obsolete product, and to ultimate disposal.

D) Industrial ecology

24) ________ refers to the business conduct or morals of MNCs in their relationships with individuals and entities.

D) International business ethics

Which of the following is a true statement regarding kinesic behavior? A) Facial expressions have the same meaning across cultures. B) Minor variations in body language are insignificant. C) Hand gestures are universally interpreted. D) The meaning of body movements varies by culture.

D) The meaning of body movements varies by culture.

19) According to the international codes of conduct, MNEs should ________.

D) conduct research and development activities in developing countries

40) John, an American national, works as a manager at his firm's subsidiary in Indonesia. A local government official tells John that materials could be delivered to the firm's facility more quickly if John pays an extra fee to the port supervisor. What should be John's first action?

D) consult both American and Indonesian laws

38) Which of the following is the first step of making an ethical decision?

D) consulting the laws of both the host and the home countries

Which of the following is most likely a characteristic of communication channels in low-context cultures? A) rapid spread of information B) informal flow of information C) upward flow of information D) controlled flow of information

D) controlled flow of information

Which of the following will a person working in a high-contact culture most likely experience? A) coworkers spending time together socially B) managers using hand motions to express emotion C) managers bowing to their seniors as a token of respect D) coworkers putting an arm over their colleague's back

D) coworkers putting an arm over their colleague's back

Which of the following does NOT constitute a normal interpersonal communication task for managers? A) coordinating activities B) disseminating information C) motivating employees D) giving speeches at conferences

D) giving speeches at conferences

Communication to managers is of vital importance because it ________. A) demonstrates the manager's depth of knowledge B) immediately results in an increase of revenue C) indicates technological advancement D) greatly helps in negotiating future plans

D) greatly helps in negotiating future plans

The international business manager of Toro Automobiles, based in London, is currently in Indonesia negotiating with potential partners to set up a manufacturing plant. He is intrigued and startled by the lack of apprehension shown by every person he has met in standing close to him when greeting him. This is because the persons or the groups involved in the meeting are a part of a ________. A) low-context culture B) polychronic culture C) high-context culture D) high-contact culture

D) high-contact culture

8) With an ethnocentric approach, a company applies the morality used in its ________.

D) home country

50) Which of the following is a potential benefit to the host country of MNC operation?

D) infrastructure development and support

Josh, a tourist from the United States, goes on a five-day trip to Japan. Apart from learning their rich history and heritage, he notices that people do not shake hands, but bow to each other. He is most likely to conclude that the Japanese have a ________. A) low-context culture B) monotheistic culture C) polychronic culture D) low-contact culture

D) low-contact culture

Subtle differences in eye behavior are known as ________. A) proxemics B) tics C) stereotypes D) oculesics

D) oculesics

Which of the following terms refers to the influence of closeness and space on communication? A) oculesics B) kinesics C) aesthetics D) proxemics

D) proxemics

In an interview, a British journalist asked a German athlete, "Are you a typical German?" When asked to clarify, the journalist explained that a typical German loved machines, worked hard, and was dependable. This is an example of ________. A) cultural noise B) discrimination C) kinesic behavior D) stereotyping

D) stereotyping

Which of the following is the primary cause of noise in the communication process? A) a lack of cultural empathy B) ineffective listening skills C) the technology used in the medium of communication D) the difference between two individuals' life space

D) the difference between two individuals' life space

___ comprises the shared values, understandings, assumptions, and goals that over time are passed on and imposed by members of a group or society. A. Environment B. Workforce C. Economy D. Culture

D. Culture

The checklist approach relies on a few easily measurable and timely criteria believed to reflect or indicate changes in the creditworthiness of the country.

T

Which of the following prohibits U.S. companies from making illegal payments or other gifts or political contributions to foreign government officials for the purposes of influencing them in business transactions? A. Sherman Antitrust Act B. Robinson-Patman Act C. Wagner Corruption Act D. Foreign Corrupt Practices Act

D. Foreign Corrupt Practices Act

___ refers to the business conduct or morals of MCNC's in their relationships with individuals and entities A. Global corporate culture B. Ethical Relativism C. Moral Universalism D. International business ethics

D. International business ethics

Which of the following is characterized by networks of international linkages that bind countries, institutions, and people in an interdependent economy? A. communism B. nationalization C. socialism D. globalism

D. globalism

How does the phenomenon of ethnicity affect the international manager?

