Chapter 5

Starbucks owns one third of its stores outside the U.S. Those stores are a(n)

direct investment

Which management function do differences between domestic and international production quality standards fall under? a. Planning b. Organizing c. Decision making d. Leading e. Controlling

e. controlling

Which of the following is NOT an example of a mature market system? a. The United States b. Japan c. China d. The United Kingdom e. Sweden

China

____ is a device that can help protect domestic producers by directly adding to the cost of foreign goods. a. Import quota b. Export restraint c. Buy domestic law d. Export tariff e. Import tariff

e. import tariff

Which of the following is a disadvantage of joint ventures/strategic alliances? a. More rapid market entry b. Access to technology c. Access to raw materials d. Reduced risk e. Shared control over operations

e. shared control over operations

Nokia sells phones in more than 150 countries and has employees in more than 120 countries. It is a(n) ________ business.

multinational

Siemens moves almost all the mail in the United States. Siemens and the U.S. Postal Service use a(n) ____ strategy. a. importing/exporting. b. licensing. c. outsourcing. d. direct investment. e. strategic alliance.

E. strategic alliance

People who exhibit _____ tend to place a high premium on relationships, quality of life, and concern for others.

passive goal behavior

Opponents to the maquiladoras concept are most critical of its

exploitation of human resources

Which of the following countries is NOT a member of the European Union (EU)? a. Belgium b. Luxembourg c. Italy d. Ireland e. Ukraine

Ukraine

The advantage of direct investing is

enhanced control

Germany is a mature market economy. One major problem GE expected to face when it began operating in Germany was

taking market share from established firms

____ is an example of a high-potential/high-growth economy. a. India b. The Philippines c. South Korea d. Syria e. Kuwait

A. India

With whom is the United States involved in a mature market system? a. The European Union b. The Latin American Integration Association c. The Caribbean Common Market d. Canada and Mexico e. Pacific Asia

D. Canada and Mexico

_____ is the cultural belief that the person comes first.

Individualism

Which of the following countries does NOT have a mature market economy? a. Germany b. Korea c. Sweden d. Iran e. Spain

Iran

Which of the following statements is NOT true about the WTO?

It actively supports human rights and the environment

Compassion International is a children's charity that provides basic necessities, schooling, and job training for poverty-stricken children around the world. This not-for-profit organization would require which type of investment when it enters a new country? a. Direct investment b. Joint venture c. Licensing d. Importing/exporting e. Franchising

a. direct investing

Which of the following is NOT a part of a nation's infrastructure? a. Its natural resources b. Its highway system c. Its airports d. Its commercial distribution system e. Its power plants

a. its natural resources

U.S. managers have the least difficulty operating in ____ economies. a. market b. communist c. industrializing d. developing e. pure competition

a. market

According to the text, which of the following is a factor of the political-legal environment for international managers? a. Infrastructure b. The use of import quotas and tariffs c. Natural resources d. Language spoken e. Religious beliefs

b. the use of import quotas and tariffs

The United States Department of Defense requires some weapon systems to be made by U.S. companies for national defense reasons. This is an example of

buy national legislation

A tariff a. cannot be collected by the exporting country. b. can be collected only by the importing country. c. can be collected by countries through which goods pass. d. cannot be used to raise money for a government. e. cannot be used to increase the cost of foreign goods.

c. can be collected by countries through which goods pass

Which of the following is NOT a factor of the political-legal environment for international managers?

infrastructure

Marks & Spencer is an upscale British department store that has a few stores in the United States and two stores in Paris. According to the classification scheme in the text, Marks & Spencer is a(n) ____ business. a. international b. domestic c. multinational d. intercontinental e. global

international

Which of the following is NOT a reason for using a licensing agreement as a means of entering international business?

low levels of risk

People in the U.S. and Canada and the Netherlands tend to believe that the person comes first. This refers to Hofstede's ______ orientation.

social

McDonalds operates restaurants around the world in airports. The agreement between McDonalds and the airports is a (n)

strategic alliance

Which of the following is NOT a potential disadvantage associated with an import/export operation?

