IB Midterm: Assessment 1-6
Countries that liberalize international trade and investment enjoy faster per-capita economic growth True False
True
In a "common market", barriers to the cross-border flow of factors of production are removed. True False
True
Since the 1980s, emerging market countries have experienced substantial market liberalization and privatization True False
True
The initial phase of globalization was triggered by the introduction of the railroads and ocean transport True False
True
The two primary types of international investment are portfolio investment and foreign direct investment. True False
True
Which of the following comparative advantages is acquired over time? innovative capacity petroleum reserves labor arable land
innovative capacity
Which of the following stages comes before procurement in a firm's value chain? marketing distribution manufacturing research and development
research and development
Which of the following terms refers to the existence of a legal system based on clear rules and fair enforcement?
rule of law
Which of the following terms refers to the existence of a legal system based on clear rules and fair enforcement? arbitration rule of law conciliation culture of law
rule of law
________ are letters, figures, colors, or other characters that communicate a meaning.
Symbols
he world's largest MNEs are concentrated in emerging economies. True False
False
In countries with minimal corruption Direct investment does not take place The contribution of the private sector to the national GDP is negligible Financial and accounting information is transparent Commercial laws are unfair and discriminatory
Financial and accounting information is transparent
Technological advances have helped make internationalization affordable for all sizes of firms True False
True
The 2011 Arab Spring in the Middle East was facilitated in large part by social media True False
True
Restaurant Chain Internationalization (Scenario) Harold Meyer is the vice president of a successful U.S. restaurant chain. He is getting ready to transfer to the Gulf Arab region to help establish the restaurant chain in Saudi Arabia. He is in the process of gathering information to learn about Saudi culture. Harold learned that organizations in Saudi Arabia emphasizes loyalty to the family and tribe and that ties among individuals are highly valued. Based on Harold's observation, Saudi Arabia is ________.
a collectivist culture
Which of the following is an element of socialism often found in democratic societies?
government intervention in the affairs of individuals and firms
Each of the following represents a factor of production EXCEPT ________. government regulations technology manufacturing infrastructure managerial talent
government regulations
Which of the following is characteristic of an effective legal system?
systematically enforced laws and regulations
Socialization is defined as ________.
the process of learning the rules and behavioral patterns appropriate to one's given society
Religion-based totalitarian states are called ________.
theocratic
Which of the following behaviors of a firm can be called unethical? failing to meet shareholders' expectations with regard to annual profit setting up operations abroad manufacturing luxury consumer goods tolerating sweatshop conditions
tolerating sweatshop conditions
The three major types of current political systems are ________. totalitarianism, liberalism, and fascism totalitarianism, socialism, and democracy democracy, republicanism, and oligarchy socialism, democracy, and monarchy
totalitarianism, socialism, and democracy
Cross-cultural proficiency is characterized by all of the following EXCEPT ________. Correct tolerance for ambiguity perceptiveness valuing personal relationships flexibility and adaptability all of the above characterize cross-cultural proficiency
All of the above characterize cross-cultural proficiency
Although services trade is growing rapidly, the value of merchandise trade is still much larger. True False
True
Which of the following refers to the extent to which people can tolerate risk in their lives?
uncertainty avoidance
Firms expand abroad mainly as a reaction to market globalization True False
False
In international economics, codetermination refers to the tendency for a financial or monetary crisis in one country to spread rapidly to other countries, due to integrated national economies. True False
False
The globalization of capital refers to the aggregate activities of firms that gives rise to economic integration True False
False
The globalization of markets refers to the growing independence and self-sufficiency of countries worldwide. True False
False
The internet has increased the cost of transmitting voices, data, and minages True False
False
The level of government intervention in commercial activities is similar across most countries. True False
False
The world's largest MNEs are concentrated in emerging economies True False
False
As the influence of the Chinese economy grows over time, it is likely that Western countries will embrace some of China's cultural attitudes and behaviors. True False
True
Environmental destruction diminishes as economies develop at least in the long run True False
True
Exporting is an entry strategy involving the sale of products or services to customers located abroad. True False
True
Over the last few decades, export activity by nations has grown more quickly than has domestic production. True False
True
Which of the following refers to a typical CSR value? upholding market monopolies engaging in philanthropy increasing profits sustaining sweatshops
engaging in philanthropy
Which of the following is a cultural barrier inherent to service firms that internationalize via FDI? The source of a firm's funding determines the location of its international subsidiaries. Firms that internationalize via FDI usually make large spending cuts on advertising campaigns. Service firms are unable to infiltrate international markets due to language issues. A firm's corporate culture is overly influenced by its national culture.
A firm's corporate culture is overly influenced by its national culture.
Polycentric orientation refers to _____. The use of one's own culture as the standard for judging other cultures A collectivist mind-set, which emphasizes conformity, duty, prescribed roles, and sacrifice for the greater good A host-country mind-set in which the manager develops a strong affinity with the country in which she or he conducts business The tendency to rely on elaborate verbal explanations, putting much emphasis on spoken words
A host-country mind-set in which the manager develops a strong affinity with the country in which she or he conducts business
Subjective dimensions of culture (Scenario) In the last two years, the sales of consumer electronics in China have risen by 9.4 percent. Moreover, the market is becoming increasingly competitive since a large number of Japanese, European, and American manufacturers are building factories to face the competition from low-cost Chinese manufacturers. Grande Co. is a U.S.-based consumer electronics manufacturer that has been negotiating with Chinese authorities for eight years to open a factory in the country. Since Grande has spent significant time and energy on negotiation in the past eight years, they should quit and set up a factory in a more responsive society. Which of the following, if true, strengthens the conclusion of the above passage?
