Econ 2210

A common cause of the added complexity of foreign environments is managers' unfamiliarity with other cultures and is called self-reference syndrome.

FALSE: A common cause of the added complexity of foreign environments is managers' unfamiliarity with other cultures and is called self-reference criterion, not syndrome.

A multidomestic company is an organization that attempts to standardize and integrate operations worldwide in all functional areas.

FALSE: A global company is an organization that attempts to standardize and integrate operations worldwide in all functional areas.

The term international business is used to describe an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences.

FALSE: A multidomestic company is an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences.

According to the definitions in the text, a multidomestic firm is an organization that attempts to standardize operations worldwide in all functional areas.

FALSE: A multidomestic company is an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences. A global company is an organization that attempts to standardize and integrate operations worldwide in most or all functional areas.

An examination of the 2009 Human Development Report shows that only 23 of the 182 countries for which data were available had average annual GDP per capita growth rates that were higher than the U.S. growth rate for the period 1990-2007.

FALSE: An examination of the 2009 Human Development Report shows that 83 of the 182 countries for which data were available had average annual GDP per capita growth rates that were higher than the U.S. growth rate for the period 1990-2007.

An international company is an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences.

FALSE: An international company can be either a global or a multidomestic company. A multidomestic company is an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences.

Britain was the world's leading manufacturing country for about 1,800 years, until it was replaced by the United States at the end of the 1800s.

FALSE: China was the world's leading manufacturing country for about 1,800 years, until it was replaced by Britain about 1840.

According to the text, environmental elements over which management does have some control—including competitive, labor, and financial forces—are called internal forces.

FALSE: Competitive, labor, and financial forces are external (or uncontrollable) forces.

Only those companies that have foreign operations need to be aware of what is occurring globally in foreign markets and their industry.

FALSE: Even a strictly domestic company must be able to consider actions or potential actions of suppliers, competitors, customers, and other stakeholders that operate in foreign markets or that are active or may be active within the domestic company's marketplace and that may impact the domestic company's sales and profits.

External environmental forces are commonly referred to as controllable.

FALSE: External environmental forces are commonly referred to as uncontrollable.

Exporting refers to the transportation of any good or service to a destination inside a country or region.

FALSE: Importing refers to the transportation of any good or service to a destination inside a country or region. Exporting refers to the transportation of any domestic good or service to a destination outside a country or region.

International business differs from domestic business in that a firm operating across borders must deal with the forces of two kinds of environments—domestic and foreign.

FALSE: International business involves three kinds of environments—domestic, foreign, and international.

Critics of large global firms compare these firms' sales with nations' total sales to illustrate the tremendous size of these firms.

FALSE: Large global firms' sales are compared with nations' gross national incomes (GNIs).

Opponents of globalization argue that globalization has contributed to an improvement in environmental and health conditions.

FALSE: Opponents of globalization argue that globalization has contributed to a decline in environmental and health conditions.

The United States has only about 10 percent of the world's population, so the vast proportion of most companies' potential customers are located elsewhere.

FALSE: The United States has only about 5 percent of the world's population, so the vast proportion of most companies' potential customers are located elsewhere.

According to the text, the self-absorption criterion is probably the biggest cause of international business blunders.

FALSE: The correct term is self-reference criterion, not self-absorption criterion.

The international environment is composed of all the uncontrollable forces that surround and influence the firm's life and development.

FALSE: The domestic environment is composed of all the uncontrollable forces originating in the home country. The foreign environment is composed of all the uncontrollable forces originating outside the home country. The international environment is the interaction between domestic and foreign environmental forces or between sets of foreign environmental forces.

The forces in the international environment are the same as those in the domestic environment except that they occur in foreign nations.

FALSE: The forces in the foreign environment are the same as those in the domestic environment except that they occur in foreign nations.

According to the text, the international environment is all of the uncontrollable forces originating outside the home country that surround and influence the firm.

FALSE: The international environment is the interaction between domestic and foreign environmental forces or between sets of foreign environmental forces. Foreign environment is all the uncontrollable forces originating outside the home country that surround and influence the firm.

The reasons international firms enter foreign markets are all linked to either (1) the desire to increase profits or (2) the desire to increase sales.

FALSE: The reasons international firms enter foreign markets are all linked to either (1) the desire to increase profits and sales or (2) the desire to protect these profits and sales from being eroded by competitors.

In organizing their international activities, there are five dimensions along which management can globalize or standardize these activities.

FALSE: There are at least seven dimensions along which management can globalize or standardize.

Transnational corporations account for approximately 25 percent of total global output and nearly 50 percent of world trade.

FALSE: Transnational corporations account for approximately two-thirds of world trade, not 50 percent.

Uncontrollable forces are external forces over which management cannot exert any influence.

FALSE: Uncontrollable forces are external forces over which management has no direct control, although it can exert an influence

As the term is used in the text, foreign business is business whose activities are carried out across national borders.

False: foreign business denotes the operations of a company outside its home or domestic market. International business is business whose activities are carried out across national borders.

A business whose activities are carried out across national borders is known as an international business.

TRUE

A global company is an organization that attempts to standardize and integrate operations worldwide in most or all functional areas.

TRUE

According to the text, the domestic environment is all of the uncontrollable forces originating in the home country that surround and influence the firm's life and development.

TRUE

According to the text, the level of intracompany trade of multinationals in 1930, as a percentage of world trade, may have exceeded the proportion at the end of the 20th century.

TRUE

All managers need to have a basic knowledge of international business.

TRUE

Changing the method of going abroad from exporting to overseas production is often necessary to protect foreign markets.

TRUE

Expanded international trade is linked with the creation of more and better jobs.

TRUE

External forces in the international business environment are commonly called uncontrollable forces.

TRUE

Foreign business refers to the operations of a company outside its home or domestic market.

TRUE

Globalization has produced uneven results across nations and people.

TRUE

Greater profits may be obtained by either increasing total revenue or decreasing the cost of goods sold.

TRUE

Internal environmental forces are commonly referred to as controllable.

TRUE

One variable commonly used to measure where and how fast internationalization takes place is the increase in total foreign direct investment..

TRUE

Opponents of free trade point out that globalization has contributed to a decline in environmental and health conditions.

TRUE

Supporters of globalization generally argue that it is the best strategy for advancing the world's economic development.

TRUE

That free trade is the best strategy for advancing the world's economic development is one of the few propositions on which almost all economists agree.

TRUE

The Ottoman Empire's powerful location raised the cost of Asian trade for the Europeans and resulted in a search for sea routes to Asia.

TRUE

The United Nations uses the term transnational to describe an enterprise doing business in more than one country.

TRUE

The tendency toward an international integration of goods, technology, information, labor, and capital, or the process of making this integration happen, is referred to as economic globalization.

TRUE

The term international company refers to both global and multidomestic companies.

TRUE

The world stock of outward foreign direct investment was $19 trillion at the beginning of 2010, which was more than nine times what it was in 1990.

TRUE

There are five major kinds of globalization drivers, all based on changes that are leading international firms to the globalization of their operations.

TRUE

There are many outstanding international career opportunities for people with de50sirable interpersonal and language skills that are not in mainstream business but may require basic business expertise.

TRUE

There are many outstanding international career opportunities for people with desirable interpersonal and language skills that are not in mainstream business but may require basic business expertise.

TRUE

While international business as a discipline is relatively new, international business as a business practice is not.

TRUE