IB 206 Exam #2 (Ch.6-8, 11&12)

Which term describes family conglomerates in South​ Korea?

chaeblos

When developing strategies, managers start by ________.

examining the firm's specific strengths and weaknesses

​________ is the seizure of company possessions with compensation.

expropriation

Applying​ home-country laws to people and situations abroad is a practice known as​ ________.

extraterritoriality

A specific region that is located within a nation is treated as if it were outside the​ nation's borders. This region is designated to receive imported products intended for assembly and subsequent​ re-export. Which term best describes this​ region?

foreign trade zone

Emerging markets are ________.

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

Which of the following is a stage of regional assimilation in which member countries decide to remove tariffs and other barriers to trade in goods and services within the​ bloc?

free trade area

Which of the following primarily focuses on ensuring the reduction of tariffs among certain countries and settling trade​ disagreements?

general agreements on tariffs and trade

​________ is the process of bringing together an​ organization's value-chain activities across different countries to realize global efficiency and synergy to benefit from similarities between countries.

global integration

Two basic screening methods for determining potential country markets are​ ________ and​ ________.

gradual​ elimination; indexing and ranking

Wars, Insurrection, and Violence

- Indirect effects can be disastrous for company activities -The threat or actual use of force or violence to attain a political goal through fear and intimidation.

Totalitarian countries

cuba, north Korea, sudan, guinea, zimbabwe

​________ involves limitations on the expenditure of tangible monetary exchanges from a certain nation or on the influx​ of foreign currencies.

currency control

​________ represent locations at the ports of entry in each country where government authorities inspect imported products and levy tariffs.

customs

Which of the following is characteristic of an effective legal system?

systematically enforced laws and regulations

Which of the following best defines​ maquiladoras?

​Export-assembly plants

subsidy effects

Increases the competitive advantage of the grantee while diminishing the competitive advantages of those that do not receive the subsidy

Due to the larger market size of an economic​ bloc, member country firms are able to reduce their product prices because they can​ ________.

attain economies of scale

socialist countries

bolivia, china, egypt, india, romania, russia, venezuela

subsidy

Financing or other resources that a government grants to a firm or group of firms, to ensure their survival or success.

Strategy is ________.

a planned set of actions that managers employ to make the best use of the firm's resources and core competencies to gain competitive advantage

​A(n) ________ is a group of official organizations that create a government.

Political system

Which of the following is typical of developing economies?

Poor education systems

Which of the following is a driving factor for companies to focus on local​ responsiveness?

Accommodating variances in distribution channels

Privatization has provided many opportunities for foreign firms to enter transition economies by ________.

purchasing former state enterprises

Which of the following offers an estimate of the likely sales for all firms in a particular business sector in a given​ period?

Industry market potential

Which of the following refers to a​ cross-border business alliance whereby two or more firms share​ resources, expenses, and risks to start a new​ business?

International collaborative venture

An individual from a country with a high degree of political risk would most likely be from ________.

Iraq

FDI and ownership restrictions effects

Limits how much foreigners can invest in a country, and/or the proportion of ownership that foreigners can hold in firms in the country

Managers who exemplify an open-minded attitude and who appreciate cultural diversity are described as applying a global ________.

Mindset

Government Takeover of Corporate Assets

Confiscation Expropriation Nationalization

Religion-based totalitarian states are called ________.

Theocratic

socialism

-Capital is vested in the state and used primarily as a means of production for use rather than for profit. -Group welfare outweighs individual welfare. -Government's role is to control the basic means of production, distribution, and commercial activity. -Socialism occurs in much of the world as social democracy (e.g., Western Europe, Brazil, India). -Government intervention in the private sector. -Corporate income tax rates are higher.

Embargos and Sanctions

-Governments may respond to offensive activities of foreign countries by imposing embargoes and sanctions. -Sanctions are bans on international trade, usually undertaken by a country, or a group of countries, against another judged to have jeopardized peace and security. -Embargoes are bans on exports or imports that forbid trade in specific goods with specific countries. Example: The U.S. has enforced embargoes against Cuba, Iran, and North Korea, labeled as state sponsors of terrorism.

Religious Law

-Strongly influenced by religious beliefs, ethical codes, and moral values, viewed as mandated by a supreme being. -Most important religious legal systems are based on Hindu, Jewish, and Islamic law.

mixed system

-Two or more legal systems operating together. -The contrast between civil and common law has become blurred as countries combine both systems. -Totalitarianism is most associated with religious law and socialist law. -Democracy is associated with common law, civil law, and mixed systems.