there is a great deal of risk involved compared to other strategic alternatives

Which of the following is NOT an example of an economic challenge faced by international managers?

unstable government

Which of the following describes one of the reasons for the establishment of the European Union? a. Eliminate trade barriers between member countries b. Decrease tariffs on products from nonmember countries c. Enhance movement of capital and labor between nonmember nations d. Increase the usage of member labor pools by nonmembers e. Gradually eliminate imports from nonmember nations

A. Eliminate trade barriers between member countries

Which of the following countries is NOT a member of the European Union? a. Kosovo b. Spain c. France d. Italy e. Greece

A. Kosovo

Which of the following is the least intense level of international business strategy?

A. importing/exporting strategy

People from which of the following countries are in the category of uncertainty acceptance? a. United States b. Israel c. Austria d. Japan e. Germany

United States

A manager concerned with time zone differences is worried about

controlling

Which of the following statements can be used to explain the growth of international business? a. Many countries in Europe and Asia were devastated after World War II and had to be rebuilt. b. The postwar population boom decreased demand for products. c. Changes in cultural traditions made the rest of the world open to all of the products made in the United States. d. Infrastructures in Europe and Asia remained sound in spite of World War II. e. All of these choices

A. Many countries in Europe and Asia were devastated after WWII and had to be rebuilt

A nation's cost of living is part of its a. economic environment. b. cultural heritage. c. task environment. d. technological environment. e. political-legal environment.

A. economic environment

Oil is a part of a country's a. economic environment. b. cultural heritage. c. infrastructure. d. technological environment. e. political-legal environment.

A. economic environment

A(n) ____ strategy requires little initial investment, is heavily regulated, and provides little opportunity to modify products for local conditions. a. importing/exporting b. licensing c. joint venture d. global sourcing e. direct investment

A. importing/exporting

Which of the following is NOT one of the environmental challenges identified in the text that complicates international management? a. Technological b. Political c. Economic d. Cultural e. Legal

A. technological

As a manufacturing firm builds a plant in Bolivia, it also has to build an airstrip so that it can get the building supplies and the component parts it needs for operation to the Bolivian facility. The building of the airstrip was necessary because Bolivia has a. limited natural resources. b. an underdeveloped infrastructure. c. too many competing airports. d. no international trade incentives. e. None of these choices

B. an underdeveloped infrastructure

Colleges and Universities allow shirts, hats, blankets, and many other products to be sold with school logos on them. The schools get a percentage of the sale. The schools have chosen to use a(n) ____ strategy to generate more income. a. joint venture b. licensing c. direct investment d. exporting e. global involvement

B. licensing

Which of the following describes what has occurred in international business during the past three decades? a. Although still increasing, international trade has grown at a slower rate since 1980. b. The volume of international trade increased more than 3000 percent. c. U.S. investment overseas has been on the decline for the past two decades. d. The majority of the world's largest firms are firms with headquarters inside the United States. e. All U.S. firms still earn the majority of their sales and profits in the United States.

B. the volume of international trade increased more than 3000 percent

Which of the following countries is NOT part of Pacific Asia? a. China b. The Philippines c. India d. South Korea e. Australia

C. India

Which of the following statements about maquiladoras is FALSE?

C. maquiladoras are a form of licensing

TransFair USA promotes fair trade programs so farmers in developing countries can earn high enough wages to afford adequate nutrition and basic health care. TransFair is trying to change the ____ environment of international management. a. technological b. cultural c. political d. economic e. legal

D. economic

An example of the economic system in China is a. all postings on Qiangguo, the largest Internet bulletin board in China, are censored. b. bowling is the latest fad in China, with a new bowling alley opening weekly. c. calligraphy is viewed as a higher art form than painting and drama. d. one of China's greatest natural resources is its labor pool. e. the Chinese government has a one-child population control.

