Exam 1 MANA 5360

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Use the following data to answer the next question: ========================================================== ## Transparency International's CPI (Index): Chile: 71; Colombia: 36; Brazil: 42; China: 40; India: 36 ## Freedom House's Freedom in the World's Ratings: Chile: 1; Colombia: 3.5; Brazil: 2; China: 6.5; India: 2.5 ## Worldwide Governance Indicators Rule of Law Index: Chile: 1.34; Colombia: -0.45; Brazil: -0.12; China: -0.46; India: -0.10 ## Heritage Foundation's Economic Freedom's index: Chile: 71; Colombia: 36; Brazil: 42; China: 52; India: 56 ========================================================== You work for a media company studying a foreign market entry. Your business requires a great deal of civil and political rights in society to be viable in a market. According to the data provided, the chances of your company entering ______ are significantly GREATER than it entering _____: India;Colombia Brazil; Chile China; Colombia Colombia; India

India;Colombia CORRECT! Let's use the Tutorial's 5-step to solve this:Requiring a great deal of civil and political rights for a country to be a viable market is related to POLITICAL FREEDOM. To measure political freedom we use Freedom House's Freedom in the World's Ratings, and disregard all other data. Our reference sheet should tell us that such Freedom ratings range from 1 to 7, and that the lower the rating, the more free a country is (meaning 1 is totally free and 7 is not free at all). Modeling the answer, we are asked about a place where the chances of having political freedom is significantly GREATER, which means we are looking for a pair of countries in which the first has a significantly LOWER Freedom rating (meaning, it would have more political freedom) than the other. Looking at the alternatives, India (2.5) has a significantly lower Freedom rating than Colombia (3.5), which DOES satisfy the criteria, and thus, this is the right choice.

Which of the following is NOT a good example of the globalization of production

IndoSox, an Indonesian producer of sport socks, closes a deal with 12 European distributors, to channel their products in Europe, and with Alibaba.com, to distribute them in the rest of the world. This is NOT about globalization of production. Globalization of production is about multinational companies distributing their supply chains globally to seize possible location economies, which a purely domestic production could not capture. This company is simply commercializing their products/services internationally, and thus is an example of globalization of markets, not globalization of production.

Use the following data to answer the next question: ======================================================== ## GNI at PPP per capita (2014 US$): Indonesia: 9,260; Malaysia: 22,525; Philippines: 7,827; Pakistan: 4,851; Thailand: 13,397 ## GNI at PPP (2014 US$ Billions): Indonesia: 2,315; Malaysia: 669; Pakistan: 881; Phillipines: 771; Thailand: 899 ## GDP Growth % (World bank 2010-14): Indonesia: 5.8; Malaysia: 4.7; Pakistan 4.4; Phillipines: 7.2; Thailand: 1.8 ## HDI (2013): Indonesia: 0.684; Malaysia: 0.773; Pakistan 0.537; Phillipines: 0.660; Thailand: 0.722 ======================================================== You work for an forestry developer; the company makes money buying land cheap, developing forestry in them, and then selling it developed later, at better prices. One important factor is future land prices, which is a function of forecasted development: in recession economies, for example, land loses value, and the company loses money. You are studying a foreign market entry for them and you have alternative countries from which to select one. According to the data provided, taken recent history as an indication of the future, and assuming the listed variables is all the information you have, the chances of your company entering ______ are GREATER than it entering _____: Thailand; Phillipines Malaysia; Indonesia Thailand; Malaysia Indonesia; Thailand

Indonesia; Thailand CORRECT! Let's use the Tutorial's 5-step to solve this:We are told that we are looking for economies in which economic development is strong, which regards ECONOMIC GROWTH: in recession economies (meaning negative growth), land loses value. To measure economic growth, among those indicators provided, the best measure would be GDP Growth. Our reference sheet should tell us that GDP Growth vary as percentages of variation between an economy's size in one year compared to the previous year: positive percentages indicate growth, negative percentages indicate recession, and the larger the positive percentage, the larger the economic growth. Modeling the answer, we are asked about a place where the chance of growth (rather than recession) is significantly GREATER, which means we are looking for a pair of countries in which the first has a significantly HIGHER GDP GROWTH in a given period of time than the other. Looking at the alternatives, Indonesia (5.8%) has a much higher GDP Growth than Thailand (1.8%), which DOES satisfy the criteria, and thus, this is the right choice.

The following is a good example of foreign direct investment

Intel decides to acquire a local Costa Rican manufacturer, a 100 million dollar deal, to offshore its production of microprocessors

The following are GOOD examples of foreign direct investment

Intel decides to acquire a local Costa Rican manufacturer, in a 100 million dollar deal, to offshore its production of microprocessors Rivers Inc., a U.S. based sports apparel manufacturer, sets up a production unit in China to take advantage of the lower labor costs there Perrigo, a U.S. based health product manufacturer, invests 100 million dollars in Kenya to build an health related manufacturing facility there, to leverage on a World Bank-sponsored economic development endeavour

Imagine your spouse works with credit management in a large private bank, but told you that he/she has accepted a job offer in a global organism that has the primary focus of lender of the last resort to countries in need. His/her chances of working for ______ are MUCH higher than working for ______:

International Monetary Fund (IMF); World Bank CORRECT! It is The IMF, or International Monetary Fund (and thus NOT the World Bank) that is known as the lender of the last resort to countries in need among global organisms in the international community. The World Bank is the global organism that has the primary focus of poverty reduction and economic development

Imagine the following situation: Company B is a large microcomputer US manufacturer. In terms of international activities, Company B exports its products to 20 countries around the world. Which of the following is TRUE about Company B's foreign operation:

It is feasible that Company B has not engaged in FDI (foreign direct investment), even if it does business in 20 countries around the world

Which of the following statements is TRUE regarding totalitarian regimes

It is possible to have a totalitarian state that is hostile to collectivism and where some degree of individualism is encouraged CORRECT! It is possible to have a totalitarian state that is hostile to collectivism and where some degree of individualism is encouraged. Two sets of examples: the Chilean dictatorship during the 1970s, as well as those among the so-called Asian Tigers during the 1970s and 1980s

Imagine a given country A, which does intense free trade with a neighbor country B, wants to punish Country B for what it perceives to be unfair immigration and trade practicies. To make Country B "pay for its sins", Country A decides to impose a hefty import tariff on good exported from Country B to Country A. About such case, one could safeky say:

It would not represent a positive source of revenues flowing from Country B's Government or Nationals into Country A, because Country A's nationals would be the one paying the new tariff

Most ETHNOCENTRIC managers would believe that:

Lifestyles in other cultures are different, but not as valid as those in their culture CORRECT! An ethnocentric individual believes their values, their culture, are superior to others he/she knows exist out there.

The following are NOT characteristics of a command economy

Limited international trade Promotion of foreign direct investment Rare (i.e., non abundant) state-ownership of means of production

Use the following data to answer the next question: ======================================================== ## Hofstede's Individualism: Denmark: 74; France: 71; Ireland: 70; Japan: 46; Malaysia: 26; Portugal: 27; Singapore: 20 ## Hofstede's Uncertainty Avoidance: Denmark: 23; France: 86; Ireland: 35; Japan: 92; Malaysia: 26; Portugal: 99; Singapore: 8 ## Hofstede's Indulgence: Denmark: 70; France: 48; Ireland: 65; Japan: 42; Malaysia: 57; Portugal: 33; Singapore: 46 ## Hall's High vs Low Context: Denmark: Low; France: Medium; Ireland: Low; Japan: High; Malaysia: High; Portugal: Medium-High; Singapore: Medium-High ## Hall's Private Space: Denmark: High; France: Medium-High; Ireland: High; Japan: Low; Malaysia: Low; Portugal: Medium; Singapore: Medium-Low ======================================================== You work in a multinational company that sent you to negotiate with a local client in one of your subsidiaries. All negotiations are in English. During a break, your local subsidiary colleagues let you know that they were all very upset, because without intention you made the most important of the client's counterparts in the negotiation embarrassed and somewhat humiliated. You have no idea what you did to provoke this, but you are sure it was not anything you said. They explain that your demeanor, not your words, may not only spoil this specific negotiation but may jeopardize the entire long-term relationship with the client. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you are negotiating in a country such as ________, than in the _______ subsidiary: Japan; Malaysian Denmark; Irish Malaysia; Ireland Portugal; Singapore

Malaysia; Ireland

Use the following data to answer the next question: ==================================================================== ## GDP Growth % (World bank 2010-14): Philippines: 7.2; Indonesia: 5.8; Malaysia: 4.7; Pakistan 4.4; Thailand: 1.8 ## HDI (2013) Index: Malaysia: 0.773; Thailand: 0.722; Indonesia: 0.684; Philippines: 0.660; Pakistan 0.537 ## GNI (2014 US$ Billions): Indonesia: 895; Thailand: 358; Philippines: 322; Malaysia: 310; Pakistan: 247 ## GNI at PPP (2014 US$ Billions): Indonesia: 2,315; Thailand: 899; Pakistan: 881; Philippines: 771; Malaysia: 669 ==================================================================== According to the data provided, the cost of living in _____ is significantly HIGHER than in ______:

Malaysia; Pakistan HDI Index

Use the following data to answer the next question: ======================================================== ## GNI at PPP per capita (2014 US$): Indonesia: 9,260; Malaysia: 22,525; Philippines: 7,827; Pakistan: 4,851; Thailand: 13,397 ## GNI at PPP (2014 US$ Billions): Indonesia: 2,315; Malaysia: 669; Pakistan: 881; Phillipines: 771; Thailand: 899 ## GDP Growth % (World bank 2010-14): Indonesia: 5.8; Malaysia: 4.7; Pakistan 4.4; Phillipines: 7.2; Thailand: 1.8 ## HDI (2013): Indonesia: 0.684; Malaysia: 0.773; Pakistan 0.537; Phillipines: 0.660; Thailand: 0.722 ======================================================== You are being interviewed for an international business position in a company that sells life insurance policies. The interviewer asks a tricky question: he/she wants to know among the listed countries which one is most likely to have better life expectancy rates. It is tricky because you only have those indexes to go by, and cannot use any other information you may have heard about those countries. According to the data provided, chances are that the country of ______ has GREATER life expectancy than ______: Phillipines; Thailand Malaysia; Thailand Phillipines; Malaysia Indonesia; Thailand

Malaysia; Thailand CORRECT! Let's use the Tutorial's 5-step to solve this:Requiring better life expectancy rates regards non-economic development. To measure non-economic development, among those indicators provided, the best measure would be HDI (Human Development Indicators). Our reference sheet should tell us that HDI indexes vary from 0 to 1, and that the higher the HDI index (and thus the closer to 1.0), the better human development is in that country, including better public health, better quality education to minorities, better life expectancy, etc. Modeling the answer, we are asked about a place where the chances of having better life expectancy rates significantly GREATER, which means we are looking for a pair of countries in which the first has a significantly HIGHER HDI than the other. Looking at the alternatives, Malaysia (0.773) has a higher HDI than Thailand (0.722), which DOES satisfy the criteria, and thus, this is the right choice.

The following is a BAD example of outsourcing

MammaMiaPasta, an Italian pasta producer, acquires MexMill's operation in Italy, a Mexican flour producer, to better control one of the most valuable elements of their supply chain This is NOT an example of outsourcing (Outsourcing is about hiring an external provider to perfom activities the company iteself could be performing), on the contrary: the company internalized an activity that was formely performed by an external supplier.

In a January 2019 WSJ editorial, John D. Stoll argued that "Tesla should pull an Apple, leave 'production hell' to other people". The author meant that Tesla should follow Apple's example and outsource and offshore manufacturing to countries that can do a better job than US in cost-sensitive manufacturing. Stoll recalled that Steve Jobs tried to produce Apple products in California, failed due to high costs and lack of productivity compared to lower cost countries, was then convinced that the US was not equipped to manufacture competitively, and ultimately offshored the manufacturing of iPhones. To Stoll, Tesla (which is trying to produce their cars in the same California town that Jobs once failed in) should rather deal with with its 15-year-long manufacturing cost and efficiency crisis by simply leaving manufacturing to other apt partners, in more competitive countries, so it could concentrate on product design and marketing. In a point of view opposite to Stoll's, the Trump administration has argued that companies like Tesla should get incentives and protection to keep production and jobs in the US, and be punished if offshoring production, because offshoring jobs would imply in the US accruing economic and balance of payment losses, both of which should be avoided at all costs. One could fairly argue that the Trump administration's perspective is mostly inspired on the following trade perspective:

Mercantilism and protectionism The Trump Administration, contrary to most Republican and Conservative US governments in the previous 75 years, seems to adopt a protectionist and anti-free trade policy and viewpoint. Stoll's perspective, on the other hand, seems more firmly based on Ricardo's Comparative advantage (and NOT absolute advantage or Porter's theory), by arguing not only that other countries may be more competitive than the US in manufacturing (that alone would make it based on absolute advantage), but also by suggesting that leaving manufacturing to more apt foreign countries would free up tesla to focus on design and marketing, meaning to imply that Tesla does that better than manufacturing.

Use the following data to answer the next question: ===================================== ## Transparency International's CPI (2016 Index): Afghanistan: 15; Algeria: 34; Bangladesh: 26; Bhutan: 65; Estonia: 70; Gabon: 35; Montenegro: 45; Namibia: 52; Somalia: 10 ## Worldwide Governance Indicators Rule of Law (2016 Index): Afghanistan: -1.62; Algeria: -0.85; Bangladesh: -0.59; Bhutan: 0.47; Estonia: 1.24; Gabon: -0.58; Montenegro: -0.04; Namibia: 0.39; Somalia: -2.37 ## Heritage Foundation's Economic Freedom (2018 index): Afghanistan: 51; Algeria: 45; Bangladesh: 55; Bhutan: 62; Estonia: 79; Gabon: 58; Montenegro: 64; Namibia: 59; Somalia: 45 ## Freedom House's Freedom in the World (2018 Index): Afghanistan: 26; Algeria: 35; Bangladesh: 45; Bhutan: 55; Estonia: 94; Gabon: 23; Montenegro: 67; Namibia: 77; Somalia: 7 According to the data provided, the chances of you being asked to pay a bribe for your business to get things done is significantly SMALLER in _____ than in _____: -Namibia; Estonia -Montenegro; Bhutan -Montenegro; Gabon -Gabon; Montenegro

Montenegro; Gabon CORRECT! This question is about CORRUPTION, which can be best measured, among the provided indicators, with Transparency International's CPI index. In such index, the higher the number, the cleaner the country. This option is correct because the first country had a HIGHER CPI (corruption) index than the second, and therefore in the first country the chances of corrupt actions happening are SMALLER than in the second, which is a more corrupt country.

Which of the following statements is TRUE about rule of law:

Most countries rule of law can and has been measured over the years by World Bank's Worldwide Governance Indicators

Most countries' rule of law can and has been measured over the years by Freedom House's Freedom in the World Index

Most countries' rule of law can and has been measured over the years by World Bank's Worldwide Governance Indicators

Use the following data to answer the next question (all data UNCTAD, 2013; all in US$ Millions): ======================================================== ## Outward FDI Stock 2013: Central African Republic: 43.2; Chad: 70.3; Mozambique: 24.3; Namibia: 31.8; Niger: 14; Rwanda: 12.9; Swaziland: 76.2 ## Inward FDI Stock 2013: Central African Republic: 619.5; Chad: 4757.7; Mozambique: 20966.9; Namibia: 4277.3; Niger: 4939.7; Rwanda: 853.9; Swaziland: 838.1 ## FDI 2013 Inflow: Central African Republic: 0.8; Chad: 538.4; Mozambique: 5935.1; Namibia: 699.1; Niger: 631.4; Rwanda: 110.8; Swaziland: 67 ## FDI 2013 Outflow: Central African Republic: 0; Chad: 0; Mozambique: -0.3; Namibia: -8.2; Niger: -6.7; Rwanda: 13.5; Swaziland: 0.6 ======================================================== Among the following countries, one country has received in the last reported year a very large proportion of all the multinational capital investments it has ever received. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that such country is ________, than _______ : a) Mozambique; Niger b) Chad; Namibia c) Swaziland; Namibia d) Chad; Mozambique

Mozambique; Niger CORRECT! Let's use the Tutorial's 5-step to solve this:FDI made by foreign countries into a country throughout its history is related to INWARD FDI STOCKS, and last year alone is related to FDI INFLOWS. Our reference sheet should tell us that the HIGHER a country's Inward FDI Stock, the more it has received FDI from other countries throughout that country's history, until a given moment in time. And that the higher a country's FDI Inflows, the more it has received FDI from other countries last year. The proportion of what a country received last year on what is has ever received is the proportion the question talks about. For example, if a country has an Inward FDI Stock of US$10 billion, and last year its FDI Inflow was US$500 million, then last's year incoming FDI represented a proportion of 5% of all the multinational capital investments it has ever received. Modeling the answer, we are looking for a pair of countries in which the first has a significantly HIGHER of such proportion than the other. Looking at the alternatives, Mozambique received US$5.9 billlion the prior year, and had a stock of US$20.9 billion, meaning it received that year a little under 30% of what it ever received. On the other hand, Niger received US$631 milllion the prior year, had a stock of US$4.9 billion, meaning it received that year a little over 10% of what it ever received. Therefore, Mozambique has a much higher proportion (30%-) than Niger (10%-), which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer the next question: ======================================================== ## Transparency International's CPI (Index): Hong Kong: 75; Chile: 71; Brazil: 42; India: 36; Colombia: 36 ## Worldwide Governance Indicators Rule of Law Index: Hong Kong: 1.54; Chile: 1.34; India: -0.10; Brazil: -0.12; Colombia: -0.45 ## Heritage Foundation's Economic Freedom's index: Hong Kong: 90; Chile: 71; India: 56; Brazil: 42; Colombia: 36 ## Freedom House's Freedom in the World Index: Hong Kong: 3.5; Chile: 1; India: 2.5; Brazil: 2; Colombia: 3.5 ======================================================== Imagine your company asked you to rank in political economy terms five countries they are thinking of entering in their internationalization endeavors: Brazil, Chile, Colombia, China and India. Based on the provided indicators, the chances of your company being able to operate even if not passing key governmental inspections, due to its local connections and political network, would be:

Much HIGHER in Colombia than in India

Use the following data to answer the next question: ============================================================================== ## Transparency International's CPI (Index): Hong Kong: 75; Chile: 71; Brazil: 42; India: 36; Colombia: 36 ## Worldwide Governance Indicators Rule of Law Index: Hong Kong: 1.54; Chile: 1.34; India: -0.10; Brazil: -0.12; Colombia: -0.45 ## Heritage Foundation's Economic Freedom's index: Hong Kong: 90; Chile: 71; India: 56; Brazil: 42; Colombia: 36 ## Freedom HouseÕs Freedom in the World Index: Hong Kong: 3.5; Chile: 1; India: 2.5; Brazil: 2; Colombia: 3.5 ============================================================================== Imagine your company asked you to rank in political economy terms five countries they are thinking of entering in their internationalization endeavors: Brazil, Chile, Colombia, China and India. Based on the provided indicators, the chances of your company being subjected to problems with excessive governmental intervention would be:

Much HIGHER in Colombia than in India (Economic freedom Index: Lower the #, more interference. Higher the #, less interference)

Use the following data to answer the next question: ======================================================== ## Transparency International's CPI (Index): Chile: 71; Colombia: 36; Brazil: 42; China: 40; India: 36 ## Freedom House's Freedom in the World's Ratings: Chile: 1; Colombia: 3.5; Brazil: 2; China: 6.5; India: 2.5 ## Worldwide Governance Indicators Rule of Law Index: Chile: 1.34; Colombia: -0.45; Brazil: -0.12; China: -0.46; India: -0.10 ## Heritage Foundation's Economic Freedom's index: Chile: 71; Colombia: 36; Brazil: 42; China: 52; India: 56 ======================================================== Imagine your company asked you to rank in political economy terms five countries they are thinking of entering in their internationalization endeavors: Brazil, Chile, Colombia, China and India. Based on the provided indicators, the chances of your company being subjected to societal problems due to poor civil rights would be:

Much LOWER in Brazil than in China

An American manager in Colombia routinely pays off the local drug lord to guarantee that his plant will not be bombed and that none of his employees will be kidnapped. The manager argues that such payments are ethically defensible because everyone is doing it in Colombia in order to stay in business. The manager's argument exemplifies which of the following ethical approaches?

