BAPA 5131 Test 1

Falling trade barriers are facilitated by the WTO

True

International business is defined as the performance of ________ activities by firms across national borders.

finance and operational *trade and investment accounting and auditing marketing and fiduciary

Freehold Investment Corp. (Scenario) Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures. Phillip Hardy, one of the potential investors, expresses the desire to purchase only those types of assets in which he can maintain a relatively short-term interest. Which of the following investment opportunities would be most suited for Mr. Hardy?

the Freehold World Climb Project, which maintains partial ownership of an Australian hiking equipment production plant a venture that gives investors ownership of the equipment used by multiple South African mining companies an initiative to purchase the technology assets of an Indian consulting firm Correct the Freehold Eastern Growth Fund, which purchases Eastern European growth stocks

Which of the following acts makes it illegal for U.S. firms to offer bribes to foreign parties in order to secure or retain business?

the U.S. Securities Exchange Act the Sherman Antitrust Act Correct the U.S. Foreign Corrupt Practices Act the Robinson-Patman Act

________ refers to the superior features of a country that provide unique benefits in global competition, typically derived from either natural endowments or deliberate national policies

*Comparative advantage Competitive advantage Absolute advantage Industrial cluster

Sid Maxwell (Scenario) Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. Which of the following can extend legal protection to Hudson's proprietary software used in its toys?

*a copyright a patent a users' license a trademark

Boycotts and protests have the potential to harm businesses by ________.

*lost sales and increased costs for public relations activities preventing businesses from shipping their products to foreign markets destroying the ability of all local firms to carry on normal business operations raising concerns about a firm's foreign operations by initiating lawsuits

A proactive economic development plan initiated by the government, often in collaboration with the private sector, that aims to develop or support particular industries within the country is referred to as ________.

*national industrial policy national fiscal policy policy on national industrial relations national endowment policy

The free movement of capital around the world is also known as ________.

*the globalization of capital contagion bond-based debt financing common market arrangement

Which of the following countries is considered primarily socialist

Canada Correct India Germany Libya

Which of the following best characterizes the development of international business?

Correct It has existed in some form for centuries. Its development has slowed in recent years. It developed after the year 2000. It first started in Europe.

Which of the following statements is true of country risk?

Correct It is always present. It is present only in poor nations. Its nature remains constant over time and across nations. Its intensity seldom varies over time and across nations

Mercantilism Assignment (Scenario) The final assignment for Daniel Parilla's international business class involves taking an in-depth look at one of the six classical perspectives that explain the rationale for international trade. Daniel plans to present an argument in favor of mercantilism. Daniel will be attempting to convince his classmates that mercantilism leads to national prosperity. Daniel's peers will be given the opportunity to counter his argument.

Correct Restricting imports reduces the choice of products consumers can buy. Running a trade surplus is beneficial for nations. Mercantilism helps curb inflation. Mercantilism tends to benefit firms that import.

Common and Civil Law (Scenario) Zane Computer Corporation is considering the possibility of building a new manufacturing facility in a foreign country in order to lower labor and production costs. The legal department of Zane has raised some issues regarding two countries that are the top contenders for the new facility. The legal system of Country A is based on civil law, while the legal system of Country B is based on common law. Other than the legal systems of the two countries, all other aspects are virtually identical. Zane's legal experts must determine which system would be the most beneficial to Zane in the long-term. Which of the following supports Country A over Country B?

Correct contractual noncompliance provisions are broader in scope judges confer with legislators on international business issues higher flexibility compared to other legal systems contracts are so detailed that they are expensive to draft

Which of the following grants protections to the creators of art, music, books, software, movies, and TV shows?

Correct copyright patent trademark domain registration

Business dealings in low-context cultures are characterized by ________.

Correct efficient negotiations complex rituals a high degree of mutual respect a high degree of sensitivity to the context

Which of the following best explains why Taiwanese computer manufacturers established subsidiaries in the United States?

Correct low-cost financial capital low-cost labor lack of skilled managerial talent in home country access to raw materials

Which of the following legal systems is largely practiced in the Middle East?

Correct religious socialist common civil

Which of the following behaviors of a firm can be called unethical?

Correct tolerating sweatshop conditions setting up operations abroad failing to meet shareholders' expectations with regard to annual profit manufacturing luxury consumer goods

________ refers to a distinctive tradition or institution strongly associated with a particular society.

Cultural pluralism Moiety Totem *Cultural metaphor

Which of the following is a typical outcome of free trade?

Domestically produced products tend to be cheaper than imported products. Free trade sustains inflation in developing economies. Lower-cost imports cause living standards to deteriorate. Correct Unrestricted international trade generally increases the overall prosperity of poor countries.

