Global Business Midterm - Quizzes

What strategic response occurs when firms admit responsibility but do the least required? a. accommodative b. proactive c. reactive d. defensive

d. defensive

In terms of native speakers, which language is most widely spoken among the approximately 6,000 languages in the world? a. Chinese b. English c. Hindi d. Spanish

a. Chinese

Which countries represent developing economies? a. India, China, and South Africa b. France, Germany, and the United Kingdom c. Canada, the United States, and Mexico d. Poland, Bulgaria, and the Czech Republic

a. India, China, and South Africa

Global business has to cope with all but which of the following factors? a. consumer goods crisis b. geopolitical crisis c. economic crisis d. social justice crisis

a. a consumer goods crisis

What is the Group of 20 (G-20)? a. a group of 19 countries plus the European Union whose leaders meet to solve global economic problems b. a group of 20 countries whose leaders meet to solve global hunger problems c. a group of 20 countries whose leaders meet to solve global economic problems d. a group of 20 countries plus the European Union whose leaders meet to solve global economic problems

a. a group of 19 countries plus the European Union whose leaders meet to solve global economic problems

Firms need to make decisions in situations characterized by uncertainty and imperfect information. What does this describe? a. bounded rationality b. common law c. institutional work d. nonmarket strategy

a. bounded rationality

Imagine a person saying, "I would never do business in a country where I would have to bribe people to get business done. Bribery is always wrong." This person is demonstrating which concept? a. ethical imperialism b. ethical misconduct c. ethical relativism d. ethical dilemma

a. ethical imperialism

The person who claims that their country is morally right in every way is exhibiting what concept? a. ethnocentrism b. high-context culture c. power distance d. low-context culture

a. ethnocentrism

A firm uses all but which of the following functional areas for global business? a. experience b. marketing c. finance d. supply chain

a. experience

Which degree of social mobility exists if an individual can easily move from one social strata to a higher one? a. high b. natural c. neutral d. low

a. high

Which type of culture relies on direct communication rather than on building a foundation for establishing trust and friendships in early negotiations. a. low-context b. high-context c. individualism d. collectivism

a. low-context

Culture is defined as the collective programming of the mind which distinguishes what? a. members of one group from another b. foreign firms from domestic firms c. individual values from group values d. national norms from industry norms

a. members of one group from another

How is individualism defined? a. the idea that an individual's identity is fundamentally their own b. the idea that an individual's identity is fundamentally tied to the identity of their collective group c. as the extent to which a group makes decisions based on harmony d. the extent to which an individual avoids high-risk, uncertain situations

a. the idea that an individual's identity is fundamentally their own

The size of the global economy in 2021 (measured by total gross domestic product, or GDP) was approximately how much? a. $250 billion b. $94 trillion c. $47 trillion d. $50 billion

b. $94 trillion

All of the following except which are a characteristic of civil law? a. Civil law has statutes and codes to guide judges. b. In civil law countries, judges interpret the law largely based on previous judicial decisions. c. Civil law was derived from Roman law and strengthened by Napoleon's France. d. Civil law has less flexibility than common law because judges only have the power to apply the law.

b. In civil law countries, judges interpret the law largely based on previous judicial decisions.

Which statement about the stability of institutions is accurate? a. Institutions are static and never change, which creates stability for firms. b. Institutions are dynamic, which creates both huge challenges and tremendous opportunities for firms. c. Institutions are subject to sudden, unexplained changes that create disruptions to markets. d. Institutions change concerning political influences, not market influences.

b. Institutions are dynamic, which creates both huge challenges and tremendous opportunities for firms.

What is the focus of a resource-based view of global business? a. a firm's liability of foreignness b. a firm's internal resources and capabilities c. a firm's internal and external resources and capabilities d. a firm's external resources and capabilities

b. a firm's internal resources and capabilities

What is democracy? a. a political system in which power is in the hands of the military b. a political system in which citizens elect representatives to govern the country c. a political system in which power is in the hands of one religious party d. a political system in which power is in the hands of one person or party

b. a political system in which citizens elect representatives to govern the country

