International Business Final

Risk is an important factor for companies engaged in international business. One way a collaborative arrangement helps minimize risk when operating abroad is by ________. A)reducing the possibility of technical appropriation B)freeing up resources so a company can diversify into more countries C)preventing the entry of new competitors D)eliminating losses from exchange rate depreciation abroad

B

The human capital index based on a comprehensive global study of more than 2000 companies, found that superior human capital practices were_______ correlated with a firm's financial returns and were a(n) ______ indicator of increased shareholder value. A) negatively; lacking B)positively; leading C)insignificantly; timely D)weakly; accurate

B

The interbank market in foreign exchange is where A) electronic brokerage systems are required B)banks trade currency with each other C)reporting dealers set exchange terms D)Remittance payments are made

B

What is a turnkey operation? A)a contract for the complete construction of an operating facility for a fee B)a contract with a government to service one of its key industries C)the buying of another company D)the repatriation of equity

B

What is an international joint venture? A)an international agreement between two or more companies to have access to each other's patents B)The ownership of a company by two or more companies, of which at least one is a foreign company where the venture is located C)an international agreement between two or more firms for the use of a trademark D)an agreement between two or more organizations to share management expertise

B

When selling a commodity for which there is little possibility of product differentiation, a company would likely use which of the following orientations internationally? A)customer orientation B)production orientation C)sales orientation D)strategic market orientation

B

Which of the following is true concerning countries' distribution systems? A)They reflect the economic levels of countries so countries at similar economic have similar distribution systems B)They are difficult to change because they have evolved over time, reflecting countries' cultural, economic and legal environments C)They are more similar among countries than pricing and promotional systems are D)When standardized, they offer more cost savings for international companies than when products are standardized

B

Which of the following types of agents move international cargo, facilities shipment tracking and handed product returns for exporters and importers? A)trade intermediaries B)third party logistics C)customs brokers D)freight forwarders

B

A greenfield investment is another name for a company's decision to A)acquire an interest in an existing foreign operation B) Implement sustainable marketing practices C)construct a new facility in a foreign market D)build a facility for a local company

A

According to the text, what is the most common concern that expatriates have before they move overseas? A)reestablishing social life B)missing friends and family C)learning a foreign language D)adapting to the culture

A

Appropriability theory refers to A)denying rivals access to competitive resources such as management know how B)categorizing the appropriateness of a firm's foreign investments in terms of host country's objectives C)explaining an investing firm's choice of partner in a joint venture D)predicting the general pattern of direct investment locations

A

Fidelity Manufacturing is considering expanding its operations into the Phillipines. A manager at Fidelity has the task of predicting political risk in the Phillipines. Which of the following approaches should the manager LEAST use to accomplish the task? A)Analyzing the market share of competitors in the country B)analyzing the country's past political patterns and trends C)Seeking and analyzing opinions of influential people in the country D)examining social and economic conditions within the country

A

For the provider, management contracts offer the advantage of ________. A)receiving income without making a capital outlay B)increasing their merchandise exports C)reducing their global taxes D)better access to raw materials

A

a letter of credit that provides an exporter with the guarantee of another bank in addition to the importer's bank is called A)a confirmed letter of credit B)a time draft letter of credit C)an amenable letter of credit D)a cash in advance letter of credit

A

the basis for designing an effective export strategy most likely begins with A)Identifying how a firm can leverage its core competencies into foreign markets B)hiring local personnel in target markets to build the business C)enlisting the support of an export management company D)simultaneously targeting a large number of foreign markets

A

Preston Electronics is an MNE with facilities located in Taiwan, Singapore, and Germany. Preston gives its local operations the authority to adapt value activities to prevailing local economic, political, legal, and cultural conditions. Preston is most likely using a(n) ________ strategy. A)global B)multi domestic C)international D)continental

B

If a company from country A decides to sell merchandise to a company from country B, then the company from country A ____ A)Will denominate the sale in its own currency since it is too hard to convert foreign currency B)Will denominate the sale in the currency of the buyer since it is too hard for them to convert foreign currency C) can denominate the sale in either currency and use the foreign aid exchange to convert currency D)Can use the OTC market to convert receipts in the future and the exchange markets to convert receipts in the spot market

C

In 2010, what was the top remittance-receiving country in the world? A) Brazil B)Mexico C) India D)China

