inter bus mid term questions

Knowledge that is codifiable and easy to communicate or write down is called _____ knowledge.

explicit

A relatively low-risk business operation that involves penetrating foreign markets (by exporting) or importing merchandise at competitive prices for domestic consumption refers to _______.

export-import business

The initial step toward globalization is ______.

exporting

The _____ states that when factors are allowed to move freely among trading nations, efficiency increases, which leads to price of factors becoming equal among countries.

factor-price equalization theory

A specific tariff describes a tax on imports levied as a constant percentage of the monetary value of one unit of the imported good.

false

Corporate social responsibility refers only to the company's obligations to its stockholders and investors.

false

Critics argue that open trade and foreign direct investment always take jobs from workers in developing economies and transfer them to workers in advanced industrial countries which leave the workers in the developing country, out of work.

false

Enron Corporation is a perfect example of effective social and ethical responsibility in the financial sector.

false

For the World Trade Organization, increasing trade barriers has been one of the most simple ways to encourage trade and globalization.

false

In the business world, the purpose of ethics is to direct business men and women to make as much money as they can any way possible.

false

In the final stage of globalization, global companies produce goods in one country and export them to other countries.

false

Latin American negotiators will frequently engage in long periods of silence, or may have peripheral discussions among one another while ignoring foreign business people in the room.

false

MNEs can never successfully enter foreign markets as traders, licensors, or franchisors.

false

One could argue that regional and global integration are not complements, but substitutes to economic development of a particular region.

false

One way international trade benefits consumers is by providing lower living standards.

false

Power distance examines the extent to which societies tolerate risk or are risk averse.

false

Research studies find that culture is not learned; rather it is inherited.

false

Security investments have little impact on the BOP's financial account.

false

Strategic alliances are primarily aimed at enhancing goodwill.

false

The Sarbanes-Oxley Act of 2002 set "green" standards for companies.

false

The first step a domestic firm takes when entering an international arena is usually to create an international division.

false

The openness and proliferation of globalization and free trade rules can best be attributed to the interwar period between World War I and II.

false

The primary reason why language mistakes occur in global business is that organizations tend to use backward translation.

false

The world economy is quickly shifting away from countries with emerging economies.

false

Trade barriers lead to decreased competition from abroad, and raise prices and profits of domestic firms. Interestingly, such protection over time will often lead to higher-quality domestic products and services.

false

Under the terms of the Foreign Corrupt Practices Act, it is illegal to give a bribe to a foreign official or foreign political party, but permissible to give a bribe to a businessperson if bribery is considered "an integral part of doing business in the country's environment."

false

Well-designed corporate ethics codes guarantee that employees will always make the ethical choice.

false

When doing business in Japan, it is appropriate to look directly into the eyes of your hosts.

false

When it comes to franchising, the parent company's objective is to make sure that when a customer visits its franchisee in any country, the quality of products and services provided are similar in every store.

false

Whether the trade balance is positive (surplus) or negative (deficit) is important because it provides a measure of the financing needs of a particular country. Hence, the trade balance is more important than current account balance.

false

With business becoming increasingly global, its success, fortunately, depends only on the domestic environment.

false

The forex market consists of spot, forward, and discount markets.

false (international and currency traders)

The ________ consists of domestic-country-owned assets abroad, foreign-owned assets in the domestic country, and net financial derivatives.

financial account

Which of the following is NOT a key aspect of globalization?

financial independence

NAFTA is in which stage of the economic integration process?

first stage (free trade area)

McDonald's, Burger King, and Subway are all examples of businesses that operate as ______.

franchises

Three countries, X, Y, and Z are part of a member area where they have eliminated all barriers to trade such as tariffs, quotas, and non-tariff barriers like border restrictions, while at the same time keeping their own external tariffs against nonmembers. Such an area could be described as a(n) _____ area.

free trade

The words "aspirin," "escalator," and "zipper" are examples of _____.

generalized trademarks

Insurance that reduces future risk is referred to as a(n) _______.

hedge

Increasingly, emerging economies are

innovative and technologically advanced

_____ advantages refer to the mode of entry abroad.

internalization

A business that is jointly owned and operated by two or more firms that pool their resources to penetrate host country markets, generate and split profits, and share commercial risk is called a(n) _____.

international joint venture

All of the following are arguments against globalization EXCEPT:

it may lead to an increase in the appearance of old industries.

