Test #1

Companies strive to decrease their costs and reduce their selling prices through economies of scale and standardization of finished products, among other possibilities. True False

True

Countries that liberalize international trade and investment enjoy faster per-capita economic growth. True False

True

Currency risk refers to the risk posed by adverse fluctuations in exchange rates. True False

True

Exporting is an entry strategy involving the sale of products or services to customers located abroad. a. True b. Fales

True

Globalization results in more demanding buyers who shop for the best deals worldwide. True False

True

Nationalization refers to the gradual integration and growing interdependence of national economies. True False

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 ________. Brazil Mexico China United Kingdom

United Kingdom

_______ was the largest single source of counterfeit products imported into the US. a. Russia b. the United States c. China d. Iran

c. China

Which of the following statements is true about the firm-level consequences of market globalization? a. Through offshoring, a firm relocates a major value-chain activity by establishing a factory or subsidiary in the home market. b. A firm's value chain is not subject to internationalization. c. Globalization drives firms to relocate key value-adding activities to the most advantageous locations around the world. d. The globalization of markets has narrowed down new business opportunities for internationalizing firms.

c. Globalization drives firms to relocate key value-adding activities to the most advantageous locations around the world.

Which of the following types of risk is also known as political risk? a. commercial risk b. cross-cultural risk c. country risk d. currency risk

c. country risk

Which of the following explains the expansion of born global firms despite the scarcity of financial, human, and tangible resources? product shortages and supply crunch resulting from import restrictions globalization has made doing international business easier than ever before rising inflation in developing economies a concerted effort by developing nations for running a trade surplus

globalization has made doing international business easier than ever before

The science and process of creating and using information resources is known as ________. information technology demographics information design Psychographics

information technology

Which of the following is another term for importing? global sourcing unilateral procurement capital investment supply side development

global sourcing

________ describes the total value of assets that MNEs own abroad via their investment activities. Variable capital FDI stock Absolute advantage Monopolistic advantage

FDI stock

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. a. True b. False

False

Offshoring and the flight of jobs are prime drivers of market globalization. True False

False

The Great Depression marked the beginning of the second phase of globalization. a. True b. False

False

The Internet has increased the cost of transmitting voices, data, and images. True False

False

The level of government intervention in commercial activities is similar across most countries. True False

False

The world's largest MNEs are concentrated in emerging economies. True False

False

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 ____________. a. Brazil b. the United States c. France d. Italy

A. Brazil

Which of the following best explains why export growth has outpaced the growth of domestic production during the last few decades? Growth in gross domestic product in most countries has steadily increased since 1970. Both world exports and domestic production have grown significantly over the past 30 years. The cost to import products is generally higher than the cost to produce domestic products. Advanced economies now source many of their consumable products from low-cost manufacturing nations.

Advanced economies now source many of their consumable products from low-cost manufacturing nations.

Harold Meyer is the vice president of a successful U.S. restaurant chain. He is getting ready to transfer to the Gulf Arab region to help establish the restaurant chain in Saudi Arabia. He is in the process of gathering information to learn about Saudi culture. Harold decides to drop alcoholic drinks from the restaurant chain menu in Saudi Arabia. Which of the following might have led to his decision? Saudi consumers prefer European alcoholic drinks . Saudi consumers prefer local alcoholic drinks. Imported alcoholic drinks are more expensive than local drinks. Alcoholic drinks are not allowed in Saudi Arabia.

Alcoholic drinks are not allowed in Saudi Arabia.

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. Which of the following statements most likely counters Juan's argument concerning the homogenization of national cultures? In most industries, domestic operation alone cannot sustain competitive business growth. As globalization standardizes superficial aspects of life across national cultures, people resist these forces by insisting on their national identity and taking steps to protect it. Foreign values tend to shift not just superficial aspects of culture, but deeply held beliefs as well. Material goods such as cell phones and computers are found in most homes throughout the world.

As globalization standardizes superficial aspects of life across national cultures, people resist these forces by insisting on their national identity and taking steps to protect it.

________ refers to offering, giving, receiving, or soliciting anything of value to influence the actions of a government official or a corporate manager. Bribery Piracy Patenting Normativism

Bribery

Which of the following is true with regard to bribery? Bribery is considerably rare in developing economies. Bribery poses no significant threat to market economies. Bribery is not acceptable in much of the world. Bribery promotes a culture of dishonesty and immorality.

Bribery promotes a culture of dishonesty and immorality.

Which of the following is true with regard to bribery? Bribery is considerably rare in developing economies. Bribery poses no significant threat to market economies. Bribery promotes a culture of dishonesty and immorality. Bribery is not acceptable in much of the world.

Bribery promotes a culture of dishonesty and immorality.