Ethnicity is a driving force of political instability around the world. Many uprisings and conflicts are expressions of differences in ethnic groupings, and religious disputes often lie at the heart of those differences. Managers must understand the ethnic and religious composition of the host country in order to anticipate problems of general instability as well as those of an operational nature-such as effects on their workforce, on production and access to raw materials, and also the market as a whole.

(T/F) An event that affects all foreign firms doing business in a country or region is called a micropolitical risk event.

F

(T/F) An event that affects one industry or company or only a few companies is called a macropolitical risk event

F

(T/F) Confiscation occurs when a local government seizes and provides inadequate compensation for the foreign-owned assets of an MNC.

F

(T/F) Expropriation occurs when a local government seizes and does not provide any compensation for the foreign-owned assets of an MNC.

F

(T/F) NAFTA is an agreement that came into force to lower tariffs to 25 percent within three to five years, and to eliminate them within seven years.

F

(T/F) Political risk insurance and local debt financing are forms of dependency

F

(T/F) Privatization refers to the forced sale of an MNC's assets to local buyers with some compensation to the firm, perhaps leaving a minority ownership with the MNC.

F

(T/F) SAARC is an agreement that came into force to bring faster growth, more jobs, better working conditions, and a cleaner environment for all as a result of increased exports and trade.

F

(T/F) The quantitative approach evaluates a country's economic risk by assessing the competence of its leaders and analyzing the types of policies they are likely to implement.

F

Common law is based on a comprehensive set of laws organized into a code

F

Differences in laws and regulations from country to country are very few and simple

F

Firms use e-business to help build new relationships between businesses and retailers

F

Internet is a completely open platform and it does not have to abide by any laws.

F

Under civil law, past court decisions act as precedents to the interpretation of the law and to common custom

F

Under common law, it is assumed a contract reflects promises that will be enforced without specifying the details in the contract.

F

62) Social responsibility deals with decisions and interactions mostly on an individual level.

FALSE

63) Decisions about ethics tend to be made at a higher level, affect more people, and reflect a general stance taken by a company or a number of decision makers.

FALSE

65) The increased complexity regarding the social responsibility and ethical behavior of firms across borders is brought about by the distance between the headquarters and its subsidiaries.

FALSE

67) Ethnocentric culture is an integration of the business environments in which firms currently operate.

FALSE

68) The term "moral idealism" is used to address the need for a moral standard that is accepted by all cultures.

FALSE

71) Creating Shared Value (CSV) leverages the unique resources and expertise of the company to create social value by creating economic value.

FALSE

72) Globalization has reduced the ethical problems facing organizations.

FALSE

73) Global corporate culture refers to the business conduct or morals of MNCs in their relationships with individuals and entities.

FALSE

77) Under nationalism, the host institutes a partial or complete closing of borders to withstand competitive foreign products, using tariff and nontariff barriers.

FALSE

79) Under protectionism, public opinion is rallied in favor of national goals and against foreign influences.

FALSE

What is globalization? What is the relationship between globalization and information technology?

Globalization is defined as global competition characterized by networks of international linkages that bind countries, institutions, and people in an interdependent global economy. Information technology, more than anything else, is making those networks of international linkages more possible by boosting the efficiency of that "connectedness." The Internet is propelling electronic commerce around the world. Companies around the world are linked electronically with employees, customers, distributors, suppliers, and alliance partners in many countries making the world a global marketplace.

What is the difference between common law, Islamic law, and civil law?

In common law, past court decisions act as precedents to the interpretation of law. Civil law is based on a comprehensive set of laws organized into a code. Interpretations of civil law are based on reference to codes and statutes. In Islamic countries, such as Saudi Arabia, the dominant legal system is Islamic law; based on religious beliefs; it dominates all aspects of life. Islamic law is followed in approximately 27 countries and combines, in varying degrees, civil, common, and indigenous law.

60) Global interdependence creates demands on international managers to take a positive stance on issues of social responsibility and ethical behavior.

TRUE

What is political risk? Give an example of how political risk can affect an MNC.

Political risks are any government action or politically motivated event that could adversely affect the long-run profitability or value of the firm. For example, Bolivia nationalized its natural gas industry ordering foreign companies to give up control of fields and accept much tougher operating terms within six months or leave the country.

