MGMT 425 FINAL Ch. 7, 15, 16, &19

T/F: Companies that have well-established exporting procedures typically use an export management company to handle financial transactions

False

T/F: Most benefits that are tax deductible for the firm in its home country are tax deductible outside of the country.

False

T/F: Relational capital refers to releasing technological know-how to partners in an acquisition.

False

T/F: Research has shown that the top reason for expatriate failure in U.S. multinational firms is the manager's inability to cope with larger overseas responsibilities.

False

T/F: The Export-Import Bank is an agency of the United Nations and its mission is promoting global trade.

False

T/F: The main principle of countertrade is to accept advance payments for goods and services that are exported to another country.

False

Lawrence is the manager of the product development department of a furniture manufacturing facility and has three expatriates working in Finland on his team. When it comes time for Lawrence to evaluate these expatriates, he will most likely rely on ________ because of the physical distance between himself and the expatriates.

hard data such as productivity

Millie is an expatriate. She is originally from San Diego and now works in Indonesia where health care, schools, and retail stores are not as prominent or efficient as those she had in San Diego. To compensate for this, her company will provide her with a(n) ________ allowance.

hardship

A major advantage of countertrade is that it

helps firms finance export deals when there are no other means

A letter of credit is a document that

is issued by a bank at the request of an importer.

As a contract, the bill of lading specifies that the carrier

is obligated to provide a transportation service in return for a certain charge.

The threat of antidumping action affects a firm by

limiting its ability to use aggressive pricing to gain market share in a country

In the 1960s, international trade secretariats (ITSs) were established to provide worldwide links for

national unions in particular industries

According to Mendenhall and Oddou, the attributes of the ________ dimension enhance the expatriate's ability to interact effectively with host-country nationals.

others-orientation

In an ethnocentric staffing approach, the key management positions are held by

parent-country nationals

A lobbyist from California argues that the U.S. government needs to protect the U.S. semiconductor industry from foreign competition. She argues that semiconductors are now such important components of defense products that it would be dangerous to rely primarily on foreign producers for them. This is an example of a(n) _____ argument for government intervention.

political

Which of the following is a disadvantage that a firm faces when forming a strategic alliance?

A firm can give away more than it receives when forming an alliance.

Which of the following is true with respect to multinational firms?

Because of their pivotal role in international trade, firms can and do exert a strong influence on government policy toward trade.

The ____ benefits inefficient farmers and the politicians in the EU who rely on the farm vote, but not consumers in the European Union, who end up paying more for their foodstuffs

Common Agricultural Policy (CAP)

Which of the following is a disadvantage of establishing a wholly owned subsidiary?

Establishing a wholly owned subsidiary is generally the most costly method.

An import quota is a specific tax levied on imports

FALSE

Economic arguments for trade policy intervention are concerned with protecting the interests of certain groups within a nation, often at the expense of other groups, or with achieving some objective that lies outside the sphere protecting the environment or human rights

FALSE

Governments always act in the national interest of their countries when they intervene in the economy.

FALSE

The infant industry arguments relies on an assumption that firms can make efficient long-term investments by borrowing money from the domestic or international capital market

FALSE

Pioneering costs arise when the business system in a foreign country is like a firm's home market.

False

T/F: A firm can maintain high control on product quality by entering a foreign country through franchising

False

T/F: A firm that enters into a joint venture with another company reserves the right to keep control of its own technology.

False

T/F: A letter of credit awards the title of a product or service to the issuing bank.

False

T/F: A polycentric staffing policy requires parent-country nationals to be recruited to manage subsidiaries.

False

T/F: A sight draft allows for a delay in payment—typically, 30, 60, 90, or 120 days

False

In the United States, export credit insurance is provided by the ________, an association of private commercial institutions operating under the guidance of the Export-Import Bank.

Foreign Credit Insurance Association (FCIA)

Which of the following describes the Export-Import (Ex-Im) Bank?

It is a wholly owned corporation of the U.S. government and promotes international trade.

Access to local partner's knowledge and shared development costs and risks are advantages of which foreign market entry mode?

Joint Venture

A company that wants to use scenes from the Walt Disney movie "Frozen" in its advertising campaign would have to have a ________ with the Disney company to use the movie.

Licensing agreement

Which of the following statements is true regarding management development?

Management development programs help improve the overall productivity and quality of the firm's management resources.

Which of these is a common difficulty that traders face when exporting goods or services to other countries?

Many customers require face-to-face negotiations on their home turf.

Which of the following is true of many novice exporters?

Novice exporters often have a poor understanding of competitive conditions in the foreign market.

________ argues that a strategic trade policy aimed at establishing domestic firms in a dominant position in a global industry boosts national income at the expense of other countries.