Values in a culture ________. A) represent the symbolic, material, and creative productions unique to a society B) are rigidly held attitudes, usually unfavorable and usually aimed at particular groups of people C) represent a person's judgments about what is good or bad, acceptable or unacceptable, important or unimportant, and normal or abnormal D) are similar to opinions but are often unconsciously held and may not have a rational basis

C) represent a person's judgments about what is good or bad, acceptable or unacceptable, important or unimportant, and normal or abnormal

Sustainable firms ________. A. have a high employee turnover rate B. have greater liabilities than assets C. avoid emitting toxic wastes D. actively resist organizational change

C. avoid emitting toxic wastes

In 2014,________ was the largest single source of counterfeit products imported into the U.S. The United States Iran China Russia

China

________ represents the base of the pyramid of ethical behavior. Guarding against corruption Complying with laws and regulations Ethical behavior Corporate social responsibility

Complying with laws and regulations

________ are the people and organizations that support the political system and receive government resources. Shell corporations Constituents Regional trade blocs Subsidiaries

Constituents

________ refers to the tendency of a financial or monetary crisis in one country to spread rapidly to other countries, due to the ongoing integration of national economies. Nationalization Contagion Internationalization Codetermination

Contagion

Which of the following, if true, would most strongly support the claim that national prosperity is increased by participation in international business? Countries that participate in international trade have higher GDP per capita than non-participating countries. For most countries, levels of international trade have increased significantly in recent decades. Individuals in advanced economies tend to set purchasing trends for consumers worldwide. National literacy levels are strongly correlated with a country's degree of political freedom.

Countries that participate in international trade have higher GDP per capita than non-participating countries.

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 is always present, but its nature and intensity vary over time and from country to country. 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.

Freedom Shoes Inc., a sports shoe company, is considering entering into a contract with an overseas vendor to expand its production capacity. The company investigated several suppliers and found one vendor to be the most attractive in terms of cost and manufacturing efficiency. However, Freedom's managers have heard reports that the vendor operates factories with sweatshop conditions. Which of the following, if true, implies that Freedom has a strong social interest? The top management of Freedom actively engages in positively contributing to the disadvantaged communities in the society. Despite the overseas vendor's effectiveness, Freedom decides not to enter into a contract with it because according to Freedom, tolerating sweatshop conditions is unethical. According to Freedom, a firm that fails to institute a green purchasing policy in sourcing its inputs is more likely than not to fail in the long run. Freedom considers that the key to success for MNCs lie in their ability to tap resources effectively and at a lower cost.

Despite the overseas vendor's effectiveness, Freedom decides not to enter into a contract with it because according to Freedom, tolerating sweatshop conditions is unethical.

________ are moral principles and values that govern the behavior of people, firms, and governments, regarding right and wrong. Biases Attitudes Ethics Laws

Ethics

________ marked the end of the 50-year Cold War and smoothed the integration of former command economies into the global economy. Free-market reforms in China and the former Soviet Union China's move to join the WTO The Bolshevik Revolution in Russia The end of World War II

Free-market reforms in China and the former Soviet Union

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, ties among people are relatively loose. In collectivist societies, compromise and conformity help maintain group harmony. In collectivist societies, those who compete best are rewarded financially.

In collectivist societies, compromise and conformity help maintain group harmony.

________ is the most populous Muslim country in the world. Saudi Arabia Iran Indonesia Egypt

Indonesia

________ refers to ideas or works created by individuals or firms and includes a variety of proprietary, intangible assets: discoveries and inventions; artistic, musical, and literary works; and words, phrases, symbols, and designs. Intellectual property Corporate governance Global sourcing Constant capital

Intellectual property

Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. The CEO justified one of the company's moves by pointing out that it not only enabled Sterling to benefit from global sourcing advantages, but it also provided access to new ideas about business methods. The shareholders viewed this justification positively most likely because they understood which of the following? Sourcing advantages are usually more important to growth than obtaining new business ideas. This expansion strategy would enable the company to better manage cross-cultural risk. The most compelling motive for international expansion is to gain new ideas from other markets. International firms may have more than one motive for international expansion.

International firms may have more than one motive for international expansion.

Harold Meyer is the vice president of a successful U.S. restaurant chain. He is getting ready to transfer to the Gulf Arab region to help establish the restaurant chain in Saudi Arabia. He is in the process of gathering information to learn about Saudi culture. Which type of religious practices will Harold most likely have to study? Confucian Christian Jewish Islamic

Islamic

The most widespread form of religious law is ________ law. Jewish Catholic Hindu Islamic

Islamic

Which of the following is true with regard to culture? It captures how the members of the society live. It does not define the collective behavior of each society. It is absolute. It is inherited.

It captures how the members of the society live.