What is SAARC?

SAARC stands for South Asia Association of Regional Cooperation—an association of seven developing South Asian nations. According to the Agreement that was effective January 1, 2006, the countries will lower tariffs by 25% within three to five years and eliminate them within seven years. Trade in South Asia is estimated at $14 billion, although the majority of that trade will take place between India and Pakistan, the two largest members.

(T/F) Small- and medium-sized enterprises contribute to their national economies by creating new jobs.

T

What is the European Union (EU)? Discuss how the EU affects both Europe and international managers working in Europe.

The EU now comprises a 27-nation, unified market of over 400 million people. Since the euro became a legally tradable currency, Europe's business environment has been transformed. The vast majority of legislative measures have been adopted to create an internal market with free movement of goods and people among the EU countries. The elimination of internal tariffs and customs, as well as financial and commercial barriers, has not eliminated national pride. Global managers face two major tasks in the EU. One is strategic: how firms outside of Europe can deal with the implications of the EU and of what some have called a "Fortress Europe"—that is, a market giving preference to insiders. The other task is cultural: how to deal effectively with multiple sets of national cultures, traditions, and customs within Europe, such as differing attitudes about how much time should be spent on work versus leisure activities.

How does the Internet facilitate both e-commerce and business-to-business transactions?

The Internet and e-business provide a number of uses and advantages in business-to-consumer transactions: (1) convenience in conducting business worldwide-facilitating communication across borders contributes to the shift toward globalization and a global market; (2) an electronic meeting and trading place, which adds efficiency in conducting business sales; (3) a corporate Intranet service, merging internal and external information for enterprises worldwide; (4) power to consumers as they gain access to limitless options and price differentials; and (5) a link and efficiency in distribution. Although most early attention was on e-commerce, experts now believe the real opportunities are in business-to-business (B2D) transactions where the Internet offers assistance with supply chain, procurement, and distribution channels.

Identify and describe four means of political risk adaptation.

The four means of political risk adaptation are: (1) equity sharing-shared ownership or partial ownership with nationals; (2) participative management-actively involving nationals in the management of the firm; (3) localization of operations-modifications to the company's management style, company name, etc., to accommodate national issues; and (4) development assistance-corporate aid for infrastructure development.

What methods are used by MNCs to protect intellectual property rights?

The most common methods of protecting proprietary technology are the use of patents, trademarks, trade names, copyrights, and trade secrets. Various international conventions afford some protection in participating countries; more than 80 countries adhere to the International Convention for the Protection of Industrial Property, often referred to as the Paris Union, for the protection of patents. However, restrictions and differences in the rules in some countries not signatory to the Paris Union, as well as industrial espionage, pose continuing problems for firms trying to protect their technology.

What is currency translation exposure? Provide an example to illustrate your answer

The risk of exchange-rate volatility results in currency translation exposure to the firm when the balance sheet of the entire corporation is consolidated, and may cause a negative cash flow from the foreign subsidiary. Currency translation exposure occurs when the value of one country's currency changes relative to that of another. When exchange-rate changes are radical, repercussions are felt around the world. For example, a U.S. company operating in Mexico at the time of the peso devaluation in the late 1990s meant that the company's assets in that country were worth less when translated into U.S. dollars. The company's liabilities, however, were also less.

Which of the following Trompenaars's value dimensions explains the source of power and status in society? A) universalism versus particularism B) neutral versus affective C) specific versus diffuse D) achievement versus ascription

achievement versus ascription

According to contingency management, international managers need to ________. A) transfer home-country business practices to the local environment B) adapt their management styles to the local setting and people C) determine the extent to which locals will accept unequal power D) provide training to locals before transferring new technology

adapt their management styles to the local setting and people

Which of the following is true of the way Arabs view time? A) Deadlines and firm commitments are crucial to Arabs. B) Arabs view time as a valuable and limited resource. C) Arabs believe important decisions cannot be rushed. D) Arabs honor deadlines by all means.