C

In which of the following situations would tax rate difference among countries be most important for deciding where to place an investment? A)companies find advantage in being located near specialized private and public institutions B)companies must compare the benefits of labor-versus capital-intensive production C) companies want to serve an entire regional trading bloc D)companies must deal with difficult startup regulations

C

Jeanette Thompson, a native Texan, is being sent by her company, Samsung of South Korea, to head up a new facility in Hong Kong. Jeanette would be considered a(n) ________. A)inpatriate B)host-country citizen C)third country national D)local executive

C

Licensing companies commonly negotiate a "front-end" payment from licensees to cover ________ transfer costs. A)employee B)Brand name C)technology D)copyright

C

Which of the following is not a reason a country would deal in foreign exchange? A)to pay or receive dividends in a foreign country B)To speculate on possible future movements in a currency C)To buy and sell merchandise denominated in a foreign currency D)To import merchandise denominated in its currency of the exporter

D

Which of the following is the largest source of foreign exchange income in mexico? A) FDI B)tourism C)Foreign Aid D) Remittance income

D

Which of the following statements is not true about risk as it affects companies' choice of locations for foreign competitors? A)companies and their managers differ in their perception of what is risky B)One company's his may reduce another's opportunity C) There are means to reduce risk other than avoiding locations D) Companies choose the cheapest locations regardless of risk

D

a typical confirmed letter of credit transaction creates ____ legal contracts A)one B)Two C)Four D)five

D

expatriate failure, defined in broad terms, refers to the A)manager's premature return home due to poor job performance B)manager's miscues, which give competitors a market advantage C)unintentional dilution of the company's core competency D)poor expatriate selection procedures of the MNE

D

Firms alter their products for foreign markets for all of the following reasons EXCEPT ________. A) home country export requirement B)religious differences abroad C)weak infrastructures in some countries D)to respond to legal requirements E)none of the above (All of the above)

E

T/F International marketing is unlike domestic marketing because the basic principles are completely different

F

In foreign exchange markets, reporting dealers are A)Financial institutions that actively participate in local and global foreign exchange markets B)Located primarily in NY since US dollars are the most widely traded currency C)Controlled by the bank for international settlements located in switzerland D) Hedge funds and pension funds monitored by the world bank

A

The MNE that applies a global strategy aims to A)compete essentially the same way wherever the company does business B)empower local C)adapt activities to the industry practices to consumer expectations

A

The ability to compare production costs among countries in an effort to determine where to locate production is significantly hampered by all of the following except A) the number of ways the same product can be made B)Restrictions on the international flow of data C)the way laws may be enforced D)future costs from exchange rate changes

A

The internet supports more companies' efforts to launch a direct exporting strategy by A) providing information quickly and inexpensively B)eliminating the need for a high detailed export plans C)letting software take over customer service responsibilities D)countering the power of electronic data interchangeable systems

A

The three types of interpretative frameworks in international business are A)ethnocentric, polycentric, and geocentric B)ethnocentric, inter centric, and mono centric C)mono centric, neocentric, and polycentric, D)intracentric, geocentric, and neocentric

A

Today, most expatriate assignments are for ________. A)less than one year B)one to three years C)three to five years D)five to ten years

A

What is an equity alliance? A)a collaborative arrangement in which at least one collaborating company takes an ownership in the other B)a collaboration in which each contributor receives an equitable return based on relative contribution C)a collaboration in which partners agree to share technology with each other D)a wholly owned acquisition to prevent appropriation of intellectual property

A

What is an equity alliance? A)a collaborative arrangement in which at least one collaborating company takes an ownership position in the other B)a collaboration in which each contributor receives an equitable return base on relative contribution C)a collaboration in which partners agree to share technology with each other D) a wholly owned acquisition to prevent appropriation of intellectual property

A

Which of the following is generally the most costly information source for the companies? A)individualized reports B)reports from international agencies C)reports from government agencies D)published reports by accounting firms

A

Which term refers to money denominated in the currency of another nation or group of nations? A)foreign exchange B)Foreign Subsidy C)Export tariff D)Quota

A

XYZ industries has a production facility in an area of india in which roads are poorly maintained and dangerous. What part of XYZ's marketing mix do these conditions most likely affect? A)distribution B)branding C)production standardization D)promotion E)none of the above

A

Zara creates, produces, and distributes most of its products from its headquarters in Spain. Zara is most likely using a ________ configuration. A)concentrated B)coordinated C)disregard D)logical

A

Payment type letters of credit requires documents are conducted in accordance with the rules of uniform customs and practice for documentary credits which are promulgated A)IMO B)ICC C)FIB N

