MGMT 5131
T/F Governments have facilitated economic integration by lowering barriers to international trade and investment, harmonizing their monetary and fiscal policies within regional economic integration blocs.
True
T/F In cultures with a monochronic view of time, people view time as linear, managers make commitments, set deadlines, and adhere to a strict schedule of meetings and activities.
True
T/F Nonverbal communication belongs to the deep cultural makeup that we are unaware of.
True
T/F Religion belongs to the folk cultural makeup that we are aware of.
True
T/F Since the 1980s, emerging market countries have experienced substantial market liberalization and privatization.
True
According to relativists ________. a passive acceptance of others' values is unethical ethical truths differ from group to group firms and individuals should seek to uphold ethical behavioral standards consistently around the world ethical truths are absolute
ethical truths differ from group to group
Which of the following types of assumptions is the cause of most problems between business managers and foreign employees? geocentric assumptions ethnocentric assumptions polycentric assumptions religious assumptions
ethnocentric assumptions
Which of the following explains the expansion of born global firms despite the scarcity of financial, human, and tangible resources? rising inflation in developing economies globalization has made doing international business easier than ever before product shortages and supply crunch resulting from import restrictions a concerted effort by developing nations for running a trade surplus
globalization has made doing international business easier than ever before
Which of the following is an element of socialism often found in democratic societies? government control of information technology government subsidies for foreign firms government intervention in the affairs of individuals and firms government sponsored businesses
government intervention in the affairs of individuals and firms
Which of the following contributes LEAST to increasing a company's profit margins? Increasing demand increasing global competition high-growth markets underserved economies
increasing global competition
While a degree of cultural imperialism may be at work, it is offset by the countertrend of ________. offshoring McDonaldization privatization local nationalism
local nationalism
Which of the following is characteristic of an effective legal system? political involvement in business transactions a stable and rigid framework of rules and norms across nations systematically enforced laws and regulations universal emphasis on religious law over common and civil law
systematically enforced laws and regulations
Which of the following is an example of an ownership-specific advantage? inexpensive capital natural resources of the region where the firm operates the physical assets owned by a firm low-cost labor
the physical assets owned by a firm
Which of the following is an example of an ownership-specific advantage? inexpensive capital the physical assets owned by a firm low-cost labor natural resources of the region where the firm operates
the physical assets owned by a firm
Which of the following behaviors of a firm can be called unethical? setting up operations abroad manufacturing luxury consumer goods tolerating sweatshop conditions failing to meet shareholders' expectations with regard to annual profit
tolerating sweatshop conditions
Which of the following refers to the extent to which people can tolerate risk in their lives? uncertainty avoidance long-term versus short-term orientation power distance individualism
uncertainty avoidance
An individual who believes in ethical normativism is most likely to view ethical behavioral standards as ________. universal constantly changing dependent on societal norms superior to religious beliefs
universal
Which of the following approaches to ethical standards for corporate governance reflects the view that the best ethical action is the one that provides the most good or the least harm? common good approach utilitarian approach virtue approach fairness approach
utilitarian approach
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 short-term active
Active
T/F Falling trade barriers are facilitated by the WTO.
True
Which of the following countries exhibit a high-context culture? Japan Germany The United States of America Switzerland
Japan
The ability of a nation to govern its own affairs is known as ________. sovereignty liberalization interdependence homogenization
sovereignty
T/F 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.
FALSE
T/F A corporate culture that advocates profit over sustainability and human welfare cannot lead to employee abuse.
False
T/F According to the absolute advantage principle, national prosperity is the result of a positive balance of trade, achieved by maximizing exports and minimizing imports.
False
T/F Culture refers to the inherited attitudinal traits of an individual.
False
T/F English is the most common primary language in the world.
False
T/F Firms that do not export tend to create jobs more quickly than do exporting firms.
False
T/F Market globalization compels firms to organize their sourcing, manufacturing, marketing, and other value-adding activities on a strictly local scale.
False
T/F Offshoring and the flight of jobs are prime drivers of market globalization.
False
T/F The end of the Cold War in 1989 hindered the forces of market liberalization in Eastern Europe.
False
T/F The globalization of capital refers to the aggregate activities of firms that gives rise to economic integration.