American companies best thrive in cultures that are deal-oriented.
Firms that are more successful at global competition display each of the following qualities EXCEPT______. Actively pursuing partnerships with foreign firms Identifying foreign market opportunities aggressively Focusing intensively on building organizational capacities Approaching internationalization from a reactive standpoint
Approaching internationalization from a reactive standpoint
In cross-border business, successful managers______. Overly emphasized the importance of business jargons in facilitating effective cross cultural communication Ritually avoid analyzing awkward situations in cross cultural encounters Adhere to a self reference criterion Are empathetic to cultural differences
Are empathetic to cultural differences
Globalization Debate (Scenario) - In his international business class, Professor Jang organizes a debate on teh societal effects of market globalization. Juan Prince takes a position that highlightis the negative effects of market globalization. He emphasizes how multinational enterprises can weild 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 coporate pollution on the environment, and he ends his argument by explaining how market globalization helps homogenize national cultures. Rina Taylor is assigned to counter Juans position. Which of the following statements most likely to counter Juan's argument concerning the homogenization of national cultures? Foreign values tend to shift not just superficial aspects of cutlurue, but deeply hled beliefs as well As globaliztion standardizes superficial aspects of life across national cultures, people resist these forces by insisting on their national identity and taking steps to protect it In most industries, domestic operaiton alone cannot sustain competitive business growth Material goods such as cell phones and computers are found in most homes throughout the world
As globaliztion standardizes superficial aspects of life across national cultures, people resist these forces by insisting on their national identity and taking steps to protect it
The culture of which of the following countries has a close conversational distance? Brazil United States Sweden Russia
Brazil
Which of the following is true with regard to bribery? Bribery promotes a culture of dishonesty and immorality Bribery is considerably rare in developing economies Bribery poses no significant threat to market economies Bribery is not acceptable in much of the world
Bribery promotes a culture of dishonesty and immorality
Which of the following is true with regard to bribery? -Bribery poses no significant threat to market economies. -Bribery is not acceptable in much of the world. -Bribery promotes a culture of dishonesty and immorality. -Bribery is considerably rare in developing economies.
Bribery promotes a culture of dishonesty and immorality.
Earth-Rite Organic Foods (Scenario) Earth-Rite Organic Foods Inc. is an MNE based in Sweden with subsidiaries located in numerous countries around the world. Earth-Rite has annual sales of $10 billion and employs more than 90,000 individuals worldwide. Earth-Rite currently dominates the organic food industry, but competitors are beginning to catch up because of a growing demand for organic produce. Earth-Rite is considering a collaborative venture with a small chain of organic grocery stores located in Brazil, a country where Earth-Rite has no stores. Earth-Rite executives are considering internalizing operations in Brazil. Which of the following, if true, best supports this plan? Intermediaries and collaborators ensure greater control over domestic operations. Internalizing value-chain activities increases employee turnover. The management of Earth-Rite wants to maximize dissemination of proprietary knowledge. By internalizing operations, Earth-Rite will retain control of product quality.
By internalizing operations, Earth-Rite will retain control of product quality.
In 2014,________ was the largest single source of counterfeit products imported into the U.S. China Iran Russia The United States
China
____ is the most common primary language in the world. Arabic Chinese English Spanish
Chinese
________ is the seizure of corporate assets without compensation. Embargo Sanction Confiscation Expropriation
Confiscation
_______ refers to the tendency of a financial or monetary crisis in one country to spread rapidly to other countries, due to the ongoing integration of national economies. Nationalization Contagion Codetermination Internationalization
Contagion
The globalization of finance Contributes to firms' abilities to develop and operations world-scale production and marketing Discourage free international exchange of goods and services Enables companies to minimize offshoring Discourages innovation
Contributes to firms' abilities to develop and operations world-scale production and marketing
_____ refers to the system of procedures and processes by which corporations are managed, directed, and controlled Global sourcing Corporate governance Deceptive marketing Corporate social responsibility
Corporate governance
________ represents the apex of the pyramid of ethical behavior. Corporate social responsibility Complying with laws and regulations Ethical behavior Guarding against corruption
Corporate social responsibility
Feminine cultures tend to emphasize ________. ambition accumulation of wealth competitiveness Correct interdependence among people
Correct interdependence among people
Which of the following pairs of nations are on opposite ends of the political freedom scale?
Cuba and Sweden
Whittaker Semiconductors has recently decided to expand its operations oversees. Amanda Quan, VP of Int'l Business, assigned a team of investigators to analyze the risks faced by the company in making this move. Of particular interest were the risks that might affect the success of a new production plant to be located in one of three potential countries. LeShaun Golding researched the risks linked to establishing the plant in Country B. He cited government intervention, lack of local managerial talent, and unethical business practices as the most prominent risks for this location. LeShaun noted all of the following types of risks EXCEPT _____. Cross cultural risk Country risk Currency risk Political risk
Currency risk
Which of the following is characteristic of globalization of markets? Conservatism Diminishing gap between the rich and poor Lack of skilled labor Declining trade barriers
Declining trade barriers
In terms of CSR and sustainability, going _____ means institutionalizing appropriate behavior into the organization's culture so it becomes part and parcel of strategy. Deep Global Local Wide
Deep
Which of the following countries has the LEAST corruption? Russia Phillippines Mexico Denmark
Denmark
Which of the following would most likely be considered an appropriate action for multinational company in meeting its global corporate social responsibility obligations? Improving the efficiency of assembly line operations Lowering production costs for specific manufactured items Devoting substantial r&D to poor country ailments Developing a strategic plan to enter an emerging market
Devoting substantial r&D to poor country ailments
_____ belongs to the folk cultural makeup that we are aware of. Fine arts Nonverbal communications Diet Methods of problem solving
Diet
In a deal-oriented culture, managers______ Emphasize affiliations with people Seek to build trust and rapport and get to know the other party in business interactions Focus on the task at hand a prefer getting down to business Hold rigid attitudes, usually unfavorable and usually aimed at particular groups of people
Focus on the task at hand a prefer getting down to business
Mercantilism Assignment (Scenario) The final assignment for Daniel Parilla's international business class involves taking an in-depth look at one of the six classical perspectives that explain the rationale for international trade. Daniel plans to present an argument in favor of mercantilism. Daniel will be attempting to convince his classmates that mercantilism leads to national prosperity. Daniel's peers will be given the opportunity to counter his argument. 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.