Which of the following is true of a code of ethics? It emphasizes profit over righteousness. It guides decision-making by all employees in the firm. It does not define the values and principles that are intended to guide organizational decision making. It is a cure for all ethical dilemmas.

It guides decision-making by all employees in the firm.

Which of the following is true of a code of ethics? It guides decision-making by all employees in the firm. It emphasizes profit over righteousness. It is a cure for all ethical dilemmas. It does not define the values and principles that are intended to guide organizational decision making.

It guides decision-making by all employees in the firm.

Which of the following reflects the major contribution of GATT to globalization? It eliminated the divide between the rich and the poor. It simplified patent and copyright laws. It instituted strict controls on international currencies. It reduced barriers to international trade and investment.

It reduced barriers to international trade and investment.

Four senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil. The managers discuss various ethical problems commonly encountered in their local territories. Which of the following representatives is most likely to label counterfeiting of goods as the biggest challenge in his/her country? Geoff Luis Jang Marta

Jang

________ are ways of behaving and conducting oneself in public and business situations. Creative expressions Symbolic productions Manners and customs Values and attitudes

Manners and customs

Four senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil. ________ is most likely to point to a controversial practice in his/her country in which the compensation of top executives is far greater than that of low-ranking subordinates. Luis Jang Marta Geoff

Marta

Which of the following is true with regard to mercantilism? Mercantilism helps curb inflation. Mercantilism does not harm consumers. Mercantilism is superior to free trade. Mercantilism tends to harm firms that import.

Mercantilism tends to harm firms that import.

________ are the most transformative technology in developing economies. E-mails Mobile phones Intranets Televisions

Mobile phones

Calexor is a telecommunications SME that has been highly successful despite its limited resources. Stakeholders attribute Calexor's success to its ability to serve niche markets. Which of the following, if true, would most strongly support the claim that Calexor's growth can be attributed to niche market sales? Calexor developed an interest in serving niche markets through an R & D experiment. Calexor's sales in mainstream telecommunications markets have always been strong. Most of Calexor's sales are in specialty markets that larger competitors do not serve. Calexor's growth soared after it entered its first overseas market and has continued to climb.

Most of Calexor's sales are in specialty markets that larger competitors do not serve.

________ confer the exclusive right to manufacture, use, and sell products or processes. Copyrights Trade secrets Patents Trademarks

Patents

At a world conference to be conducted in Tokyo, representatives from nearly every country in the world will gather to discuss issues related to international trade. Representative A is from a totalitarian state. Representative B is from a socialist nation. Representative C hails from a democratic society. Representative B is most likely from ________. New Zealand Canada Russia North Korea

Russia

In which of the following countries would alcoholic drinks be prohibited? Saudi Arabia Spain Mexico Italy

Saudi Arabia

Which of the following is true about the determinants of national competitive advantage? The presence of strong competitors in a nation adversely affects national competitive advantage. Demand conditions describe the nation's position in factors of production, such as labor, natural resources, capital, technology, entrepreneurship, and know-how. The presence of demanding customers pressures firms to innovate faster and produce better products. Vigorous competitive rivalry among firms lowers national innovativeness.

The presence of demanding customers pressures firms to innovate faster and produce better products.

Super Sports, a large sporting goods chain based in Australia, wants to open a store in Norway. With stores around the world, Super Sports executives realize that legal systems vary from country to country. Having never opened a store in Norway, the Super Sports legal team is investigating Norwegian laws to determine how they would impact the corporation and its ability to do business in Norway. What are the regulations regarding income repatriation? What are the restrictions on inward foreign direct investment? What type of promotion and advertising is prohibited? Is the recycling of product packaging mandatory?

What are the restrictions on inward foreign direct investment?

Earth-Rite Organic Foods Inc. is an MNE based in Sweden with subsidiaries located in numerous countries around the world. Earth-Rite has annual sales of $10 billion and employs more than 90,000 individuals worldwide. Earth-Rite currently dominates the organic food industry, but competitors are beginning to catch up because of a growing demand for organic produce. Earth-Rite is considering a collaborative venture with a small chain of organic grocery stores located in Brazil, a country where Earth-Rite has no stores. Which of the following would be the most important for Earth-Rite executives to determine when deciding whether to collaborate with the Brazilian grocery store chain? Is employee empowerment culturally favored in Brazil? Would a collaborative venture allow Earth-Rite to internationalize rapidly? What is the density of venture capitalists in Brazil? Did employee empowerment lead to increased efficiencies across Earth-Rite's subsidiaries?

Would a collaborative venture allow Earth-Rite to internationalize rapidly?

