MGT 301 Ch 4
The governments of many countries in transition cannot afford all the investment required to develop and upgrade their infrastructure system, including highways, bridges, and rail networks. Where can these countries find financial resources?
Through outside sources such as the World Bank, IMF, and the Asian Development Bank
According to your textbook, which one of the following sets of countries are classified as newly industrialized countries?
Brazil, India, China, and South Korea
________ is the forced transfer of assets from a company to the government without compensation.
Confiscation
Which one of the following is the largest contributor to unemployment in China?
Migrant workers
Importing modern management practices into the culture of a transition country can be difficult. South Korea's Daewoo Motors faced a culture clash when it entered Central Europe. Korea's management system is based on a rigid hierarchical structure and an intense work ethic. Managers at Daewoo's car plants in South Korea arrived early for work to stand and greet workers at the company gates. But problems arose when Daewoo's managers did not fully comprehend the culture at its factories in Central Europe. How did the Korean company, Daewoo address this issue?
By sending Central European workers to staff assembly lines in Korea and sending Korean managers and technicians to work in Central and Eastern Europe
International firms attempt to gather information that will help them predict and manage political risk. Which source should a company use to gain insight into local culture and politics?
Current employees who have worked in a country for an extended period
Adaptation is one of the main methods of managing political risks. Which one of the following is a type of adaptation that allows an international business to assist the host country or region in improving the quality of life for locals?
Development assistance
Managers must work within the established rules and regulations of each national business environment. Bribes often represent attempts to gain political influence. Which U.S. law forbids U.S. companies from bribing government officials or political candidates in other nations?
Foreign Corrupt Practices Act
Which measure does the World Bank use to classify a country's level of development?
GNI
When PepsiCo first entered the Indian market, the company was confronted with a new government mandate to restrict ownership to domestic companies or limit ownership by non-domestic firms to a minority stake. This new mandate restricted PepsiCo's ownership of local companies to 49 percent when it first entered India. What type of political risk has affected PepsiCo?
Policy changes
Which one of the following has Russia's annexation of the Ukraine's peninsula of Crimea created?
Political instability
Using gross product figures to compare production across countries does not account for the different cost of living in each country. Which one of the following indicators helps in adjusting the GDP to reflect the cost of living in each country?
Purchasing power parity
Confiscation, expropriation, and nationalization can have an impact on the economic development of the country. Which one of the following reflects the long-term impact on the country's economic development?
Slower economic development because of foreign investors being more reluctant to invest in the country
Political risk has been defined as the likelihood that a society will undergo political change that negatively affects local business activity. Which one of the following is an example of political risk?
The foreign government has announced new laws stipulating that a specified amount of a good or service, which is known as local content requirements, must be supplied by producers in the domestic market.
Political and social problems pose threats to China's future economic performance. Which one of the following potential challenges is largely the result of China's privatization of its industry?
Unemployment
When local social unrest in a country causes disturbances that impair a company's ability to manufacture and distribute products, obtain materials and equipment, and threatens the lives of its employees, the company is facing a ________ risk.
conflict and violence
Countries that are highly industrialized and highly efficient, and whose people enjoy a high quality of life are called ________.
developed countries
Nations are commonly classified as being developed, newly industrialized, or developing based on a quantifiable economic measure. Such measures include figures on ________.
national production, the portion of the economy devoted to agriculture, the amount of exports in the form of industrial goods, and overall economic structure
Which one of the following is a method companies can use to manage political risk by incorporating risk into business strategies, a ploy known as adaptation?
partnerships
Economic transition involves changing a nation's fundamental economic organization and creating entirely new free-market institutions. Some of the key reform measures to promote economic development include ________.
reducing budget deficits, allowing prices to reflect supply and demand and expanding credit availability.