_______ refers to the practice in which a company or individual provides the foreign partner with the technology to manufacture and sell products or services in a target country for an annual fee.

licensing

In China, consumers drink soup, which usually contains rice, and do not use a spoon. In Muslim countries, it would be inappropriate to bring a gift for another man's wife. These are examples of cultural_____.

manners and customs

_____ refers to the way a society does things.

manners and customs

A political risk that only affects a certain industry or set of firms in a given country is called a ______ risk.

micro political

In a(n) _______, a global business explains why it exists and what it plans to accomplish.

mission statement

All of the following countries can be considered globalization "winners" EXCEPT:

north Korea

According to Hofstede, which of the following countries is best described as a highly feminine culture?

norway

A(n) ______ is a tool that people use to coordinate their actions to obtain something they seek or value.

organization

The corporate practice of acquiring or producing quality goods or services at a lower cost abroad thereby eliminating domestic production is called _____.

outsourcing

A statement of account that shows all transactions between the residents of one country and the rest of the world for a given period of time is called balance of ______.

payments

A(n) ________ union is created when member countries of an economic and monetary union work closely with one another to arrive at common defense and foreign policies and behave as a single country.

political

_____ risks are the risks that political forces or problems in a given country will have a meaningful negative impact upon the conduct of business in that country.

political

Of the following, which dimension identified by Hofstede refers to the level of egalitarianism in a society?

power distance

_____ corruption is business corruption involving other private businesses, individuals, or groups.

private

The practice of making illegal payments to government officials or engaging in blackmail, extortion, or other related activities to obtain government contracts or governmental approval for business activities is called _____ corruption.

public

Most, if not all, democracies today are what are known as _____ democracies.

representative

Corporate ______ responsibility is an important output control for many companies intent on "giving back" to their communities.

social

A(n) _______ is a new phase in the evolution of the multinational corporation, where work is sourced wherever it is most efficient and the corporation transcends nationality altogether.

stateless corporation

An agreement between two or more firms that do not involve the creation of a separate entity with joint ownership and in which the firms stand to gain revenues and maximize profits through cooperation for a given period of time is called a(n) _____.

strategic alliance

Knowledge that is informal in nature and difficult to communicate is known as _____ knowledge.

tacit

The sale and purchase of goods and services across national borders is known as _____.

trade

A _______ occurs when merchandise imports exceed merchandise exports for a country.

trade deficit

A fundamental consideration that must be made in business is the risk-return trade-off. In general, the greater the risk (loss of capital invested) entrepreneurs are willing to take, the greater the rewards (profit) they are likely to reap.

true

A sustainable decoupling process would eventually lead to a multi-polar world—a world economy in which the engines of growth could comprise the United States, the European Union, China, India, Brazil, Russia, and South Africa rather than the United States alone.

true

According to the law of one price, identical goods should sell for the same price in different countries according to the local currencies.

true

Countries that have successfully adapted to globalization realize that they cannot succeed without high-quality government management at home.

true

Factor price equalization theory, states that when factors are allowed to move freely among trading nations, efficiency increases, which leads to superior allocation of production of goods and services among countries.

true

Foreign direct investment (FDI) in a country brings funds and business culture from abroad, creates new well-paying jobs, introduces innovative technologies, and enhances the skills of domestic workers.

true

Global businesses that use a functional structure usually have a narrow product line.

true

Global businesses with a hybrid structure are said to be organized by more than one dimension at the top level.

true

Hofstede's masculine vs. feminine dimension is the extent to which a society values traditionally masculine attributes (assertiveness, competition) or traditionally feminine ones (modesty, caring for others).

true

If the dollar was expected to appreciate in the 60-day forward market against the Japanese yen, it would be selling at a premium.

true

In Arab countries, business executives will often digress from the primary purpose of the meeting, then eventually return to the topic initially discussed.

true

Interestingly, licensing and franchising typically leads to the penetration of international markets without significant capital investment abroad by the parent company.

true

Key aspects of globalization include the elimination of barriers to trade and information technology.

true

Latin Americans are not as conscious about time as are North Americans.

true

Mercantilists believed that for a nation to become wealthy, that nation must export as much as possible and, in turn, import as little as possible.

true

NAFTA is a comprehensive free-trade agreement among Canada, United States, and Mexico that addresses issues ranging from protection of workers' rights and the environment to phased reduction of tariff and non-tariff trade barriers, which were finally eliminated in 2009.

true

One factor affecting change in currency values is different price levels in different countries for the same goods and services.

true

Organizational culture can be a very effective control mechanism for an organization, particularly when the norms of a given business's culture are fully accepted by that organization's workforce.