A U.S. shoe manufacturer is considering internationalizing to promote growth by diversifying its markets. Which of the following, if true, would most strongly support the claim that moving to France would help the company grow through market diversification? -French consumers represent a sizeable market that could significantly boost the company's sales. -Many of the company's U.S. customers have moved overseas to Europe. -French women tend to purchase shoes more frequently than do French men. -Doing business in France would likely expose the company to new ideas for product innovation.
French consumers represent a sizeable market that could significantly boost the company's sales.
_____ is the procurement of products or services from suppliers located abroad Franchising Licensing Deceptive marketing Global sourcing
Global sourcing
As market globalization intensifies, ______. Individual firms respond to the challenges and new advantages that it brings The distance between consumers worldwide expands The gap between the rich and the poor shrinks rapidly Firms internationalize solely as a reaction to it
Individual firms respond to the challenges and new advantages that it brings
Which of the following is a driver of globalization? Integration of world financial markets Greater emphasis on proactive internationalization Internationalization of firms value chain Globalization of services
Integration of world financial markets
________ is an explanation of the process by which firms acquire and retain one or more value-chain activities inside the firm, minimizing the disadvantages of dealing with external partners and allowing for greater control over foreign operations.
Internalization theory
An idiom____ Refers to the perception about someone or something that may or may not be true Is highly ambiguous rhetorical device used in high context cultures Refers to the objective analysis of a situation Is an expression whose symbolic meaning is different from its literal meaning
Is an expression whose symbolic meaning is different from its literal meaning
Which of the following statements is true of country risk? It is present only in poor nations. It is always present. Its intensity seldom varies over time and across nations. Its nature remains constant over time and across nations.
It is always present.
Which of the following is true with regard to the rights approach? According to the rights approach, the most important virtues are truth and prudence. It is based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved. It produces the greatest balance of good over harm to customers, employees, shareholders, the community, and the natural environment. It is based on the belief that the best action treats everyone equally and fairly.
It is based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved.
Acme Ethical Standards (Scenario) : Four 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 U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil. The managers discuss various ethical problems commonly encountered in their local territories. Which of the following representatives is most likely to label counterfeiting of goods as the biggest challenge in his/her country? Luis Jang Marta Geoff
Jang
Which of the following is true about low-context cultures?
Low-context cultures rely on elaborate verbal explanations, putting much emphasis on spoken words.
Which of the following best explains why Taiwanese computer manufacturers established subsidiaries in the United States? Low-cost financial capital Access to raw materials Lack of skilled managerial talent in home country Low-cost labor
Low-cost financial capital
________ are ways of behaving and conducting oneself in public and business situations. Values and attitudes Manners and customs Creative expressions Symbolic productions
Manners and customs
In polychronic cultures ______. Managers make commitments, set deadlines, and adhere to strict schedule of meetings and activities People view time as linear and punctuality as a virtue Managers and investors are impatient and want quick returns Members are easily distracted and are inclined to do many tasks at once
Members are easily distracted and are inclined to do many tasks at once
An international trade summit is held in Geneva, Switzerland. The purpose of the summit is to cooperatively develop policies that promote international trade. Representatives from 50 different countries attend the summit. One summit attendee pointed out that the total value of her country's products trade typically accounted for more than 100 percent of her nation's GDP. The attendee most likely represents_____. Japan France United Kingdom Netherlands
Netherlands
Regional economic integration blocs________ Adopt a hostile stance toward the private sector Reduce trade and investment barriers Hinder the cross-border flow of factors of production Reduce private investments
Reduce trade and investment barriers
In which of the following countries would alcoholic drinks be prohibited?