Ethical relativism is the ability to do what in a different culture? a. limit risk at all costs b. adapt to the cultural norms and values c. negotiate all business decisions d. maintain a rigid structure in business

b. adapt to the cultural norms and values

What is an example of a strategic industry? a. automotive b. defense c. general manufacturing d. consumer products

b. defense

Which of the following is one of the four major components of a country's culture? a. trade b. education c. geopolitics d. profitability

b. education

The institution-based view of global business requires dynamic interaction between institutions and which other actor? a. agencies b. firms c. social networks d. governments

b. firms

Which rule of thumb is used when companies are venturing overseas? a. expect to be understood in one's own language b. respect cultural differences c. practice behaviors used in other cultures without question d. understand that one's culture is inherently superior in all aspects

b. respect cultural differences

What is lingua franca? a. the situation that people cannot communicate in global business b. the dominance of one language as a global business language c. the coexistence of two languages as a global business language d. the situation that no single language dominates global business

b. the dominance of one language as a global business language

Intellectual property rights (IPR) cover which of the following? a. methods b. trademarks c. systems d. ideas

b. trademarks

What is deglobalization? a. resources that allow an organization to adapt successfully to pressures b. weakening economic interdependence among countries c. the capacity to recover quickly from difficulties d. coordinated activities involved in the production of a good or service

b. weakening economic interdependence among countries

World news is filled with stories about how large manufacturing firms are withdrawing from foreign markets due to increased pressure to reduce reliance on outsourcing and increase production at home. How should a manager respond in the short term? a. Withdraw immediately from all foreign markets to follow what some firms are doing. b. Change industries due to the uncertainty occurring in the world of manufacturing. c. Develop capabilities to identify and leverage opportunities for further globalization. d. Redirect resources to focus exclusively on producing in the home country market.

c. Develop capabilities to identify and leverage opportunities for further globalization.

What is the textbook's definition of global business? a. Global business focuses exclusively on domestic firms' strategies for competing against foreign firms entering their home territories. b. Global business focuses on foreign firms' strategies for competing against foreign firms entering their home territories. c. Global business refers to domestic and international business activities. d. Global business refers to firms that are designed to do business internationally from the beginning.

c. Global business refers to domestic and international business activities.

What are some possible benefits of studying global business? a. You will be able to communicate in multiple languages. b. If you are transferred to another state by your company, you will be better prepared. c. If you go to work for a multinational firm, you will be better prepared for expatriate assignments abroad. d. You will be able to negotiate more effectively with suppliers.

c. If you go to work for a multinational firm, you will be better prepared for expatriate assignments abroad.

All of the following situations except which are a proposition of the institution-based view of global business? a. Formal and informal institutions combine to govern firm behavior. b. Managers and firms rationally pursue their interests and make choices within the formal and informal constraints. c. Informal institutions do not govern firm behavior. d. In situations where formal constraints are unclear, informal constraints will play a larger role in reducing uncertainty.

c. Informal institutions do not govern firm behavior.

Which country follows theocratic law? a. France b. United States c. Saudi Arabia d. China

c. Saudi Arabia

What is a multinational enterprise (MNE)? a. a firm that engages in imports b. a firm that engages in outsourcing c. a firm that engages in foreign direct investments d. a firm that engages in exports

c. a firm that engages in foreign direct investments

Which position argues that culture is moving toward more "modern" Western values such as individualism and consumerism? a. in-group b. divergence c. out-group d. convergence

d. convergence

What is purchasing power parity (PPP)? a. an adjustment made to the gross domestic product (GDP) to reflect differences in populations b. an adjustment made to the gross domestic product (GDP) to reflect changes in the price level c. an adjustment made to the exchange rates of two currencies to make them at par with the purchasing power of each other d. an adjustment made to the gross domestic product (GDP) to reflect differences in time zones

c. an adjustment made to the exchange rates of two currencies to make them at par with the purchasing power of each other

You are a professional songwriter. The songs you have written—your intellectual property—are protected by which type of right? a. patent b. license c. copyright d. trademark

c. copyright

A business owner pays off local government officials so that they do not grant business permits to the owner's potential competitors. What is this an example of? a. ethical imperialism b. extraterritoriality c. corruption d. ethical relativism

c. corruption

All of the following topics except which one is a formal institution? a. law b. culture c. rules d. regulation

c. culture

What are the two leading perspectives in global business? a. finance-based and market-based b. profit-based and resource-based c. institution-based and resource-based d. firm-based and market-based

c. institution-based and resource-based

What do savvy managers need to understand about how managerial choices are made? a. made rationally without institutional constraints b. made based only on resource-based constraints c. made rationally within institutional constraints d. made by stakeholders focused on resources

c. made rationally within institutional constraints

Which economic system is the most common? a. pure command economy b. pure market economy c. mixed economy d. global economy