Naive immoralist CORRECT! According to the Naive immoralist's perspective, actions are ethically justified if everyone else is doing the same thing.

Use the following data to answer the next question: ===================================== ## Transparency International's CPI (2016 Index): Afghanistan: 15; Algeria: 34; Bangladesh: 26; Bhutan: 65; Estonia: 70; Gabon: 35; Montenegro: 45; Namibia: 52; Somalia: 10 ## Worldwide Governance Indicators Rule of Law (2016 Index): Afghanistan: -1.62; Algeria: -0.85; Bangladesh: -0.59; Bhutan: 0.47; Estonia: 1.24; Gabon: -0.58; Montenegro: -0.04; Namibia: 0.39; Somalia: -2.37 ## Heritage Foundation's Economic Freedom (2018 index): Afghanistan: 51; Algeria: 45; Bangladesh: 55; Bhutan: 62; Estonia: 79; Gabon: 58; Montenegro: 64; Namibia: 59; Somalia: 45 ## Freedom House's Freedom in the World (2018 Index): Afghanistan: 26; Algeria: 35; Bangladesh: 45; Bhutan: 55; Estonia: 94; Gabon: 23; Montenegro: 67; Namibia: 77; Somalia: 7 According to the data provided, the chances of your company's competitors expecting they can get away without respecting laws and regulations, because they will not be really enforced, is significantly SMALLER in _____ than in _______: Montenegro; Estonia Afghanistan; Bangladesh Namibia; Bangladesh Namibia; Bhutan

Namibia; Bangladesh CORRECT! This question is about RULE OF LAW, which can be best measured, among the provided indicators, with Worldwide Governance Indicators Rule of Law index. In such index (that varies from -2.5 to +2.5), the higher (meaning hte closer to +2.5) the number, the more a country's laws are prone to be enforced and the more contracts will tend to be fulfilled. This option is correct because the first country had a HIGHER Rule of Law index than the second, and therefore in the first country the chances of laws and contracts NOT being enforced are SMALLER than in the second, which is a country with a weaker rule of law.

Use the following data to answer the next question: Transparency international CPI(2016 index): Afghanistan: 15; Algeria: 34; Bangladesh: 26; Bhutan: 65; Estonia: 70; Gabon: 35; Montenegro: 45; Namibia: 52; Somalia: 10 According to the Data Provided, the chances of you being requested to pay "grease money" to get a government official to promptly fulfill a legal company request is significantly GREATER in _____ than _____. a) Nambia; Gabon b) Gabon; Somalia c) Bhutan; Namibia d) Namibia; Bhutan

Namibia; Bhutan CORRECT! This question is about CORRUPTION, which can be best measured, among the provided indicators, with Transparency International's CPI index. In such index, the higher the number, the cleaner the country. This option is correct because the first country had a LOWER CPI (corruption) index than the second, and therefore in the first country the chances of corrupt actions happening are GREATER than in the second, which is a cleaner (or less dirty) country.

Use the following data to answer the next question (all data UNCTAD, 2013; all in US$ Millions): ===================================================================================== ## Outward FDI Stock 2013: Central African Republic: 43.2; Chad: 70.3; Mozambique: 24.3; Namibia: 31.8; Niger: 14; Rwanda: 12.9; Swaziland: 76.2 ## Inward FDI Stock 2013: Central African Republic: 619.5; Chad: 4757.7; Mozambique: 20966.9; Namibia: 4277.3; Niger: 4939.7; Rwanda: 853.9; Swaziland: 838.1 ## FDI 2013 Inflow: Central African Republic: 0.8; Chad: 538.4; Mozambique: 5935.1; Namibia: 699.1; Niger: 631.4; Rwanda: 110.8; Swaziland: 67 ## FDI 2013 Outflow: Central African Republic: 0; Chad: 0; Mozambique: -0.3; Namibia: -8.2; Niger: -6.7; Rwanda: 13.5; Swaziland: 0.6 ===================================================================================== Among the African countries listed, some have more capital investments abroad from its multinationals than others. According to the data provided, and assuming the listed variables is all the information you have, companies from _____ have, overall and over time, invested abroad more than companies from ______:

Namibia; Niger

Namibia; Niger Outward FDI Stock

Hans and Max are brothers who were separated at birth and given up for adoption to foreign couples. Each one lived in different countries all their lives. With the internet and lots of research, they were able to find each other and reunited as adults in a much awaited gathering in the country Max was taken to and raised. Hans came all the way from another country, where he was taken to and raised. When they finally met, Max and his family found it very strange and inappropriate when, rather than accepting their cordial handshake and preserving personal space, Hans hugged and cried out loud and then hugged everyone around, unable to control himself. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that Max was taken to and raised at a country such as ________, than one such as _______:

Netherlands; Spain

According to the _________, a given country can be globally dominant, even when it does not have any comparative advantage in such industry, or even when it does not have a significant domestic market. For such theorists, global dominance may rather arise from first-move advantages and economies of scale.

New Trade Theory

Use the following data to answer the next question: ===================================== ## Hall's High vs Low Context: Australia: Medium; Costa Rica: Medium-High; Egypt: High; Lebanon: Medium-High; New Zealand: Medium-Low; Poland: Medium-Low; Spain: Medium; Switzerland: Low ## Hofstede's Individualism (2018): Australia: 90; Costa Rica: 15; Egypt: 25; Lebanon: 40; New Zealand: 79; Poland: 60; Spain: 51; Switzerland: 68 ## Hofstede's Power Distance (2018): Australia: 36; Costa Rica: 35; Egypt: 70; Lebanon: 75; New Zealand: 22; Poland: 68; Spain: 57; Switzerland: 34 ## Hofstede's Uncertainty Avoidance (2018): Australia: 51; Costa Rica: 86; Egypt: 80; Lebanon: 50; New Zealand: 49; Poland: 93; Spain: 86; Switzerland: 58 ## Hofstede's Indulgence (2018): Australia: 71; Egypt: 4; Lebanon: 25; New Zealand: 75; Poland: 29; Spain: 44; Switzerland: 66 Assume you are from country X and that you were sent by your multinational company to improve the sales team's performance in a foreign country Y. You quickly notice that superiors are much more relaxed and benevolent in country Y than in your country. According to the data provided, and assuming the listed variables is all the information you have, there is a much GREATER probability that you WERE SENT TO a country such as ________, than to _______ : Spain; Australia Poland; New Zealand New Zealand; Australia Lebanon; New Zealand

New Zealand; Australia CORRECT! Let's use the Tutorial's 5-step to solve this: Superiors being relaxed and benevolent, or else expecting obedience from subordinates, are related to HOFSTEDE's POWER DISTANCE. Our reference sheet should tell us that the LOWER is the Power Distance of a country (the closer to 0 in a 0-100 scale), the more superiors will tend to be participative and benevolent with subordinates, and the HIGHER the Power Distance (the closer to 100 in a 0-100 scale), the more superiors will tend to expect and demand obedience from subordinates. Modeling the answer, we are asked about a place you WERE SENT TO, where the chances of LOW Power Distance are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly LOWER Power Distance than the other. Looking at the alternatives, the first country has a significantly lower power distance than the second, which DOES satisfy the criteria, and thus, this is the right choice.

Country A imports electronic goods from Country B although there are no underlying differences in factor endowments between the two countries. Which of the following theories explains this anomaly?

New trade theory

The following ARE correct statements about culture: - One is rarely aware and cannot usually fully summarize, when asked, the main elements of their own countries culture - A country's culture is commonly transmitted to new, younger and future members mostly via written documents that summarize the cultures deeply engrained, and taken-for-granted, symbolic meaning and assumptions. -Most of the time one is aware and can usually summarize, when asked, the main elements of their own country'a culture -a country's culture is simply the sum of all its written cultural norms

One is rarely aware and cannot usually fully summarize, when asked, the main elements of their own countries culture CORRECT! One is really aware and cannot usually fully summarize, when asked, the main elements of their own country's culture. The reason is that culture is comprised of deeply engrained, and taken-for-granted, symbolic meanings and assumptions.

The following is TRUE about FDI flows and stocks:

Outward FDI stock refers to the amount of FDI undertaken by a country overseas throughout is history, until a point in time

Which of the following theories predicts that, if a rich country engages in free trade with a poor country, then the rich country is bound to have negative effects?

Paul Samuelson's theory of irrestricted free trade

Use the following data to answer the next question: ==================================================================== ## GNI (2014 US$ Billions): Indonesia: 895; Thailand: 358; Philippines: 322; Malaysia: 310; Pakistan: 247 ## GNI at PPP (2014 US$ Billions): Indonesia: 2,315; Thailand: 899; Pakistan: 881; Philippines: 771; Malaysia: 669 ## GNI at PPP per capita (2014 US$): Malaysia: 22,525; Thailand: 13,397; Indonesia: 9,260; Philippines: 7,827; Pakistan: 4,851 ## GDP Growth % (World bank 2010-14): Philippines: 7.2; Indonesia: 5.8; Malaysia: 4.7; Pakistan 4.4; Thailand: 1.8 ## HDI (2013) Index: Malaysia: 0.773; Thailand: 0.722; Indonesia: 0.684; Philippines: 0.660; Pakistan 0.537 ==================================================================== Your company needs to choose a country to enter based on poverty: the lower the wealth of the average family, the better is the country as a target. According to the data provided, and assuming the listed variables is all the information you have, the chances of your company selecting ______ are MUCH HIGHER than it selecting _____:

Philippines; Thailand

Use the following data to answer the next question: ===================================== ## Hall's High vs Low Context: Australia: Medium; Costa Rica: Medium-High; Egypt: High; Lebanon: Medium-High; New Zealand: Medium-Low; Poland: Medium-Low; Spain: Medium; Switzerland: Low ## Hofstede's Individualism (2018): Australia: 90; Costa Rica: 15; Egypt: 25; Lebanon: 40; New Zealand: 79; Poland: 60; Spain: 51; Switzerland: 68 ## Hofstede's Power Distance (2018): Australia: 36; Costa Rica: 35; Egypt: 70; Lebanon: 75; New Zealand: 22; Poland: 68; Spain: 57; Switzerland: 34 ## Hofstede's Uncertainty Avoidance (2018): Australia: 51; Costa Rica: 86; Egypt: 80; Lebanon: 50; New Zealand: 49; Poland: 93; Spain: 86; Switzerland: 58 ## Hofstede's Indulgence (2018): Australia: 71; Egypt: 4; Lebanon: 25; New Zealand: 75; Poland: 29; Spain: 44; Switzerland: 66 Imagine you are from country X and that you were sent by your multinational company to start-up a subsidiary abroad. You quickly notice that in the country you went to people are much more prone to use their family connections to resolve issues for the start-up than people would be back in your country. According to the data provided, and assuming the listed variables is all the information you have, there is a much GREATER probability that YOU ARE FROM a country such as ________, than from _______ : Poland; Spain New Zealand; Australia Costa Rica; Egypt Egypt; Poland

Poland; Spain Let's use the Tutorial's 5-step to solve this: People tending to work by themselves and seek for individual achievement, or preferring to work collectively/rely on their collectives, are beliefs related to HOFSTEDE's INDIVIDUALISM vs COLLECTIVISM. Our reference sheet should tell us that the HIGHER is the Individualism of a country, the more people will tend to work and rely on themselves, rather than on their collectives. Conversely, the lower the individualism, the more people tend to work with, and rely on, their collectives. Modeling the answer, we are asked about a place you ARE FROM, where the chances of HIGH Individualism are significantly GREATER, which means we are looking for a pair of countries in which the first has a significantly HIGHER Individualism than the other. Looking at the alternatives, the first country has significantly lower Individualism than the second, not significantly higher as the question requires, which does NOT satisfy the criteria, and thus, this is NOT the right choice.

Use the following data to answer the next question: ===================================== ## Hall's High vs Low Context: Australia: Medium; Costa Rica: Medium-High; Egypt: High; Lebanon: Medium-High; New Zealand: Medium-Low; Poland: Medium-Low; Spain: Medium; Switzerland: Low ## Hofstede's Individualism (2018): Australia: 90; Costa Rica: 15; Egypt: 25; Lebanon: 40; New Zealand: 79; Poland: 60; Spain: 51; Switzerland: 68 ## Hofstede's Power Distance (2018): Australia: 36; Costa Rica: 35; Egypt: 70; Lebanon: 75; New Zealand: 22; Poland: 68; Spain: 57; Switzerland: 34 ## Hofstede's Uncertainty Avoidance (2018): Australia: 51; Costa Rica: 86; Egypt: 80; Lebanon: 50; New Zealand: 49; Poland: 93; Spain: 86; Switzerland: 58 ## Hofstede's Indulgence (2018): Australia: 71; Egypt: 4; Lebanon: 25; New Zealand: 75; Poland: 29; Spain: 44; Switzerland: 66 Imagine you work in a multinational company that transferred you from the headquarters to a subsidiary. You quickly notice that in the subsidiary people tend to be more opinionated and give plenty of suggestions to higher graded people than you are used to. On the other hand, as a typical citizen of your country, you know that it is not your place to give suggestions, and as usual you keep your mouth shut, even when asked to contribute with ideas about what management is proposing to do with the company's strategies. According to the data provided, and assuming the listed variables is all the information you have, there is a much GREATER probability that you ARE FROM a country such as ________, than from _______ : - Spain; Egypt -Poland; Switzerland -Costa Rica; Australia -New Zealand; Poland

Poland; Switzerland CORRECT! Let's use the Tutorial's 5-step to solve this: Superiors being relaxed and benevolent, or else expecting obedience from subordinates, are related to HOFSTEDE's POWER DISTANCE. Our reference sheet should tell us that the LOWER is the Power Distance of a country (the closer to 0 in a 0-100 scale), the more superiors will tend to be participative and benevolent with subordinates, and the HIGHER the Power Distance (the closer to 100 in a 0-100 scale), the more superiors will tend to expect and demand obedience from subordinates. Modeling the answer, we are asked about a place you ARE FROM, where the chances of HIGH Power Distance are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly HIGHER Power Distance than the other. Looking at the alternatives, the first country has a significantly higher power distance than the second, which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer the next question: ===================================== ## Trompenaars' Achievement vs Ascription (2010): Brazil: 33; Cuba: 15; Germany: 40; Portugal: 39; Russia: 30; Spain: 13; Switzerland: 34; Venezuela: 29 ## Trompenaars' Inner vs Outer Directed (2010): Brazil: 39; Cuba: 56; Germany: 66; Portugal: 71; Russia: 49; Spain: 50; Switzerland: 29; Venezuela: 33 ## Trompenaars' Neutrals vs Affective (2010): Brazil: 40; Cuba: 19; Germany: 35; Portugal: 47; Russia: 24; Spain: 19; Switzerland: 32; Venezuela: 20 ## Trompenaars' Specific vs. Diffuse (2010): Brazil: 56; Cuba: 67; Germany: 65; Portugal: 73; Russia: 46; Spain: 71; Switzerland: 90; Venezuela: 52 ## Trompenaars' Universalism (2010): Brazil: 79; Cuba: 65; Germany: 87; Portugal: 56; Russia: 44; Spain: 75; Switzerland: 97; Venezuela: 32. Imagine a scenario where you would be sent from the headquarters of a multinational to one of its foreign subsidiaries to handle a dispute with an important client. The conflict between the client and your company happened over a contract. Your company has been refusing to concede because the requirements of the scenario were clearly laid out in the contract, but the client insists on changing them at a later date to suit their own needs. If your company insists on standing by the agreement, thereby refusing to concede, they risk losing any future working relationship with the client, as it is threatening to drop you and find another supplier. You are quite surprised, because that attitude by a client, on a binding contract, would hardly ever happen in your country. According to the data provided, and assuming the listed variables is all the information you have, there is a much GREATER probability that you WERE SENT TO a country such as ________, than to _______ : Portugal; Russia Portugal; Brazil Germany; Spain Germany; Russia