Firms expand abroad mainly as a reaction to market globalization

False

In the past, international trade and investment activities were mainly conducted by companies that sold services

False

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

False

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

False

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

False

Freedom Shoes (Scenario) Freedom Shoes Inc., a sports shoe company, is considering entering into a contract with an overseas vendor to expand its production capacity. The company investigated several suppliers and found one vendor to be the most attractive in terms of cost and manufacturing efficiency. However, Freedom's managers have heard reports that the vendor operates factories with sweatshop conditions. Which of the following, if true, implies that Freedom has a strong social interest?

Freedom considers that the key to success for MNCs lie in their ability to tap resources effectively and at a lower cost. The top management of Freedom actively engages in positively contributing to the disadvantaged communities in the society. According to Freedom, a firm that fails to institute a green purchasing policy in sourcing its inputs is more likely than not to fail in the long run. Correct Despite the overseas vendor's effectiveness, Freedom decides not to enter into a contract with it because according to Freedom, tolerating sweatshop conditions is unethical.

________ represents the apex of the pyramid of ethical behavior

Guarding against corruption Correct Corporate social responsibility Complying with laws and regulations Ethical behavior

Which of the following best explains why India was once characterized by high country risk?

Indian leaders feared the modern influences of American firms taxes and financial incentives benefited Indian businesses over foreign firms Indian business leaders distrusted most European corporations Correct political leaders enacted laws that targeted foreign firms for harassment

Earth-Rite Organic Foods (Scenario) Earth-Rite Organic Foods Inc. is an MNE based in Sweden with subsidiaries located in numerous countries around the world. Earth-Rite has annual sales of $10 billion and employs more than 90,000 individuals worldwide. Earth-Rite currently dominates the organic food industry, but competitors are beginning to catch up because of a growing demand for organic produce. Earth-Rite is considering a collaborative venture with a small chain of organic grocery stores located in Brazil, a country where Earth-Rite has no stores. Earth-Rite executives are considering internalizing operations in Brazil. Which of the following, if true, best supports this plan?

Intermediaries and collaborators ensure greater control over domestic operations. Internalizing value-chain activities increases employee turnover. Correct By internalizing operations, Earth-Rite will retain control of product quality. The management of Earth-Rite wants to maximize dissemination of proprietary knowledge.

The ________ is a policy platform and practical framework for companies committed to sustainability and responsible business practices. It is the world's largest voluntary corporate citizenship initiative, representing thousands of businesses in more than 135 countries.

International Economic Development Council Global Reporting Initiative Correct United Nations Global Compact Organization for Economic Cooperation and Development

Which of the following is NOT true about Islam?

Islam prohibits drinking alcoholic drinks . Islam condemns charging interest for money loaned. Islam prohibits gambling. Correct Islam discourages free trade

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

Panama Uganda Hungary Correct Japan

Subjective dimensions of culture (Scenario) In the last two years, the sales of consumer electronics in China have risen by 9.4 percent. Moreover, the market is becoming increasingly competitive since a large number of Japanese, European, and American manufacturers are building factories to face the competition from low-cost Chinese manufacturers. Grande Co. is a U.S.-based consumer electronics manufacturer that has been negotiating with Chinese authorities for eight years to open a factory in the country. Since Grande has spent significant time and energy on negotiation in the past eight years, they should quit and set up a factory in a more responsive society. Which of the following can be inferred from the above passage?

The Chinese culture is more likely than not to be deal-oriented. The American culture is less likely to take an impersonal approach to business. Correct The Chinese culture is more likely than not to be relationship-oriented. The American culture is more likely than not to be relationship-oriented.

Which of the following statements is true about the firm-level consequences of market globalization?

The globalization of markets has narrowed down new business opportunities for internationalizing firms. A firm's value chain is not subject to internationalization. Through offshoring, a firm relocates a major value-chain activity by establishing a factory or subsidiary in the home market. Correct Globalization drives firms to relocate key value-adding activities to the most advantageous locations around the world.

Which of the following is an example of offshoring

Treat Corp. is a food and beverage manufacturer based in Texas. It decided to move from Houston to Fort Worth in Texas to cut production costs. Fahad, a resident of the UAE can share his views-data and information-about the country's construction industry with his friends in the U.S. Lin, a Chinese citizen, decides to move to the U.K. after her application for scholarship is accepted by a leading university in London. Correct The IT support services for customers of Mayfair Inc., a U.S. based consumer electronics manufacturer, are based in India.

Which of the following is true about the determinants of national competitive advantage?

Vigorous competitive rivalry among firms lowers national innovativeness. Demand conditions describe the nation's position in factors of production, such as labor, natural resources, capital, technology, entrepreneurship, and know-how. Correct The presence of demanding customers pressures firms to innovate faster and produce better products. The presence of strong competitors in a nation adversely affects national competitive advantage.