Saudi Arabia
Corruption is defined as_____. The system of procedures and processes by which corporations are managed, directed, and controlled The abuse of power to achieve illegitimate personal gain A manner of operating a business that meets or exceeds the ethical, legal, commercial, and public expectations of customers The tendency to make decisions based purely on cognitive factors
The abuse of power to achieve illegitimate personal gain
The third phase of globalization was triggered by_____. The end of World War II The intervention of electricity The end of World War I The Great Depression
The end of World War II
The ______ is a policy platform and practical framework for companies committed to sustainability and responsible business practices. It is the world's largest voluntary corporate citizenship initiative, representing thousands of businesses in more than 135 countries Org for Econ Cooperation and Dev International Economic Dev Council Global Reporting Initiative United Nations Global Compact
United Nations Global Compact
The ________ is a policy platform and practical framework for companies committed to sustainability and responsible business practices. It is the world's largest voluntary corporate citizenship initiative, representing thousands of businesses in more than 135 countries. United Nations Global Compact International Economic Development Council Global Reporting Initiative Organization for Economic Cooperation and Development
United Nations Global Compact
Which of the follwoing approaches to ethical standards for corporate governance reflects the view that the best ethical action is one that provides the most good or the least harm? Fairness approach Utilitarian approach Common good approach Virtue approach
Utilitarian approach
Over time, the GATT evolved into the ________. World Trade Organization World Intellectual Property Organization World Bank International Monetary Fund
World Trade Organization
Restaurant Chain Internationalization (Scenario) : Harold Meyer is the vice president of a successful U.S. restaurant chain. He is getting ready to transfer to the Gulf Arab region to help establish the restaurant chain in Saudi Arabia. He is in the process of gathering information to learn about Saudi culture. Harold learned that organizations in Saudi Arabia emphasizes loyalty to the family and tribe and that ties among individuals are highly valued. Based on Harold's observation, Saudi Arabia is ________. a collectivist culture characterized by low power distance an individualistic culture a feminine culture
a collectivist culture
Which of the following would most likely be considered an appropriate action for a multinational company in meeting its global corporate social responsibility obligations? -improving the efficiency of assembly line operations -developing a strategic plan to enter an emerging market -devoting substantial R&D to poor-country ailments -lowering production costs for specific manufactured items
a continuous effort to understand how CSR and sustainability affect every aspect of the firm's operations worldwide
High power-distance countries are characterized by ________. a relative equality in terms of income and power a strong desire to minimize gaps between the powerful and the weak organizations that grant a high degree of autonomy to lower-level employees a relative indifference toward social inequalities
a relative indifference toward social inequalities
According to the ________, a country benefits by producing only those products in which it has complete advantage or that it can produce using fewer resources than another country.
absolute advantage principle
According to the ________, a country benefits by producing only those products in which it has complete advantage or that it can produce using fewer resources than another country. international product cycle theory comparative advantage principle absolute advantage principle factor proportions theory
absolute advantage principle
Freehold Investment Corp. (Scenario): Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures. 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. indirect passive active short-term
active
Advertising themes often convey unfavorable and embarrassing interpretations. This is most likely because ________. advertising themes often lose their original meaning in translation or give the wrong impression popular slogans used in international advertising do not use idiomatic expressions language is rarely subtle colloquial expressions are more likely than not to puzzle native speakers
advertising themes often lose their original meaning in translation or give the wrong impression
Prejudices in a culture ________. are rigidly held attitudes, usually unfavorable, and usually aimed at particular groups of people represent a person's judgment about what is important and what is not guide the development of our attitudes and preferences represent the symbolic, material, and creative productions unique to a society
are rigidly held attitudes, usually unfavorable, and usually aimed at particular groups of people
Sustainable firms ________. have greater liabilities than assets actively resist organizational change avoid emitting toxic wastes have a high employee turnover rate
avoid emitting toxic wastes
When making decisions regarding ethical business actions, managers should ________. -focus mainly on the company's obligations to produce profits for its shareholders -balance their obligation to shareholders with explicit contributions to the broader public good -minimize employee empowerment to achieve greater control place the highest emphasis on enhancing the company's ability to benefit from a common pool of resources
balance their obligation to shareholders with explicit contributions to the broader public good
Current trends suggest that early internationalizing firms will ________. significantly dampen entrepreneurial efforts of smaller firms become even more common in international business eliminate MNEs worldwide be unable to sustain the rigors of international trade
become even more common in international business
Current trends suggest that early internationalizing firms will ________. eliminate MNEs worldwide become even more common in international business significantly dampen entrepreneurial efforts of smaller firms be unable to sustain the rigors of international trade
become even more common in international business
International entrepreneurship is a new field of scholarly inquiry that is a result of the________ phenomenon. standardization born global industrial cluster Localization
born global
Technological leapfrogging is defined as ________. -adopting new technology as soon as it is released -boosting demand artificially by postponing the sale of new technology in the market -bypassing certain stages of technology to come up with a radical innovation when upgrading to new products -adopting new technology late in the hype cycle
bypassing certain stages of technology to come up with a radical innovation when upgrading to new products
Technological leapfrogging is defined as ________. bypassing certain stages of technology to come up with a radical innovation when upgrading to new products adopting new technology as soon as it is released boosting demand artificially by postponing the sale of new technology in the market adopting new technology late in the hype cycle
bypassing certain stages of technology to come up with a radical innovation when upgrading to new products
Firms with high power distance are most likely to be characterized by ________.
concentrated power among executives and little autonomy for subordinates
With regard to the iceberg concept of culture, ________ is the most deeply embedded.
conversational patterns
The process of reproducing assets without compensating those who originally created them is known as ________. product differentiation counterfeiting trademarking bribery
counterfeiting
Which of the following types of risk is also known as political risk? currency risk commercial risk country risk cross-cultural risk
country risk
In the five-step framework for making ethical decisions, implementing a course of action implies ________.
creating new rules, processes, or procedures, and putting these into effect
According to Porter's competitive advantage of nations, ________ refer to the nature of home-market demand for specific products and services
demand conditions
Which form of government is characterized by private property rights and limited government?