Civil Law

-legislative origin -found in western europe and latin america -Based on an all-inclusive system of laws that have been "codified" - clearly written by legislative bodies. Commercial, civil and criminal codes -Laws are more "cast in stone" and not strongly subject to interpretation by courts.

common law

-primary judicial origin -The basis of law is tradition, past practices, and legal precedents set by courts via interpretation of statutes, legislation, and past rulings. - originated in england and spread to canada, USA and australia.

You work at an international company that is headquartered in California. Your​ company's R&D and manufacturing activities take place near the company headquarters. The managers at the California location are responsible for company operations​ worldwide, and they view the entire world as one large marketplace. As a​ result, your company sells the same products on six continents. Which of the following strategies is being used by your​ company?

A global strategy

Quota

A limit placed on the quantities of a product that can be imported

________ 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 tasks should a shoe manufacturing company perform first if it needs to assess the global market opportunity?

Analyze the firm's readiness to internationalize

​________ is a process in which an unbiased third party listens to both sides of a case and makes a decision in favor of one party or the​ other, based on an impartial analysis of facts.

Arbitration

Which of the following is NOT helpful in estimating company sales​ potential?

Extensive marketing efforts to test the waters

Which of the following represents a method of negotiation in which the objective is to settle any disagreements in a pleasant​ manner?

Conciliation

Which of the following approaches provides the headquarters of an organization significant power and control over the​ firm's activities​ globally?

Centralized structure

Which of the following tasks in the global market opportunity assessment process should be performed directly before the task of estimating company sales potential?

Choose qualified foreign partners

When managers develop and present an ultimate picture of what their company should​ become, they are exhibiting which trait of visionary​ leadership?

Communicating a strategic vision

Which diagnostic tool was developed by Tamer Cavusgil to aid managers in auditing their​ organization's readiness to​ internationalize?

Company Readiness to Export

Which of the following offers an estimate of the share of annual industry sales that the firm expects to generate in a particular target​ market?

Company sales potential

________ are the people and organizations that support the political system and receive government resources.

Constitutes

Which term defines the business transactions where payments are made in kind instead of in​ cash?

Countertrade

Which of the following systematically profiles the​ political, economic, and commercial environment of about 150​ countries?

Country Commercial Guides

Which of the following characterizes country risk?

Country risk is always present, but its nature and intensity vary over time and from country to country.

Restrictions on the outflow of hard currency from a country or on the inflow of foreign currencies is called ________.

Currency Control

________ are checkpoints at the ports of entry in each country where government officials inspect imported products and levy tariffs.

Customs

Which form of government is characterized by private property rights and limited government?

Democratic

Democracy

Economic activity occurs freely, as per market forces Maximum efficiency in allocation of resources

With 28​ countries, which of the following is the​ world's most advanced and largest regional economic​ bloc?

European union

________ refers to a government measure intended to manage or prevent the export of certain products or trade with certain countries.

Export Control

Which term defines a favorable combination of​ conditions, places, and timing that offers scenarios for​ exporting, investing,​ sourcing, or partnering in foreign​ markets?

Global market opportunity

Raul works for an Argentinian company that buys goods from China and sells them in Argentina. What internationalization strategy is​ Raul's company​ using?

Global sourcing

Totalitarianism

Government controls all economic and political matters. Either theocratic (religion-based) or secular A state party is led by a dictator. Membership is mandatory for those wanting to advance. Power is sustained via secret police, propaganda, regulation of free discussion and criticism. Today: Some countries in the Middle East and Africa; Cuba, North Korea. Ex-totalitarian states tend to have much government intervention and bureaucracy.

How did Muhammad Yunus help address poverty in​ Bangladesh?

He founded the Grameen Bank that has provided micro loans to millions of people.

Which of the following is characteristic of emerging markets?

High Trade Volumes

In which of the following approaches does an organization view international business as distinct from and ancillary to its domestic​ business?

Home replication strategy

Which of the following is the most critical asset of any organization?

Human Capital

Which of the following was formed by three countries to increase market​ entrance, remove barriers to​ trade, establish investment​ standards, and encourage bidding on government contracts within the three countries participating in​ it?