Portugal; Brazil CORRECT! Let's use the Tutorial's 5-step to solve this: Expecting rules and regulations to bend, contracts to be flexible given circumstances, and to accept exceptions when following agreements/rules is inconvenient, are all related to TROMPENAARS' UNIVERSALISM. Our reference sheet should tell us that the HIGHER is the Universalism of a country (the closer to 100 in a 0-100 scale), the more people will believe rules are rules, the more they will expect contracts to be binding, and the less they would expect exceptions to be acceptable. Modeling the answer, we are asked about a place you WERE SENT TO, where people DO expect rules to bend and exceptions to be acceptable, and thus where the chances of LOW universalism are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly LOWER universalism than the other. Looking at the alternatives, the first country has a significantly lower universalism than the second, which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer the next question: ======================================================== ## Hofstede's Power Distance: Denmark: 18; France: 68; Ireland: 28; Japan: 54; Malaysia: 100; Portugal: 63; Singapore: 74 ## Hofstede's Masculinity: Denmark: 16; France: 43; Ireland: 68; Japan: 95; Malaysia: 50; Portugal: 31; Singapore: 48 ## Hofstede's Uncertainty Avoidance: Denmark: 23; France: 86; Ireland: 35; Japan: 92; Malaysia: 26; Portugal: 99; Singapore: 8 ## Hofstede's Indulgence: Denmark: 70; France: 48; Ireland: 65; Japan: 42; Malaysia: 57; Portugal: 33; Singapore: 46 ## Hofstede's Individualism: Denmark: 74; France: 71; Ireland: 70; Japan: 46; Malaysia: 26; Portugal: 27; Singapore: 20 ======================================================== Assume you are from country X and that you were sent by your multinational company to improve the sales teams' performance in a foreign country Y. You quickly notice that in the country you were sent to bonuses based on giving extra vacation time and family cruise prizes were much more successful than in your country. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you are from a country such as ________, than from _______: - Denmark; Malaysia - Malaysia; Singapore - Portugal; France - Ireland; Japan

Portugal; France CORRECT! Let's use the Tutorial's 5-step to solve this:Tending one's urges, pleasures, and seeking to have fun and enjoyment, are all related to HOFSTEDE's INDULGENCE. Our reference sheet should tell us that the HIGHER is the Indulgence of a country (the closer to 100 in a 0-100 scale), the more people will try to satisfies one's desires and the more they will prioritize having fun and enjoyment. Modeling the answer, we are asked about a place you ARE FROM, where people refrain themselves and do not place their own enjoyment and pleasure in high priority, and thus where the chances of HIGH Indulgence are significantly LOWER. This means we are looking for a pair of countries in which the first has a significantly LOWER indulgence than the other. Looking at the alternatives, Portugal (33) has a much lower indulgence than France (48), which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer the next question: ======================================================== ## Hofstede's Uncertainty Avoidance: Denmark: 23; France: 86; Ireland: 35; Japan: 92; Malaysia: 26; Portugal: 99; Singapore: 8 ## Hofstede's Masculinity: Denmark: 16; France: 43; Ireland: 68; Japan: 95; Malaysia: 50; Portugal: 31; Singapore: 48 ## Hofstede's Power Distance: Denmark: 18; France: 68; Ireland: 28; Japan: 54; Malaysia: 100; Portugal: 63; Singapore: 74 ## Hofstede's Indulgence: Denmark: 70; France: 48; Ireland: 65; Japan: 42; Malaysia: 57; Portugal: 33; Singapore: 46 ## Hall's High vs Low Context: Denmark: Low; France: Medium; Ireland: Low; Japan: High; Malaysia: High; Portugal: Medium-High; Singapore: Medium-High ======================================================== Assume you are from country X and that you were sent by your multinational company to conduct a group motivation session in a foreign country Y. You quickly notice that in the country you were sent to people do not engage in competition games as they do in your country, but rather prefer solidarity, and tend to help each other attain their tasks and goals. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you were sent to a country such as ________, than to _______:

Portugal; Ireland CORRECT! People tending to engage in cooperative and not to tolerate competitive and rank-prone behavior is related to HOFSTEDE's MASCULINITY. Our reference sheet should tell us that the LOWER is the Masculinity of a country (the closer to 0 in a 0-100 scale), the more people will engage in solidarity, rather than be competitive as masculine countries do.

Use the following data to answer the next question: ===================================== ## Trompenaars' Achievement vs Ascription (2010): Brazil: 33; Cuba: 15; Germany: 40; Portugal: 39; Russia: 30; Spain: 13; Switzerland: 34; Venezuela: 29 ## Trompenaars' Inner vs Outer Directed (2010): Brazil: 39; Cuba: 56; Germany: 66; Portugal: 71; Russia: 49; Spain: 50; Switzerland: 29; Venezuela: 33 ## Trompenaars' Neutrals vs Affective (2010): Brazil: 40; Cuba: 19; Germany: 35; Portugal: 47; Russia: 24; Spain: 19; Switzerland: 32; Venezuela: 20 ## Trompenaars' Specific vs. Diffuse (2010): Brazil: 56; Cuba: 67; Germany: 65; Portugal: 73; Russia: 46; Spain: 71; Switzerland: 90; Venezuela: 52 ## Trompenaars' Universalism (2010): Brazil: 79; Cuba: 65; Germany: 87; Portugal: 56; Russia: 44; Spain: 75; Switzerland: 97; Venezuela: 32. Adam is the supervisor and notices Ashley has been late to work three times this month. The rule is three late arrivals results in one day suspension. Ashley tries to explain she was late because she is a single mom and has to take her kid to the doctor frequently, and really expects Adam makes an exception in her specific case. Adam feels sorry for suspending her, but believes rules are rules, so he suspends her anyways. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that ASHLEY is from a country such as ________, than _______: - Portugal; Spain -Spain; Russia -Switzerland; Russia - Spain; Portugal

Portugal; Spain CORRECT! Let's use the Tutorial's 5-step to solve this: Expecting rules and regulations to bend, contracts to be flexible given circumstances, and to accept exceptions when following agreements/rules is inconvenient, are all related to TROMPENAARS' UNIVERSALISM. Our reference sheet should tell us that the HIGHER is the Universalism of a country (the closer to 100 in a 0-100 scale), the more people will believe rules are rules, the more they will expect contracts to be binding, and the less they would expect exceptions to be acceptable. Modeling the answer, we are asked about a place an individual who believes rules should be flexible according to the situation is FROM, where people DO expect rules to bend and exceptions to be acceptable, and thus where the chances of LOW universalism are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly LOWER universalism than the other. Looking at the alternatives, the first country has a significantly lower universalism than the second, which DOES satisfy the criteria, and thus, this is the right choice.

The following is a GOOD example of a multinational enterprise

RayCo, a German X-Ray equipment manufacturer, signs a contract with SinoRay, a Chinese hospital equipment manufacturer, acquiring and taking over a manufacturing plant SinoRay half-built in China and abandoned, to produce there RayCo's most valuable models

Which of the following is a GOOD example of a multinational enterprise (MNE):

In a January 2019 WSJ editorial, John D. Stoll argued that under Steve Jobs and after many failed attempts to manufacture theirs products in the U.S., Apple made the strategic decision to "leave 'production hell' to other people". The author meant that Apple created an example to other US-based manufacturing companies, to outsource and offshore manufacturing to countries that can do a better job than US in cost-sensitive manufacturing. Stoll recalled that Steve Jobs tried to produce Apple products in California, failed due to high costs and lack of productivity compared to lower cost countries, was then convinced that the US was not equipped to manufacture competitively, and ultimately offshored the manufacturing of iPhones, so it could concentrate on product design and marketing. In a point of view opposite to Stoll's, the Trump administration has argued that companies like Apple should get incentives and protection to keep production and jobs in the US, and be punished if offshoring production, because offshoring jobs would imply in the US accruing economic and balance of payment losses, both of which should be avoided at all costs. One could fairly argue that Stoll's perspective is mostly inspired on the following trade perspective:

Ricardo's Comparative advantage CORRECT! The Trump Administration, contrary to most Republican and Conservative US governments in the previous 75 years, seems to adopt a protectionist and anti-free trade policy and viewpoint. Stoll's perspective, on the other hand, seems more firmly based on Ricardo's Comparative advantage, by arguing not only that other countries may be more competitive than the US in manufacturing (that alone would make it based on absolute advantage), but also by suggesting that leaving manufacturing to more apt foreign countries freed up Apple to focus on design and marketing, meaning to imply that Apple does that better than manufacturing.

The following is a BAD example of a foreign direct investment

RoundyInc, an Irish Bowling equipment producer, using a long term loan by a Canadian bank, acquires a traditional shoemaker in Ireland, which it plans to convert to start producing bowling shoes it will ship to the US, its major consumer market This is NOT an example of foreign investment of any kind: the company bought another domestic producer to expand its portfolio. After the acquisition, it all remained domestic, in Ireland. The money coming from a Canadian loan does NOT make this international, as the Irish company is the rightful owner, and the Canadian bank is merely a creditor. So it is NOT an example of FDI.

Use the following data to answer this question: ===================================================== ## Trompenaars' Universalism: Argentina 70; China 47; Ireland 92; Russia 44; South Africa 92; South Korea 37; Sweden 92; Switzerland, 97; Venezuela 32 ## Trompenaars' Achievement vs Ascription: Argentina 12; China 28; Ireland 65; Russia 30; South Africa 65; South Korea 20; Sweden 54; Switzerland, 34; Venezuela 29 ## Trompenaars' Neutrals vs Affective: Argentina 28; China 55; Ireland 47; Russia 24; South Africa 57; South Korea 71; Sweden 46; Switzerland, 32; Venezuela 20 ## Trompenaars' Specific vs. Diffuse: Argentina 77; China 32; Ireland 84; Russia n/a; South Africa 72; South Korea 65; Sweden 91; Switzerland, 90; Venezuela 52 ## Trompenaars' Inner vs Outer Directed: Argentina 36; China 39; Ireland 38; Russia 49; South Africa 67; South Korea 72; Sweden 21; Switzerland, 29; Venezuela 33 ===================================================== Bob, a salesman working for a multinational company from his own country, goes to a foreign nation. There, he gives a sales pitch to client representatives, about a new product he knows very well. Bob gives a very direct and formal sales pitch, providing mostly numbers and figures. His pitch ends in a third of the time of his competitors, and he covered twice as many features of his company's product. After the sales pitch, which Bob thought had gone really well, to Bob's surprise, the client reps turn down his offer. Their reason is that they perceived Bob to be very uptight and non-passionate about his product offering, an approach that is not appreciated in that foreign country. They also critique him because he did not take his time to build rapport, going straight to the point in his sales pitch, and this did not create interest with the client reps. Bob is very surprised, because his presentation and behavior with the client would have been considered very effective and professional in his own country. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that Bob was sent to a country such as ________, than to _______: Ireland; Sweden South Africa; Ireland Argentina; Russia Russia; South Africa

Russia; South Africa CORRECT! Let's use the Tutorial's 5-step to solve this: Expressing or repressing one's emotions, keeping one's composure, being straight to the point or not, are all related to TROMPENAARS' NEUTRAL VS. AFFECTIVE. Our reference sheet should tell us that the HIGHER is the Neutrality of a country (the closer to 100 in a 0-100 scale), the more people will tend to repress their emotions, keep their composure, and be straight to the point; and the less they would expect people to freely demonstrate affection or emotional attachment. Modeling the answer, we are asked about a place the character IS SENT TO, where one would expect people to freely demonstrate emotion, rather than restraint, and thus where the chances of HIGH neutrality are significantly LOWER. This means we are looking for a pair of countries in which the first has a significantly LOWER neutrality than the other. Looking at the alternatives, Russia (24) has a much lower neutrality than South Africa (57), which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer the next question: ===================================== ## Trompenaars' Achievement vs Ascription (2010): Brazil: 33; Cuba: 15; Germany: 40; Portugal: 39; Russia: 30; Spain: 13; Switzerland: 34; Venezuela: 29 ## Trompenaars' Inner vs Outer Directed (2010): Brazil: 39; Cuba: 56; Germany: 66; Portugal: 71; Russia: 49; Spain: 50; Switzerland: 29; Venezuela: 33 ## Trompenaars' Neutrals vs Affective (2010): Brazil: 40; Cuba: 19; Germany: 35; Portugal: 47; Russia: 24; Spain: 19; Switzerland: 32; Venezuela: 20 ## Trompenaars' Specific vs. Diffuse (2010): Brazil: 56; Cuba: 67; Germany: 65; Portugal: 73; Russia: 46; Spain: 71; Switzerland: 90; Venezuela: 52 ## Trompenaars' Universalism (2010): Brazil: 79; Cuba: 65; Germany: 87; Portugal: 56; Russia: 44; Spain: 75; Switzerland: 97; Venezuela: 32. Susan gets transferred from her own country to a foreign country. Susan tries long and hard to make friends with her boss and co-workers, and spends quite a bit of time with them outside of work. She befriended people at work becuse she expects to receive preferential treatment at work due to these relationships, and she is disappointed her boss, Mary, keeps their work and personal lives separate. Mary does not understand Susan, as she is quite used to treat everyone at work equally, regardless if they are her friends or not. Most of the people in Mary's country feel and act similarly to Mary. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that SUSAN is FROM a country such as ________, than from _______: Switzerland; Germany Portugal; Brazil Switzerland; Russia Russia; Spain

Russia; Spain CORRECT! Let's use the Tutorial's 5-step to solve this: Keeping work and private lives separate, or believing they intertwine, are all related to TROMPENAARS' SPECIFIC VS. DIFFUSE. Our reference sheet should tell us that the HIGHER is the Specificity of a country (the closer to 100 in a 0-100 scale), the more people will tend to keep work and private lives separate; and the less they would let those lives intertwine. Modeling the answer, we are asked about a place Susan's character IS FROM, where one would expect people to mix personal life and work, and thus where the chances of LOW specificity are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly LOWER specificity than the other. Looking at the alternatives, the first country has a significantly lower specificity than the second, which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer the next question (all data UNCTAD, 2013; all in US$ Millions): ======================================================== ## Outward FDI Stock 2013: Swaziland: 76.2; Chad: 70.3; Central African Republic: 43.2; Namibia: 31.8; Mozambique: 24.3; Niger: 14; Rwanda: 12.9 ## Inward FDI Stock 2013: Mozambique: 20966.9; Niger: 4939.7; Chad: 4757.7; Namibia: 4277.3; Rwanda: 853.9; Swaziland: 838.1; Central African Republic: 619.5 ## FDI 2013 Inflow: Mozambique: 5935.1; Namibia: 699.1; Niger: 631.4; Chad: 538.4; Rwanda: 110.8; Swaziland: 67; Central African Republic: 0.8 ## FDI 2013 Outflow: Rwanda: 13.5; Swaziland: 0.6; Central African Republic: 0; Chad: 0; Mozambique: -0.3; Niger: -6.7; Namibia: -8.2 ======================================================== According to the data provided, and assuming the listed variables is all the information you had, which of the following countries has created the greatest amount of investments abroad by their companies in the last year reported alone?

Rwanda

Use the following data to answer the next question (all data UNCTAD, 2013; all in US$ Millions): ======================================================== ## Outward FDI Stock 2013: Swaziland: 76.2; Chad: 70.3; Central African Republic: 43.2; Namibia: 31.8; Mozambique: 24.3; Niger: 14; Rwanda: 12.9 ## Inward FDI Stock 2013: Mozambique: 20966.9; Niger: 4939.7; Chad: 4757.7; Namibia: 4277.3; Rwanda: 853.9; Swaziland: 838.1; Central African Republic: 619.5 ## FDI 2013 Inflow: Mozambique: 5935.1; Namibia: 699.1; Niger: 631.4; Chad: 538.4; Rwanda: 110.8; Swaziland: 67; Central African Republic: 0.8 ## FDI 2013 Outflow: Rwanda: 13.5; Swaziland: 0.6; Central African Republic: 0; Chad: 0; Mozambique: -0.3; Niger: -6.7; Namibia: -8.2 ======================================================== According to the data provided, and assuming the listed variables is all the information you had, which of the following countries has created the greatest amount of investments abroad by their companies in the last year reported alone? Central African Republic Rwanda Niger Chad

Rwanda

Use the following data to answer the next question (all data UNCTAD, 2013; all in US$ Millions): ======================================================== ## Outward FDI Stock 2013: Swaziland: 76.2; Chad: 70.3; Central African Republic: 43.2; Namibia: 31.8; Mozambique: 24.3; Niger: 14; Rwanda: 12.9 ## Inward FDI Stock 2013: Mozambique: 20966.9; Niger: 4939.7; Chad: 4757.7; Namibia: 4277.3; Rwanda: 853.9; Swaziland: 838.1; Central African Republic: 619.5 ## FDI 2013 Inflow: Mozambique: 5935.1; Namibia: 699.1; Niger: 631.4; Chad: 538.4; Rwanda: 110.8; Swaziland: 67; Central African Republic: 0.8 ## FDI 2013 Outflow: Rwanda: 13.5; Swaziland: 0.6; Central African Republic: 0; Chad: 0; Mozambique: -0.3; Niger: -6.7; Namibia: -8.2 ======================================================== According to the data provided, and assuming the listed variables is all the information you had, which of the following countries has created the greatest amount of investments abroad by their companies in the last year reported alone?