B

why is management of international resource management more difficult than directing human resources at the domestic level? A)the complications that arise from political, cultural, legal, and economic differences between countries B)The challenge posed by the managers in other countries that aim to achieve global objectives for the company no matter the costs imposed on national objectives C)the greater similarity among foreign subsidiaries than domestic subsidiaries in terms of dependence on headquarters for resources D)The complications posed by dealing with competing agendas from different labor unions in different countries

A

A company's overall geographic strategy should be flexible enough to A)implement concentration strategies instead of diversification strategies B)respond to new opportunities and withdraw from less profitable ones C)Import from anywhere in the world to a single product location D)Export anywhere in the world from a single production location

B

A manager has the task of collecting analyzing data that will help the firm decide where to locate its international operations. which of the following best describes how the manager should handle the risk? A)conduct extensive research, regardless of the expense, in order to avoid costly mistakes B)Compare the costs of data collection with the probable payoff for the firm in order to budget and schedule the collection C)continue data gathering until all data have been collected, regardless of how long this takes D)Focus all data collection on governmental resources because they have the highest reliability

B

A strategy that focuses on lowering operating costs is referred to as a ____ strategy A)differentiation B)cost leadership C)niche market D)diversification

B

All of the following are true about the internet and electronic commerce EXCEPT which one? A)Supplier can deal more quickly with their customers B)It enhances companies' abilities to differentiate their marketing methods by country C)customers worldwide can quickly compare prices from different distributors D)to be successful, companies must be able to deliver efficiently what they sell over the internet

B

All the following are common problems associated with exporting and importing except A)managing financial risks B)finding reliable intermediaries C)Matching foreign rivals' prices D)establishing distribution networks

B

Companies are likely to export products abroad in all of the following situations EXCEPT which one? A)when their average cost per unit of home country production declines substantially by increasing output B)When they want to use the riskiest but most profitable method to engage international trade C)when they aim to increase degree of market diversification D)When they are new to international business

B

Companies most likely use the foreign exchange market to ________. A) establish fair currency trading policies B) facilitate regular business transactions C)establish a global market presence D)Diversify their hedge fund

B

Executives at a US firm are debating whether to start a new operation in russia or acquire an existing one. Which one of the following best supports a decision to start up a new operation in Russia? A) the russian government places restrictions on the outward transfer of foreign capital B)Labor relations at existing Russian firms are poor and difficult to change C)Russia's currency is weak and stock market prices are significantly depressed D)Existing companies have goodwill and positive brand recognition in europe

B

Mona, a native of india, is employed by IBM in the firm's facility in New Delhi. Mona is best described as a(n) A)expatriate B)local C) third country national D) home country national

B

A company's value chain is best described as the A)variable sequence of converting product ideas into the value for shareholders B)mixture of activities taken to define product value standards and price points C)discrete series of steps taken to move a product from conception to end-users D)blueprint that must be followed to leverage the core capabilities of a global firm

C

A(n)____ staffing policy framework assumes that the practices and procedures that work at headquarters will work in foreign operations; as such, executive slots are filled by home-country nationals A)polycentric B)inter centric C)ethnocentric D)geocentric

C

A____ is special outlook, skill, capability, or technology that runs through the firm's operations, weaving together all value activities into an integrated value chain A)core competency B)value proposition C)mission statement D)learning curve

C

Ferguson Manufacturing, an American MNE, has facilities in India and Mexico. Ferguson fills management positions at the facility in India with Indians and management positions in Mexico with Mexicans. Ferguson most likely follows a(n) ________ approach to staffing. A)ethnocentric B)geocentric C)polycentric D)intercentric

C

Grids are a useful method of comparing countries for international business expansion because they A)generally show how countries will perform in the future B)show risk on one axis and opportunity on another C)set minimum scores for proceeding further D)highlight first-mover advantages

C

Home country nationals are A)used a great deal abroad by polycentric companies B)citizens of the countries in which they are working C)citizens of the country where the company is headquartered D)noncitizen of the countries in which they are working

C

Studies indicate that the main cause of nearly half of the failed expatriate assignments is the inability of the expatriate to A)meet performance expectations B)initiate a fair compensation package C)adapt to the host culture D)learn the local language

C

The US dollar is most widely traded because it is A) a reserve currency held by many central banks B)One of the oldest and most stable currencies in the world C)Monitored by the bank of international settlements and the US federal reserve D) Based on the prices of the NYSE, which is the world's largest foreign exchange center