c. mixed economy

All of the following factors except which are a primary driver of economic development in different countries? a. geography b. institutions c. political system d. culture

c. political system

Which of the following is included in the Hofstede's Dimensions of Culture framework? a. certainty avoidance b. group cohesiveness c. power distance d. religious orientation

c. power distance

A firm has been accused of creating an unsafe product and denies all responsibility. This is an example of which type of strategic response? a. defensive b. accommodative c. reactive d. proactive

c. reactive

A small business owner pays taxes so that they will not owe interest on their taxes. The owner makes this decision by which institutional pillar? a. cultural b. cognitive c. regulatory d. administrative

c. regulatory

What is the key role of institutions? a. to increase transaction costs b. to expand the range of acceptable actions c. to reduce uncertainty d. to restrict actions of competitors

c. to reduce uncertainty

All of the following statements except which describe a characteristic of a market economy? a. A market economy is influenced by the "invisible hand" of market forces. b. The government takes a hands-off approach in a market economy. c. The government only performs functions the private sector cannot perform. d. All factors of production are government-owned and controlled.

d. All factors of production are government-owned and controlled.

What is the definition of an institution-based view of global business? a. An institution-based view suggests that the successes and failures of firms are enabled and constrained by institutions, meaning the human and natural resources available in the firms' home countries. b. An institution-based view studies how firms must overcome their internal resource constraints. c. An institution-based view looks at how firms use the services of financial institutions to expand their businesses internationally. d. An institution-based view suggests that the successes and failures of firms are enabled and constrained by institutions, also known as the rules of the game, such as regulations, laws, cultures, ethics, and norms.

d. An institution-based view suggests that the successes and failures of firms are enabled and constrained by institutions, also known as the rules of the game, such as regulations, laws, cultures, ethics, and norms.

What emerging economies does the acronym BRIC represent? a. Britain, Russia, India, and China b. Belgium, Romania, Indonesia, and Chile c. Brazil, Romania, India, and Chile d. Brazil, Russia, India, and China

d. Brazil, Russia, India, and China

Categorizing countries into civilizations is a characteristic of which system for classifying cultures? a. GLOBE b. Ronen and Shenkar c. Hofstede d. Huntington

d. Huntington

How do institutions influence individual and firm behaviors? a. Institutions exert control by reducing formal laws. b. Institutions create chaos by promoting opportunism, defined as self-interest seeking with guile. c. Institutions separate individuals and firms into categories by forcing them to choose between pillars. d. Institutions reduce uncertainty by signaling what conduct is legitimate and acceptable.

d. Institutions reduce uncertainty by signaling what conduct is legitimate and acceptable.

What are the two core propositions behind the institution-based view of global business? a. Managers and firms make choices irrationally in situations; when formal constraints are unclear or fail, informal constraints will also fail to reduce uncertainty. b. Managers and firms make choices rationally in situations; when formal constraints are unclear or fail, informal constraints will also fail to reduce uncertainty. c. Managers and firms make choices irrationally in situations; where formal constraints are unclear or fail, informal constraints will play a larger role in reducing uncertainty. d. Managers and firms make choices rationally in situations; where formal constraints are unclear or fail, informal constraints will play a larger role in reducing uncertainty.

d. Managers and firms make choices rationally in situations; where formal constraints are unclear or fail, informal constraints will play a larger role in reducing uncertainty.

Which type of culture engages in communication that is taken at face value without much reliance on unspoken context? a. high-context b. social stratification c. social mobility d. low-context

d. low-context

Which of the following types of groups tend to be an opponent of globalization? a. healthcare b. airlines c. universities d. nongovernmental

d. nongovernmental

How is a moral hazard defined? a. the social results of making poor ethical choices b. any type of ethical dilemma that occurs in business c. a condition created by government bailouts d. recklessness when firms do not face the full consequences of their actions

d. recklessness when firms do not face the full consequences of their actions

What method is used to consider alternate ways of conducting business to manage risk? a. deglobalization b. semiglobalization c. resource planning d. scenario planning

d. scenario planning

From an institution-based view, a government's legal requirement for a business to pay taxes would be an example of which element? a. a political resource b. a core perspective c. the influence of an informal institution d. the influence of a formal institution

d. the influence of a formal institution

What is an important reason to study global business? a. to persuade consumers in different markets to make purchases b. to understand why one culture is superior to another c. to become a political actor in your own country d. to advance your career in a complex global economy

d. to advance your career in a complex global economy