Rwanda FDI Outflow

Which of the following is a GOOD example of a multinational enterprise (MNE):

SoupHeaven, a Vietnamese fast food chain, opens 20 restaurants they will own and operate across Canada, their first international venture

The following are BAD examples of OFFSHORING

SoupHeaven, a Vietnamese fast food chain, opens 20 restaurants they will own and operate across Canada, their first international venture GutenAir, an Austrian airline from Vienna, closes all call centers in Austria and hires a German service provider to handle all their calls, but locating the new call center in the same city of Vienna MammaMiaPasta, an Italian pasta producer, acquires MexMill's operation in Italy, a Mexican flour producer, to better control one of the most valuable elements of their supply chain

Use the following data to answer this question: ===================================================== ## Trompenaars' Universalism: Argentina 70; China 47; Ireland 92; Russia 44; South Africa 92; South Korea 37; Sweden 92; Switzerland, 97; Venezuela 32 ## Trompenaars' Achievement vs Ascription: Argentina 12; China 28; Ireland 65; Russia 30; South Africa 65; South Korea 20; Sweden 54; Switzerland, 34; Venezuela 29 ## Trompenaars' Neutrals vs Affective: Argentina 28; China 55; Ireland 47; Russia 24; South Africa 57; South Korea 71; Sweden 46; Switzerland, 32; Venezuela 20 ## Trompenaars' Specific vs. Diffuse: Argentina 77; China 32; Ireland 84; Russia n/a; South Africa 72; South Korea 65; Sweden 91; Switzerland, 90; Venezuela 52 ## Trompenaars' Inner vs Outer Directed: Argentina 36; China 39; Ireland 38; Russia 49; South Africa 67; South Korea 72; Sweden 21; Switzerland, 29; Venezuela 33 ===================================================== Tony is the new sales manager of a multinational's foreign subsidiary. After only one third of the fiscal year has passed, Tony tell his superior, Julie, that his subsidiary is not likely to reach their sales goals, because the market is very competitive, and several uncontrollable elements in their local market environment do not favor them. Julie does not accept this, as she believes Tony is accountable for his subsidiary's sales results, and she believes Tony should strive to make do, and find a way to meet his sales quota. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that Julie is from a country such as ________, than from _______: Ireland; China South Africa; Ireland Venezuela; China Russia; South Korea

South Africa; Ireland CORRECT! Let's use the Tutorial's 5-step to solve this: Believing that one's destiny if determined by external factors, and expecting people not to hold one accountable when one claims external circumstances were in control of one's faith, are all related to TROMPENAARS' INNER- VS OUTER_DIRECTION. Our reference sheet should tell us that the HIGHER is the Inner Direction of a country (the closer to 100 in a 0-100 scale), the more people will believe faith to be in their own hands; and the less one would expect people not to hold one accountable when one claims to not be in control of one's performance. Modeling the answer, we are asked about a place JULIE IS FROM, where people do NOT believe their faith is out of their control, and thus where the chances of HIGH inner-direction are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly HIGHER inner direction than the other. Looking at the alternatives, South Africa (67) has a much higher inner direction than Ireland (38), which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer this question: ===================================================== ## Trompenaars' Universalism: Argentina 70; China 47; Ireland 92; Russia 44; South Africa 92; South Korea 37; Sweden 92; Switzerland, 97; Venezuela 32 ## Trompenaars' Achievement vs Ascription: Argentina 12; China 28; Ireland 65; Russia 30; South Africa 65; South Korea 20; Sweden 54; Switzerland, 34; Venezuela 29 ## Trompenaars' Neutrals vs Affective: Argentina 28; China 55; Ireland 47; Russia 24; South Africa 57; South Korea 71; Sweden 46; Switzerland, 32; Venezuela 20 ## Trompenaars' Specific vs. Diffuse: Argentina 77; China 32; Ireland 84; Russia n/a; South Africa 72; South Korea 65; Sweden 91; Switzerland, 90; Venezuela 52 ## Trompenaars' Inner vs Outer Directed: Argentina 36; China 39; Ireland 38; Russia 49; South Africa 67; South Korea 72; Sweden 21; Switzerland, 29; Venezuela 33 ===================================================== Imagine you were sent by your multinational company to a foreign subsidiary, to conduct a negotiation with an important client there. During the negotiations, you spend time equally and treat everyone of your client's representatives in the same manner. However, you notice that your subsidiary colleagues keep asking you to give more time and special attention to two of the clients' representatives, because they came from traditional families and even descended from local nobility. That surprised you, because in your country everyone is treated equally, and such individual ties are not so relevant. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you are from a country such as ________, than from _______ : Argentina; South Africa South Africa; Russia Ireland; South Africa South Korea; Sweden

South Africa; Russia CORRECT! Let's use the Tutorial's 5-step to solve this: Expecting status to be attributed based on social context or position, rather than on achievement, is related to TROMPENAARS' ACHIEVEMENT VS. ASCRIPTION. Our reference sheet should tell us that the HIGHER is the Achievement of a country (the closer to 100 in a 0-100 scale), the more people will believe status should be attributed based on achievement, and the less they would expect status to derive from position or social status, titles, etc. Modeling the answer, we are asked about a place you ARE FROM, where people do NOT expect status to be attributed based on social stature and context, but rather expect achievement to prevail, and thus where the chances of HIGH achievement are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly HIGHER achievement than the other. Looking at the alternatives, South Africa (65) has a much higher achievement than Russia (30), which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer this question: ===================================================== ## Trompenaars' Universalism: Argentina 70; China 47; Ireland 92; Russia 44; South Africa 92; South Korea 37; Sweden 92; Switzerland, 97; Venezuela 32 ## Trompenaars' Achievement vs Ascription: Argentina 12; China 28; Ireland 65; Russia 30; South Africa 65; South Korea 20; Sweden 54; Switzerland, 34; Venezuela 29 ## Trompenaars' Neutrals vs Affective: Argentina 28; China 55; Ireland 47; Russia 24; South Africa 57; South Korea 71; Sweden 46; Switzerland, 32; Venezuela 20 ## Trompenaars' Specific vs. Diffuse: Argentina 77; China 32; Ireland 84; Russia n/a; South Africa 72; South Korea 65; Sweden 91; Switzerland, 90; Venezuela 52 ## Trompenaars' Inner vs Outer Directed: Argentina 36; China 39; Ireland 38; Russia 49; South Africa 67; South Korea 72; Sweden 21; Switzerland, 29; Venezuela 33 ===================================================== Imagine you are doing a one week executive education program in a foreign country. In the first day, participants, all executives from different companies, introduce each other and exchange business cards. You notice that among people from that foreign country, it was common that the treatment given to people would change after the business cards swaps, as the others realized some people had a prestigious family name in their business cards. Additional respect and power would be entitled to the people whose cards had that important last name. That surprised you, because in your country last names are not so relevant. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you are from a country such as ________, than from _______: South Africa; Venezuela South Korea; Sweden Russia; South Africa Argentina; Ireland

South Africa; Venezuela CORRECT! Let's use the Tutorial's 5-step to solve this: Expecting status to be attributed based on social context or position, rather than on achievement, is related to TROMPENAARS' ACHIEVEMENT VS. ASCRIPTION. Our reference sheet should tell us that the HIGHER is the Achievement of a country (the closer to 100 in a 0-100 scale), the more people will believe status should be attributed based on achievement, and the less they would expect status to derive from position or social status, titles, etc. Modeling the answer, we are asked about a place you ARE FROM, where people do NOT expect status to be attributed based on social stature and context, but rather expect achievement to prevail, and thus where the chances of HIGH achievement are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly HIGHER achievement than the other. Looking at the alternatives, South Africa (65) has a much higher achievement than Venezuela (29), which DOES satisfy the criteria, and thus, this is the right choice.

Which of the following factors is likely to make a country a more attractive location for international business?

Strong protection of property rights CORRECT! The stronger the protection of property rights, the more attractive a location becomes for international business.

Which of the following is a home-country policy aimed at limiting outward FDI flow?

Taxing domestic companies' foreign earnings at a higher rate than their domestic earnings CORRECT! Taxing domestic companies' foreign earnings at a higher rate than their domestic earnings is a home-country policy aimed at limiting outward FDI flow.

Use the following data to answer the next question: ======================================================== ## GNI at PPP per capita (2014 US$): Indonesia: 9,260; Malaysia: 22,525; Philippines: 7,827; Pakistan: 4,851; Thailand: 13,397 ## GNI at PPP (2014 US$ Billions): Indonesia: 2,315; Malaysia: 669; Pakistan: 881; Phillipines: 771; Thailand: 899 ## GDP Growth % (World bank 2010-14): Indonesia: 5.8; Malaysia: 4.7; Pakistan 4.4; Philippines: 7.2; Thailand: 1.8 ## HDI (2013): Indonesia: 0.684; Malaysia: 0.773; Pakistan 0.537; Phillipines: 0.660; Thailand: 0.722 ======================================================== Your company needs to choose a country to enter based on market viability to its high priced, luxury products: the higher the capacity of the local market to consume such type of products, the better is the country as a target. According to the data provided, and assuming the listed variables is all the information you have, the chances of your company selecting ______ are MUCH HIGHER than it selecting _____:

Thailand; Philippines

The following statement is TRUE: a) The WTO is an international court, in which its judges rule and their decisions are binding, and if offenders fail to comply with the WTO judges' recommendations, trading partners have the right to compensation or to impose trade sanctions b)The WTO publishes arbitration panel reports on trade disputes, and such reports are merely used as general guidelines for trading partners; they cannot be used to determine a right to compensation, or to impose trade sanctions c)The WTO does not have the power to determine a right to compensation or to impose trade sanctions d) The WTO publishes arbitration panel reports on trade disputes, but if offenders fail to comply with the panel's recommendations, trading partners have the right to compensation or to impose trade sanctions

The WTO publishes arbitration panel reports on trade disputes, but if offenders fail to comply with the panel's recommendations, trading partners have the right to compensation or to impose trade sanctions CORRECT! The WTO publishes arbitration panel reports on trade disputes, but if offenders fail to comply with the panel's recommendations, trading partners have the right to compensation or to impose trade sanctions.

The following are BAD examples of foreign direct investments

The World Bank gives an aid of 100 million dollars to Kenya for building health related manufacturing facilities. Rivers Inc., a U.S. based sports apparel manufacturer, partners with a manufacturer in China (to take advantage of the lower labor costs there) in order to offshore part of their production to them, importing the manufactured items into the US for manufacturing finishing, packaging and distribution. SleepyInn, a budget Canadian hotel chain, starts to serve customers in foreign countries through its franchise units.

A certain foreign country does not reject any type of inward FDI proposals, and it takes offense when other countries restrict FDI flows in any way. Which political view of FDI is discussed in this example?

The free market view

Which of the following statements is TRUE about rule of law:

The higher the rule of law in a country, the better the chances laws and contracts will be enforceable. CORRECT! The higher the rule of law in a country, the better the chances laws and contracts will be enforceable. Rule of law is NOT a legal principle or code, but rather, a socio-political economy trend, in any given society, related to the degree to which such society is ruled by laws, and transactions are rules by contracts. In low rule of law societies, laws may exist but may not be enforced, and contracts may be written, but may then be ignored, in favor of either relationships or social stature/power.

Which of the following statements is TRUE: Most countries' rule of law can and has been measured over the years by Freedom House's Freedom in the World Index The stronger the rule of law in a country, the higher the chances that most pertinent rules to operate in that country will be found in the legal coded or the legal system Rule of law is a legal principle, which measures the amount and complexity of laws a society has The indication of a country having rule of law is the extent that it is governed by laws and transactions are ruled by contracts

The indication of a country having rule of law is the extent that it is governed by laws and transactions are ruled by contracts

Which of the following statements is TRUE:

The indication of a country having rule of law is the extent that it is governed by laws and transactions are ruled by contracts CORRECT! The indication of a country having rule of law is the extent that it is governed by laws and transactions are ruled by contracts

The textile industry in a nation is characterized by very strong domestic competition. Which of the following observations of this nation's international competency is most likely to be true?

The nation's textile firms will likely have a competitive advantage in international trade

According to the _____ of FDI, MNEs extract profits from the host country and take them to their home country, giving nothing of value to the host country in exchange.

The radical view CORRECT! According to the radical view of FDI, MNEs extract profits from the host country and take them to their home country, giving nothing of value to the host country in exchange.

When entering a new market, a traditionally domestic company will most likely attempt to implement in the new market

The same business model and modus operandi that was successfully applied in their home country CORRECT! Although is not the best practice, and not advisable at all, the truth is that most domestic companies, when first venturing abroad, tend to attempt to act as if they were at home. And they usually fail when doing so, but most attempt to do it anyway.

About the relationship between political economy and economic growth and development, the following statement is TRUE:

The state can expropriate the profits from innovation, and thus decrease the incentives to innovate, through legal means. The economic freedom associated with a market economy creates greater incentives for innovation and entrepreneurship than a planned economy, and ALSO greater than a mixed economy

A manager needs to define at headquarters what to send to the companyÕs subsidiaries as a standard, and what to allow each subsidiary to adapt locally. Most ETHNOCENTRIC managers would believe that:

The value proposition and differentiation strategies used at home is the reason behind the companys global success, and thus these strategies should be applied in all subsidiaries after an acquisition, rather than using the acquired firms model

A manager needs to define at headquarters what to send to the companys subsidiaries as a standard, and what to allow each subsidiary to adapt locally. Most ETHNOCENTRIC managers would believe that:

The value proposition and differentiation strategies used at home is the reason behind the companyÕs global success, and thus these strategies should be applied in all subsidiaries after an acquisition, rather than using the acquired firms model

A manager needs to define at headquarters what to send to the companys subsidiaries as a standard, and what to allow each subsidiary to adapt locally. Most PAROCHIAL managers would believe that:

The way people psychologically react to incentives is human nature, and thus the companys motivation strategies should be applied following the corporate model

Identify the INCORRECT statement about trade barriers:

They may put a firm at a competitive advantage to indigenous competitors. CORRECT! We are looking for a NON TRUE statement, and this one meets the criteria: Trade barriers may put a firm at a competitive advantage to foreign, NOT indigenous, competitors.

In early 2017, the newly elected US government accused NAFTA partners, particularly Mexico, of exporting more goods and services to the US than it is importing from the US. That would mean the US would have, relative to Mexico, a(n):

Trade deficit

Which of the following arises when a country is importing more goods and services than it is exporting?

Trade deficit When a country is importing more goods and services than it is exporting, a TRADE DEFICIT arises, NOT a trade surplus.

US policies intervening in free trade, imposing protectionist import tariffs, triggering retaliatory Chinese intervention in free trade, also via import tariff responses CORRECT! In 2018-19 trade wars, US protectionist policies backed fired, triggering retaliatory Chinese intervention in free trade, also via import tariff responses, provoking an escalating conflict in which both countries lost more than they may have won.

Starting in 2018, a trade conflict between the US and China developed after the US imposed tariffs on Chinese imports into the US, as a part of Trump's administration's intent to 'get jobs back' and 'restore fair trade'. Responses and counter responses from both sides escalated and by early 2019 the two nations had swapped tariffs on more than $200 billion of goods. In January 2019, HSBC divulged a synthesis of the results of such trade war for the year of 2018, in the graph below. (If the graph is not visible to you, it depicts the following: the share of the US among China's main import partners decreased more than 40% between early 2017 and early 2019; during the same time, the share of both Brazil and Russia among China's main import partners increased more than 40% in the same exact period) According to such balance and graph:

US protectionist policies backed fired and US jobs suffered the most, particularly among US exporters, as China substituted them with other trade partners CORRECT! In 2018-19 trade wars, US protectionist policies backed fired and US jobs suffered the most, particularly among US exporters. China responded to US protectionist tariff increases with retaliatory import tariffs on US imports, which caused US exporters to lose and exporters from other economies (such as Russia and Brazil) to take the slack. Some Chinese sectors suffered, but overall US suffered much more than the Trump administration predicted, as China substituted US exporters with other trade partners.

The following are BAD examples of OFFSHORING

UT Tyler creates a study abroad program, in which College of Business students can take college credit while taking a one-week trip to Europe over Spring Break Company T, a Canadian Hotel chain, opens 5 new units in the US Company C, a Canadian tire manufacturer, obtains a loan from Southside Bank, from Tyler, TX, to build a new manufacturing plant in Ontario

Company X from Country A does FDI in country B. In country A, a company operating locally can be shut down if it pays what they call Òinhumane salariesÓ (less than 1 US$ per hour). In Country B, Company X pays $1 per day (!) to its workers. Company X argues that doing is justified because it results in the benefit of the maximum number of people: it is higher than the local salaries, and otherwise people would be out of work. Their ethical point is typical of:

Utilitarian approach to business ethics

Use the following data to answer this question: ===================================================== ## Trompenaars' Universalism: Argentina 70; China 47; Ireland 92; Russia 44; South Africa 92; South Korea 37; Sweden 92; Switzerland, 97; Venezuela 32 ## Trompenaars' Achievement vs Ascription: Argentina 12; China 28; Ireland 65; Russia 30; South Africa 65; South Korea 20; Sweden 54; Switzerland, 34; Venezuela 29 ## Trompenaars' Neutrals vs Affective: Argentina 28; China 55; Ireland 47; Russia 24; South Africa 57; South Korea 71; Sweden 46; Switzerland, 32; Venezuela 20 ## Trompenaars' Specific vs. Diffuse: Argentina 77; China 32; Ireland 84; Russia n/a; South Africa 72; South Korea 65; Sweden 91; Switzerland, 90; Venezuela 52 ## Trompenaars' Inner vs Outer Directed: Argentina 36; China 39; Ireland 38; Russia 49; South Africa 67; South Korea 72; Sweden 21; Switzerland, 29; Venezuela 33 ===================================================== Peter, a local employee, is stressed out, and gets angry with Joe, his foreign manager, over time pressures for completing a sensitive project. Peter (the employee) requests a meeting with Joe (the manager), and clearly expresses his feelings and all his frustrations to his superior. Joe is quite surprised, because in the country that Joe comes from, an angry employee like Peter would most likely repress his feeling, keeping his composure and not saying a word to Joe. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that Peter is from a country such as ________, than from _______ : China; Russia Venezuela; South Korea Sweden; Argentina South Korea; Sweden

Venezuela; South Korea CORRECT! Let's use the Tutorial's 5-step to solve this: Expressing or repressing one's emotions, keeping one's composure, being straight to the point or not, are all related to TROMPENAARS' NEUTRAL VS. AFFECTIVE. Our reference sheet should tell us that the HIGHER is the Neutrality of a country (the closer to 100 in a 0-100 scale), the more people will tend to repress their emotions, keep their composure, and be straight to the point; and the less they would expect people to freely demonstrate affection or emotional attachment. Modeling the answer, we are asked about a place the character IS FROM, where one would expect people to freely demonstrate emotion, rather than restraint, and thus where the chances of HIGH neutrality are significantly LOWER. This means we are looking for a pair of countries in which the first has a significantly LOWER neutrality than the other. Looking at the alternatives, Venezuela (20) has a much lower neutrality than South Korea (71), which DOES satisfy the criteria, and thus, this is the right choice.

__________ is a direct restriction on trade imposed by the exporting country, typically at the request of the importing country's government:

Voluntary export restraint CORRECT! A direct restriction on trade imposed by the exporting country, typically at the request of the importing country's government, is called a voluntary export restraint.