Sustainable firms ________. have greater liabilities than assets avoid emitting toxic wastes have a high employee turnover rate actively resist organizational change

avoid emitting toxic wastes

Companies strive to drive down prices ________, among other strategies. by thwarting the growth of supranational institutions by standardizing what they sell by centralizing manufacturing and procurement to a single source by discouraging competition

by standardizing what they sell

Acme Software is a U.S.-based maker of software products for the health care industry. Recently Acme has been investigating whether it would be beneficial to internationalize some of its value-chain activities. Acme hires a consulting group to help determine which, if any, value-chain activities could be conducted abroad to promote business growth. The consulting group identifies two health care software development companies in India that could provide programming services at a lower cost than Acme's current expenditures for programming. In addition, the consultants conduct international market research which shows that German health care companies have a strong demand for the type of software that Acme offers. Which of the following would be most important for Acme to determine before outsourcing its programming services to India? Would the lower cost of outsourcing allow Acme to sustain a competitive advantage in its business operations? Do Indian businesses outsource value-chain activities to Europe? What benefits have Indian companies gained historically from internationalizing their value-chain activities? Is either of the Indian health care companies interested in moving their operations abroad?

Would the lower cost of outsourcing allow Acme to sustain a competitive advantage in its business operations?

Harold Meyer is the vice president of a successful U.S. restaurant chain. He is getting ready to transfer to the Gulf Arab region to help establish the restaurant chain in Saudi Arabia. He is in the process of gathering information to learn about Saudi culture. Harold learned that organizations in Saudi Arabia emphasizes loyalty to the family and tribe and that ties among individuals are highly valued. Based on Harold's observation, Saudi Arabia is ________. a collectivist culture characterized by low power distance a feminine culture an individualistic culture

a collectivist culture

In terms of CSR and sustainability, going wide implies ________. a continuous effort to understand how CSR and sustainability affect every aspect of the firm's operations worldwide encouraging unstructured learning among employees a sustained effort to reduce control mechanisms throughout the organization institutionalizing appropriate behavior into the organization's culture so it becomes part and parcel of strategy

a continuous effort to understand how CSR and sustainability affect every aspect of the firm's operations worldwide

Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. Which of the following can extend legal protection to Hudson's proprietary software used in its toys? a copyright a patent a users' license a trademark

a copyright

Which of the following statements is true about value chain and international business? a. Exporting firms perform most of the upstream value chain activities abroad. b. Exporting firms perform most of the upstream value chain activities in the home markets. c. Exporting firms perform most of the research and product development and production abroad. Exporting firms perform most of the downstream value chain activities in the home markets.

b. Exporting firms perform most of the upstream value chain activities in the home markets.

Market globalization compels firms to organize their sourcing, manufacturing, marketing and other value-adding activities on a strictly local scale. a. True b. False

b. False

Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. In discussing the expansion effort to India, the CEO reminded shareholders of Black and Decker's move to partner with the Indian auto retailer Bajaj. The CEO was most likely attempting to justify which of the following? a price drop to ward off competition from an emerging Indian auto retailer a marketing effort targeted to American citizens living in India a new manufacturing protocol based on an efficient Indian production method a joint venture that would position Sterling for long-term sales in India

a joint venture that would position Sterling for long-term sales in India

Cultural intelligence is defined as ________ the method of analyzing awkward situations in cross-cultural encounters by developing objectivity and empathy for other points of view the measurement of the inequalities in power that exist among people a person's ability to function effectively in situations characterized by cultural diversity the information gathered by local firms about those entering foreign markets

a person's ability to function effectively in situations characterized by cultural diversity

Which of the following best explains why export growth has outpaced the growth of domestic production during the last few decades? a. Advanced economies now source many of their consumable products from low-cost manufacturing nations. b. Growth in gross domestic product in most countries has steadily increased since 1970. c. Both world exports and domestic production have grown significantly over the past 30 years. d. The cost to import products is generally higher than the cost to produce domestic products.

a. Advanced economies now source many of their consumable products from low-cost manufacturing nations.

An international Trade Summit is held in Geneva, Switzerland. The purpose of the summit is to cooperatively develop policies that promote international trade. One summit attendee pointed out that the total value of her country's products trade typically accounted for more than 100% of her nation's GDP. This attendee most likely represents __________. a. Netherlands b. France c. Japan d. United Kingdom

a. Netherlands

Firms are sometimes motivated to enter new markets because of unfavorable conditions in the home market, such as regulation or declining local industry sales. a. True b False

a. True

Since the 1980s, emerging market countries have experienced substantial market liberalization and privatization. a. True b. False

a. True

The two primary types of international investment are portfolio investment and foreign direct investment. a. True b. False

a. True

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. a. active b. passive c. indirect d. short-term

a. active

Advertising themes often convey unfavorable and embarrassing interpretations. This is most likely because _______. a. advertising themes often lose their original meaning in translation or give the wrong impression. b. popular slogans used in international advertising do not use idiomatic expressions. c. language is rarely subtle. d. colloquial expressions are more likely than not to puzzle native speakers.

a. advertising themes often lose their original meaning in translation or give the wrong impression.

