International

________ is a preferential trade agreement that was organized in 1967 and comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

ASEAN

Rockwall Enterprises is planning to expand the firm by establishing operations outside of the United States. In which of the following countries would Rockwall most likely be able to establish operations most quickly?

Australia

Which of the following statements referring to intellectual property rights and violations is INCORRECT?

Companies can register a global patent, trademark, or copyright through the World Trade Organization (WTO).

Which of the following has MOST influenced consumers to demand access to foreign-made products?

Consumers have become more efficient in using media and technologies to compare prices worldwide.

________ typically results when demand decreases and supply increases.

Deflation

_______ is the most common way of identifying market segments within a country.

Demographics

________ effects of economic integration are the overall growth in the market and the impact on a company caused by expanding production and by the company's ability to achieve greater economies of scale.

Dynamic

________ people account for the largest percentage of global production.

English-speaking

________ consists of specific learned norms based on attitudes, values, and beliefs of a group of people.

Ethnology

Independent suppliers can connect to a company's intranet to help automate and organize delivery of components to that company.

False

Offshore manufacturing is attractive because it offers high labor costs, cheap materials and components, and proximity to markets.

False

The same automobile company produces Fiats and Ferraris. The company builds an engine plant in China with low production costs for Fiats but not Ferraris. The probable reason is that ________.

Fiat competes mainly on a mass-market strategy, whereas Ferrari competes mainly on a focus strategy

In which of the following situations would Company X most likely seek a collaborative arrangement with Company Z in which Company Z would handle work for Company X?

Fixed costs for the work are high, and Company X has small volumes of work.

________ is a general, sustained rise in prices measured against a standard level of purchasing power.

Inflation

Wharton Enterprises, a U.S. firm, manufactures small kitchen appliances. The firm has recently developed an innovative blender design that Wharton executives anticipate being very profitable. Currently, Wharton has production facilities in the United States and China. Wharton executives are trying to determine where the new product should be manufactured. Which of the following best supports a decision to manufacture the new product in the United States instead of China?

Intellectual property rights are strongly protected by U.S. patent laws.

The shifting of national borders has most likely created which of the following situations for international business?

It has increased physical barriers to exporting.

Garnet Footwear suffered significant financial losses and had to close its foreign operations. The dissolution process took six months and cost four percent of the firm's value. Where were Garnet's foreign operations most likely located?

Japan

Which of the following best supports the idea that MNEs should remain in countries that allow child labor?

Many MNEs have substantially improved the working conditions of their foreign plants.

Korman Industries is a foreign multinational that recently established operations in the European Union. What is the most likely advantage for Korman as a result?

Market size is larger because of the elimination of internal tariff barriers.

The term used by the United Nations as a synonym for multinational enterprise is

Multinational Corporation

Which of the following is a common shortcoming of studies examining culture in different countries and regions?

Responses are reported in averages, which can lead to a belief in unrealistic stereotypes.

Small economies are sometimes less successful than large countries in attracting FDI by raising import restrictions. What is the most likely reason for this?

Small economies frequently lack sufficient markets for large-scale production.

A comprehensive supply chain strategy should include good inventory management.

True

What is an equity alliance?

a collaborative arrangement in which at least one collaborating company takes an ownership position in the other

Before the strong emphasis on zero defects, U.S. companies operated under the premise of ________, which allowed a level of poor quality with the assumption that service warranties and repair facilities would deal with product defects.

acceptable quality leve

Most people's basic value system is ________.

acquired mainly during early childhood

All of the following are possible advantages of globally standardized advertising programs EXCEPT ________.

avoidance of legal impediments

Although the U.S. film industry depends heavily on revenue in foreign countries, revenue from international markets is usually low for a sports-themed film. This is most likely due to ________ factors.

behavioral (cultural)

Ethnocentrism in international business refers to the ________.

belief that what works best at home should work best everywhere

In societies where trust is high, ________.

business costs are typically lower

Which of the labor issues identified by the Ethical Trading Initiative (ETI) receives the most attention?