Your significant other has a surprise for you: he/she was offered a job at an international organization, but wants to keep which one a surprise for you. You did get from him/her that the organization was involved in helping countries resolve subsidies and tariff disputes with other countries. You could safely say it is much MORE LIKELY it is the _________ than the _______:

WTO; G20

Imagine you work with regional economic development in Texas, but a headhunter callsyou and tells you they have an undisclosed client that is hiring and they would like to talk to you in candidate. All they tell you is that the position is in a global organism that has the primary focus of poverty reduction and economic development. The chances of the Headhunterz client being _______ are MUCH higher than being _________.

World Bank; United Nations The World Bank (and thus NOT the UN or the WTO) is the global organism that has the primary focus of poverty reduction and economic development

Imagine you have set up your own very successful Texan hats manufacturing business. After some years, your company started ventured internationally, but you realize quickly that brought several risks along with amazing opportunities. Thus, you have to carefully select what characteristics a market should have to maximize opportunities and minimize risks. About your company selection of foreign markets, if your business model requires you to have the highest possible degree of freedom of speech: You would want Heritage FoundationÕs scores to be as HIGH as possible You would want HDI rank number to be as LOW as possible You would want Transparency InternationalÕs CPI Index to be as LOW as possible You would want Freedom House scores to be as LOW as possible

You would want Freedom House scores to be as LOW as possible

Your company sells consulting services in legal forecasting to multinationals studying foreign market entries. In some countries, by studying the target marketÕs laws, you may predict judgesÕ decisions quite accurately. In others, forecasts are much fuzzier, as it will depend on individual judgesÕ interpretations. Chances are that when your company is forecasting legal decisions in _______, predictions will be MUCH MORE accurate than when forecasting legal decisions in _______:

a civil law system; a common law system

The US invents a product. After many years of exporting it globally from the US, they decide to FDI in a poor country, to take advantage of their low production cost, and start serving some overseas markets from that foreign subsidiary. After a few more years, the US operations are shut down, and the US market is serviced solely from foreign production manufacturing operations, importing 100% of the good it once invented. This occurrence is _____ the idea of ____.

a classical illustration of; product life-cycle theory CORRECT! The cycle shown in this questions is a great illustration of the product life cycle theory

Your boss asked you to analyze some foreign market entry strategies for your company, to determine where it would need to consider FDI type of strategies and where it could remain in arms-length entry modes, such as exporting. Your analysis suggests that in Country A your company should consider a greenfield entry, rather than pursuing an acquisition, whereas in Country B you have suggested acquisition instead. It is most likely that Country A is _________ and Country B is _________:

a less developed country; a more developed country

The righteous moralist suggests that:

a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries

Free trade refers to:

a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country, or what they can produce and sell to another country

Protectionism refers to:

a situation where a government does restrict what its citizens can buy from or sell to another country, to protect domestic interests, such as essential jobs and producers CORRECT! Protectionism trade refers to a situation where a government does restrict what its citizens can buy from or sell to another country, to protect domestic interests, such as essential jobs and producers.

Mercantilism views trade as:

a zero-sum game CORRECT! It is the 500-year old Mercantilist doctrine that views trade a zero-sum game, where for one country to win the other must lose. Mercantilism thus advocates that countries should export more than what they import. Modern economic theory, from Adam Smith's 1776 studies and afterward, have all valued trade instead.

According to the concept of ________, countries should specialize in the production of goods that they are more efficient than any other country in producing, and then trade these for goods produced by other countries:

absolute advantage According to the concept of ABSOLUTE ADVANTAGE, NOT comparative advantage, countries should specialize in the production of goods that they are more efficient than any other country in producing, and then trade these for goods produced by other countries.

A Japanese car manufacturer buys an Italian producer of car tires. This is an example of a(n):

acquisition CORRECT! If a Japanese car manufacturer buys an Italian producer of car tires, this is called FDI through acquisition.

Company A and Company B are both considering different forms of FDI. Company A needs to have tight control over marketing and sales in the foreign market; Company B needs to protect sensitive proprietary technology. It is more likely that the chosen form of entry for Company A would a(n) __________, and that the chosen form of entry for Company B would a(n) ___________:

acquisition; greenfield

Goals such as promotion of higher standards of living, full employment, and conditions of economic and social progress and development:

are one of UN's central mandates, although the UN is perhaps best known for its world safety and peacekeeping role CORRECT! These are some of UN's central mandates, although the UN is perhaps best known for its world safety and peacekeeping role

as advocated by new trade theory, escalation of tariffs produce reciprocal retaliations, with all involved countries ultimately losing CORRECT! In 2018-19 trade wars, protectionist policies backed fired and US jobs suffered the most, particularly among US exporters. China's retaliatory import tariffs on US imports, also created problems to Chinese exporters. All this vicious cycle of problems, as advocated by new trade theory, demonstrate that escalation of tariffs produce reciprocal retaliations, with all involved countries ultimately losing

According to the Friedman doctrine: -if a manager of a multinational sees that firms from other nations are not following environmental legislation in a host nation, that manager should not either. -businesses should not undertake social expenditures beyond those mandated by the law and required for the efficient running of a business. -a multinational's home-country standards of ethics are inappropriate to follow in foreign countries. - ethics are nothing more than the reflection of culture.

businesses should not undertake social expenditures beyond those mandated by the law and required for the efficient running of a business. CORRECT! According to the Friedman doctrine, the social responsibility of business is to increase profits, so long as the company stays within the rule of law. Therefore, for the Friedman doctrine, businesses should not undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.

A ______ law system tends to be ________ than a ______ law system:

civil; less adversarial; common CORRECT! A civil law system tends to be less adversarial than a common law system, because the judges' decisions are based on legal codes, and are not as subjected to the argumentation and rhetoric of the lawyers presenting the case

Political systems that emphasize __________ , whereas those that place a high value on __________; ___________: - individualism tend toward totalitarian; collectivism tend to be democratic; these are higly correlated and thus this is flawless predictive relationship in international business -collectivism tend toward totalitarian; individualism tend to be democratic; these are higly correlated and thus this is flawless predictive relationship in international business - collectivism tend toward totalitarian; individualism tend to be democratic; however, a large gray area exists in the middle - individualism tend toward totalitarian; collectivism tend to be democratic; however, a large gray area exists in the middle

collectivism tend toward totalitarian; individualism tend to be democratic; however, a large gray area exists in the middle CORRECT! Political systems that emphasize collectivism tend toward totalitarian, whereas those that place a high value on individualism tend to be democratic; however, a large gray area exists in the middle. Indeed, there are exceptions in both sides, and these trends should not be considered a universal equivalency rule.

In a _____ law system, ___________: -civil; contracts tend to be longer and more complex than in a common law system, because in common law contracts reflect more advanced US / Western practices -common; contracts tend to be longer and more complex than in a civil law system, because in civil law contracts do not need to add clauses that are already predicted in legal codes - common; contracts tend to be longer and more complex than in a civil law system (as the USA uses), because judges' decisions are based on interpretations made in prior legal cases -civil; contracts tend to be longer and more complex than in a common law system, because judges' decisions are based on interpretations made in prior legal cases

common; contracts tend to be longer and more complex than in a civil law system, because in civil law contracts do not need to add clauses that are already predicted in legal codes In a common law system, contracts tend to indeed be longer and more complex than in a civil law system, because in a civil law system, contracts do not need to add clauses that are already predicted in legal codes. Thus, under civil law systems the contracts are usually simpler than under common law systems. Moreover, the US uses a common law system, and not a civil law system

Local content requirements help domestic producers in ______________, and also affect consumers _________:

competing against foreign imports, but not gaining export markets; negatively

The recent 2016 US election has brought to light the debate between those in favor and those critics of globalization and free trade. In terms of such debate, if one is a ______ of globalization, one tends to believe that _______:

critic; free trade encourages firms from advanced nations to move manufacturing facilities to less developed countries

Under an extreme _________ ethical viewpoint, an inhumane act may be ethically supported, such as child labor

cultural relativist

Most likely, democracy and economic progress as related in the sense that:

democracy is most likely a consequence, rather than an essential condition, of economic progress

A multinational company wants to FDI into a new foreign market. The more ________ the target country is, the more likely that the chosen form of FDI would be __________, rather than ___________:

developed; an acquisition; a greenfield CORRECT! A multinational company wants to FDI into a new foreign market. The more developed the target country is, the more likely that the chosen form of FDI would be an acquisition, rather than a greenfield.

WalMart makes bulk purchases from its vendors and hence it is able to get better deals than its competitors. This allows WalMart to offer greater discounts to its customers. In this case, WalMart benefits from ____.

economies of scale

The globalization of markets and production and the resulting growth of world trade, foreign direct investment, and imports, all imply that:

firms are finding their home markets under attack from foreign competitors CORRECT! The more the world globalizes, the more competition becomes global, and as a result, the more firms find their home markets under attack from foreign competitors

You are an international business analyst studying a foreign market entry. You sell luxury goods, such as Masseratti automobiles. In your case, to determine in which country to enter, it is critical to account for the potential for that country to have the best market for that car, meaning comparing the countries in terms of the market of people that can afford it. Assuming the listed variables is all the information you have, you should:

go to the country with the highest GNI per capita at PPP (Gross national income per capita at PPP) CORRECT! Buying luxury goods required WEALTH. To measure wealth in an economy, among those indicators provided, the best measure would be GNI per capita at PPP (Gross national income per capita at PPP). Our reference sheet should tell us that the higher the GNI per capita at PPP, the wealthier families are in that country, and thus the more they can buy luxury goods. Therefore, this is the right choice.

A Norwegian paper manufacturer setting up a new forestry operation in Vietnam is an example of:

greenfield FDI A Norwegian paper manufacturer setting up a new forestry operation in Vietnam is a good example of FDI through a greenfield, NOT of an acquisition (it is not buying an established player).

A multinational company wants to enter into a new foreign market. The more the multinational needs to have tight control over manufacturing, marketing, and strategy, in the new foreign country, the more likely that the chosen form of entry would be a(n)__________, rather than a(n)___________:

greenfield; licensing CORRECT! If a company wants to enter a foreign market through FDI, the more it needs to have tight control over manufacturing, marketing, and strategy, in the new foreign country, the more likely that the chosen form of entry would be greenfield, rather than licensing.

Since the 1960s, a current trend in international business is the _______ of medium-sized and small __________, known as __________: -growth; multinationals; mini-multinationals -decline; multinationals; quasi-multinationals -decline; global exporters; multinationals -growth; global exporters; multinationals

growth; multinationals; mini-multinationals CORRECT! Since the 1960s, a current trend in international business is the growth of medium-sized and small multinationals, known as mini-multinationals

The ________ sector in the U.S. ________ seize the benefits of outsourcing to low-cost producers in other nations, as manufacturing services may do, __________ of the nature of their type of work

health care service provision; can; in spite CORRECT! Health care service provision CAN benefit from outsourcing in search of low labor location advantages, as long as the law does not prohibits the specific practice: India and Mexico service providers have provided varied outsourcing services (such as reading and transcribing lab exams overnight, producing protheses, etc) for US and many other countires for decades, due to better cost advantages. In the US laws have been more restrictive to this type of practice in the last few years, but several legal avenues still exist

When entering a new market, the level of difficulty (and/or the extent of time required) to conquer that new market will most likely be: -much lower for companies coming from developed countries, compared to those coming from less developed countries -the same for both traditionally domestic companies and traditionally international companies - lower for a traditionally domestic company, and higher for a traditionally international company - higher for a traditionally domestic company, and lower for a traditionally international company

higher for a traditionally domestic company, and lower for a traditionally international company CORRECT! The domestic company will have more difficulty when first attempting to do business internationally than an already international company would have

The higher the level of economic freedom, the _______ incentives for _____ and, and thus, the better the chances for economic growth and development

higher innovation, entrepreneurship CORRECT! Innovation and entrepreneurship, the known engines of economic growth and development, require a higher level of economic freedom, a market economy, and strong property rights.

New trade theorists argue that a strategic trade policy aimed at establishing domestic firms in a dominant position in a global industry tend to:

hurt the citizens of both countries: the interventionist country, and the country retaliating against the interventionist country

About international ethics, the U.S. law, in particular the Foreign Corrupt Practices Act, clearly ___________ officials of U.S. companies to bribe foreign officials _________:

includes language that allows; under certain circumstances

increased difficulties for US exporters to sell in China, as well increased difficulty of Chinese exporters selling in the US; the consequence is lower foreign competition in each domestic market market, raising local prices and reducing consumption CORRECT! In 2018-19 trade wars, US protectionist policies backed fired, triggering retaliatory Chinese intervention in free trade, also via import tariff responses, provoking an escalating conflict in which both countries lost more than they may have won. It increased difficulties for US exporters to sell in China, as well increased difficulty of Chinese exporters selling in the US; the consequence has been lower foreign competition in each domestic market market, raising local prices and reducing consumption in both economies.

When _________ is politically emphasized in a society, ________________:

individualism; individual will is generally viewed as being more important than the needs of society as a whole CORRECT! When individualism is politically emphasized in a society, individual will is generally viewed as being more important than the needs of society as a whole

When _________ is politically emphasized in a society, ________________: -collectivism; the general trend is to favor a free and market-driven economy, which will generate societal development -individualism; the general trend is to favor a control economy, to guarantee the generation of societal development - individualism; individual will is generally viewed as being more important than the needs of society as a whole -collectivism; the needs of society as a whole are generally viewed as being less important than individual will

The concept of comparative advantage explains international trade in terms of:

international differences in productivity WITHIN AND BETWEEN countries The concept of comparative advantage explains international trade in terms of international differences in productivity within and between countries, NOT in terms of international differences in productivity between countries (that would be Adam Smith's ABSOLUTE advantage).

Starting in 2018, the US started several trade conflict with multiple trade partners, from China, Mexico and Canada, to multiple traditional trade partners across the world. For example, when the US imposed heightened import tariffs on steel and aluminum imports, numerous retaliations began, with the trade wars with China being the most salient. An unintended consequence in the US was felt by US manufacturing companies that are dependent on foreign steel or aluminum, and thus had a cost increase, making their products more costly, less competitive, and thus ultimately jeopardizing US-based jobs. Some of such companies, like Harley-Davidson, have lately considered offshoring their production (out of the US), to be able to have lower cost in products they sell worldwide, by circumventing such US import tariffs on their critical raw materials (CNN, 8/12/2018). Companies such as Harley-Davidson are an example of:

intervention in free trade by US imposition of import tariffs may ultimately back fire and cause outward FDI by US firms into target, or more free-trade oriented, foreign countries CORRECT! Companies such as Harley-Davidson are an example of how US intervention in free trade by imposition of import tariffs will likely produce reciprocal and escalating retaliations, which ultimately increases outward FDI by US firms into target foreign countries, as retaliatory tariffs may cause US exports to become prohibitive. Harley-Davidson is a US company considering investing (doing outward FDI) outside of the US to avoid US import tariffs on their critical raw materials: thus, this is outward FDI for the US and inward FDI for the foreign country Harley-Davidson's production becomes offshore to. And such outward US FDI is an unintended consequence of a US protectionist Governmental intervention in trade.

Starting in 2018, a trade conflict between the US and China developed after the US imposed tariffs on Chinese imports into the US, as a part of Trump's administration's intent to 'get jobs back' and 'restore fair trade'. Responses and counter responses from both sides escalated and by early 2019 the two nations had swapped tariffs on more than $200 billion of goods. The automotive industry was particularly impacted as exports became less competitive for most global players. In late 2018, US-based Tesla announced it would build a factory in China to allow it to serve the Asian market without paying the import tariffs imposed to Cars manufactured in the US. This is an example of:

intervention in free trade by US imposition of import tariffs may ultimately back fire and cause outward FDI by US firms into target, or more free-trade oriented, foreign countries Tesla is a US company investing (doing outward FDI) in China to avoid Chinese retaliatory import taxes on US cars: thus, this is outward FDI for the US and inward FDI for China. Tesla's starting to manufacture cars in China in 2019 is an example of how US intervention in free trade by imposition of import tariffs will likely produce reciprocal and escalating retaliations, which ultimately increases outward FDI by US firms into target foreign countries, as retaliatory tariffs may cause US exports to become prohibitive. In that sense, such outward US FDI is an unintended consequence of a US protectionist Governmental intervention in trade.

A country has an absolute advantage in the production of a product when it ____.

is more efficient than any other country in producing it

A country has an absolute advantage in the production of a product when:

it is more efficient than any other country in producing it

Some traditionally domestic companies attempt to do business abroad by implementing in the target markets the same business model and modus operandi that was successfully applied in their home country. About such type of internationalization strategy:

it tends to be the reason for failure behind many of the first-time internationalization endeavours CORRECT! The practice of attempting to act as if they were at home is not the main internationalization strategy used by experienced international companies: they know better, and that it tends not to work. But most domestic companies, when first venturing abroad, tend to attempt to act as if they were at home. And they usually fail when doing so, but most attempt to do it anyway.

A Norwegian paper manufacturer grants permission to another company in Vietnam to use its brand. The Vietnamise then builds a factory from the ground up to initiate production. This is an example of:

licensing CORRECT! If a Norwegian paper manufacturer grants permission to another company in Vietnam to use its brand, and then that Vietnamise builds a factory from the ground up to initiate production, this is an example of licensing.

A little-known law in the United States, the Buy America Act, specifies that government agencies must give preference to American products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage. This is a real example of:

local content requirement CORRECT! The Buy America Act, by requiring that some specific fraction of a good be produced domestically, constitutes a great example of strategy of government intervention in trade called local content requirement.

In international trade, if you want to protect a(n) _____ most likely the type of legal protection needed would be ___________:

logo; trademark CORRECT! Trademarks protect a word, phrase, symbol or a character, or yet a design, that distinguishes the source of such symbols of one business from its competitors. In international business, one must understand which protection a target country needs to have to support their business model or trade arrangement

Under a tariff rate quota, a _____ tariff rate is applied to imports _____ the quota than those _____ the quota:

lower; within; over CORRECT! Under a tariff rate quota, a lower tariff rate is applied to imports within the quota than those over the quota.