Firms with a strong social interest _______. a. aim to optimize work conditions and diversity in hiring. b. openly support the use of sweatshops c. are reluctant to provide health insurance to employees. d. engage in deceptive marketing.

a. aim to optimize work conditions and diversity in hiring.

_________ represents the apex of the pyramid of ethical behavior. a. corporate social responsibility b. guarding against corruption c. ethical behavior d. complying with laws and regulations

a. corporate social responsiblity

International business is also known as which of the following? a. cross-border business b. laissez-faire business c. multi-hub business d. born global business

a. cross-border business

In countries with minimal corruption _______. a. financial and accounting information is transparent. b. the contribution of the private sector to the national GDP is negligible c. direct investment does not take place d. commercial laws are unfair and discriminatory.

a. financial and accounting information is transparent.

Which of the following best explains why Taiwanese computer manufacturers established subsidiaries in the United States? a. low-cost financial capital b. lack of skilled managerial talent in home country c. low-cost labor d. access to raw materials

a. low-cost financial capital

Market globalization compels firms to organize their sourcing, manufacturing, marketing, and other value-adding activities on a strictly local scale. a. True b. False

b. False

In the last two years, the sales of consumer electronics in China have risen by 9.4%. Moreover, the market is becoming increasingly competitive since a large number of Japanese, European, and American manufactures are building factories to face the competition from low-cost Chinese manufactures. Grande Co, is a US based consumer electronic manufacturer that have been regulating with Chinese authorities for eight years to open a factory in the country. Since Grande Co. has spent significant time and energy on negotiation the the past eight years, they should quit and set up a facility in a more responsive society. Which of the following can be inferred from the above passage? a. the chinese culture is more likely than not to be relationship oriented b. the chinese culture is more like than not to be deal-orients c. the american culture is less likely to take an impersonal approach to business. d. the american culture is more likely than not to be relationship oriented.

a. the chinese culture is more likely than not to be relationship oriented

Convergence of consumer preferences has led to an enhanced emphasis on standardization which implies that ________. a. the raw materials, parts, and components sourced by professional buyers are very similar in design and structure b. the consistently rising prices of consumer goods have led to a demand vacuum in the market c. the distance between consumers worldwide has increased with the advent of technology d. the globalization of services has adversely affected the quality of service worldwide

a. the raw materials, parts, and components sourced by professional buyers are very similar in design and structure

Acculturation is defined as the process of __________. forcing minority cultures to adopt the values of the dominant culture adjusting and adapting to a culture other than one's own learning the behavioral patterns and rules of one's own society segregating ethnic minorities by distinct groups

adjusting and adapting to a culture other than one's own

In cross-border business, successful managers ________. ritually avoid analyzing awkward situations in cross-cultural encounters are empathetic to cultural differences overly emphasize the importance of business jargons in facilitating effective cross-cultural communication adhere to a self-reference criterion

are empathetic to cultural differences

Managers with a geocentric view of the world ________. are generally better at understanding and accommodating similarities and differences among cultures ritually avoid analyzing awkward situations in cross-cultural encounters have a strong preference for ambiguity tend to view other cultures through the lens of his/her own culture

are generally better at understanding and accommodating similarities and differences among cultures

Prejudices in a culture ________. guide the development of our attitudes and preferences are rigidly held attitudes, usually unfavorable, and usually aimed at particular groups of people represent the symbolic, material, and creative productions unique to a society represent a person's judgment about what is important and what is not

are rigidly held attitudes, usually unfavorable, and usually aimed at particular groups of people

Offshoring and the flight of jobs are prime drivers of market globalization. a. True b. False

b. False

A U.S. shoe manufacturer is considering internationalizing to promote growth by diversifying its markets. Which of the following, if true, would most strongly support the claim that moving to France would help the company grow through market diversification? a. Doing business in France would likely expose the company to new ideas for product innovation. b. French consumers represent a sizeable market that could significantly boost the company's sales. c. Many of the company's U.S. customers have moved overseas to Europe. d. French women tend to purchase shoes more frequently than do French men.

b. French consumers represent a sizeable market that could significantly boost the company's sales.