Paul Krugman

________ costs are typically associated with early entrants into a market and avoided by later entrants

Pioneering

A counterpurchase occurs when

a firm agrees to buy a certain amount of materials back from a country to which a sale is made.

Most economist would probably argue that the best interests of international business are served by

a free trade stance

Most economists would probably argue that the best interests of international business are served by

a free trade stance

Dumping is viewed as a method by which firms unload excess production in foreign markets.

TRUE

The strategic trade policy arguments of the new trade theorists suggest an economic justification for government intervention in international trade

TRUE

Tariff barriers raise the cost of exporting products to a country (or of exporting partly finished products between countries). Which of the following is likely consequences of these barriers?`

This may put a firm at a competitive disadvantage to indigenous competitors in that country

T/F: A firm can rapidly build its presence in the target foreign market through acquisitions.

True

T/F: GATT's objective was to liberalize trade

True

T/F: In a turnkey project, the contractor agrees to handle every detail of the project for a foreign client.

True

T/F: In a wholly owned subsidiary, the firm owns 100 percent of the stock.

True

T/F: In many cases, firms fail to plan for an expatriate's repatriation.

True

T/F: Most expatriates appear to believe more weight should be given to an on-site manager's appraisal than to an off-site manager's appraisal.

True

T/F: One big impediment to exporting is the simple lack of knowledge about the opportunities available in other countries.

True

T/F: One of the obstacles to cooperation between unions and international firms is the wide variation in the structure of unions around the world.

True

T/F: Superior human resource management can be a sustained source of high productivity and competitive advantage in the global economy.

True

T/F: Switch trading involves the use of a specialized third-party trading house in a countertrade agreement.

True

What intermediary is typically used to establish trust during an international trade transaction?

a reputable bank

The farm bill that passed the U.S. Congress in 2007 contained subsidies of $289 billion for the next 10 years. This is an example of

a subsidy

Which of the following is an advantage of turnkey contracts?

ability to earn returns from process technology skills in countries where FDI is restricted

Unions' bargaining power is derived largely from their

ability to threaten to disrupt production.

Rinaldo's Ravioli Ranch based in San Francisco plans to buy Maria's Marinara, which is based in Italy. Maria's Marinara has been in business for 12 years and demonstrates amazing profits. What type of entry mode is Rinaldo's using?

acquisition

The government is considering placing additional taxes on foreign steel imports that are a proportion of the value of the imported steel. This is an example of

an ad valorem tariff

Michael's company would like to sell its products to a company in Nicaragua, but it fears that the company will not pay for the products in a timely manner. Instead of asking for cash, Michael's company decides to ask for a shipment of coffee and tobacco products in exchange for their products. What type of countertrade is Michael's company using?

barter

Which of the following refers to an order written by an exporter instructing an importer, or an importer's agent, to pay a specified amount of money at a specified time?

bill of exchange

Forming a strategic alliance is a way to

bring together complementary skills.

Sharon works for a cereal manufacturing company. Her company recently built a manufacturing facility in Canada and agreed to take 15 percent of the cereal produced as partial payment over a ten-year period. What form of countertrade is her company pursuing?

buyback

To increase the probability of selecting a good partner for forming a strategic alliance, a firm should

collect publicly-available information on potential allies.

The three types of training that seem to reduce expatriate failure include language training, practical training, and ________ training.

cultural

The ________ dimension of Mendenhall and Oddou's study refers to the relationship between the country of assignment and how well an expatriate adjusts to a particular posting.

cultural toughness

A ________ is the extra pay that an expatriate receives for working outside his or her country of origin

foreign service premium

The lack of progress in the Doha Round negotiations has resulted in countries that are

forging ahead with their own bilateral agreements

The WTO argues that by removing all tariff barriers and subsidies to agriculture

global economic growth would rise

Apple has a first-mover with many of its products, which means that Apple is able to

preempt rivals and capture demand.

Which of the following is the main objective of the SCORE program administered by the SBA?

providing one-on-one counseling to active and new-to-export businesses

A franchising strategy is typically associated with

quickly building a global presence

The multicultural composition of the management team in firms pursuing a geocentric staffing policy tends to

reduce cultural myopia

Connor's company produces bicycles and wants to establish a wholly owned subsidiary in Austria. It can do this by acquiring an established firm in Austria or by

setting up a Greenfield venture

Which trade policy argument suggests that a government should use subsidies to support promising firms that are active in newly emerging industries

strategic trad policy

In the 1986 Uruguay Round, GATT negotiations extended global trading rules to cover

trade in services

Most often, joint ventures involve ________ parties with each holding an equal percent ownership stake.

two

Performance appraisals of expatriate managers are often hampered by

unintentional bias