democratic
Common and Civil Law (Scenario) Zane Computer Corporation is considering the possibility of building a new manufacturing facility in a foreign country in order to lower labor and production costs. The legal department of Zane has raised some issues regarding two countries that are the top contenders for the new facility. The legal system of Country A is based on civil law, while the legal system of Country B is based on common law. Other than the legal systems of the two countries, all other aspects are virtually identical. Zane's legal experts must determine which system would be the most beneficial to Zane in the long-term. Which of the following statements is most likely applicable to Country B? an all-inclusive system of law that has been codified detailed contracts that clearly state all potential contingencies ethics and morality are the underlying tenets local and national legislatures pass laws
detailed contracts that clearly state all potential contingencies
As market globalization intensifies, ________. -individual firms respond to the challenges and new advantages that it brings -the gap between the rich and the poor shrinks rapidly -firms internationalize solely as a reaction to it -the distance between consumers worldwide expands
individual firms respond to the challenges and new advantages that it brings
The science and process of creating and using information resources is known as ________. information design psychographics information technologie demographics
information technologie
Culture is not ________. inherited a collective phenomenon relative about beliefs and values of society
inherited
Which of the following comparative advantages is acquired over time? arable land labor innovative capacity petroleum reserves
innovative capacity
Host-Country Legal System (Scenario) Super Sports, a large sporting goods chain based in Australia, wants to open a store in Norway. With stores around the world, Super Sports executives realize that legal systems vary from country to country. Having never opened a store in Norway, the Super Sports legal team is investigating Norwegian laws to determine how they would impact the corporation and its ability to do business in Norway. Which of the following would most likely oppose the opening of a Super Sports store in Norway? labor unions local sports retailers local sports enthusiasts international banks
local sports retailers
Firms with strong environmental interests are most likely to ________.
minimize pollutants in manufacturing
Maxdime Inc. is an international automobile manufacturer that has decided to work on low-cost fuel efficient motorbikes. Foray Inc., a domestic automobile company based in China, is willing to partner temporarily with the R&D team of Maxdime to design and launch motorbikes specially for the Chinese market. This is an example of ________. sole proprietorship non-equity-based strategic alliance product differentiation entrepreneurial orientation
non-equity-based strategic alliance
Which of the following is a societal consequence of market globalization? internationalization of firm's value chain greater emphasis on proactive internationalization new risks and instant rivalry from foreign competitors offshoring and the flight of jobs
offshoring and the flight of jobs
In a typical value chain, the firm ________. -rarely conducts research and development -performs marketing activities such as pricing, promotion, and selling -performs most downstream activities in the home market, when exporting -performs most upstream value-chain activities abroad, when exporting
performs marketing activities such as pricing, promotion, and selling
Titania is a country characterized by a high-context culture. This implies that ________. -personal relations and goodwill are valued in Titania -business is primarily deal-oriented in Titania -the people of Titania tend to use legalistic contracts to conclude agreements -the people of Titania tend to conduct negotiations as efficiently as possible
personal relations and goodwill are valued in Titania
An underground economy ________. is regulated and monitored by public authorities is characterized by dominantly legal transactions refers to the formal economic sector refers to the informal economic sector
refers to the informal economic sector
Which of the following is an element of the comparative advantage principle? relative efficiency of production negative balance of trade absolute cost of production per unit cost advantage
relative efficiency of production
Which of the following legal systems is largely practiced in the Middle East? civil religious socialist Common
religious
The U.S. Securities and Exchange Act encourages confidence in business transactions by ________. protecting public companies from government scrutiny shielding investors from bankruptcy and excessive taxation requiring public companies to frequently disclose their financial indicators to investors evaluating the inner workings of privately owned firms
requiring public companies to frequently disclose their financial indicators to investors
Which of the following acts makes it illegal for U.S. firms to offer bribes to foreign parties in order to secure or retain business? the U.S. Securities Exchange Act the Robinson-Patman Act the U.S. Foreign Corrupt Practices Act the Sherman Antitrust Act
the U.S. Foreign Corrupt Practices Act
Corruption is defined as ________. -the abuse of power to achieve illegitimate personal gain -the system of procedures and processes by which -corporations are managed, directed, and controlled -a manner of operating a business that meets or exceeds the ethical, legal, commercial, and public expectations of customers -the tendency to make decisions based purely on cognitive factors
the abuse of power to achieve illegitimate personal gain
According to the virtue approach ________.
the best action emphasizes moral excellence and righteousness that provide for the full development of our humanity
Globalization Debate (Scenario): In his international business class, Professor Jang organizes a debate on the societal effects of market globalization. Juan Prince takes a position that highlights the negative effects of market globalization. He emphasizes how multinational enterprises can wield 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 is Rina most likely to cite as a counter example to Juan's argument regarding the influence of MNEs on national sovereignty? technological advances in computer-aided design of products the dominating influence of market forces on the global economy the political influence of large firms such as Walmart the actual GDPs of underdeveloped economies
the dominating influence of market forces on the global economy
The third phase of globalization was triggered by ________. the end of World War I the invention of electricity the end of World War II the Great Depression
the end of World War II
Sid Maxwell (Scenario) Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. Hudson uses a distinctive sign to enable its customers to easily identify its products. This distinctive sign that the company also uses to distinguish its offerings from that of its competitors is known as a ________.
trademark
Which of the following characterizes country risk? A nation's country risk level remains fairly constant until the election and installation of a new political leader. Country risk is always present, but its nature and intensity vary over time and from country to country. The political and legal systems of adjacent nations greatly impact the country risk of nations that host foreign firms. Country risk will change only after the creation of laws and regulations that affect foreign firms.
Country risk is always present, but its nature and intensity vary over time and from country to country.