By _______ production costs, subsidies help domestic producers in ______________:

lowering; both competing against foreign imports, and gaining export markets CORRECT! By lowering production costs, subsidies help domestic producers in both competing against foreign imports, and gaining export markets. Among the downsides, the subsidized company tends to become artifically competitive, and dependent on the continutity of subsidies to compete. It tends to become less effective over time. Moreover, critics of subsidies claim that consumers and tax payers are hurt by increased costs and the extension of survival of a company which should be naturally eliminated from the market by more effective competitors.

An administrative trade policy is a bureaucratic rule designed to

make it difficult for imports to enter a country

A local content requirement is a bureaucratic rule designed to

mandate that some specific fraction of a good be produced domestically

Business firms that lobby their governments to engage in protectionism:

may be denying themselves the opportunity to build a competitive advantage by constructing a globally dispersed production system

According to the _______ perspective, countries should __________:

mercantilist; export more than what they import

Company X was a small scale producer of a consumer product that used an alternative technology to generate energy. The largest competitors used traditional energy sources and viewed Company X as a "hippie competitor", and a non threat, in spite of Company X's global presence (albeit with a smaller market share in each market). Suddenly, traditional technologies became outlawed only Company X's technology was compliant. Their product became popular and demand skyrocketed globally, while it took competitors many more years to follow Company X's lead, to no avail: by then Company X had exclusivity contracts with most of the critical suppliers and the volume they produced allowed them to keep their prices very competitively low, with great profit margins. Company X rules the world in this product, in spite of outher countries being naturally more suited to succeed in its production. This situation exemplifies _______________ concept the importance of ____________ in international trade:

new trade theory's; economies of scale CORRECT! The theory that explains why industries can be successful in spite of having no factor endowments to make it a natural contender in it, and leaving behind countries that would naturally have an advantage, is indeed the New Trade Theory. According to this approach, this is possible to first-mover advantages and/or economies of scale.

Company X from Country A does FDI in country B. In country B, good companies are those that share their wealth with the community through corporate social responsibility actions. This is a typical example of:

noblesse oblige

BP, one of the world's largest oil companies, has made it part of the company policy to undertake "social investments" in the countries where it does business. There was no economic reason for BP to make this social investment, but the company believes it is morally obligated to give something back to the societies that have made their success possible. BP's actions are an example of:

noblesse oblige. CORRECT! Noblesse oblige implies that with wealth, power and prestige come social responsibilities. Multinationals following noblesse oblige would thus feel compelled to give something back to the (host) societies that have made their success possible.

According to the concept of COMPARATIVE ADVANTAGE, countries should

not produce a good, but rather import it, even if they are more efficient than other countries in producing it, in case another good they can produce they can be even more efficient in producing CORRECT! According to the concept of COMPARATIVE ADVANTAGE, countries should NOT produce a good, but rather import it, even if they are more efficient than other countries in producing it, in case another good they can produce they can be even more efficient in producing.

About offshoring and outsourcing in international business: -offshoring happens when a company implements outsourcing overseas -offshoring and outsourcing are processes limited to manufacturing enterprises -offshoring and outsourcing are processes not limited to manufacturing, and can comprise service provision -offshoring and outsourcing are processes limited to service enterprises

offshoring and outsourcing are processes not limited to manufacturing, and can comprise service provision CORRECT! Offshoring and outsourcing are processes that can be applied to both manufacturing and service operations

It is __________ to have democratic societies that emphasize __________. Furthermore, it is __________:

possible; a mix of collectivism and individualism; possible to have totalitarian societies that are not collectivist CORRECT! It is possible to have democratic societies that emphasize a mix of collectivism and individualism (such as the Scandinavian countries). Furthermore, it is possible to have totalitarian societies that are not collectivist (such as the Chilean dictatorship during the 1970s, or those among the so-called Asian Tigers during the 1970s and 1980s)

When a country shifts from a command economy to a market-based economy, it is likely that _______ will ________:

privatization; increase

Imagine your country can produce both products A and B more efficiently than any other country. But also assume that you are more efficient in producing A than in producing B. According to the concept of ABSOLUTE ADVANTAGE, your country should:

produce A and B, because you are more efficient than all other countries

produce A and not B, and import B from another country

According to the concept of ABSOLUTE ADVANTAGE, countries should:

produce all the products for which they are more efficient than other countries in producing, rather than importing products from a less efficient source market

According to the _________, if a given country is innovative and a generator of new products, and it starts marketing such product in poorer foreign countries, and from there it starts to FDI in such country to seize location economies, it will ultimately end up no longer manufacturing its invention, but rather importing such product it once invented from such poorer country.

product life-cycle theory

protectionist US policies triggering retaliatory interventions in free trade responses by the Chinese CORRECT! The 2018-19 trade wars are an example of protectionist US policies triggering retaliatory interventions in free trade responses by the Chinese, in a conflict in which all involved countries tend to lose. Neither the US action or the Chinese reaction represent examples of free trade advocacy.

When a country shifts from a market-based economy to a command economy, it is likely that _______ will ________:

regulation; increase

The U.S. government has used the threat of punitive trade sanctions to try to get the Chinese government to enforce its intellectual property laws. This is an example of government intervention based on:

retaliation CORRECT! The U.S. government using the threat of punitive trade sanctions to try to get the Chinese government to enforce its intellectual property laws is a great example of government intervention based on retaliation.

The term offshore production refers to FDI undertaken to:

serve the home market from a low-cost production location The term offshore production refers to FDI undertaken to serve the home market from a low-cost production location, NOT to substitute imports from host country into home country.

The _______ believed that __________, and thus __________:

social democrats; socialism could be achieved by democratic means; they turned their backs on violent revolution and dictatorship

A multinational company wants to FDI into a new foreign market. The more the multinational wants a(n) __________ entry, the more likely that the chosen form of FDI would be __________, rather than ___________:

speedy; an acquisition; a greenfield CORRECT! A multinational company wants to FDI into a new foreign market. The more the multinational wants a speedy entry, the more likely that the chosen form of FDI would be an acquisition, rather than a greenfield.

The _____ of ______ FDI refers to the aggregated amount of FDI made by a foreign multinationals into a country throughout its history, until a point of time:

stock; inward CORRECT! The stock of inward FDI refers to the aggregated amount of FDI made by a foreign multinationals into a country throughout its history, until a point of time.

Strategic trade policy suggests that a government should use _____________ to support promising firms that are active in newly emerging industries, and thus helping them _____________:

subsidies; gain first-mover advantages CORRECT! Strategic trade policy suggests that a government should use subsidies to support promising firms that are active in newly emerging industries, and thus helping them gain first-mover advantages.

The current account of the balance of payments ________ if the purpose of the foreign investment is to serve the ________ market from a low-cost production location:

suffers; home CORRECT! The current account of the balance of payments suffers if the purpose of the foreign investment is to serve the home market from a low-cost production location.

According to ____, the social responsibility of business is to increase profits, so long as the company stays within the rule of law.

the Friedman doctrine CORRECT! According to the Friedman doctrine, the social responsibility of business is to increase profits, so long as the company stays within the rule of law.

The following is TRUE about the infant industry argument in international trade: -the GATT has recognized the infant industry argument as a legitimate reason for protectionism -the GATT has opposed the infant industry argument as a legitimate reason for protectionism -the GATT has not recognized the infant industry argument as a legitimate reason for protectionism, but the subject is currently under GATT debate -the GATT has recognized the infant industry argument as a legitimate tool for the promotion of unrestricted free trade

the GATT has recognized the infant industry argument as a legitimate reason for protectionism CORRECT! It is TRUE, about the infant industry argument in international trade, that several pro-free trade agreements have found it to be an acceptable exception to justify protectionism. For example, the GATT has recognized the infant industry argument as a legitimate reason for protectionism.

In 2014, the GNI per capita of Malaysia was US$10,430, and Pakistan's was US$1,360. In the same year, the GNI at PPP per capita of Malaysia was US$22,525, and Pakistan's was US$4,851. Based solely on this data, this means that:

the cost of living in both such countries was lower than in the US

Brexit is the term used to refer to the United Kingdom (UK)s decision on June 23, 2016, to leave the European Union (EU), as the result of a public referendum in which more than 30 million people voted. The referendum decision surprised Britain and the world, and a strong backslash followed, with millions requesting a re-vote and UK's reconsideration of the decision. When explaining Brexit to your employees, you summarized BREXIT IS ALL ABOUT:

the critics of the negative impacts of globalization and free trade. The UK felt that open borders with Europe would hurt local job markets and local producers, who were being taken out of business by less expensive foreign imports

Brexit is the term used to refer to the United Kingdom (UK)Õs decision on June 23, 2016, to leave the European Union (EU), as the result of a public referendum in which more than 30 million people voted. The referendum decision surprised Britain and the world, and a strong backslash followed, with millions requesting a re-vote and UK's reconsideration of the decision. When explaining Brexit to your employees, you summarized BREXIT IS ALL ABOUT:

An international U.S. based company sets up a production unit in a developing country with poor environmental regulations. This contributes to:

the global tragedy of the commons CORRECT! The "tragedy of the commons" occurs when a resource is shared by all, but owned by no one: it does tend to be overused by individuals, resulting in its degradation.

In January 2017, the new US government announced it was considering imposing sanctions to US automobile manufacturers that would reduce US capacity (and jobs) to set up manufacturing operations abroad. In other words, it announced it disliked outward FDI from the US, and a part of the new administration's argument is that such outward FDI would hurt the US balance of payments. Some critics have counter-argued that outward, US-originated, FDI may be positive to the US balance of payments. It is TRUE that the balance of payments of the US may be POSITIVELY affected by outward, US-originated, FDI if:

the new US subsidiary created by such outward FDI would create demand for US exports of goods such as capital equipment

Issues at the forefront of the current agenda of the WTO are all of the following, with THE EXCEPTION OF:

the unresolved issue of the infant industry argument as legitimate or illegitimate protectionism

Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics because of all of the following reasons EXCEPT:

they are psychologically and geographically closer to the parent company. CORRECT! Expatriate managers are NOT psychologically and geographically closer to the parent company: by definition, they are away from their supporting cultures; thus, they may experience more than the usual degree of pressure to violate their personal ethics for other reasons, not this one. The question asks for an option that DOES NOT constitute a reason for them to have such higher pressure to violate their personal ethics, thus this is the right choice.

Foreign producers typically agree to voluntary export restrictions because:

they fear far more damaging punitive tariffs or import quotas might follow if they do not CORRECT! Foreign producers typically agree to voluntary export restrictions because they fear far more damaging punitive tariffs or import quotas might follow if they do not.

EarthÕs atmosphere has been vastly used and abused, particularly by the action of corporations and governments. Air pollution and greenhouse gases from various industries and transportation increasingly damage this valuable, shared resource. This is a sad example of:

tragedy of the commons

The _____ occurs when a resource is shared by all, but owned by no one, is overused by individuals, resulting in its degradation.

tragedy of the commons CORRECT! The "tragedy of the commons" occurs when a resource is shared by all, but owned by no one: it does tend to be overused by individuals, resulting in its degradation.

The concepts of absolute and comparative advantage show:

why it is beneficial for a country to engage in international trade even for products it is able to produce for itself

Use the following data to answer the next question: ======================================================== ## Hofstede's Masculinity: Denmark: 16; France: 43; Ireland: 68; Japan: 95; Malaysia: 50; Portugal: 31; Singapore: 48 ## Hofstede's Power Distance: Denmark: 18; France: 68; Ireland: 28; Japan: 54; Malaysia: 100; Portugal: 63; Singapore: 74 ## Hofstede's Indulgence: Denmark: 70; France: 48; Ireland: 65; Japan: 42; Malaysia: 57; Portugal: 33; Singapore: 46 ## Hall's Private Space: Denmark: High; France: Medium-High; Ireland: High; Japan: Low; Malaysia: Low; Portugal: Medium; Singapore: Medium-Low ## Hall's High vs Low Context: Denmark: Low; France: Medium; Ireland: Low; Japan: High; Malaysia: High; Portugal: Medium-High; Singapore: Medium-High ======================================================== You work in a multinational company that sent you as an expatriate to one of your foreign subsidiaries. You quickly notice, while house hunting, that at that foreign country people expect to live in very large houses and to have huge cars, much different than what you are used to, and comfortable with, back home. You are frustrated, because you cannot easily find a place or a car where you would not feel like you are shamefully wasting company's money. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you are from a country such as ________, than from _______: - Denmark; Singapore - Ireland; Malaysia - Japan; Portugal - Ireland; Portugal

- Japan; Portugal CORRECT! Let's use the Tutorial's 5-step to solve this:People believing the space around them being psychologically "theirs", or else believing space between people belongs to no one, are beliefs related to HALL's PRIVATE (or "Personal") SPACE. Our reference sheet should tell us that the more HIGH Private Space a country is, the more people will be protective or the space around them, and attempt to search for larger, and more exclusive, space for themselves. Conversely, the lower the Private Space, the less people believe the space around them is theirs and the less they feel protective about it. Modeling the answer, we are asked about a place you ARE FROM, where the chances of LOW Private Space are significantly GREATER, which means we are looking for a pair of countries in which the first has a significantly LOWE Private Space than the other. Looking at the alternatives, Japan (Low) has lower private space than Portugal (Medium), which DOES satisfy the criteria, and thus, this IS the right choice.

If a person wants to truly understand a foreign culture, he/she needs to: -learn that country's language - read the foreign country's laws and regulations, as ---they comprise most of that culture's beliefs and norms -All other alternatives are INCORRECT -read the commandments of the foreign country's main religion, as they comprise most of that culture's beliefs and norms

-All other alternatives are INCORRECT CORRECT! None of the other statements captured how one would truly understand another culture

Which of the following is an example of a greenfield investment?

A Chinese sugar maker setting up a sugar crushing facility in Cuba

The following statement is NOT TRUE: a)An aspect of pragmatic nationalism is the tendency to aggressively court FDI believed to be in the national interest by, for example, offering subsidies to foreign MNEs in the form of tax breaks or grants b)Countries adopting a pragmatic stance pursue policies designed to maximize the national benefits and minimize the national costs: they believe that FDI should be allowed so long as the benefits outweigh the costs c) In practice no country has adopted the free market view in its pure form d) According to the pragmatic nationalistic view, the MNE is a tool for exploiting host countries to the exclusive benefit of their capitalist-imperialist home countries

According to the pragmatic nationalistic view, the MNE is a tool for exploiting host countries to the exclusive benefit of their capitalist-imperialist home countries CORRECT! We are looking for a NON TRUE statement, and this one meets the criteria: According to the RADICAL view, NOT pragmatic nationalistic, the MNE is a tool for exploiting host countries to the exclusive benefit of their capitalist-imperialist home countries.

At one point in time, Japan wanted to put a façade of being pro-free trade, but at the same time it wanted to protect domestic producers of a certain perishable product, and shield them from foreign competition. The Japanese government then decided to eliminate import tariffs for such product, and yet determined that any import of it would need to be quarantined for 40 days before it could be cleared by Japanese customs. As a result, all incoming shipments woudl invariable go to waste, before they could come into Japan and compete with the Japanese producers under protection. This is a classic example of:

Administrative trade policies CORRECT! When a country imposes bureaucratic rules designed to make it difficult for imports to enter a country, even while under a "pro-free trade" facade, it is intervening in trade using a strategy called Administrative trade policy.

Use the following data to answer the next question: Heritage Foundation's Economic Freedom (2018 Index): Afghanistan: 51; Algeria: 45; Bangladesh; 55; Bhutan: 62; Estonia: 79; Gabon: 58; Montenegro: 64; Namibia: 59; Somalia: 45 According to the data provided, the probability of you being subject to high regulation and government intervention is significantly GREATER in ______ than in ______. a) Bhutan; Bangladesh b) Afghanistan; Gabon c) Namibia; Afghanistan d) Bangladesh; Afghanistan

Afghanistan; Gabon CORRECT! This question is about ECONOMIC FREEDOM, which can be best measured, among the provided indicators, with the Heritage Foundation's Economic Freedom index. In such index, the higher the number, the more economic freedom a country has, and therefore, the LESS likely that in such country one would find excessive regulation of economic activity or governmental intervention. This option is correct because the first country had a LOWER economic freedom index than the second, and therefore in the first country the chances of excessive regulation of economic activity or governmental intervention are GREATER than in the second, which is a country with a higher economic freedom.

Use the following data to answer the next question: Transparency international CPI(2016 index): Afghanistan: 15; Algeria: 34; Bangladesh: 26; Bhutan: 65; Estonia: 70; Gabon: 35; Montenegro: 45; Namibia: 52; Somalia: 10 According to the data provided, the chances of you being asked to buy a "gift" to a government official in order to get a licence to operate it significantly GREATER in _______ than in _________ a) Algeria; Somalia b) Bangladesh; Afghanistan c) Afghanistan; Namibia d) Algeria; Bangladesh

Afghanistan; Namibia CORRECT! This question is about CORRUPTION, which can be best measured, among the provided indicators, with Transparency International's CPI index. In such index, the higher the number, the cleaner the country. This option is correct because the first country had a LOWER CPI (corruption) index than the second, and therefore in the first country the chances of corrupt actions happening are GREATER than in the second, which is a cleaner (or less dirty) country.

Use the following data to answer the next question: ===================================== ## Transparency International's CPI (2016 Index): Afghanistan: 15; Algeria: 34; Bangladesh: 26; Bhutan: 65; Estonia: 70; Gabon: 35; Montenegro: 45; Namibia: 52; Somalia: 10 ## Worldwide Governance Indicators Rule of Law (2016 Index): Afghanistan: -1.62; Algeria: -0.85; Bangladesh: -0.59; Bhutan: 0.47; Estonia: 1.24; Gabon: -0.58; Montenegro: -0.04; Namibia: 0.39; Somalia: -2.37 ## Heritage Foundation's Economic Freedom (2018 index): Afghanistan: 51; Algeria: 45; Bangladesh: 55; Bhutan: 62; Estonia: 79; Gabon: 58; Montenegro: 64; Namibia: 59; Somalia: 45 ## Freedom House's Freedom in the World (2018 Index): Afghanistan: 26; Algeria: 35; Bangladesh: 45; Bhutan: 55; Estonia: 94; Gabon: 23; Montenegro: 67; Namibia: 77; Somalia: 7 Imagine you have a binding contract with a client. According to the data provided, the chances of your client backing away from your agreement and expecting that it will not be enforced is significantly GREATER in _____ than in _______: Algeria; Gabon Algeria; Afghanistan Afghanistan; Somalia Estonia; Bhutan

Algeria; Gabon CORRECT! This question is about RULE OF LAW, which can be best measured, among the provided indicators, with Worldwide Governance Indicators Rule of Law index. In such index (that varies from -2.5 to +2.5), the higher (meaning hte closer to +2.5) the number, the more a country's laws are prone to be enforced and the more contracts will tend to be fulfilled. This option is correct because the first country had a LOWER Rule of Law index than the second, and therefore in the first country the chances of laws and contracts NOT being enforced are GREATER than in the second, which is a country with a stronger rule of law.