arabs believe important decisions cannot be rushed

Austria and Germany value competition and have a "can-do" attitude. Therefore, according to the GLOBE project, Austria and Germany are most likely to be ________ societies. A) accommodative B) cooperative C) humane-oriented D) assertive

assertive

According to the GLOBE project, which of the following cultural dimensions refers to how much people in a society are expected to be tough, confrontational, and competitive versus modest and tender? A) humane orientation B) assertiveness C) future orientation D) performance orientation

assertiveness

All of the following are value dimensions proposed by Hofstede EXCEPT ________. A) uncertainty avoidance B) assertiveness C) power distance D) individualism

assertiveness

Which of the following is a primary characteristic of masculine societies? A) assertiveness B) emphasis on group achievements C) tight social frameworks D) lack of gender bias

assertiveness

Workplaces in high power distance cultures will most likely be characterized by ________. A) flexible schedules B) autocratic leadership C) loosely defined chains of command D) open communication of ideas

autocratic leadership

________ comprises the shared values, understandings, assumptions, and goals that over time are passed on and imposed by members of a group or society. A) Environment B) Workforce C) Economy D) Culture

culture

________ consists of specific learned norms based on attitudes, values, and beliefs of a group of people. A) Ethnology B) Civilization C) Culture D) Doctrine

culture

The European view of information privacy most likely stems from its ________. A) foreign business practices B) global nature of information technology C) culture and history D) competitive origins

culture and history

According to Hofstede, tight social frameworks, emotional dependence on belonging to the organization, and a strong belief in group decisions are characteristics of ________. A) individualism B) collectivism C) masculinity D) high power distance

collectivism

________ is the phenomenon of the shifting of individual management styles to become more similar to one another. A) Parochialism B) Convergence C) Stereotyping D) Particularism

convergence

An international manager can best develop an understanding of a particular culture by ________. A) creating a cultural profile for that country or region in which the firm does business B) assuming that his or her own cultural styles and practices can be successfully followed in the host country C) using stereotypes to develop cross-cultural understanding in a business setting D) hiring locals rather than expatriates for management positions in overseas subsidiaries

creating cultural profile for that country or region in which the firm does business

When immigrants adopt some aspects of the local culture while keeping aspects of their culture of origin, this process is called ________. A) stereotyping B) particularism C) creolization D) ethnocentrism

creolization

Which of the following is a primary reason for failed expatriate assignments? A) creeping incrementalism B) cross-cultural differences C) moral universalism D) economic barriers

cross-cultural differences

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.

cultural diversity is most successful when domestic and foreign firms establish joint ventures

Cultural sensitivity is also known as ________. A) cultural empathy B) cultural intelligence C) cultural quotient D) cultural diffusion

cultural empathy

________ is an outsider's seemingly natural ability to interpret someone's unfamiliar and ambiguous gestures in just the way that person's compatriots and colleagues would. A) Multicultural sensitivity B) Cultural accommodation C) Multicultural transfer D) Cultural intelligence

cultural intelligence

________ is the awareness of and an honest caring about another individual's culture. A) Cultural accommodation B) Cultural empathy C) Cultural sympathy D) Cultural quotient

cultural sympathy

Which of the following is NOT categorized as a sociocultural variable of culture? A) religion B) economy C) education D) language

economy

________ refers to the belief that the practices of one's own country are best no matter where or under what conditions they are applied. A) Geocentrism B) Nationalism C) Parochialism D) Ethnocentrism

ethnocentrism

Which of the following is NOT a critical operational value difference? A) time B) etiquette C) material factors D) change

etiquette

Med-Tex, a large pharmaceutical firm based in Texas, wants to establish its presence by expanding overseas. The company's executives evaluate locations across the world for the most suitable place to build the latest Med-Tex manufacturing facility. Which of the following, if true, best supports the argument that Med-Tex should build its new facility in Ireland? A) Expanding into a similar culture reduces risks associated with different attitudes, values, and communication styles. B) Med-Tex's main competitor received government incentives for building a new manufacturing facility in the United Kingdom. C) Collectivist societies like Ireland encourage the individual achievement necessary for scientific advancements in pharmaceuticals. D) Particularistic cultures apply rules and systems objectively, which is important within the Med-Tex organizational culture.

expanding into a similar culture reduces associated with different attitudes, values, and communication styles