C

The essence of a differentiation strategy is to A)target the most sophisticated segment of the market B)incorporate the greatest number of features into a product C)offer a unique product that supports a premium price D)outspend rivals on product advertising

C

Today, which of the following circumstances is least likely to cause expatriate failure A)inability of one of the expatriates family to adjust B)resistance from an expatriate's partner C)inadequate technical expertise D)inability to adjust

C

What is the primary advantage of an MNE using ethnocentric framework? A)minimizing relocation costs B)developing community support C)transferring core competencies abroad D)encouraging innovative business practices

C

Which of the following handles the majority of all foreign exchange activities? A) multinational enterprises B)Commodities exchange C)commercial banks D)regional banks

C

Which of the following is not an example of a service export? A)A management firm providing advice to a foreign client B)An investment bank arranging financial for a foreign firm C)A coffee chain opening a new store in a foreign country D)an engineering firm building roads in a foreign country

C

Which of the following is usually not a factor that triggers companies to look to exports to boost total sales? A)maturity of domestic market B)potential to leverage competencies in a foreign market C)social needs in developing countries D)response to the market entity of a foreign rival

C

Which of the following most accurately compares the techniques of scanning versus detailed analysis of countries? A)scanning is used for planning and detailed analysis for control B)Detailed analysis is used to consider countries overlooked in the scanning process C)Scanning considers a large number of countries so that only the most prominent ones undergo a detailed analysis D)Scanning compares one country to another, whereas detailed analysis compares regions within a single country

C

Why is London most likely the top market for trading foreign exchange? A) The british pound is the world's top trading currency B)Most multinational firms are headquartered in london C) London is uniquely positioned geographically in terms of time zones D)

C

an irrevocable letter of credit ___ A) is issued by a global credit agency B)is the basis for multilateral credit netting C)can be amended only if all parties involved agree D)obligates the exporter's bank to pay interest to the importer

C

international marketing differs from domestic marketing In that A)marketing principles are different B)consumers prefer domestically made merchandise C)environmental variations require applying principles differently D)low prices are a more important competitive factor in foreign markets

C

what is an international consortium? A)an ownership of a company by a government and a foreign company B)an agreement signed by most governments to protect intellectual property rights C)an international joint venture owned by at least three organizations D)an agreement between two or more governments to provide for reciprocal foreign investment protection

C

A US firm owns 100% of its production facility in brazil, thus is more likely using a __ strategy A) competitive ownership B)vertical integration C)appropriability D)Internationalization

D

A broker or other import consultant can help an importer minimize import duties by A)bypassing duty rebates available through backwards provisions B)incurring duties by using non-bonded warehouses and foreign trade zones C)maximizing liability by improperly marking an import's country of origin D)valuing products in such a way that they qualify for more favorable duty treatment

D

A useful way to understanding the purpose of strategy is to think of the firm as a(n)_____. Composed of a series of distinct activities, including production, marketing, materials management, R&D, human resources, information systems, and firm infrastructure A)activity network B)value constellation C)task succession D)Value chain

D

A(N) ____ manager champions the ways of foreign markets as comparable, if not more enlightened than the practices of his or her parent company and home nation A)ethnocentric B)geocentric C)mono centric D)polycentric

D

All o the following are true about distribution concerns when marketing internationally except which one? A)geographic barriers may divide countries into very distinct markets B)in some countries, few potential sales lie outside the large metropolitan areas C)each country has its own distribution system, making standardization of distribution difficult D)because most foreign consumers are easily pressed by advertising messages, it is difficult to convince retailers to convince retailers to offer good services

D

Comparing countries in international business is least useful for determining A)Best location for sales and production B)sequence of entering different countries C)amount of resources to allocate in each country D) selection of which managers to send to which countries

D

Firms that pursue a(n) ________ strategy compete for market share on a country-by-country basis and vary their product or service offerings to meet the demands of the local market. A)Transnational B)multi domestic C)global D)international

D

Labor cost advantages gained by moving into a country with low wages may be short-lived because ________. A) transport costs go up to cancel out the savings cost B)tax increases cancel out all labor cost differentials C)rivals adopt capital intensive production methods D)competitors follow leaders into low-wage areas

D

The ____ is the most widely traded currency in the world A)Pound B)Yen C)Euro D)US dollar

D

T/FThe marketing approach a company takes internationally should be compatible with its overall aims and strategies

T