False
T/F The globalization of markets refers to the growing independence and self-sufficiency of countries worldwide.
False
T/F While the number of containers transported internationally has decreased, the cost of transportation has increased dramatically.
False
T/F According to Porter, the competitive advantage of a nation depends on the collective competitive advantages of the nation's firms.
True
T/F Firms are sometimes motivated to enter new markets because of unfavorable conditions in the home market, such as regulation or declining local industry sales.
True
T/F For manufacturing companies, on a per-unit-of-output basis, high volumes of production are correlated with lower per-unit cost.
True
Which of the following refers to a typical CSR value? increasing profits upholding market monopolies engaging in philanthropy sustaining sweatshops
engaging in philanthropy
Which of the following is true with regard to competitive advantage? A competitive advantage is also known as a country-specific advantage. Competitive advantages are typically derived from deliberate national policies. Competitive advantage includes inherited resources, such as arable land. A competitive advantage is difficult for competitors to imitate.
A competitive advantage is difficult for competitors to imitate.
Which of the following is a cultural barrier inherent to service firms that internationalize via FDI? Service firms are unable to infiltrate international markets due to language issues. The source of a firm's funding determines the location of its international subsidiaries. A firm's corporate culture is overly influenced by its national culture. Firms that internationalize via FDI usually make large spending cuts on advertising campaigns.
A firm's corporate culture is overly influenced by its national culture.
Which of the following is true with regard to bribery? Bribery promotes a culture of dishonesty and immorality. Bribery poses no significant threat to market economies. Bribery is considerably rare in developing economies. Bribery is not acceptable in much of the world.
Bribery promotes a culture of dishonesty and immorality.
Which of the following types of organizations would wield the greatest power over a firm attempting to do business in Canada? Public Works and Government Services Canada Canada's Ministry of Foreign Affairs World Trade Organization North American Free Trade Agreement
Canada's Ministry of Foreign Affairs
Which of the following religions has the largest number of adherents? Islam Christianity Hinduism Judaism
Christianity
Which of the following grants protections to the creators of art, music, books, software, movies, and TV shows? patent trademark copyright domain registration
Copyright
________ refers to the system of procedures and processes by which corporations are managed, directed, and controlled. Corporate governance Deceptive marketing Global sourcing Corporate social responsibility
Corporate governance
________ represents the apex of the pyramid of ethical behavior. Ethical behavior Corporate social responsibility Complying with laws and regulations Guarding against corruption
Corporate social responsibility
Which of the following is true with regard to corruption? Countries with minimal corruption fail to attract direct investment. In firms, corruption rarely occurs across the range of value chain activities. Corruption harms the poorest in societies. Under the Sherman Antitrust Act, firms charged for corruption may be fined $2 million and managers can be imprisoned for up to five years.
Corruption harms the poorest in societies.
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 will change only after the creation of laws and regulations that affect foreign firms. The political and legal systems of adjacent nations greatly impact the country risk of nations that host foreign firms. Country risk is always present, but its nature and intensity vary over time and from country to country.
Country risk is always present, but its nature and intensity vary over time and from country to country.
Which of the following countries have the LEAST corruption? Mexico Philippines Russia Denmark
Denmark
Which of the following situations is an example of geocentric orientation? Marsha, CEO of QST Solutions, believes that top level executives at her company should be Americans to avoid any communication gaps. 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. 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.
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 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. Rina is most likely to counter Juan's claim regarding environmental effects by pointing out which of the following?
Environmental destruction tends to diminish in the long run, as economies develop.
________ are moral principles and values that govern the behavior of people, firms, and governments, regarding right and wrong. Attitudes Ethics Laws Biases
Ethics
Which of the following is a typical complaint of host-country competitors against foreign firms? Foreign firms receive financial support from host-country governments. Foreign firms do not have to obey host-country laws and regulations. Foreign firms burden the host-country with infrastructure requirements. Foreign firms lure host-country workers to the home-country businesses.
Foreign firms receive financial support from host-country governments.
________ is the total value of products and services produced in a country over the course of a year. GDP CAD FDI PPP
GDP
Which of the following is characteristic of collectivist societies? In collectivist societies, each person tends to focus on his or her own self-interest. In collectivist societies, compromise and conformity help maintain group harmony. In collectivist societies, ties among people are relatively loose. In collectivist societies, those who compete best are rewarded financially.
