Test 1 Review Questions

Which of the following statements about FDI is FALSE

FALSE: -FDI requires fewer of a firm's capabilities than does any other entry strategy. TRUE: -a firms engaging in FDI muse become very familiar with the culture of the host nation -a firm with FDI has direct contact with customers and suppliers -comparative advantage is the driving force behind FDI -FDI requires a significant investment in resources

The MNEs that are the most active in FDI are in the ______,________, and ______ industries.

automotive, oil, telecommunications

Which of the following is a motivation for international expansion?

being closer to supply sources

Established in 2010, Instagram quickly found an international market for its photo-site. Currently, only a small fraction of Instagram's customers are from the United States. Instagram is an example of a(n) __________.

born global firm

Advances in _________ have resulted in an expansion of the global marketplace for small-and medium-sized enterprises (SMEs).

communications

Which of the following represents the trend of economic disaster spreading from one country to another?

contagion

Johnson & Johnson created alcohol-free Listerine Zero for Muslim countries, where spirits are forbidden, and Green Tea Listerine for Asian markets. This example shows that ________.

cultural differences necessitate the tailoring of marketing activities to target markets

Which of the following best describes culture?

culture is relative

________ describes using one's own culture as a basis for judging other cultures.

ethnocentric orientation

________ refers to the performance of trade and investment activities by firms across national borders?

international business

______ involves the passive ownership of foreign securities such as stocks and bonds for the purpose of generating financial returns.

international portfolio investment

A(n) _______ is a form of collaboration between two or more firms to create a new enterprise.

joint venture

Tori believes that business contracts should be very exactly worded. Because of bad experiences, she does not trust agreements based on assumptions, handshakes, or unspoken understandings. Tori trusts extensive verbal explanations and spoken words more than relationships. She is from a _______ culture.

low-context

When a company transfers its value-chain activities by launching a subsidiary in a foreign country, it is called ______.

offshoring

Which of the following is a societal consequence of globalization?

offshoring and the fight of jobs

What is the second stage of the internationalization process model?

pre-export

Which of the following is NOT a key feature of foreign direct investment?

proximity to key export markets

_____________ is the tendency to view other cultures through the lens of one's own culture.

self-reference criterion

_______ is an inflexibly held attitude that is generally negative and typically aimed at particular groups of people.

A prejudice

_______ is a situation or event in which a cultural misunderstanding puts some human value at stake.

Cross-cultural risk

Which of these describes a strategy that involves a firm's establishing a presence overseas by acquiring productive assets such as land, plants, equipment, capital, and technology?

Foreign direct investment

_________ inspires corporations to establish their sourcing, producing, and promoting activities on a worldwide scale in order to attain lower costs with higher efficiency.

Gloablization

Which dimension of market globalization is a result of the North American Free Trade Agreement (NAFTA), as well as other countries' agreements that have facilitated reduced trade barriers among their members?

Growth of regional economic enterprise blocs

______ is a religion that is not associated with one particular prophet. It is an open-hearted faith that fully accepts other faiths and is inspired by central concepts called dharma and karma.

Hinduism

Which term refers to an expression whose symbolic meaning differs from the literal meaning?

Idiom

___________ involves the allocation of assets to another country or the attainment of assets in that particular country.

International Investment

In what do companies engage when they systematically increase the international dimension of their business activities?

Internationalization

Sierra's religion is based on a holy book called the Qur'an. She participates in daily ritual prayers, fasts during certain times of the year, and gives to charities. Her religion prohibits the consumption of alcohol or wearing revealing clothing. What religion does Sierra practice?

Islam

In a(n)_______ culture, people are flexible, and they value multitasking and spending a lot of time with others. Such cultures do not put much emphasis on time and schedules.

Polychronic

ABC Enterprises transferred some of its manufacturing and other value-chain activities to a more cost-effective location in China five years ago. Recently, ABC Enterprises has undergone a change in management, and the new manager has decided to move those value-chain and manufacturing activities back to the home country.

Reshoring

Sally, a recent business school graduate, loves adventure, so she is seeking a job in a foreign country to expand her sense of the world of business. She is being recruited by a company that has 50 employees and is looking to hire additional personnel to oversee the firm's supporting branch in Vietnam. What type of international business is recruiting Sally?

Small enterprise

_____ refers to the degree of competence a country has in overseeing its own matters. It implies that the laws of one country cannot be applied to another country.

Sovereignty

The formation of the WTO and the emergence of economic integration blocs led to __________.

a global decrease in barriers to trade.

The sequence of activities implemented by a company in the course of creating, manufacturing, promoting, and servicing a product is known as _______.

a value chain

Acculturation refers to the process of_________.

adapting to a culture other than one's original culture

Cross-cultural differences in business can lead to problems with ________, which is when information and instructions can be understood in multiple ways.

ambiguity

Which term refers to unconscious judgments, often not based on logical facts, about what is good, acceptable, important, and normal.

attitudes

What is the most complex entry strategy for engaging in global business?

foreign direct investment

From the trade theories perspective, the main reason that firms internalize value-chain activities is to _______.

gain and sustain competitive advantage

A(n)_____ values nonverbal messages and sees communication as a way to encourage harmony in relationships.

high-context culture

Nigeria's telecom infrastructure has increased telephone usage to over 30 million cellular subscribers. What is the most likely benefit Nigeria will realize from adding telephones?

improved living standards

In _______, people are primarily concerned with their own self-interest, and ties among individuals are fairly loose.

individualistic societies

Societies that score low on uncertainly avoidance ___________.

take risks and make decisions quickly

There have been 4 phases of globalization since the 1800's. The most current phase is characterized by__________.

the growth of cross-border trade

________ is defined as the ability to accept uncertainty and a lack of clarity in the thinking and actions of others. I ask my students to do this all the time!!

tolerance for ambiguity

Critical incident analysis involves all of the following steps EXCEPT:

using an ethnocentric orientation in judging behavior (wrong answers but correct steps) -gathering information from local citizens -interpreting the behavior of others based on the cultural context -considering the culture when assessing problems -identifying situations where cultural awareness is essential to interaction

The greatest significance of globalization is reflected directly in a company's _______.

value chain

Which cultural dimension relates to personal motivations and behaviors?

values

Which of the following describes an instance when a firm own multiple stages in the production of a product or service?

vertical integration