Technological leapfrogging is defined as ________ a. adopting new technology late in the hype cycle b. bypassing certain stages of technology to come up with a radical innovation when upgrading to new products c. boosting demand artificially by postponing the sale of new technology in the market d. adopting new technology as soon as it is released

b. bypassing certain stages of technology to come up with a radical innovation when upgrading to new products

The globalization of finance _____________. a. enables companies to minimize offshoring b. contribute to firms' abilities to develop and operate world-scale production and marketing c. discourages free international exchange of goods and services d. discourages innovation

b. contribute to firms' abilities to develop and operate world-scale production and marketing

Which of the following is characteristic of globalization of markets? a. diminishing gap between the rich and the poor b. declining trade barriers c. lack of skilled labor d. conservatism

b. declining trade barriers

Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. The software program embedded in Hudson's signature toy, the Witty Parakeet, is an example of a(n) _____________. a. tangible asset b. intellectual property c. trade secret d. trademark

b. intellectual property

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? a. foreign direct b. international portfolio c. indirect production d. domestic securities

b. international portfolio

A few decades ago, international business was largely the domain of ________. a. service firms b. multinational firms c. smaller firms d. All of these

b. multinational firms

When applying the five-step framework for making ethical decisions, managers should, at first, _______. a. evaluate alternatives b. recognized the ethical problem d. implement a decision d. examine the facts

b. recognized the ethical problem

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. Phillip Hardy, once of the potential investors, expresses the desire to purchase only those types of assets in which he can maintain a relatively short-term interest. Which of the following investment opportunities would be most suited for Mr. hardy? a. an initiative to purchase the technology assets of an Indian consulting firm b. the Freehold Growth Fund, which purchases Eastern European growth stocks c. a venture that gives investors ownership of the equipment used by multiple South African mining companies. d. the Freehold World Climb Project, which maintains partial ownership of an Australian hiking equipment production plant.

b. the Freehold Growth Fund, which purchases Eastern European growth stocks

A value chain is ________. a. the process of relocating manufacturing and production to valuable and cost-effective locations abroad b. the sequence of value-adding activities performed by a firm in the course of developing, producing, marketing, and servicing a product c. the sequence of administrative policies implemented to promote economic integration by a government d. the process of integrating national economies during a financial crisis

b. the sequence of value-adding activities performed by a firm in the course of developing, producing, marketing, and servicing a product

International entrepreneurship is a new field of scholarly inquiry that is a result of the________ phenomenon. localization industrial cluster born global standardization

born global

A(n) ________ is a voluntary refusal to engage in commercial dealings with a nation or a company. confiscation sanction expropriation boycott

boycott

An international human rights organization recommends that its member countries review their human rights policies on a periodic basis to ensure that the governments are upholding ethical standards for the treatment of prisoners'. Which of the following represents the most effective reasoning in support of the organization's recommendations? a. nations should emphasize more on rehabilitation than retribution in their treatment of prisoners. b. nations should enforce only those ethical standards that have been adopted by other nations. c. ethical standards change over time, so national policies should be updated as necessary. d. ethical policies and practices tend to remain consistent within the same country over time.

c. ethical standards change over time, so national policies should be updated as necessary.

Which of the following is true with regards to the rights approach? a. it is based on the belief that the best actions treats everyone equally and fairly. b. according to the rights approach, the most important virtues are truth and prudence. c. it is based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved. d. it produces the greatest balance of good over harm to customers, employees, shareholders, the community and the natural environment.

c. it is based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved

While a degree of cultural imperialism may be at work, it is offset by the countertrend of ________. a. offshoring b. McDonaldization c. local nationalism d. privatization

c. local nationalism

The relocation of manufacturing and other value-chain activities to cost-effective locations abroad is known as _________. a. insourcing b. contagion c. offshoring d. cultural imperialisms

c. offshoring

The fourth phase of globalization is characterized by _________. a. the initiation of the Marshall Plan to reconstruct Europe. b. the reduction of barriers to trade by Western industrialized countries. c. the enormous growth of cross-border trade and investment d. the rise of railroads and ocean transport

c. the enormous growth of cross-border trade and investment

The Gulf nations benefit economically from rich petroleum reserves in the region. This is an example of ________. ownership-specific advantage comparative advantage cost advantage competitive advantage

comparative advantage

Firms with high power distance are most likely to be characterized by ________. concentrated power among executives and little autonomy for subordinates an equal distribution of power among executives, managers, and lower-level employees a highly flexible work environment a minimal gap between the powerful and the weak

concentrated power among executives and little autonomy for subordinates

With regard to the iceberg concept of culture, ________ is the most deeply embedded. cooking courtship practices literature conversational patterns

conversational patterns

The process of reproducing assets without compensating those who originally created them is known as ________. trademarking bribery counterfeiting product differentiation

counterfeiting

Which of the following types of risk is also known as political risk? currency risk cross-cultural risk commercial risk country risk

country risk

Governments have facilitated economic integration by ________. adopting different monetary and fiscal policies within the same regional economic integration blocs increasing barriers to international trade and investment creating supranational institutions to further reduce trade barriers standardizing consumer lifestyles and preferences