Which of the following is a characteristic of a command economy?

Allowing prices to be set by the interplay between demand and supply

Most PAROCHIAL managers would believe that:

Any civilized culture would think and act as we do CORRECT! A parochial individual believes there's only one truth, one valid way of thinking, one that all civilized people (including them, of course) share.

It has been proven that privatization may fail to deliver predicted benefits if the newly privatized firms:

Are sheltered from foreign competition CORRECT! Privatization may fail to deliver predicted benefits if the newly privatized firms are protected from market forces: a market-based economy tends to increase competition and foster natural selection.

The following is a GOOD example of OFFSHORING

ArgCork, an Argentine wine producer, buys 3 discontinued Mondavi locations in California and Oregon, to establish its first US-based operation. It will import wine in bulk from its Argentine headquarters, and bottle it in the US, to supply their expanding North America operations, without the need to import finished products from Argentina into the US

Which of the following is a GOOD example of OFFSHORING

ArgCork, an Argentine wine producer, buys three discontinued Mondavi locations in California and Oregon, to establish its first US-based operation. They will import wine in bulk from its Argentine headquarters, and bottle it in the US, to supply their expanding North America operations, without the need to import finished products from Argentina into the US CORRECT. This is a good example of offshoring. Offshoring is about locating part of a campany's production process or value chain abroad, to seize potential location economies. An offshoring decision does NOT need to be outsourced, but it may aso be owned by the same company. Outsourcing is about hiring an external provider to perfom activities the company iteself could be performing. This company is doing FDI (foreign direct investment) in the US, with some value-adding activities (final assembly and packaging), which they think it is advantageous compared to importing the finished product from abroad into the US. Because they are locating part of their production outside of their home country, it is an example of offshoring. But because they own the operation, and did not hire it out from an external supplier, it is NOT an example of outsourcing.

Use the following data to answer the next question: ===================================== ## Hall's High vs Low Context: Australia: Medium; Costa Rica: Medium-High; Egypt: High; Lebanon: Medium-High; New Zealand: Medium-Low; Poland: Medium-Low; Spain: Medium; Switzerland: Low ## Hofstede's Individualism (2018): Australia: 90; Costa Rica: 15; Egypt: 25; Lebanon: 40; New Zealand: 79; Poland: 60; Spain: 51; Switzerland: 68 ## Hofstede's Power Distance (2018): Australia: 36; Costa Rica: 35; Egypt: 70; Lebanon: 75; New Zealand: 22; Poland: 68; Spain: 57; Switzerland: 34 ## Hofstede's Uncertainty Avoidance (2018): Australia: 51; Costa Rica: 86; Egypt: 80; Lebanon: 50; New Zealand: 49; Poland: 93; Spain: 86; Switzerland: 58 ## Hofstede's Indulgence (2018): Australia: 71; Egypt: 4; Lebanon: 25; New Zealand: 75; Poland: 29; Spain: 44; Switzerland: 66 Imagine you are from country X and that you were sent by your multinational company to improve the sales force performance in a foreign country Y. You quickly notice that in the country you went to sales people tend to work much more by themselves than in teams or cooperatively, as you are used to in your country. According to the data provided, and assuming the listed variables is all the information you have, there is a much GREATER probability that YOU WENT TO a country such as ________, than to _______ : -Spain; Poland -Poland; New Zealand -Australia; New Zealand - Lebanon; Spain

Australia; New Zealand CORRECT! Let's use the Tutorial's 5-step to solve this: People tending to use personal connections, or working collaborately, to resolve professional challenges is related to LOW HOFSTEDE's INDIVIDUALISM (i.e., high collectivism); on the other hand, they relying more on themselves is related to HIGH INDIVIDUALISM (i.e., low collectivism). Our reference sheet should tell us that the LOWER is the Individualism of a country (therefore, the more collectivist), the more people will tend to use personal connections or to work collaborately to resolve professional challenges. Conversely, the higher the individualism, the more people tend to rely on themselves, rather than on their collectives. Modeling the answer, we are asked about a place you WENT TO, where people DO NOT rely on personal connections at work, and thus the chances of HIGH Individualism are significantly GREATER. This means we are looking for a pair of countries in which the first has a significantly HIGHER Individualism than the other. Looking at the alternatives, the first country has a significantly higher individualism than the second, which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer the next question: ===================================== ## Trompenaars' Achievement vs Ascription (2010): Brazil: 33; Cuba: 15; Germany: 40; Portugal: 39; Russia: 30; Spain: 13; Switzerland: 34; Venezuela: 29 ## Trompenaars' Inner vs Outer Directed (2010): Brazil: 39; Cuba: 56; Germany: 66; Portugal: 71; Russia: 49; Spain: 50; Switzerland: 29; Venezuela: 33 ## Trompenaars' Neutrals vs Affective (2010): Brazil: 40; Cuba: 19; Germany: 35; Portugal: 47; Russia: 24; Spain: 19; Switzerland: 32; Venezuela: 20 ## Trompenaars' Specific vs. Diffuse (2010): Brazil: 56; Cuba: 67; Germany: 65; Portugal: 73; Russia: 46; Spain: 71; Switzerland: 90; Venezuela: 52 ## Trompenaars' Universalism (2010): Brazil: 79; Cuba: 65; Germany: 87; Portugal: 56; Russia: 44; Spain: 75; Switzerland: 97; Venezuela: 32. Imagine you were sent by your multinational company to a foreign subsidiary, to start up a new operation there. A local governmental regulation does not favor the new operation in that country, and thus you are about to report to headquarters to you cannot continue with the start-up because, given that regulation, you believe the company will not manage to obtain a license to operate. However, the local subsidiary manager lets you know that he does not see a problem, because he is sure that your company can convince the local government to make an exception and give you a license even if you do not comply with the regulation. He believes the exception would likely be granted, due to the significance of the capital investment that the start-up would entail, and the impact it would have in the country's economy. You are surprised, because that would hardly happen in your country. According to the data provided, and assuming the listed variables is all the information you have, there is a much GREATER probability that you ARE FROM a country such as ________, than from _______ : Spain; Germany Venezuela; Russia Russia; Spain Brazil; Portugal

Brazil; Portugal CORRECT! Let's use the Tutorial's 5-step to solve this: Expecting rules and regulations to bend, contracts to be flexible given circumstances, and to accept exceptions when following agreements/rules is inconvenient, are all related to TROMPENAARS' UNIVERSALISM. Our reference sheet should tell us that the HIGHER is the Universalism of a country (the closer to 100 in a 0-100 scale), the more people will believe rules are rules, the more they will expect contracts to be binding, and the less they would expect exceptions to be acceptable. Modeling the answer, we are asked about a place you ARE FROM, where people DO NOT expect rules to bend and exceptions to be acceptable, and thus where the chances of HIGH universalism are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly HIGHER universalism than the other. Looking at the alternatives, the first country has a significantly higher universalism than the second, which DOES satisfy the criteria, and thus, this is the right choice.

Which of the following is a BAD example of a multinational interprise (MNE)

BudaCork, a Hungarian wine producer, sets up sales offices with their own personnel stationed in 15 countries across 4 continents, who visit delicacy stores and distributors, trying to pitch to retailers the superiority of Hungarian wine This is NOT an example of a multinational enterprise (MNE), because the company did NOT do any FDI (foreign direct investment) abroad. It rather expanded its foreing markets through exporting, which does not meet the FDI requirement to constitute an MNE.

The following are BAD examples of a multinational enterprise (MNE)

ChilCitrus, a Chilean tangerine farmer and distributor, closes a deal with Walmart to import their produce from Chile into the US, and then distribute the merchandise all across the US, using NAFTA's trade advantages AllegroBank, a Swiss bank, closes all its call centers in Switzerland and hires a German service provider to handle all their calls, which will locate the new call center in India OvalCo, a football equipment manufacturer from Pakistan, closes a deal with Amazon and 4 of its competitors, to distribute their products from Pakistan to clients all over the world

The following are BAD examples of a multinational enterprise (MNE)

ChilCitrus, a Chilean tangerine farmer and distributor, closes a deal with Walmart to import their produce from Chile into the US, and then distribute the merchandise all across the US, using NAFTA's trade advantages OvalCo, a football equipment manufacturer from Pakistan, closes a deal with Amazon and 4 of its competitors, to distribute their products from Pakistan to clients all over the world AllegroBank, a Swiss bank, closes all its call centers in Switzerland and hires a German service provider to handle all their calls, which will locate the new call center in India

The following is NOT a good example of the globalization of production

ChineseCom, a Chinese producer of smart phones, closes a deal with 12 US distributors, to channel their products in North America, and with Amazon.com, to distribute them in the rest of the world. This is NOT about globalization of production. Globalization of production is about multinational companies distributing their supply chains globally to seize possible location economies, which a purely domestic production could not capture. This company is simply commercializing their products/services internationally, and thus is an example of globalization of markets, not globalization of production.

When _________ is politically emphasised in a society, _______.

Collectivism; an individual's right to do something may be restricted on the grounds that it runs counter to "the good of society." CORRECT! When collectivism is politically emphasized in a society, an individual's right to do something may be restricted on the grounds that it runs counter to "the good of society"

In a _______ law system, _________.

Common; a judges ruling may be guided by interpretations made in prior legal cases *CORRECT! In a common law system, a judge's ruling may be guided by interpretations made in prior legal cases

Which of the following is a GOOD example of OFFSHORING:

Company B signs a contract with LENOVO, a Chinese microcomputer manufacturer (formerly IBM's laptop division), purchasing and taking over a manufacturing plant Lenovo half-built in China and abandoned, to produce there Company B's CPUs and monitors

Which of the following is a GOOD example of both OFFSHORING and OUTSOURCING:

Company B signs a contract with LENOVO, a Chinese microcomputer manufacturer (formerly IBM's laptop division), which will supply from China Company B's CPUs and monitors

You and your garage band wrote a couple of songs that you are sure will be great rock and roll hits. Which of the following types of legal protections can apply to you and your band?

Use the following data to answer the next question: ===================================== ## Hall's High vs Low Context: Australia: Medium; Costa Rica: Medium-High; Egypt: High; Lebanon: Medium-High; New Zealand: Medium-Low; Poland: Medium-Low; Spain: Medium; Switzerland: Low ## Hofstede's Individualism (2018): Australia: 90; Costa Rica: 15; Egypt: 25; Lebanon: 40; New Zealand: 79; Poland: 60; Spain: 51; Switzerland: 68 ## Hofstede's Power Distance (2018): Australia: 36; Costa Rica: 35; Egypt: 70; Lebanon: 75; New Zealand: 22; Poland: 68; Spain: 57; Switzerland: 34 ## Hofstede's Uncertainty Avoidance (2018): Australia: 51; Costa Rica: 86; Egypt: 80; Lebanon: 50; New Zealand: 49; Poland: 93; Spain: 86; Switzerland: 58 ## Hofstede's Indulgence (2018): Australia: 71; Egypt: 4; Lebanon: 25; New Zealand: 75; Poland: 29; Spain: 44; Switzerland: 66 Assume you are from country X and that you were sent by your multinational company to run a project in a foreign country Y. You quickly notice that superiors in country Y expect to be obeyed without discussion by their subordinates much more than in your country. According to the data provided, and assuming the listed variables is all the information you have, there is a much GREATER probability that you ARE FROM a country such as ________, than from _______ : Costa Rica; Spain Egypt; Spain Lebanon; Spain Poland; Spain

Costa Rica; Spain CORRECT! Let's use the Tutorial's 5-step to solve this: Superiors being relaxed and benevolent, or else expecting obedience from subordinates, are related to HOFSTEDE's POWER DISTANCE. Our reference sheet should tell us that the LOWER is the Power Distance of a country (the closer to 0 in a 0-100 scale), the more superiors will tend to be participative and benevolent with subordinates, and the HIGHER the Power Distance (the closer to 100 in a 0-100 scale), the more superiors will tend to expect and demand obedience from subordinates. Modeling the answer, we are asked about a place you WERE ARE FROM, where the chances of LOW Power Distance are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly LOWER Power Distance than the other. Looking at the alternatives, the first country has a significantly lower power distance than the second, which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer the next question: ===================================== ## Trompenaars' Achievement vs Ascription (2010): Brazil: 33; Cuba: 15; Germany: 40; Portugal: 39; Russia: 30; Spain: 13; Switzerland: 34; Venezuela: 29 ## Trompenaars' Inner vs Outer Directed (2010): Brazil: 39; Cuba: 56; Germany: 66; Portugal: 71; Russia: 49; Spain: 50; Switzerland: 29; Venezuela: 33 ## Trompenaars' Neutrals vs Affective (2010): Brazil: 40; Cuba: 19; Germany: 35; Portugal: 47; Russia: 24; Spain: 19; Switzerland: 32; Venezuela: 20 ## Trompenaars' Specific vs. Diffuse (2010): Brazil: 56; Cuba: 67; Germany: 65; Portugal: 73; Russia: 46; Spain: 71; Switzerland: 90; Venezuela: 52 ## Trompenaars' Universalism (2010): Brazil: 79; Cuba: 65; Germany: 87; Portugal: 56; Russia: 44; Spain: 75; Switzerland: 97; Venezuela: 32. Imagine a manager expects two of his foreign employees at a retail store, Ben and Jack, to help him paint his house, for free, but they respond quite differently to that idea. Ben thinks that he should do it because he is their boss. On the other hand, Jack thinks that he is their boss only at work and not outside, so he will not help their boss paint his house. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that JACK (who did NOT agree to paint his boss' house) is FROM a country such as ________, than from _______: Russia; Venezuela Brazil; Spain Cuba; Spain Cuba; Russia

Cuba; Russia CORRECT! Let's use the Tutorial's 5-step to solve this: Keeping work and private lives separate, or believing they intertwine, are all related to TROMPENAARS' SPECIFIC VS. DIFFUSE. Our reference sheet should tell us that the HIGHER is the Specificity of a country (the closer to 100 in a 0-100 scale), the more people will tend to keep work and private lives separate; and the less they would let those lives intertwine. Modeling the answer, we are asked about a place the character "JACK" (who did NOT agree to paint his boss' house) IS FROM, where one would NOT expect people to mix personal life and work, and thus where the chances of HIGH specificity are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly HIGHER specificity than the other. Looking at the alternatives, the first country has a significantly higher specificity than the second, which DOES satisfy the criteria, and thus, this is the right choice.

Child labor is permitted and widely employed in Country X. A multinational company entering Country X decides to employ minors in its subsidiary, even though it is against the multinational's home-country ethics. Which of the following approaches to business ethics would justify the actions of the multinational company?

Cultural relativism CORRECT! According to Cultural Relativism, a firm should adopt the ethics codes and practices of the culture in which it is operating.

A multinational company is accused of paying bribes to the government of a host country to obtain permission to build a production factory. The public relations manager of the company defends the company's actions as being ethically sound; he states that in the host country, paying bribes to government officials is the accepted norm and is in keeping with the social practices in the host country. The public relations manager is using which of the following philosophical doctrines to defend the actions of the company?

Cultural relativism CORRECT! We like or or not, according to Cultural Relativism, a firm should adopt the ethics codes and practices of the culture in which it is operating.

About the relationship between political economy and economic growth and development, the following statement is TRUE:

Democracy is not a necessary precondition for a free market economy in which property rights are protected, but if subsequent economic growth occurs, it often leads to establishment of a democratic regime. CORRECT! Although many of us would prefer that democracy would be a pre-requisite for economic development, the truth is that it is not necessarily so: Democracy is not a necessary precondition for a free market economy in which property rights are protected, but if subsequent economic growth occurs in a totalitarian (yet market-based) regime, it often leads to establishment of a democratic regime.

Use the following data to answer the next question: ======================================================== ## Hofstede's Individualism: Denmark: 74; France: 71; Ireland: 70; Japan: 46; Malaysia: 26; Portugal: 27; Singapore: 20 ## Hofstede's Uncertainty Avoidance: Denmark: 23; France: 86; Ireland: 35; Japan: 92; Malaysia: 26; Portugal: 99; Singapore: 8 ## Hofstede's Indulgence: Denmark: 70; France: 48; Ireland: 65; Japan: 42; Malaysia: 57; Portugal: 33; Singapore: 46 ## Hall's High vs Low Context: Denmark: Low; France: Medium; Ireland: Low; Japan: High; Malaysia: High; Portugal: Medium-High; Singapore: Medium-High ## Hall's Private Space: Denmark: High; France: Medium-High; Ireland: High; Japan: Low; Malaysia: Low; Portugal: Medium; Singapore: Medium-Low ======================================================== Imagine you work in a multinational company that sent you to run the factory expansion in one of your foreign subsidiaries. You quickly notice that people in the subsidiary act differently than at the headquarters. For example, you notice that people from the headquarters (where you come from) find it hard to distinguish between a sincere invitation and one intended merely as a gesture of politeness. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you are from a country such as ________, than from _______ : - Denmark; France - Malaysia; Japan - Singapore; Portugal - Ireland; Denmark

Denmark; France CORRECT! Let's use the Tutorial's 5-step to solve this:People speaking more ambiguously, and being affected by demeanor and innuendo, or by nonverbal cues, is related to HALL's HIGH vs LOW CONTEXT. Our reference sheet should tell us that the more LOW context a country is, the more people will have trouble perceiving and attributing meaning to demeanor and innuendo, and the more they will have trouble understanding people speaking ambiguously to get their subliminal meaning; conversely, the higher the context, the more people perceive or understand nonverbal cues, and the more they convey meaning within ambiguous messages. Modeling the answer, we are asked about a place where the chances of LOW context (meaning people having trouble to understand demeanor and innuendo) are significantly GREATER, which means we are looking for a pair of countries in which the first has a significantly LOWER context than the other. Looking at the alternatives, Denmark (Low) has a much lower context than France (Medium), as the question requires, which DOES satisfy the criteria, and thus, this IS the right choice.