According to Harris and Moran's eight categories, a kinship system refers to the influence of ________. A) workplace relations B) religious activities C) family relationships D) formal groups

family relationships

Based on the study conducted by Harris and Moran, which of the following is NOT a workplace behavior of most Americans? A) following a formal culture B) being highly organized and institutionally minded C) having a strong work ethic D) being competitive and aggressive

following a formal culture

People in Singapore and Denmark are inclined toward long-term planning. According to the GLOBE project, such societies score high on ________. A) performance orientation B) assertiveness C) humane orientation D) future orientation

future orientation

________ is increasing the pace of both cultural diffusion and cultural change. A) Collectivism B) Enculturation C) Fundamentalism D) Globalization

globalization

In which of the following countries would an autocratic style of leadership be most effective? A) low power distance countries B) high power distance countries C) humane-oriented countries D) high performance-oriented countries

high power distance countries

Based on Hofstede's value dimensions, countries that have strict laws and procedures to which their people adhere closely most likely have ________. A) high power distance B) high masculinity C) high uncertainty avoidance D) high individualism

high uncertainty avoidance

Which of the following is NOT a characteristic of the Arab culture? A) emphasis on hospitality B) imposition of deadlines C) five times a day prayer pattern D) indirect communication style

imposition of deadlines

According to Hofstede, the tendency of people to look after themselves and their immediate family and to place less emphasis on the needs of the society is known as ________. A) power distance B) uncertainty avoidance C) individualism D) masculinity

individualism

An organization where employees typically wear casual clothes and interact casually is most likely to have a(n) ________ organizational culture. A) hierarchical B) formal C) rules-bound D) informal

informal

Which of the following is NOT one of Trompenaars's value dimensions? A) universalism versus particularism B) neutral versus affective C) specific versus diffuse D) intrinsic versus extrinsic

intrinsic versus extrinsic

Which of the following is likely to cause offense in Saudi Arabia? A) introducing business subjects too soon B) intolerance toward employees and coworkers C) failure to make decisions with a long-term perspective D) discrimination based on gender

introducing business subjects too soon

According to Trompenaars's value dimensions, which of the following is true of the universalistic approach? A) It emphasizes applying rules and systems objectively. B) It focuses on expressing emotions openly. C) It emphasizes relationships. D) It focuses on separating work and private life.

it emphasizes applying rules and systems objectively

Which of the following is true of a future-oriented country? A) It focuses on short-term planning. B) It emphasizes solidarity. C) It focuses on longer time horizon for decisions. D) It emphasizes instant gratification.

it focuses on longer time horizon for decisions

Which of the following is true of the attitude toward work in Mexican culture? A) Work is a sacred duty. B) Group harmony at work is essential to success. C) Workers are primarily focused on the future. D) Leisure time is more important than work.

leisure time is more important than work

According to Trompenaars's value dimensions, if you are born and raised in an achievement society, your source of status will most likely be based upon your ________. A) father's occupation B) age C) level of education D) gender

level of education

Which of the following factors primarily determines how the Internet is used in different countries? A) local connection speeds B) availability of personal computer parlors C) local attitude to information privacy D) extent of intercultural communication systems

local attitude of information privacy

Which of the following is an advantage of organizational culture? A) long-term commitment B) tendency to adopt changes quickly C) excessive domestic focus D) individuality

long-term commitment

Stereotyping should most likely be avoided by international managers because ________. A) current variables of culture are grossly inaccurate B) many cultures have diverse subcultures C) many countries outlaw the practice D) national culture is nonexistent

many cultures have diverse subcultures

Which of the following factors can cause changes in traditional, non-Western societies? A) media exposure B) religious activities C) stereotyping D) self-reference criterion

media exposure

Which of the following is true of countries with low masculinity? A) more job conflicts B) increase in work-related stress C) more women in high-level jobs D) lack of concern for others

more women in high-level jobs

Global managers who exhibit cultural intelligence and cultural sensitivity will most likely be able to ________. A) negotiate effectively in expatriate assignments B) request bonuses for overseas job assignments C) implement technological changes quickly D) conduct efficient performance appraisals

negotiate effectively in expatriate assignments

With regard to small family businesses in China, a "guanxi" can be best described as a ________. A) family hierarchy that determines who receives profits B) competitive management style based on Confucian values C) network of relationships centered on mutual obligations and favors D) combination of modern and traditional methods for managing employees

