Exam 1 practice questions

Which of the following comparative advantages is acquired over time?

innovative capacity

The __________ phase of globalization began around 1900 an was associated with the rise of electricity and street production.

second

Which of the following is true with regard to firm-level theories?

Firm-level explanations dress the question: "how can internationalizing firms gain and sustain competitive advantage?"

_________ refers to the values, beliefs, customs, arts, and other products of human thought and work that characterize the people of a given society

Culture

Sean, a senior manager in Freedom, adheres to the relativist view regarding ethical standards. He goes by the rule "When in Rome, do as the Romans do." Sean is most likely to agree strongly with which of the following views?

Freedom should passively accept the practices that prevail in countries where it does business.

_______ is the total value of products and services produced in a country over the course of a year

GDP

The Technix Computer Corp recently finished construction of a customer service phone center in New Dehli, India. Phone center agents will be responsible for answering technical questions from customers around the globe. Technix hired 55 computer experts as online phone agents, and a training session is underway. Tech specialists and call center specialists from the U.S. have flown to India to train the new Indian employees. Hank Patelli, senior manager of a Technix phone center in Michigan, will oversee the New Delhi center for 6 months until a local manager is hired and trained to replace him. Ashok, one of the Indian employees, asks Hank if the weekend training session could be rescheduled because it is a Hindu festival day. What will be the most likely outcome if Hank agrees to Ashnok's request?

Hank will develop a relationship of trust and understanding with the Indian employees

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

Japan / Uganda?

4 senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and US sales divisions, respectively. Geoff manages the research and development office, based in Brazil. Who among the following managers is most likely to raise concern over the ban on advertising directed at children in his/her country?

Luis

4 senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and US sales divisions, respectively. Geoff manages the research and development office, based in Brazil. ________ is most likely to point a controversial practice in his/her country in which the compensation of top executives is far greater than that of low-ranking subordinates.

Marta

The Technix Computer Corp recently finished construction of a customer service phone center in New Dehli, India. Phone center agents will be responsible for answering technical questions from customers around the globe. Technix hired 55 computer experts as online phone agents, and a training session is underway. Tech specialists and call center specialists from the U.S. have flown to India to train the new Indian employees. Hank Patelli, senior manager of a Technix phone center in Michigan, will oversee the New Delhi center for 6 months until a local manager is hired and trained to replace him. After the first training session, a number of the Michigan employees expressed frustration that the Indian employees lacked tech knowledge bc none of them asked questions or offered answers. Which of the following would be the best way for Hank to handle the situation?

Remind the American employees that the Indians may be showing respect by remaining silent

In his IB class, Professor Jang organizes a debate on the societal effects of market globalization. Juan Prince takes a position that highlights the negative effects of marketing globalization. He emphasizes how multinational enterprises can wield out so much influence that they threaten national sovereignty. He also notes the prevalence of low wages and sweatshop conditions as firms utilize low-cost labor abroad. Juan then describes the detrimental effects of corporate pollution on the environment, and he ends his argument by explaining how market globalization helps homogenize national cultures. Rina Taylor is assigned to counter Juan's position. Which of the following most likely supports Rina's argument over Juan's concerning wages and working conditions in developing countries?

Vietnam has experienced a five-fold increase in wages as a result of the growth of the footwear industry there

Over time, the GATT evolved into the_______

World Trade Organization

Bethany presents another opportunity that involves the purchase of a manufacturing plant in South Korea. She explains that this type of strategy will involve _______ ownership on the part of the firm.

active

___________ refer to post-industrial countries characterized by high per-capita income, highly competitive industries, and well-developed commercial infrastructure

advanced economies

Which of the following best explains why export growth has outpaced the growth of domestic production during the last few decades?

advanced economies now source many of their consumable products from low-cost manufacturing nations

Competitive advantage refers to the __________

advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and servicethat justifies higher prices.

Purchasing power parity is _________.

an adjustment for prices that reflects the amount of goods that consumers can buy in their home country, using their own currency and consistent with their own standard of living.

________ refers to the ability of a party (individual, firm, or country) to produce a particular good or service at a lower opportunity cost than another party.

comparative advantage

__________ represents the base of the pyramid of ethical behavior.

complying with laws and reglations

__________ refers to the system of procedures and processes by which corporations are managed, directed, and controlled.

corporate governance

__________ represents the apex of the pyramid of ethical behavior

corporate social responsibility

International business is also known as which of the following?

cross-border business

Which of the following would NOT be considered an example of foreign direct investments (FDI)?

cross-border purchases of stocks

Jordan is employed in an American investment firm and is currently working with some Japanese clients on a new project. He uses a ton of hand gestures during meetings which his clients find very distracting and rude. This has also led to many misunderstandings between Jordan and his Japanese clients in the recent past. Which of the following best describes such a situation?

cross-cultural risk

Which of the following is a characteristic of globalization of markets?

declining trade barriers

In an informal economy, __________

economic transactions are not officially recorded and are therefore left out of national GDP calculations

Nations running a trade surplus ____________

export more goods than import

Emerging markets are ________

former developing economies that have achieved substantial industrialization, modernization, and rapid economic growth since the 1980s

Which of the following statements strengthens the proposition that free trade is beneficial to nations?

free trade increases the standard of living by reducing consumer expenses

Dan discusses an investment opportunity that involves the purchase of selected securities from the Chinese stock market. This opportunity represents which type of international investment?

international portfolio

__________ is the belief that national prosperity is the result of a positive balance of trade, archived by maximizing exports and minimizing imports

mercantilism

________ argues that increasing returns to scale, especially economies of scale, are important for superior international performance in industries that succeed best as their production volume increases.

new trade theory

Which of the following is a characteristic of emerging markets?

rapidly declining trade barriers

In his International Product Life Cycle (IPLC) Theory, Raymond Vernon observed that each product and its manufacturing technologies go through three stages of evolution: introduction, maturity, and:

standardization

Which of the following is a comparative advantage?

superior strategies of an organization

Which of the following is true about the first stage of evolution in the international product life cycle theory?

the product enjoys a temporary monopoly at this stage

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

tolerating sweatshop conditions

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

trade and investment

Acme Software is a US-based maker of software products for the health care industry. Recently, Acme has been investigating whether it would be beneficial to internationalize some of its value-chain activities. Acme hires a consulting group to help determine which, if any, value-chain activities could be conducted abroad to promote business growth. The consulting group identifies two health care software development companies in India that could provide programming services at a lower cost than Acme's current expenditures for programming. In addition, the consultants conduct international market research which shows that German health care companies have a strong demand for the type of software that Acme offers. Which of the following would be most important for Acme to determine before outsourcing its programming services to India?

would the lower cost of outsourcing allow Acme to sustain a competitive advantage in its business operations?