Governments have facilitated economic integration by _______. Adopting different monetary and fiscal policies within the same regional economic integration blocs Standardizing consumer lifestyles and preferences Increasing barriers to international trade and investment Creating supranational institutions to further reduce trade barriers
Creating supranational institutions to further reduce trade barriers
________ refers to a distinctive tradition or institution strongly associated with a particular society. Cultural metaphor Moiety Cultural pluralism Totem
Cultural metaphor
________ refers to a distinctive tradition or institution strongly associated with a particular society. Moiety Cultural metaphor Totem Cultural pluralism
Cultural metaphor
________ refers to the values, beliefs, customs, arts, and other products of human thought and work that characterize the people of a given society. Heritage Ethnicity Race Culture
Culture
Which of the following situations is an example of geocentric orientation? Derek, the VP of Banner Technologies, wants managers from the firm's India office to visit the U.S. branch to provide training to American officials visiting India. Chill & Break Inc., an American global coffee company, is used to judging other cultures by the standards of its own culture. The Gram Group of retail stores decided to open branches in China and focus on changing their policies to suit the Chinese population to maximize profits. Marsha, CEO of QST Solutions, believes that top level executives at her company should be Americans to avoid any communication gaps.
Derek, the VP of Banner Technologies, wants managers from the firm's India office to visit the U.S. branch to provide training to American officials visiting India.
In terms of international business, market globalization can be viewed as a ______. Consequence of the loss of national sovereignty Consequence of a strong emphasis on traditional values worldwide Driver and consequence of firm-level internationalization Prime cause of rising diseconomies of scale in emerging economies
Driver and consequence of firm-level internationalization
Business dealings in low-context cultures are characterized by_____. A high degree of mutual respect Efficient negotiations Complex rituals A high degree of sensitivity to the context
Efficient negotiations
______ are moral principles and values that govern the behavior of people, firms, and governments, regarding right and wrong. Laws Attitudes Ethics Biases
Ethics
________ are moral principles and values that govern the behavior of people, firms, and governments, regarding right and wrong. Biases Laws Attitudes Ethics
Ethics
Which of the following types of assumptions is the cause of most problems between business managers and foreign employees? Religious assumptions Ethnocentric assumptions Geocentric assumptions Polycentric assumptions
Ethnocentric assumptions
At a conference on business internationalization strategies, representatives 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. The rep from Business B is most likely from: Japan Panama Hungary Uganda
Japan
Which of the following countries exhibit a high-context culture? Germany Japan The United States of America Switzerland
Japan
Which of the following is a societal consequence of market globalization? New risks and instant rivalry from froeign competitors Offshoring and the flight of jobs Internationalization of a firms value chain Greater emphasis on proactive internationalization
Offshoring and the flight of jobs
When applying the five-step framework for making ethical decisions, managers should, at first______. Evaluate alternatives Examine the facts Implement a decision Recognize the ethical problem
Recognize the ethical problem
Technological advances have contributed to manufacturing by______. Reducing cross-border flow of factors of production Reducing production costs Promoting traditional lifestyles and values Promoting nationalization
Reducing production costs
________ means meeting humanity's needs without harming the ability of future generations to meet their needs. Ethical behavior Casuistry Corporate social responsibility Sustainability
Sustainability
Values in a culture_____ Are similar to opinions but are often unconsciously held and may not have a rational basis Represent a person's judgements about what is good or bad, acceptable, unacceptable, etc. Are rigidly held attitudes, usually unfavorable and usually aimed at particular groups of people Represent the symbolic, material, and creative productions unique to a society
Represent a person's judgements about what is good or bad, acceptable, unacceptable, etc.
Which of the following statements would be supported by Michael Porter? The presence of strong competitors in a nation hinders national competitive advantage. Rivalry among industry competitors spurs innovation. Economic prosperity depends primarily on inherited national advantages. The presence of highly demanding customers discourages innovation.
Rivalry among industry competitors spurs innovation.
An international trade summit is held in Geneva, Switzerland. The purpose of the summit is to cooperatively develop policies that promote international trade. Representatives from 50 different countries attend the summit. One of the attendees represents a leading nation in the international services trade. This attendee is most likely from which of the following countries? South Africa Greece Singapore Brazil
Singapore
Subjective dimensions of culture (Scenario): In the last two years, the sales of consumer electronics in China have risen by 9.4 percent. Moreover, the market is becoming increasingly competitive since a large number of Japanese, European, and American manufacturers are building factories to face the competition from low-cost Chinese manufacturers. Grande Co. is a U.S.-based consumer electronics manufacturer that has been negotiating with Chinese authorities for eight years to open a factory in the country. Since Grande has spent significant time and energy on negotiation in the past eight years, they should quit and set up a factory in a more responsive society. Which of the following can be inferred from the above passage? The Chinese culture is more likely than not to be deal-oriented. The Chinese culture is more likely than not to be relationship-oriented. The American culture is less likely to take an impersonal approach to business. The American culture is more likely than not to be relationship-oriented.
The Chinese culture is more likely than not to be relationship-oriented.
Which of the following is a benefit of internalizing foreign-based value-chain activities? The MNE oversees control of foreign operations and ensures product quality. The MNE learns new manufacturing methods from foreign partners. The MNE eliminates employee turnover. The MNE maintains a monopolistic presence in foreign countries.
The MNE oversees control of foreign operations and ensures product quality.