network of relationships centered on mutual obligations and favors

According to Trompenaars's value dimensions, which of the following focuses on the emotional orientation of relationships? A) universalism versus particularism B) neutral versus affective C) specific versus diffuse D) achievement versus ascription

neutral versus affective

Managers from Italy and Mexico would most likely express their emotions openly during a business situation, while managers from England and Japan would most likely consider such behavior unprofessional. Which of the following Trompenaars's value dimensions explains this difference in behavior and attitude? A) universalism versus particularism B) neutral versus affective C) specific versus diffuse D) achievement versus ascription

neutral versus affective

Based on Trompenaars's value dimensions, which of the following is a characteristic of the particularistic approach? A) application of rules and systems B) open expression of emotions C) obligation toward relationships D) opportunity to achieve status

obligation toward relationships

Which of the following is NOT a typical characteristic of the Arab culture? A) open admission of mistakes B) indirect communication style C) emphasis on hospitality D) five times a day prayer pattern

open admission of mistakes

Which of the following represents the expectations, norms, and goals held in common by members of a specific company or group? A) cultural variable B) societal culture C) organizational culture D) organizational system

organizational culture

Which of the following terms refers to the expectation that foreigners should automatically fall into host-country patterns of behavior? A) geocentrism B) nationalism C) parochialism D) ethnocentrism

parochialism

In which of the following societies are people more likely to pass on inside information to a friend? A) particularistic B) universalistic C) neutral D) affective

particularistic

Which of the following is a predominant characteristic of the Chinese management style? A) paternalism B) individualism C) nepotism D) religious affinity

paternalism

Managers from Singapore, New Zealand, and Hong Kong tend to take initiative and have a sense of urgency, and the confidence to get things done. According to the GLOBE project, such managers score high on the cultural dimension of ________. A) humane orientation B) future orientation C) performance orientation D) assertiveness

performance orientation

According to Hofstede, societies that accept strong hierarchical boss-subordinate relationships are high on ________. A) uncertainty avoidance B) collectivism C) individualism D) power distance

power distance

According to Hofstede, the extent to which subordinates accept a hierarchical system in a company is known as ________. A) uncertainty avoidance B) power distance C) individualism D) masculinity

power distance

Which of the following is a cultural dimension identified by the GLOBE Project team? A) power distance B) universalism C) individualism D) fatalism

power distance

Which of the following is a drawback of organizational culture? A) dishonesty toward organization B) reduced cooperation C) lack of commitment D) resistance to change

resistance to change

The unconscious reference point of one's own cultural values is called a(n) ________. A) self-reference criterion B) cultural distance criterion C) cultural diffusion standard D) unconscious power-distance point

self-reference criterion

According to Harris and Moran, which of the following is NOT a category that forms the subsystems in any society? A) societal system B) health system C) education system D) political system

societal system

Based on Trompenaars's value dimensions, in which of the following cultures do managers separate their work and private lives, and tend to be open and direct when communicating with coworkers? A) diffuse-oriented B) specific-oriented C) universalistic D) particularistic

specific-oriented

________ refers to the assumption that every member of a society or subculture has the same characteristics or traits without regard to individual differences. A) Diversification B) Posturing C) Stereotyping D) Parochialism

stereotyping

Canada consists of distinct groups such as Anglophones, Francophones, and indigenous Canadians. This is an example of ________. A) subculture B) stereotyping C) cultural diffusion D) convergence

subculture

The main purpose of Harris and Moran's eight categories is ________. A) to show how subsystems in a society affect an individual's behavior B) to emphasize how stereotyping can be used for learning about different cultures C) to show how subcultures are beginning to converge with broader cultures D) to indicate that global managers should adapt to subordinates from other cultures

to show how subsystems in a society affect an individual's behavior

Based on Hofstede's value dimensions, countries in which nationalism is less pronounced, protests are tolerated, and job mobility is common are high on ________. A) power distance B) collectivism C) uncertainty avoidance D) masculinity

uncertainty avoidance

The first step for an international manager toward cultural sensitivity should be to ________. A) work and travel in a foreign culture B) interact with people from other cultures C) understand his or her own culture D) learn to speak another language

understand his or her own culture

Which of the following terms refers to a society's ideas and convictions about what is good or bad and right or wrong? A) regulations B) values C) rules D) procedures

values