North American Free Trade Agreement​ (NAFTA)

Which of the following identifies the reporting relationships in an​ organization?

Organizational structure

Which of the following refers to an often-used form of nontariff trade barrier?

Quota

​________ involves a legal system where instructions are​ clarified, publicly​ imposed, justly​ applied, and valued by all.

Rule of Law

________ fundamental tenet is that capital and wealth should be vested in the state and used primarily as a means of production rather than for profit.

Socialism's

Creeping Expropriation

The most common expropriation today. The government gradually modifies regulations and laws after foreign M N Es have made big local investments in property and plants.

In emerging​ markets, why do successful firms develop close community​ relationships?

To tailor goods to specific developing market necessities

boycots against firms and nations

Voluntary refusal to engage in commercial dealings with a nation or a company

In​ a(n) ________, barriers to trade within a participating country are reduced or​ eliminated, shared external barriers are​ established, and unrestricted movement of​ goods, services, and factors of production is permitted.

common market

exposure to potential loss or adverse effects on company operations and profitability caused by developments in a countries political and or legal environments is _____________

country risk

Which of the following comprise the largest group of countries and include Bangladesh and​ Zaire?

developing economies

Which term refers to exported goods being priced lower than their average value whether in​ home-country markets or foreign​ markets?

dumping

In order to become globally​ competitive, your company is making changes in its manufacturing process to make it more standardized and significantly cheaper. For which of Bartlett and​ Ghoshal's objectives is your company striving with these​ changes?

efficiency

​________ include countries that have attained significant​ modernization, industrialization, and rapid economic growth since the 1980s.

emerging economies

Companies help address poverty around the world in many ways. If a foreign firm in an emerging market modernizes local roads and bridges and creates jobs for workers in the​ community, the firm is​ ________.

encouraging economic growth

Regional integration enables member countries to gain bargaining power in world affairs by​ ________.

establishing a stronger political position as a united bloc

Government intervention and trade barriers imposed by developed countries raise​ ______ for developing economies that supply them.

ethical concerns

When determining the international market potential for goods such as laundry​ detergent, international managers should realize that​ ________ typically make decisions about purchasing such products.

homemakers

One of the goals that firms most likely want to attain from internationalizing is ________.

increase their sales and profits

In which of the following industries have​ Brazil's manufacturing firms enjoyed considerable success producing for foreign​ clients?

iron ore and processed food

Which term refers to a method of understanding and administering​ laws, regulations, and rules that are used to establish standards for​ conduct?

legal system

A business arrangement where one company grants another the right to use intellectual property for a stated period of time in exchange for royalties is called​ ________.

licensing

A​ ________ depends on the interactions of supply and demand in order to determine prices for products and services.

market economy

A product or service with the best international prospects is most likely to​ ________.

meet a universal need

Democratic Countries

most european countries, United states, japan, canada

Which term refers to acquiring certain​ value-chain activities, including the production of finished​ products, from independent​ suppliers?

outsourcing

Which challenge of emerging markets is associated with corruption and weak legal frameworks that discourage business​ investments?

political instability

Transition economies were once socialist states but have been largely transformed into capitalism-based systems, partly through ________.

privatization of state-owned industries

​________ represents cost alterations that indicate the amount of products that customers are able to purchase in their own​ country, using their own monetary​ system, in accordance with their standard of living.

purchasing power parity

Which of the following is used by managers to analyze data to estimate market potential in a certain​ location?

purchasing power power parity

Which of the following includes organizations like​ NAFTA, the​ EU, and​ ASEAN?

regional trade organizations

FDI and ownership restrictions

rules that limit the ability of foreign firms to invest in certain industries or acquire local firms

​________ is considered a gateway country to Southeast Asian markets.

singapore

​________ include establishments such as OPEC and OECD that work to improve the development of specific communities.

special interest groups

Which term defines a planned set of activities in which managers engage to best utilize the​ firm's resources and core capabilities to gain a competitive​ lead?

strategy

​________ are taxes placed on imported goods that increase the final purchase price for consumers.

tariffs

Which term refers to official propositions prepared by a purchaser to procure specific goods or​ services?

tenders

The three major types of current political systems are ________.

totalitarianism, socialism, and democracy

Top managers who provide inspirational direction and motivation to employees in an attempt to take a company to a better future are exhibiting​ ________.

visionary leadership