Use the following data to answer the next question: ======================================================== ## Hofstede's Individualism: Denmark: 74; France: 71; Ireland: 70; Japan: 46; Malaysia: 26; Portugal: 27; Singapore: 20 ## Hofstede's Uncertainty Avoidance: Denmark: 23; France: 86; Ireland: 35; Japan: 92; Malaysia: 26; Portugal: 99; Singapore: 8 ## Hofstede's Indulgence: Denmark: 70; France: 48; Ireland: 65; Japan: 42; Malaysia: 57; Portugal: 33; Singapore: 46 ## Hall's High vs Low Context: Denmark: Low; France: Medium; Ireland: Low; Japan: High; Malaysia: High; Portugal: Medium-High; Singapore: Medium-High ## Hall's Private Space: Denmark: High; France: Medium-High; Ireland: High; Japan: Low; Malaysia: Low; Portugal: Medium; Singapore: Medium-Low ======================================================== You were participating in a business transaction in another country. Large meeting, several people in both sides, all done in English. One of the local people, sitting directly across from you in the other side, was very participative and made several comments to all of you on your side of the table. You did not say a word during the entire meeting. At the end, you talked to that person sitting across from you, and you apologized if you offended him during the meeting with your attitude. He had no idea why you could have offended him. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you are negotiating in a country such as ________, and that you are from a country such as _______ : Denmark; Malaysia Portugal; Singapore Singapore; Denmark Malaysia; Ireland

Denmark; Malaysia CORRECT! Let's use the Tutorial's 5-step to solve this:People being affected by demeanor and innuendo, or by nonverbal cues, is related to HALL's HIGH vs LOW CONTEXT. Our reference sheet should tell us that the more HIGH context a country is, the more people will perceive and attribute meaning to demeanor and innuendo, and thus conversely, the lower the context, the less people perceive or understand nonverbal cues. Modeling the answer, we are asked about two places: one where the character IS, and the other where they are FROM. The one they ARE IN is one with LOW context (or demeanor and innuendo having little or no effect on people); the one they are FROM is one with HIGH context (demeanor and innuendo having strong effect on people). This means we are looking for a pair of countries in which the first has a significantly LOWER context than the other. Looking at the alternatives, Denmark (Low) has a much lower context than Malaysia (High), which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer the next question: ======================================================== ## Hofstede's Masculinity: Denmark: 16; France: 43; Ireland: 68; Japan: 95; Malaysia: 50; Portugal: 31; Singapore: 48 ## Hofstede's Power Distance: Denmark: 18; France: 68; Ireland: 28; Japan: 54; Malaysia: 100; Portugal: 63; Singapore: 74 ## Hofstede's Uncertainty Avoidance: Denmark: 23; France: 86; Ireland: 35; Japan: 92; Malaysia: 26; Portugal: 99; Singapore: 8 ## Hall's Private Space: Denmark: High; France: Medium-High; Ireland: High; Japan: Low; Malaysia: Low; Portugal: Medium; Singapore: Medium-Low ## Hall's High vs Low Context: Denmark: Low; France: Medium; Ireland: Low; Japan: High; Malaysia: High; Portugal: Medium-High; Singapore: Medium-High ======================================================== You work in a multinational company that sent you to re-structure one of your foreign subsidiaries. You quickly notice that at that foreign country people tend to work in crowded, communal areas, with no much room for individual work stations. You worked for a while in one of such positions and felt uncomfortable and invaded all the time by people around you, whereas the locals seem to not even notice this strange work arrangement. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you are from a country such as ________, than from _______: Malaysia; Ireland Portugal; Ireland Singapore; France Denmark; Portugal

Denmark; Portugal CORRECT! Let's use the Tutorial's 5-step to solve this:People believing the space around them being psychologically "theirs", or else believing space between people belongs to no one, are beliefs related to HALL's PRIVATE (or "Personal") SPACE. Our reference sheet should tell us that the more HIGH Private Space a country is, the more people will be protective or the space around them, and attempt to search for larger, and more exclusive, space for themselves. Conversely, the lower the Private Space, the less people believe the space around them is theirs and the less they feel protective about it. Modeling the answer, we are asked about a place you ARE FROM, where the chances of HIGH Private Space are significantly GREATER, which means we are looking for a pair of countries in which the first has a significantly HIGHER Private Space than the other. Looking at the alternatives, Denmark (High) has a much higher Private Space than Portugal (Medium), which DOES satisfy the criteria, and thus, this is the right choice.

When states in the world shift away from a mixed economy to a market-based economy, one of the key measures to follow is:

Deregulation of the economy, to increase competition and foster natural selection CORRECT! When states shift away from a mixed economy to a market-based economy, one of the key measures to follow is the reduction of regulation of the economy, in order to increase competition and foster natural selection.

Corporation X is a multi-business US conglomerate contemplating international expansion. Company X has several different businesses, and it is trying to decide which of them should be internationalized first, and which ones could wait or may not have internationalization potential. Which of the following best illustrates the globalization of production for Corporation X?

Division D, a digital imaging provider starting to expand internationally, hiring doctors in India to analyze X-Rays and MRIs taken everyday at Trinity Mother Francis in Tyler, Texas.

In 1997, two South Korean manufacturers of semiconductors, LG Semicon and Hyundai Electronics, were accused of selling dynamic random access memory chips (DRAMs) in the U.S. market at below their costs of production. It was alleged that the firms were trying to unload their excess production in the United States. This is an example of:

Dumping

__________ is defined as selling goods in a foreign market at below their costs of production or as selling goods in a foreign market at below their "fair" market value:

Dumping CORRECT! Selling goods in a foreign market at below their costs of production or as selling goods in a foreign market at below their "fair" market value is called DUMPING.

Use the following data to answer the next question: Heritage Foundation's Economic Freedom (2018 Index): Afghanistan: 51; Algeria: 45; Bangladesh; 55; Bhutan: 62; Estonia: 79; Gabon: 58; Montenegro: 64; Namibia: 59; Somalia: 45 According to the data provided, the chances of your business being subject to low regulation and very small government intervention is significantly GREATER in _____ than in _______ a) Bangladesh; Estonia b) Estonia; Algeria c) Algeria; Montenegro d) Somalia; Bhutan

Estonia; Algeria CORRECT! This question is about ECONOMIC FREEDOM, which can be best measured, among the provided indicators, with the Heritage Foundation's Economic Freedom index. In such index, the higher the number, the more economic freedom a country has, and therefore, the LESS likely that in such country one would find excessive regulation of economic activity or governmental intervention. This option is correct because the first country had a HIGHER economic freedom index than the second, and therefore in the first country the chances of low regulation of economic activity or low governmental intervention are GREATER than in the second, which is a country with a lower economic freedom.

Which of the following statements is true about the growth of foreign direct investment in the world economy over the last few decades?

FDI has accelerated faster than world trade growth

Use the following data to answer the next question: ======================================================== ## Hall's High vs Low Context: Denmark: Low; France: Medium; Ireland: Low; Japan: High; Malaysia: High; Portugal: Medium-High; Singapore: Medium-High ## Hofstede's Masculinity: Denmark: 16; France: 43; Ireland: 68; Japan: 95; Malaysia: 50; Portugal: 31; Singapore: 48 ## Hofstede's Uncertainty Avoidance: Denmark: 23; France: 86; Ireland: 35; Japan: 92; Malaysia: 26; Portugal: 99; Singapore: 8 ## Hofstede's Indulgence: Denmark: 70; France: 48; Ireland: 65; Japan: 42; Malaysia: 57; Portugal: 33; Singapore: 46 ## Hofstede's Individualism: Denmark: 74; France: 71; Ireland: 70; Japan: 46; Malaysia: 26; Portugal: 27; Singapore: 20 ======================================================== Imagine you work in a multinational company from your own country, that sent you to run a project in a foreign subsidiary. You have noticed that at the subsidiary, people are much better than at headquarters (where you are from) with ambiguity and lack of clear directives. In the type of project you run, these ambiguous situations are very frequent, so are surprised that your project ran better at the subsidiary than it would have back home. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you are from a country such as ________, than from _______ : Malaysia; Japan Singapore; Ireland Ireland; France France; Singapore

France; Singapore CORRECT! Let's use the Tutorial's 5-step to solve this:Needing detailed instructions, safeguards, and keeping away from ambiguity, are all related to HOFSTEDE's UNCERTAINTY AVOIDANCE. Our reference sheet should tell us that the HIGHER is the Uncertainty Avoidance of a country (the closer to 100 in a 0-100 scale), the more people will try to stir away from ambiguity and expect detailed instructions and plenty of safeguards. Modeling the answer, we are asked about a place you ARE FROM, where people tend to need detailed instructions, safeguards, and thus where the chances of HIGH Uncertainty Avoidance are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly HIGHER Uncertainty Avoidance than the other. Looking at the alternatives, France (86) has a much lower uncertainty avoidance than Singapore (8), which DOES satisfy the criteria, and thus, this is the right choice.

Use the following data to answer the next question: ======================================================== ## Hall's High vs Low Context: Denmark: Low; France: Medium; Ireland: Low; Japan: High; Malaysia: High; Portugal: Medium-High; Singapore: Medium-High ## Hofstede's Masculinity: Denmark: 16; France: 43; Ireland: 68; Japan: 95; Malaysia: 50; Portugal: 31; Singapore: 48 ## Hofstede's Uncertainty Avoidance: Denmark: 23; France: 86; Ireland: 35; Japan: 92; Malaysia: 26; Portugal: 99; Singapore: 8 ## Hofstede's Individualism: Denmark: 74; France: 71; Ireland: 70; Japan: 46; Malaysia: 26; Portugal: 27; Singapore: 20 ## Hofstede's Power Distance: Denmark: 18; France: 68; Ireland: 28; Japan: 54; Malaysia: 100; Portugal: 63; Singapore: 74 ======================================================== Imagine you work in a multinational company that transferred you from the headquarters to a subsidiary. You have noticed that at the subsidiary, people need a lot more detailed procedures and regulations than you were used to, and sometimes they require that you spell the entire rule book out for them more than once. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that you were transferred to a country such as ________, than to the _______ subsidiary: -Ireland; France - France; Singapore -Singapore; Japan -Malaysia; Portugal

France; Singapore CORRECT! Let's use the Tutorial's 5-step to solve this:Needing detailed instructions, safeguards, and keeping away from ambiguity, are all related to HOFSTEDE's UNCERTAINTY AVOIDANCE. Our reference sheet should tell us that the HIGHER is the Uncertainty Avoidance of a country (the closer to 100 in a 0-100 scale), the more people will try to stir away from ambiguity and expect detailed instructions and plenty of safeguards. Modeling the answer, we are asked about a place you WERE SENT TO, where people tend to prefer detailed instructions and not deal well with ambiguity, and thus where the chances of HIGH Uncertainty Avoidance are significantly HIGHER. This means we are looking for a pair of countries in which the first has a significantly HIGHER Uncertainty Avoidance than the other. Looking at the alternatives, France (86) has a much higher uncertainty avoidance than Singapore (8), which DOES satisfy the criteria, and thus, this is the right choice.

Your significant other has a surprise for you: he/she was offered a job at an international organization, but wants to keep which one a surprise for you. You did get from him/her that the organization was involved in sustaining a coordinated policy response to the global financial crisis that started in America in the late 2000s and then rapidly spread around the world. You could safely say it is much MORE LIKELY it is the _________ than the _______:

G20; UN

Use the following data to answer the next question: ======================================================== ## GNI at PPP per capita (2014 US$): Indonesia: 9,260; Malaysia: 22,525; Philippines: 7,827; Pakistan: 4,851; Thailand: 13,397 ## GNI at PPP (2014 US$ Billions): Indonesia: 2,315; Malaysia: 669; Pakistan: 881; Phillipines: 771; Thailand: 899 ## GDP Growth % (World bank 2010-14): Indonesia: 5.8; Malaysia: 4.7; Pakistan 4.4; Philippines: 7.2; Thailand: 1.8 ## HDI (2013): Indonesia: 0.684; Malaysia: 0.773; Pakistan 0.537; Phillipines: 0.660; Thailand: 0.722 ======================================================== You work for a sales organization that needs to decide where to open a sales office among several alternative countries. Their main criteria is to go to the country where they would have the best market for their low-priced product. The product is so cheap and common that the average wealth in the country does not matter much, as a wealthier family would not buy more of such product, or would not really buy it for a higher price. Assume you know nothing about the country's population, and that what the country needs to be attractive is a larger economy. According to the data provided, and assuming the listed variables is all the information you have, the chances of your company selecting ______ are MUCH HIGHER than it selecting _____:

GNI at PPP Thailand; Malaysia

Which of the following observations about subsidies is true?

Government subsidies must be paid for, typically by taxing individuals and corporations

Which of the following summarizes the total amount of resources invested in an economy in factories, stores, office buildings, and the like?

Gross fixed capital formation CORRECT! The total amount of resources invested in an economy in factories, stores, office buildings, and the like, is called Gross fixed capital formation.

Which of the following theories emphasizes the interplay between the proportions in which the factors of production are available in different countries and the proportions in which they are needed for producing particular goods?

Heckscher-Ohlin theory CORRECT! Heckscher-Ohlin is the theory that emphasizes the interplay between the proportions in which the factors of production are available in different countries and the proportions in which they are needed for producing particular goods.

Use the following data to answer the next question: ======================================================== ## Hall's High vs Low Context: Denmark: Low; France: Medium; Ireland: Low; Japan: High; Malaysia: High; Portugal: Medium-High; Singapore: Medium-High ## Hall's Private Space: Denmark: High; France: Medium-High; Ireland: High; Japan: Low; Malaysia: Low; Portugal: Medium; Singapore: Medium-Low ## Hofstede's Individualism: Denmark: 74; France: 71; Ireland: 70; Japan: 46; Malaysia: 26; Portugal: 27; Singapore: 20 ## Hofstede's Power Distance: Denmark: 18; France: 68; Ireland: 28; Japan: 54; Malaysia: 100; Portugal: 63; Singapore: 74 ## Hofstede's Uncertainty Avoidance: Denmark: 23; France: 86; Ireland: 35; Japan: 92; Malaysia: 26; Portugal: 99; Singapore: 8 ## Hofstede's Masculinity: Denmark: 16; France: 43; Ireland: 68; Japan: 95; Malaysia: 50; Portugal: 31; Singapore: 48 ## Hofstede's Indulgence: Denmark: 70; France: 48; Ireland: 65; Japan: 42; Malaysia: 57; Portugal: 33; Singapore: 46 ======================================================== Imagine Joe is a person who goes to a foreign country. In that foreign country, people tend to communicate using subliminar (innuendo) messages, and they usually communicate by speaking a lot but not very clearly. Just the opposite to how people are in Joe's country. According to the data provided, and assuming the listed variables is all the information you have, there is a much greater probability that Joe was sent to a country such as ________, than to _______ : France; Singapore Singapore; Malaysia Malaysia; Ireland Ireland; Denmark

High Low Context

The ________ was established to maintain order in the international financial system, and as a ____________ to countries in severe economic distress -WTO (World Trade Organization); negotiation forum - World Bank; source of relief funds -IMF (International Monetary Fund); lender of last resort -Federal Reserve; monetary regulator

IMF (International Monetary Fund); lender of last resort CORRECT! The IMF (International Monetary Fund) was established to maintain order in the international financial system, and as a lender of last resort to countries in severe economic distress

The following statement is TRUE: A country can truly support free trade, and yet advocate via import quotas that domestic jobs should be protected A country can truly support free trade, and also support via import tariffs a domestic producer A country can benefit through subsidies its domestic producers and yet truly defend free trade If a country restricts free trade in any way, such as import tariffs, import quotas, or subsidies, it cannot truly defend free trade, and it is engaging in some degree of protectionism

If a country restricts free trade in any way, such as import tariffs, import quotas, or subsidies, it cannot truly defend free trade, and it is engaging in some degree of protectionism

Most PAROCHIAL managers would believe that

If any person thinks different from them, they must be barbarians in need of civilization

Your boss asked you to analyze the effects of a foreign governments new policies on your company, which exports from the US into that country. Your analysis suggests that the foreign government just made it harder for your company to export, and seems to be pushing you to FDI into such country. It is most likely that foreign country has:

Implemented import quotas

Licensing would be a good option for firms in which of the following industries?

In fragmented, low-technology industries in which globally dispersed manufacturing is not an option. CORRECT! Licensing would be a good option for firms in fragmented, low-technology industries in which globally dispersed manufacturing is not an option.

Which of the following statements concerning a voluntary export restraint is NOT TRUE?

In most cases, it benefits consumers

Which of the following is a consequence of globalization

Increasing offshoring of production and services CORRECT! The more the world is globalized, the more globalization of production tends to happen, which increases offshoring of production and services across nations

Use the following data to answer the next question: Freedom House's Freedom In The World's Ratings: Chile: 1; Colombia: 3.5; Brazil: 2; China: 6.5; India 2.5 You work for an organization that just moved out before and country due to its lack of religious liberty. You are studying a foreign market entry, and your organization does not want to risk of the same religious problem. According to the data provided, the chances of your company entering ________ are significantly SMALLER than it entering _______> a) Chile; Brazil b) Colombia; China c) India; Chile d) India; Colombia

India; Chile CORRECT! Let's use the Tutorial's 5-step to solve this:Requiring religious liberties for a country to be a viable market is related to POLITICAL FREEDOM. To measure political freedom we use Freedom House's Freedom in the World's Ratings, and disregard all other data. Our reference sheet should tell us that such Freedom ratings range from 1 to 7, and that the lower the rating, the more free a country is (meaning 1 is totally free and 7 is not free at all). Modeling the answer, we are asked about a place where the chances of having political freedom is significantly SMALLER, which means we are looking for a pair of countries in which the first has a significantly HIGHER Freedom rating (meaning, it would have lower political freedom) than the other. Looking at the alternatives, India (2.5) has a much higher Freedom rating than Chile (1.0), which DOES satisfy the criteria, and thus, this is the right choice.

Exam 1 MANA 5360

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