D. one of China's greatest natural resources is its labor pool

One of the primary challenges facing those who would like to enter a high-potential/high-growth economy is a. more infrastructure than can be used. b. a large upper class. c. a communist government. d. potential consumers are poor. e. None of these choices

D. potential consumers are poor

Which of the following is an example of an economic challenge faced by international managers? a. Government ownership of all property b. Absence of natural resources c. Lack of communication capabilities d. Poor transportation system e. All of these choices

E. All of these choices

Which of the following statements about tariffs is TRUE? a. Tariffs can be collected by the exporting country. b. Tariffs can be collected by the importing country. c. Tariffs are taxes collected on goods shipped across national borders. d. Import tariffs are the most common kind of tariff used. e. All of these choices

E. All of these choices

The major reason so many companies from all over the world are embracing the maquiladoras concept is because of a. lower transportation costs. b. its efficient use of raw materials. c. its ability to avoid regulatory problems. d. improved technology. e. cheap labor.

E. cheap labor

A(n) ____ business transcends national boundaries and is not committed to a single home country. a. international b. domestic c. multinational d. intercontinental e. global

E. global

A disadvantage of importing/exporting is a. inflexibility. b. competition. c. shared ownership. d. complexity. e. government restriction.

E. government restriction

Which of the following statements does NOT describe a characteristic of importing/exporting? a. Importing/exporting is an easy way to enter a market. b. There is very little risk involved with importing and exporting. c. The cost of importing/exporting may be high due to transportation costs. d. Due to government restrictions, not all products can be imported or exported. e. The costs of initiating an import/export strategy are high.

E. the costs of initiating an import/export strategy are high

A(n) ____ business is one that is primarily based in a single country but that acquires some meaningful share of its resources and/or revenues from other countries. a. international b. domestic c. multinational d. intercontinental e. global

a

Tohos, pantyhose with the foot shaped like a mitten, are sold over the Internet. Its business is primarily in the United States and Japan. It is an example of a(n) ____ business. a. international b. domestic c. multinational d. intercontinental e. global

a

_______ is a form of international business involvement in which two or more firms have an equity position in an operation.

a joint venture

Great Wolf Lodge is a hotel chain with water parks built inside. In the lobbies they have Pizza Hut and Starbucks. Great Wolf Lodge uses a(n) ______ strategy.

a joint venture/strategic alliance

An example of the cultural system in China is a. all postings on Qiangguo, the largest Internet bulletin board in China, are censored. b. Bowling is the latest fad in China, with a new bowling alley opening weekly. c. China has budgeted 240 million Yuan ($29 million) to clean up the public toilets. d. One of China's greatest natural resources is its labor pool. e. The Chinese government has a one-child population control

b. bowling is the latest fad in china, with a new bowling alley opening weekly

Labor unions in the United States would like to see Congress pass domestic content laws that would require, for example, that all automobiles sold in the United States contain at least a specified percentage of parts that were manufactured in the United States. Such laws would fall under the heading of a. import tariffs. b. buy national legislation. c. quotas. d. export tariffs. e. economic disincentives.

b. buy national legislation

When Starbuck operates in other countries it customizes the snacks to local tastes. This is a(n) ____ challenge for international managers. a. technological b. cultural c. political d. economic e. legal

b. cultural

Donna is a certified public accountant with expertise in only the U.S. tax code. Her service is a(n) ____ business. a. international b. domestic c. multinational d. intercontinental e. global

b. domestic

Geer Hofstede identified all of the following fundamental differences that can be used to characterize people in different cultures EXCEPT a. power orientation. b. global orientation. c. social orientation. d. time orientation. e. uncertainty orientation.

b. global orientation

____ economies are recognizable by their tendency to allow market forces to determine business strategies and to have private ownership of property. a. Communist b. Market c. Industrializing d. Pure competition e. Socialist

b. market

Top executives at BBT Corporation set the strategic direction for the firm at corporate headquarters. BBT's local managers are then informed of these strategies and given complete freedom to implement them. Which of the following management functions best describes the freedom provided local managers? a. Planning b. Organizing c. Decision making d. Leading e. Controlling

b. organizing

When a local manager is given autonomy and responsibility in dealing with job design, he or she has freedom in global a. planning and decision making. b. organizing. c. leading. d. controlling. e. None of these choices

b. organizing

In Japan apples are very expensive and are traditionally presented as gifts. The apples are grown with wrapping on each apple to prevent insects and ensure perfect color. When Washington Apples wanted to export to Japan it faced ____ barriers. a. economic. b. political-legal. c. cultural. d. infrastructure. e. technological.