creating supranational institutions to further reduce trade barriers

International business is also known as which of the following? multi-hub business laissez-faire business cross-border business born global business

cross-border business

Jordan is employed in an American investment firm and is currently working with some Japanese clients on a new project. He uses a lot of hand gestures during meetings which his clients find very distracting and rude. This has also led to many misunderstandings between Jordan and his Japanese clients in the recent past. Which of the following best describes such a situation? organizational anarchy risk aversion acculturation cross-cultural risk

cross-cultural risk

Fluctuating exchange rates are an example of which of the following? cross-cultural risk political risk country risk currency risk

currency risk

Which of the following benefits of IT is specific to smaller firms? a. It mitigates organizational anarchy. b. It aids in the consolidation of market monopolies. c. It creates competitive advantages by encouraging organizational learning. d. It allows firms to design and produce customized products they can target to narrow, cross-national market niches.

d. It allows firms to design and produce customized products they can target to narrow, cross-national market niches.

Which of the following best characterizes the development of international business? a. It first started in Europe. b. Its development has slowed in recent years. c. It developed after the year 2000. d. It has existed in some form for centuries.

d. It has existed in some form for centuries.

Firms that are more successful at global competition display each of the following qualities EXCEPT ________________. a. identifying foreign market opportunities aggressively b. actively pursuing partnerships with foreign firms c. focusing intensively on building organizational capacities d. approaching internationalization from a reactive standpoint

d. approaching internationalization from a reactive standpoint

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? a. reduction of barriers to investment b. the highly conservative nature of the Japanese economy c. the rise of monopoly markets in Japan d. integration of world financial markets

d. integration of world financial markets

Reduction in trade barriers is associated with the emergence of ___________. a. violation of GATT provisions b. widespread violation of intellectual property rights law c. fragmentary monetary and fiscal policies across the borders d. regional economic integration of blocs

d. regional economic integration of blocs

The ability of a nation to govern its own affairs is known as _________. a. homogenization b. liberalization c. interdependence d. sovereignty

d. sovereignty

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. At the meeting, Dan explains to the attendees that Freehold direct investment projects differ from international trade in that _________. a. the firm has chosen to focus strictly on the technology sector b. the firm is restricting its investments to stocks and does not purchase mutual funds c. the firm is engaging in the transfer of products across national borders d. the firm itself is crossing international borders to purchase foreign assets

d. the firm itself is crossing international borders to purchase foreign assets

In a world ever sensitive to social and environmental issues, more and more firms are embracing CSR and sustainability. Such firms are more likely than not to ________. favor region-specific CSR standards to global CSR standards for foreign operations be reluctant to hire managers from around the world minimize their contribution to the local community in order to maximize profits develop closer relations with foreign stakeholders to better understand their needs and work jointly toward solutions

develop closer relations with foreign stakeholders to better understand their needs and work jointly toward solutions

The leaders of Kazmia, a small nation in the southern hemisphere, have called a meeting to discuss ways to encourage foreign firms to invest in Kazmia. The country was once a leader in diamond mining and exports; however, the diamond mines have been depleted. Meanwhile, the standard of living in Kazmia has plummeted to its lowest levels, and young people are fleeing the country. Government leaders must devise a plan to reinvigorate the once prosperous nation. In the context of national industrial policy, which of the following actions by the government of Kazmia would be the most beneficial for the long-term economic security of the country? increasing the rate of taxation devoting resources to improve national infrastructure discouraging entrepreneurial ventures undertaken by small firms discouraging foreign trade

devoting resources to improve national infrastructure

Firms with a strong social interest ________. complex rituals a high degree of sensitivity to the context efficient negotiations a high degree of mutual respect

efficient negotiations

The purpose of material productions in a society is to ________. help unite people distinguish the dominant culture from minority cultures enable people to cope with their environments segregate people based on race and ethnicity

enable people to cope with their environments

Financial market integration makes it easier for internationally active firms to ________. minimize offshoring increase tariffs on the import of automobiles and industrial machinery nationalize manufacturing industries engage in foreign currency transactions

engage in foreign currency transactions

According to relativists ________. firms and individuals should seek to uphold ethical behavioral standards consistently around the world a passive acceptance of others' values is unethical ethical truths differ from group to group ethical truths are absolute

ethical truths differ from group to group

Using one's own culture as a standard for judging other cultures is known as ________. anthropocentric orientation geocentric orientation polycentric orientation ethnocentric orientation

ethnocentric orientation

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? rights approach utilitarian approach virtue approach fairness approach

fairness approach

Feminine cultures tend to emphasize ________. competitiveness ambition accumulation of wealth interdependence among people

interdependence among people

An idiom ________. refers to the perception about someone or something that may or may not be true refers to the objective analysis of a situation is a highly ambiguous rhetoric device used in high-context cultures is an expression whose symbolic meaning is different from its literal meaning