In collectivist societies, compromise and conformity help maintain group harmony.
As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with preparing a comprehensive report on the company's global operations over the past twenty years. Deva assigns three strategists to collaborate on the History portion of the report, which details the rationale behind Pax's decisions to expand operations in particular areas. Rashid Ahl focuses on early expansion to China, which occurred after China began to make its market more accessible to foreign companies. Markus Teller focuses on Pax's expansion to Eastern Europe, which was motivated by increased industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan, which happened when the company's commercial bank expanded its service network to Asia. Which of the following drivers of market globalization is Lavonne's research most likely to recognize as the factor responsible for the company's expansion to Japan?
Integration of world financial markets
Which of the following is NOT true about Islam? Islam prohibits gambling. Islam condemns charging interest for money loaned. Islam discourages free trade. Islam prohibits drinking alcoholic drinks .
Islam discourages free trade.
Which of the following is NOT true about Islam? Islam prohibits gambling. Islam condemns charging interest for money loaned. Islam discourages free trade. Islam prohibits drinking alcoholic drinks .
Islam discourages free trade.
Which of the following is true with regard to culture? It captures how the members of the society live. It is absolute. It does not define the collective behavior of each society. It is inherited.
It captures how the members of the society live.
Which of the following statements is true of country risk? It is always present. Its nature remains constant over time and across nations. Its intensity seldom varies over time and across nations. It is present only in poor nations.
It is always present.
Which of the following is true with regard to the rights approach? It is based on the belief that the best action treats everyone equally and fairly. It produces the greatest balance of good over harm to customers, employees, shareholders, the community, and the natural environment. 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 is based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved.
Which of the following is true with regard to the rights approach? It is based on the belief that the best action treats everyone equally and fairly. It produces the greatest balance of good over harm to customers, employees, shareholders, the community, and the natural environment. 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 is based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved.
Which of the following statements is true of technological advances? it provides a means for globalization to happen it discourages internationalization it inhibits the growth of new products and services it hels consolidate traditional values among consumers worldwide
It provides a means for globalization to happen.
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 country. The representative from business B is most likely from ________________. Panama Hungary Uganda Japan
Japan
Which of the following is true about language? Language does not entail facial expressions and gestures. National languages, dialects, and translation facilitate straightforward communication. Language has both verbal and nonverbal characteristics. Business jargons are common across cultures.
Language has both verbal and nonverbal characteristics.
Which of the following situations illustrate a polychronic perspective? When a North American talks to a Latin American, he or she may unconsciously back up to maintain personal space. In Islamic countries close interaction between men and women is not encouraged in public places. Latin Americans have a flexible perception of time and may not arrive exactly at the pre-determined time for appointments. People in young countries like Australia, Canada, and the United States are relatively focused on schedules, punctuality, and time as a resource.
Latin Americans have a flexible perception of time and may not arrive exactly at the pre-determined time for appointments.
Overseas Expansion (Scenario)Whittaker Semiconductors has recently decided to expand its operations overseas. Amanda Quan, Vice President of International 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. Rosa Suarez reported on her analysis of cross-cultural risks involved with establishing the plant in Country C. Each of the following was most likely discussed in her report EXCEPT ________. language barriers lifestyle differences religious beliefs the level of national debt
Level of national debt
A few decades ago, international business was largely the domain of ________. service firms multinational firms smaller firms All of these
Multinational firms
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. This attendee most likely represents ________. Japan United Kingdom France Netherlands
Netherlands
Which of the following countries is considered a mixed economy? China Russia Norway Vietnam
Norway
The relocation of manufacturing and other value-chain activities to cost-effective locations abroad is known as _______________. insourcing cultural imperialism contagion offshoring
Offshoring
Which of the following statements is true about managing country risk? Home-country employees are the best source for anticipating country risk in host-countries. Country risk can seldom be anticipated by advance research. Firms can reduce country risk by entering markets in collaboration with a foreign partner. Scanning allows a firm to assess the potential country risk.
Scanning allows a firm to assess the potential country risk.