Which of the following is an example of a supranational institution? The Red Cross The World Trade Organization UNICEF World Intellectual Property Organization
The World Trade Organization
Common and Civil Law (Scenario) Zane Computer Corporation is considering the possibility of building a new manufacturing facility in a foreign country in order to lower labor and production costs. The legal department of Zane has raised some issues regarding two countries that are the top contenders for the new facility. The legal system of Country A is based on civil law, while the legal system of Country B is based on common law. Other than the legal systems of the two countries, all other aspects are virtually identical. Zane's legal experts must determine which system would be the most beneficial to Zane in the long-term. Which of the following statements supports Country B over Country A?
The flexibility of common law allows for judicial interpretation in unique cases.
Common and Civil Law (Scenario) Zane Computer Corporation is considering the possibility of building a new manufacturing facility in a foreign country in order to lower labor and production costs. The legal department of Zane has raised some issues regarding two countries that are the top contenders for the new facility. The legal system of Country A is based on civil law, while the legal system of Country B is based on common law. Other than the legal systems of the two countries, all other aspects are virtually identical. Zane's legal experts must determine which system would be the most beneficial to Zane in the long-term. Which of the following statements supports Country B over Country A? Common law nations administer justice based on a structured set of rules. The flexibility of common law allows for judicial interpretation in unique cases. Laws are primarily legislative in origin and based on laws passed by national and local legislatures. Rules and principles form the starting point for legal reasoning and administering justice.
The flexibility of common law allows for judicial interpretation in unique cases.
Each of the following has contributed to the rapid growth of trade among nations EXCEPT______. The growth of emerging market countries The liberalization of markets The increase in trade barriers Advances in information technology
The increase in trade barriers
Which of the following is true about the determinants of national competitive advantage? Demand conditions describe the nation's position in factors of production, such as labor, natural resources, capital, technology, entrepreneurship, and know-how. The presence of strong competitors in a nation adversely affects national competitive advantage. The presence of demanding customers pressures firms to innovate faster and produce better products. Vigorous competitive rivalry among firms lowers national innovativeness.
The presence of demanding customers pressures firms to innovate faster and produce better products.
Which of the following is true about the first stage of evolution in the international product life cycle theory? The competition intensifies at this stage and export orders begin to come from lower-income countries. The product enjoys a temporary monopoly at this stage. The knowledge about how to produce the product is widespread. The product's inventors mass-produce it and seek to export it.
The product enjoys a temporary monopoly at this stage.
Self-reference criterion is _____. The propensity to understand culture as an inherited trait The propensity to view other cultures through the lens of one's own culture The tendency to understand a culture without regard to country boundaries The tensity to assume that all people from one culture are the same
The propensity to view other cultures through the lens of one's own culture
Which of the following is true about absolute advantage principle? This approach allows the nation to consume more than it otherwise could, generally at lower cost. This is the only approach that can be used to explain why nations attempt to run a trade surplus. According to this approach, enhanced product specialization adversely affects communal welfare. This approach explains the process by which firms acquire and retain one or more value-chain activities inside the firm.
This approach allows the nation to consume more than it otherwise could, generally at lower cost.
A ________ government seeks to control not only all economic and political matters but also the attitudes, values, and beliefs of the citizenry. mixed socialistic democratic Totalitarian
Totalitarian
A country's economic assets are also known as factors of production True False
True
A country's economic assets are also known as factors of production. True False
True
Which of the following legal systems is based on legal precedents and past practices set by the nation's courts through interpretation of statutes, legislation, and past rulings?
common
Which of the following approaches to ethical standards for corporate governance reflects the view that the best action emphasizes the welfare of the entire community or nation?
common good approach
The ________ states that it can be beneficial for two countries to trade without barriers as long as one is relatively more efficient at producing goods or services needed by the other. comparative advantage principle internalization theory absolute advantage principle monopolistic advantage theory
comparative advantage principle
In recent years, business executives and scholars have used ________ to refer to the advantages possessed by nations and individual firms in international trade and investment. comparative advantage competitive advantage country-specific advantage cost advantage
competitive advantage
Low-context cultures tend to ________.
conduct negotiations as efficiently as possible
Common and Civil Law (Scenario) Zane Computer Corporation is considering the possibility of building a new manufacturing facility in a foreign country in order to lower labor and production costs. The legal department of Zane has raised some issues regarding two countries that are the top contenders for the new facility. The legal system of Country A is based on civil law, while the legal system of Country B is based on common law. Other than the legal systems of the two countries, all other aspects are virtually identical. Zane's legal experts must determine which system would be the most beneficial to Zane in the long-term. Which of the following supports Country A over Country B? higher flexibility compared to other legal systems contracts are so detailed that they are expensive to draft judges confer with legislators on international business issues contractual noncompliance provisions are broader in scope
contractual noncompliance provisions are broader in scope
Common and Civil Law (Scenario) Zane Computer Corporation is considering the possibility of building a new manufacturing facility in a foreign country in order to lower labor and production costs. The legal department of Zane has raised some issues regarding two countries that are the top contenders for the new facility. The legal system of Country A is based on civil law, while the legal system of Country B is based on common law. Other than the legal systems of the two countries, all other aspects are virtually identical. Zane's legal experts must determine which system would be the most beneficial to Zane in the long-term. Which of the following supports Country A over Country B? judges confer with legislators on international business issues contractual noncompliance provisions are broader in scope higher flexibility compared to other legal systems contracts are so detailed that they are expensive to draft
contractual noncompliance provisions are broader in scope
Governments have facilitated economic integration by ________. standardizing consumer lifestyles and preferences creating supranational institutions to further reduce trade barriers increasing barriers to international trade and investment adopting different monetary and fiscal policies within the same regional economic integration blocs
creating supranational institutions to further reduce trade barriers
Kazmia Revitalization (Scenario) The leaders of Kazmia, a small nation in the southern hemisphere, have called a meeting to discuss ways to encourage foreign firms to invest in Kazmia. The country was once a leader in diamond mining and exports; however, the diamond mines have been depleted. Meanwhile, the standard of living in Kazmia has plummeted to its lowest levels, and young people are fleeing the country. Government leaders must devise a plan to reinvigorate the once prosperous nation. In the context of national industrial policy, which of the following actions by the government of Kazmia would be the most beneficial for the long-term economic security of the country? discouraging foreign trade discouraging entrepreneurial ventures undertaken by small firms devoting resources to improve national infrastructure increasing the rate of taxation
devoting resources to improve national infrastructure
In which of the following stages of the internationalization process is a firm preoccupied with business in its home market?