is an expression whose symbolic meaning is different from its literal meaning

While a degree of cultural imperialism may be at work, it is offset by the countertrend of ________. offshoring privatization McDonaldization local nationalism

local nationalism

Super Sports, a large sporting goods chain based in Australia, wants to open a store in Norway. With stores around the world, Super Sports executives realize that legal systems vary from country to country. Having never opened a store in Norway, the Super Sports legal team is investigating Norwegian laws to determine how they would impact the corporation and its ability to do business in Norway. Which of the following would most likely oppose the opening of a Super Sports store in Norway? local sports enthusiasts local sports retailers international banks labor unions

local sports retailers

In polychronic cultures, ________. managers and investors are impatient and want quick returns members are easily distracted and are inclined to do many tasks at once people view time as linear and punctuality as a virtue managers make commitments, set deadlines, and adhere to a strict schedule of meetings and activities

members are easily distracted and are inclined to do many tasks at once

___________ are the most transformative technology in developing economies. Mobile phones Intranets E-mails Televisions

mobile phones

Which of the following explains how firms can use FDI to gain and sustain competitive advantage? Leontief paradox monopolistic advantage theory factor proportions theory new trade theory

monopolistic advantage theory

The Coca-Cola Company is an example of ________. NGO SME multinational enterprise born global firm

multinational enterprise

A few decades ago, international business was largely the domain of ___________. service firms multinational firms smaller firms All of these

multinational firms

The relocation of manufacturing and other value-chain activities to cost-effective locations abroad is known as ________. insourcing offshoring cultural imperialism contagion

offshoring

Which of the following is a societal consequence of market globalization? greater emphasis on proactive internationalization internationalization of firm's value chain new risks and instant rivalry from foreign competitors offshoring and the flight of jobs

offshoring and the flight of jobs

Country risk is considered similar to ________. political risk commercial risk currency risk cross-cultural risk

political risk

Acme Software is a U.S.-based maker of software products for the health care industry. Recently Acme has been investigating whether it would be beneficial to internationalize some of its value-chain activities. Acme hires a consulting group to help determine which, if any, value-chain activities could be conducted abroad to promote business growth. The consulting group identifies two health care software development companies in India that could provide programming services at a lower cost than Acme's current expenditures for programming. In addition, the consultants conduct international market research which shows that German health care companies have a strong demand for the type of software that Acme offers. Which of the following activities in Acme's value chain would be internationalized if Acme decides to establish a development contract with one of the Indian software firms? distribution sales procurement Marketing

procurement

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 Sherman Antitrust Act the U.S. Foreign Corrupt Practices Act the Robinson-Patman Act the U.S. Securities Exchange Act

the U.S. Foreign Corrupt Practices Act

The third phase of globalization was triggered by ________. the invention of electricity the Great Depression the end of World War I the end of World War II

the end of World War I

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 ________. lifestyle differences language barriers the level of national debt religious beliefs

the level of national debt

Economic interests refer to a firm's economic impact on ________. the top management of the firm the society as a whole the middle management of the firm the localities where it does business

the localities where it does business

Economic interests refer to a firm's economic impact on _________________. the middle management of the firm the localities where it does business the society as a whole the top management of the firm

the localities where it does business

Which of the following is an example of an ownership-specific advantage? the physical assets owned by a firm inexpensive capital natural resources of the region where the firm operates low-cost labor

the physical assets owned by a firm

Which of the following behaviors of a firm can be called unethical? manufacturing luxury consumer goods tolerating sweatshop conditions failing to meet shareholders' expectations with regard to annual profit setting up operations abroad

tolerating sweatshop conditions

Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. Hudson uses a distinctive sign to enable its customers to easily identify its products. This distinctive sign that the company also uses to distinguish its offerings from that of its competitors is known as a ________. trademark users' license copyright patent

tradaemark

Which of the following refers to the extent to which people can tolerate risk in their lives? power distance long-term versus short-term orientation individualism uncertainty avoidance

uncertainty avoidance

An individual who believes in ethical normativism is most likely to view ethical behavioral standards as ________. superior to religious beliefs dependent on societal norms universal constantly changing

universal

In the five-step framework for making ethical decisions, which of the following approaches to evaluating actions is being used by a manager who questions whether a proposed action embodies character strengths he/she values? virtue approach common good approach rights approach utilitarian approach

virtue approach

Both common law and civil law systems originated in ________. western Europe eastern Asia eastern Europe western Asia

western Europe

Born global firms are ________. young companies that focus on the ratio of production costs rather than the absolute cost of production companies that forgo the domestic focus stage of the internationalization process companies that focus mainly on running a trade surplus young companies that internationalize early in their evolution

young companies that internationalize early in their evolution