________ means meeting humanity's needs without harming the ability of future generations to meet their needs. Sustainability Corporate social responsibility Ethical behavior Casuistry
Sustainability
Which of the following is an example of a supranational institution? the World Intellectual Property Organization the UNICEF the Red Cross the World Trade Organization
The World Trade Organization
T/F Cultural values and attitudes can be transmitted through a variety of sources including parents, teachers, friends, government leaders, movies, television, and the Internet.
True
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 country. The representative from Business A is most likely from ________. China United Kingdom Mexico Brazil
United Kingdom
Stella manages the production team at Camden Inc., a manufacturer of heavy industry machinery in the United States. She needs to decide if her firm should export finished products or manufacture abroad. Which of the following would most likely help her evaluate the best alternative in this instance? What is the gross national income of the United States? What are the costs of transporting raw materials, components, and finished products? Is employee empowerment culturally favored in the United States? What is the average annual rate of employee turnover in the manufacturing industry?
What are the costs of transporting raw materials, components, and finished products?
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. factor proportions theory international product cycle theory comparative advantage principle absolute advantage principle
absolute advantage principle
Acculturation is defined as the process of ________. segregating ethnic minorities by distinct groups adjusting and adapting to a culture other than one's own learning the behavioral patterns and rules of one's own society forcing minority cultures to adopt the values of the dominant culture
adjusting and adapting to a culture other than one's own
Firms that are more successful at global competition display each of the following qualities EXCEPT ________. identifying foreign market opportunities aggressively approaching internationalization from a reactive standpoint actively pursuing partnerships with foreign firms focusing intensively on building organizational capacities
approaching internationalization from a reactive standpoint
Which of the following is subject to importing and exporting? both finished products and intermediate goods finished products but not intermediate goods intermediate goods but not raw materials raw materials and components, but not finished products
both finished products and intermediate goods
Companies strive to drive down prices ________, among other strategies. by centralizing manufacturing and procurement to a single source by standardizing what they sell by thwarting the growth of supranational institutions by discouraging competition
by standardizing what they sell
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? rights approach utilitarian approach common good approach virtue approach
common good approach
Which of the following is the LEAST adversarial method of resolving a contractual dispute? litigation arbitration conciliation trial
conciliation
Which of the following terms indicates potential loss or adverse effects on company operations and profitability caused by developments in a country's political and/or legal environments. commercial risk cross-cultural risk country risk currency risk
country risk
Which of the following types of risk is also known as political risk? currency risk cross-cultural risk commercial risk country risk
country risk
Whittaker Semiconductors has recently decided to expand its operations overseas. Amanda Quan, Vice President of International 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. Philip Baxter reported on the risks associated with establishing the plant in Country A. The most significant risk, in his view, was posed by the government's complex bureaucratic structure. Philip reported the likelihood of significant administrative delays in opening the plant. The risk identified by Philip is an example of which of the following? country risk commercial risk currency risk cross-cultural risk
country risk
International business is also known as which of the following? born global business laissez-faire business cross-border business multi-hub business
cross-border business
Fluctuating exchange rates are an example of which of the following? country risk political risk currency risk cross-cultural risk
currency risk
Whittaker Semiconductors has recently decided to expand its operations overseas. Amanda Quan, Vice President of International 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 ________.