Japanese Supercenter (Scenario) The Tag-Mart chain of discount superstores is nearing completion of its new supercenter in Tokyo. The Tokyo store is the first foreign store for the large U.S.-based company. Tag-Mart offers a large variety of products at virtually unbeatable prices. A group of Tag-Mart representatives has traveled to Tokyo to inspect the new store and hire a store manager. The top two contenders for the position are Hisako Aoki and Takematsu Sato. Aoki has 25 years of experience managing a local department store renowned for its customer service. Sato, born and raised in Japan, earned a college degree in the U.S. before working six years as a manager at a Texas Tag-Mart. Which of the following is most important for Tag-Mart's top management to determine while making a choice between Sato and Aoki as the new store manager?

What is the average age and annual income of Tokyo Tag-Mart shoppers? Correct Would customers at the Tokyo Tag-Mart prefer strong customer service or a U.S.-style shopping experience? How many shoppers are expected at the Tokyo Tag-Mart grand opening sale? How many locally owned stores will Tokyo Tag-Mart compete against?

Polycentric orientation refers to ________

a collectivist mind-set, which emphasizes conformity, duty, prescribed roles, and sacrifice for the greater good the tendency to rely on elaborate verbal explanations, putting much emphasis on spoken words the use of one's own culture as the standard for judging other cultures Correct a host-country mind-set in which the manager develops a strong affinity with the country in which she or he conducts business

Which form of government is characterized by private property rights and limited government?

autocratic socialist totalitarian Correct democratic

Technological leapfrogging is defined as ________.

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

The Coca-Cola Company is an example of ________.

born global firm *multinational enterprise NGO SME

The process of reproducing assets without compensating those who originally created them is known as ________.

bribery *counterfeiting trademarking product differentiation

Titania is a country characterized by a high-context culture. This implies that ________.

business is primarily deal-oriented in Titania Correct personal relations and goodwill are valued in Titania the people of Titania tend to conduct negotiations as efficiently as possible the people of Titania tend to use legalistic contracts to conclude agreements

In order to be effective, a corporate code of ethics should be designed to function like a ________.

business white paper project plan political treatise *moral compass

A ________ is one or more resources or capabilities a company possesses that few other firms have.

comparative advantage country-specific advantage *monopolistic advantage factor endowment

According to Porter's competitive advantage of nations, ________ refer to the nature of home-market demand for specific products and services.

demand liabilities firm strategy, structure, and rivalry factor conditions *demand conditions

An individual who believes in ethical normativism is most likely to view ethical behavioral standards as ________.

dependent on societal norms superior to religious beliefs Correct universal constantly changing

According to the internationalization process model, a firm advances to the ________ stage by initiating limited international activity, typically in the form of basic exporting.

domestic focus *experimental involvement active involvement pre-export

Which of the following would be the best way for a manager to learn about country risks in a host country?

host country nationals working abroad employees working in the home country analysis of records of competitor firms Correct employees working in the host country

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

industrialization *market liberalization advances in technology integration of world financial market

Each of the following represents a factor of production EXCEPT ________.

manufacturing infrastructure technology *government regulations managerial talent

Financial market integration makes it easier for internationally active firms to ________.

minimize offshoring increase tariffs on the import of automobiles and industrial machinery *engage in foreign currency transactions nationalize manufacturing industries

Which of the following comparative advantages is acquired over time?

petroleum reserves arable land labor Correct innovative capacity

In the five-step framework for making ethical decisions, which of the following approaches to evaluating actions is being used by a manager who questions whether a proposed action embodies character strengths he/she values?

rights approach utilitarian approach Correct virtue approach common good approach

In cross-border business, successful managers ________.

ritually avoid analyzing awkward situations in cross-cultural encounters adhere to a self-reference criterion overly emphasize the importance of business jargons in facilitating effective cross-cultural communication Correct are empathetic to cultural differences

A ________ government seeks to control not only all economic and political matters but also the attitudes, values, and beliefs of the citizenry.

socialistic democratic mixed Correct totalitarian

Which of the following refers to a collaborative venture which results in a new legal entity?

sole proprietorships non-equity-based strategic alliances not-for-profit organizations Correct equity-based joint ventures

Freehold Investment Corp. (Scenario) Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures. At the meeting, Dan explains to the attendees that Freehold direct investment projects differ from international trade in that ________.

the firm is engaging in the transfer of products across national borders Correct the firm itself is crossing international borders to purchase foreign assets the firm is restricting its investments to stocks and does not purchase mutual funds the firm has chosen to focus strictly on the technology sector

Economic interests refer to a firm's economic impact on ________.

the top management of the firm the middle management of the firm the society as a whole Correct the localities where it does business