c. cultural

A French ministry has banned the word e-mail from official communication. Instead, the French words for quick and mail have been combined to form a new word. This is an official attempt to protect the French a. political-legal system. b. economic system. c. cultural environment. d. economic community. e. natural resources.

c. cultural environment

A U.S. recording company that wanted to take advantage of the fact that European teens love everything American would find it difficult to get its music played on French radio stations. French radio stations are required to play at least 40 percent French-made music. This requirement indicates one way that the ____ environment challenges international management. a. technological b. cultural c. political-legal d. economic e. natural

c. political-legal

In the U.S. Starbucks does not franchise. It has a(n) ____ agreement with Barnes and Noble. a. importing b. exporting c. strategic d. global sourcing e. direct investment

c. strategic

Which of the following is a problem associated with the implementation of a direct investment strategy?

complexity of decision making

The U.S. government limits how many automobiles can be imported into the United States annually. This is a(n) a. export restraint agreement. b. import tariff. c. embargo. d. quota. e. boycott.

d. quota

A certain developing country in South America offers your firm a construction subsidy if you build your new plant there. This is an example of a. an economic challenge for international managers. b. a control on international trade. c. a mature infrastructure. d. an incentive for international trade. e. a technological challenge for international managers.

d. an incentive for international trade

____ gives preference to domestic producers through content or price restrictions. a. A maquiladora b. Nationalization c. Privatization d. Buy national legislation e. A boycott

d. buy national legislation

Schools, highways, hospitals, and power plants are part of a nation's a. natural resources. b. political system. c. cultural environment. d. infrastructure. e. technological environment.

d. infrastructure

The cultural challenges of international management include a. natural resources. b. the infrastructure. c. government stability. d. language. e. All of these choices

d. language

Which of the following statements about medium-sized international business organizations is TRUE? a. Many are still primarily domestic organizations. b. They are much more selective about the markets they enter than are MNCs. c. They depend more on international specialists to help them manage their foreign operations than do MNCs. d. They tend to compete with foreign businesses in their own domestic market. e. All of these choices

e. all of these choices

____ strategy is considered the highest level of involvement in international business. a. Importing/exporting b. Licensing c. Joint venture/strategic alliance d. Franchising e. Direct investment

e. direct investment

Coca-Cola is based out of Atlanta but reaches into hundreds of countries. The product is locally packaged, but the cola inside is essentially the same throughout the world. Coca-Cola is edging closer to being a(n) ________business

e. global

Which of the following is an example of how cultural differences directly impact international business practices? a. Government stability b. Schools c. Buy national legislation d. Hospitals e. Religious practice that separates men and women

e. religious practice that separates men and women

American music and movie industries are the largest in the world. These industries use ____ to bring their product around the world.

exporting

Two U.S. companies Cargill and Archer Daniels Midland purchase 25% of the world cocoa supply from farmers in West Africa. These companies use a. importing. b. direct investment. c. global sourcing. d. exporting. e. joint venture.

importing

____ is the least risky type of international business in which firms usually become involved. a. Importing/exporting b. Licensing c. Joint venture d. Global sourcing e. Direct investment

importing/exporting

A(n) _______ strategy involves a partnership with a long-term commitment that can be used to acquire new technology and information.

joint venture

The U.S government became the majority shareholder in GM in 2009. The Obama administration was moving the U.S. away from a ______ economy.

market

Which of the following is the type of economy most countries in the world are striving to attain?

mature market economy

People in the U.S, Israel and Ireland are likely to question their supervisors. This is referred to as a(n) ______ orientation.

power tolerant

A(n) ______ is the most common form of trade restriction.

quota

People in Pakistan and West Africa are more likely to want immediate gratification. This is an example of Hofsted's _______ orientation.

time