currency risk
Which form of government is characterized by private property rights and limited government? totalitarian autocratic socialist democratic
democratic
Which of the following would most likely be considered an appropriate action for a multinational company in meeting its global corporate social responsibility obligations? lowering production costs for specific manufactured items improving the efficiency of assembly line operations developing a strategic plan to enter an emerging market devoting substantial R&D to poor-country ailments
devoting substantial R&D to poor-country ailments
Which of the following would be the best way for a manager to learn about country risks in a host country? analysis of records of competitor firms employees working in the home country employees working in the host country host country nationals working abroad
employees working in the host country
Which of the following would be the best way for a manager to learn about country risks in a host country? host country nationals working abroad employees working in the host country analysis of records of competitor firms employees working in the home country
employees working in the host country
Which of the following statements is true about value chain and international business? Exporting firms perform most of the downstream value chain activities in the home market. Exporting firms perform most of the upstream value chain activities in the home market exporting firms perform of the upstream value chain activities abroad exporting firms perform most of the research and product development and production abroad
exporting firms perform most of the upstream value chain activities in the home market
Which of the following approaches to ethical standards for corporate governance reflects the view that the best action treats everyone equally and in a just manner? fairness approach virtue approach utilitarian approach rights approach
fairness approach
As market globalization intensifies, ________. the gap between the rich and the poor shrinks rapidly the distance between consumers worldwide expands individual firms respond to the challenges and new advantages that it brings firms internationalize solely as a reaction to it
individual firms respond to the challenges and new advantages that it brings
Culture is not ________. about beliefs and values of society relative a collective phenomenon inherited
inherited
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? indirect production international portfolio foreign direct domestic securities
international portfolio
All of the following are reasons to study international business EXCEPT ________. international business contributes to economic prosperity international trade is a critical engine for job creation international trade and investment have experienced unprecedented decline international business provides an opportunity to support sustainability and corporate citizenship
international trade and investment have experienced unprecedented decline
Which of the following statements is true of technological advances? it provides a means for globalization it discourages internationalization it inhibits the growth of new products and services it helps consolidate traditional values among consumers worldwide
it provides a means for globalization to happen
Which of the following reflects the major contribution of GATT to globalization? In instituted strict controls on international currencies it simplified patent and copyright laws it reduced barriers to international trade and investment it eliminated the divide between the rich and the poor
it reduced barriers to international trade and investment
The process of targeting and serving markets outside the home country is known as ________. market diversification competition intensity reactive internationalization trade protectionism
market diversification
Which of the following explains how firms can use FDI to gain and sustain competitive advantage? Leontief paradox new trade theory monopolistic advantage theory factor proportions theory
monopolistic advantage theory
Which of the following is a societal consequence of market globalization? greater emphasis on proactive internationalization internationalization of firm's value chain new risk and instant rivalry from foreign competitors offshoring and the flight of jobs
offshoring and the flight of jobs
Which of the following best explains why India was once characterized by high country risk? Indian business leaders distrusted most European corporations 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
political leaders enacted laws that targeted foreign firms for harassment
Which of the following best explains why India was once characterized by high country risk? political leaders enacted laws that targeted foreign firms for harassment Indian leaders feared the modern influences of American firms taxes and financial incentives benefited Indian businesses over foreign firms Indian business leaders distrusted most European corporations
political leaders enacted laws that targeted foreign firms for harassment
As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with preparing a comprehensive report on the company's global operations over the past twenty years. Deva assigns three strategists to collaborate on the History portion of the report, which details the rationale behind Pax's decisions to expand operations in particular areas. Rashid Ahl focuses on early expansion to China, which occurred after China began to make its market more accessible to foreign companies. Markus Teller focuses on Pax's expansion to Eastern Europe, which was motivated by increased industry privatization in key countries. Lavonne Jackson focuses on expansion to Japan, which happened when the company's commercial bank expanded its service network to Asia. In describing the main driver behind Pax's expansion to China, Rashid is most likely to emphasize ________.
reduction of barriers to trade
Reduction in trade barriers is associated with the emergence of ________. fragmentary monetary and fiscal policies across the borders regional economics integration blocs widespread violation of intellectual property rights law violation of GATT provisions
regional economic integration blocs
Which of the following legal systems is largely practiced in the Middle East? socialist common religious civil
religious
Which of the following stages comes before procurement in a firm's value chain? research and development marketing manufacturing distribution
research and development
Which of the following represents the final stage in a firm's value chain? marketing procurement research and development sales and service
sales and service
Which of the following is an example of a location-specific advantage? proprietary knowledge the ability to reduce buyer uncertainty skilled labor managerial skills
skilled labor
Which of the following is an example of a location-specific advantage? the ability to reduce buyer uncertainty managerial skills proprietary knowledge skilled labor
skilled labor
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. Foreign Corrupt Practices Act the Robinson-Patman Act the U.S. Securities Exchange Act the Sherman Antitrust Act
the U.S. Foreign Corrupt Practices Act
The free movement of capital around the world is also known as ________________________. bond-based debt financing contagion the globalization of capital common market arrangement
the globalization of capital