domestic focus
In terms of international business, market globalization can be viewed as a ________. -driver and consequence of firm-level internationalization -consequence of a strong emphasis on traditional values worldwide -consequence of the loss of national sovereignty -prime cause of rising diseconomies of scale in emerging economies
driver and consequence of firm-level internationalization
A(n) ________ is an official ban on exports to or imports from a particular country, in order to isolate it and punish its government.
embargo
Which of the following is a comparative advantage? : superior strategies of an organization close relationships with suppliers entrepreneurial orientation the distinct capabilities of an organization
entrepreneurial orientation
Nations running a trade surplus ________. import more goods than they export export more goods than they import openly discourage export rely solely on imports
export more goods than they import
Businesses that directly initiate international business transactions are known as ________. business affiliates fiscal enterprises fiduciary trusts focal firms
focal firms
In a deal-oriented culture, managers ________. -emphasize affiliations with people -seek to build trust and rapport and get to know the other party in business interactions -focus on the task at hand and prefer getting down to business -hold rigid attitudes, usually unfavorable and usually aimed at particular groups of people
focus on the task at hand and prefer getting down to business
Freehold Investment Corp. (Scenario): Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures. 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 foreign direct domestic securities indirect production
international portfolio
Income repatriation laws affect MNEs that earn profits in foreign countries by ________. limiting the amount of net income or dividends that can be transferred to the home-country headquarters restricting the amount of earned income being re-invested in the foreign facility imposing restrictions on the distribution of products from the foreign facility enforcing strict stipulations on cross-border transactions and joint ventures
limiting the amount of net income or dividends that can be transferred to the home-country headquarters
The eclectic paradigm specifies three conditions that determine whether a company will internationalize via FDI. Which of the following refer(s) to one of those conditions?
location-specific advantages
Boycotts and protests have the potential to harm businesses by ________. destroying the ability of all local firms to carry on normal business operations lost sales and increased costs for public relations activities preventing businesses from shipping their products to foreign markets raising concerns about a firm's foreign operations by initiating lawsuits
lost sales and increased costs for public relations activities
Which of the following best explains why the Japanese firm Canon relocated much of its production to China Low-cost financial capital Access to raw materials low -cost labor Lack of skilled managerial talent in home country
low -cost labor
Which of the following best explains why Taiwanese computer manufacturers established subsidiaries in the United States? low-cost labor access to raw materials lack of skilled managerial talent in home country low-cost financial capital
low-cost financial capital
Which of the following best explains why the Japanese firm Canon relocated much of its production to China? low-cost labor low-cost financial capital lack of skilled managerial talent in home country access to raw materials
low-cost labor
The process of targeting and serving markets outside the home country is known as ________. trade protectionism market diversification competition intensity reactive internationalization
market diversification
Firms with strong environmental interests are most likely to ________. minimize pollutants in manufacturing optimize diversity in hiring encourage the use of sweatshops provide employees educational opportunities
minimize pollutants in manufacturing
In order to be effective, a corporate code of ethics should be designed to function like a ________. moral compass political treatise project plan business white paper
moral compass
The Coca-Cola Company is an example of ________. born global firm SME NGO multinational enterprise
multinational enterprise
A proactive economic development plan initiated by the government, often in collaboration with the private sector, that aims to develop or support particular industries within the country is referred to as ________. national fiscal policy national endowment policy policy on national industrial relations national industrial policy
national industrial policy
The United States restricts foreign investments that might affect ________.
national security
Which of the following best explains why India was once characterized by high country risk? taxes and financial incentives benefited Indian businesses over foreign firms political leaders enacted laws that targeted foreign firms for harassment Indian leaders feared the modern influences of American firms Indian business leaders distrusted most European corporations
political leaders enacted laws that targeted foreign firms for harassment
Which of the following refers to an important monopolistic advantage for firms?
proprietary technology
Which of the following refers to an important monopolistic advantage for firms? imitable skills favorable climate proprietary technology unskilled labor
proprietary technology
Which of the following is an example of a location-specific advantage?
skilled labor
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
Convergence of consumer preferences has led to an enhanced emphasis on standardization which implies that ________. the globalization of services has adversely affected the quality of service worldwide the distance between consumers worldwide has increased with the advent of technology the raw materials, parts, and components sourced by professional buyers are very similar in design and structure the consistently rising prices of consumer goods have led to a demand vacuum in the market
the raw materials, parts, and components sourced by professional buyers are very similar in design and structure
A value chain is ________.
the sequence of value-adding activities performed by a firm in the course of developing, producing, marketing, and servicing a product
International business is defined as the performance of ________ activities by firms across national borders. accounting and auditing trade and investment finance and operational marketing and fiduciary
trade and investment