true

Porter stresses the importance of domestic demand for goods and services when determining a nation's competitive advantage. When domestic demand remains high, the number of suppliers will also be high.

true

Restrictions on the transfer or exchange of a given foreign country's currency is an example of an economic risk.

true

Subsidiaries require major marketing efforts to penetrate the international market because of cultural differences and because the entrant is new and relatively unknown.

true

The International Monetary Fund (IMF) was established under the Bretton Woods Agreement to help ensure the stability of the international monetary and financial system.

true

The ability of a firm to adjust to a culture different from its own is called acculturation.

true

The decoupling of world economic order and the move to a multipolar world helps explain why China is now the world's largest recipient of FDI.

true

The foundations of the globalized business world are political—and so are the biggest threats to the system.

true

The four basic steps in ethical decision making are: define all the facts and circumstances, identify the people affected, determine the alternative decisions and consequences, and make the decision and carry it out.

true

The growth trends in China and India today illustrate the impact that international business has on blue-collar and white-collar workers in wealthy countries as relatively low-skill factory jobs as well as high-skill service profession jobs migrate overseas.

true

The infant industry argument is part of the socio-economic category of managed trade.

true

The reason why some organizations reject a functional organizational structure is because they believe it renders them unable to respond to environmental changes that require coordination between functional areas, and because it offers each employee a restricted view of the organization's primary goal.

true

The stakeholder model of strategy formulation believes businesses exist to benefit not just their shareholders, but also all the various groups that have a meaningful stake in their operations. Such groups, for example, might include a company's employees, customers, and the community where it operates.

true

When MNEs go abroad, they generally do so for two major reasons. There could be massive competition in the home market or firms may genuinely identify new business opportunities abroad based upon the company's competitive advantage in production, technology and management.

true

In this form of government, all citizens vote directly on matters affecting the community

Athenian democracy

The so-called BRIC countries consist of: _____.

Brazil, Russia, India, China

The _____ is a report published each year by Transparency International, providing metrics to the potential corruption risk for 174 countries.

Corruption Perceptions Index

Of the following, which is NOT a cost of regional integration?

Enhancing the flow of capital, labor, and technology

_____ is considered by many to be the most infamous financial scandal in United States history.

Enron

______ refers to a negative tariff or tax aimed at boosting exports.

Export subsidy

Of the following statements about WorldCom, which is NOT true?

Five techniques were used to cook the books.

_________ is an organizational structure that groups people together because they hold similar positions in a company, perform a similar set of tasks, or use the same kind of skills.

Functional structure

Which of the following is NOT true about franchising?

In franchising, the parent firm assumes relatively less risk than with licensing.

_____ refers to agreements, sometimes temporary, between countries (or a group of countries) that aim at achieving certain trade outcomes.

Managed trade agreements

The oldest form of trade theory is called _____.

Mercantilism

Which of the following is NOT an objective of the WTO?

Naming commissioners to local trade organizations

Which of the following is a U.S. government agency that sells political risk insurance to U.S. businesses operating in countries with which the U.S. has a bilateral investment treaty?

Overseas Private Investment Corporation

_____ refers to the way people in a society relate to one another within group settings.

Social institution

Of the following, which is NOT true of the Enron financial scandal?

The scandal surprised no one because Enron was always regarded as an unethical company.

The color black in the United States indicates mourning, but in Japan white is the color of mourning. Green is an acceptable color in Muslim countries; all flags of those countries contain green. These are examples of which of the following?

aesthetics

_______ is an economic ideology where by the government owns and controls all major factors of production, and is philosophically an economically classless society.

communisum

The ability of one country that has an absolute advantage in the production of two or more goods (or services) to produce one of them relatively more efficiently than the other is called a(n) _____.

comparative advantage

A company's obligations to society, including the welfare of people and places affected by company activities is called _____.

corporate social responsibility

Successive waves of globalization include characteristics such as the expansion of trade, the diffusion of technology, extensive migration, and _____.

cross-fertilization of diverse cultures

_______ refers to a fundamental global shift in which industrialized country-dependent developing economies begin to grow based on their own underlying economic strengths rather than the ups and downs of the world's richest countries.

decoupling

The U.S. government may require that apparel imported into the United States should use U.S. cotton, or use a certain amount of American labor. This is an example of a(n) _____.

domestic content provision

Countries that have been moving toward more open trade and free market policies are known as _____.

emerging economies

Multinational ______ are firms that are headquartered in one country, but own and control manufacturing, services, research and development facilities, or other business entities on foreign soil.

enterprises MNEs