child labor

A ________ law system is based on a systematic and extensive codification of laws and puts political officials in charge of specifying accessible, detailed, and written law that applies to all citizens.

civil

A system of ________ law sets the framework for the system of government and defines the authority and procedure of political bodies to establish laws and regulations.

constitutional

Which level of moral development involves an individual learning role-conformity from peers, parents, and laws?

conventional

A strategy that focuses on lowering operating costs is referred to as a ________ strategy.

cost leadership

The fact that an English word such as blue jeans has entered the Spanish language, while a Spanish word such as macho has come into American English illustrates that ________.

cultural diffusion is a two-way process

The more a company engages in international collaborative arrangements as opposed to wholly owned foreign operations, the more it is likely to ________.

decrease its exposure to political risk

Which of the following is one of the primary business objectives for pursuing ethical behavior?

developing competitive advantages

Johnson Enterprises manufactures computer chips used in cell phones. The MNE has long production runs that lower the per unit cost of each chip. The firm also purchases materials in bulk from its suppliers with whom Johnson has long-term contracts. Johnson is most likely benefiting from ________.

economies of scale

A major criticism of offshoring is that it ________.

exchanges good jobs for bad jobs

Uneven income distribution ________.

exists in almost every country

Advantages of following a strategy of local responsiveness include the ________.

flexibility to apply location-specific skills to local opportunities

Which of the following is NOT affected by the Foreign Corrupt Practices Act?

foreign companies managed by U.S. expatriates

The goal of a ________ is to abolish all tariffs among member countries.

free trade agreement

In a(n) ________ culture, people tend to regard seemingly peripheral information as pertinent to decision making and infer meanings from things that people say either indirectly or casually.

high-context

Limitation of logging in the Amazon region is generally viewed as environmentally beneficial for the planet as a whole; however, unemployed Brazilian workers have felt that job creation inside Brazil is more important than climate protection outside Brazil. This example best illustrates which of the following?

how global interests can conflict with a country's local interests

If a company's foreign sales per customer is small compared to those in its domestic market, it should most likely ________.

introduce a larger family of products

Dependencia theory holds that ________.

low-income countries have practically no power in dealings with MNEs

Visible exports and imports are ________.

merchandise imports and exports

In a totalitarian political system, ________.

one agent monopolizes political power

Baldani Manufacturing, an Italian firm, plans to expand into Asia. In order to take advantage of regional trading groups, Baldani will most likely need to change its ________.

operating strategies

A(n) ________ ideology is the system of ideas that expresses the goals, theories, and aims of how society should work.

political

The attempt to resolve small issues before principles is a characteristic of which of the following?

pragmatism

When selling a commodity for which there is little possibility of product differentiation, a company would likely use which of the following orientations internationally?

production orientation

Eileen, a manager at an international restaurant chain, wants to know if it will be most cost effective to buy 1,000 pounds of sugar in Country X or in Country Y using U.S. dollars. Which of the following is Eileen most likely trying to determine?

purchasing power parity

Roland Enterprises, an American company, has a manufacturing facility in France in order to serve customers throughout Europe. Roland is most likely using a ________ manufacturing strategy.

regional

The Integration-Responsiveness (IR) Grid expresses how a company's ________ is a function of the relationship between its value chain and the prevailing pressures for global integration or local responsiveness in its industry.

strategy

In a country that practices state capitalism, all of the following are most likely to be handled by the state EXCEPT ________.

supporting the local activities of foreign competitors

The view that globalization is inevitable is most likely based on the belief that ________.

technical advances in transportation and communications are highly persistent

A global strategy tends to be more successful when ________.

the industry's product is a commodity

The march toward greater political freedoms and more expansive civil liberties, beginning in the 1970s, strongly fueled a sense of ________.

the inevitability of democracy

In a country that emphasizes collectivism, ________.

the needs of society take precedence over individual freedoms

Firms alter their products for foreign markets for all of the following reasons EXCEPT ________.

to respond to legal requirements

The term used by the United Nations as a synonym for multinational enterprise is ________.

transnational company