Deck 4: Managing in a Global Environment

Question 1

Outsourcing is perhaps the most widespread approach to international involvement in China and India.

Answer 1

True

Question 2

Wal-Mart is a well-established company with a global interest who is facing minimal challenges in developing a successful international business.

Answer 2

False

Question 3

ABC Manufacturing is in the domestic stage. It has its market potential open to the countries that border its home country.

Answer 3

False

Question 4

With exporting, the corporation transfers its products for sale and its production facilities in foreign countries.

Question 5

As the number of stateless corporations increases, the awareness of national borders increases as well.

Question 6

A country's physical facilities that support economic activities make up its infrastructure.

Question 7

Some economic environments of business include resource and product markets, language, religion, and per capita income.

Question 8

Joint venture is the most risky type of direct investment.

Question 9

To deal with the marketing of products in several countries individually, a company in the international stage often uses an international division.

Question 10

According to Unlocking Innovative Solutions Through Technology in Chapter 4, radiologists are pioneers in teleradiology, a form of medical outsourcing.

Question 11

The sub-divisions of the international environment are the economic, the sociocultural, and the legal-political environments.

Question 12

The multinational stage of corporate international development transcends any single home country. The ownership, control, and top management tend to be dispersed among several nationalities.

Question 13

An example of global sourcing is seen when Gap, Inc uses low-cost Caribbean labor to cheaply produce their clothing, and then finish off and sell their clothing in the United States.

Question 14

When Harbor Trades, a Korean-based company, makes resources including technology, managerial skills, and patent and trademark rights available to Nano Technologies, a Russian company whereby allowing Nano to make products similar to CBA, it is engaging in a countertrade agreement.

Question 15

Countertrade is the barter of products for products rather than the sale of products for currency.

Question 16

An estimated 55 percent of world trade is countertrade.

Question 17

When a company builds a subsidiary from scratch in a foreign country it is called a greenfield venture.

Question 18

A form of direct investment is franchising.

Question 19

The reality of today's borderless companies also means that consumers can easily identify from which country they are buying.

Question 20

The second stage in the process of globalization is the international stage, where the company usually adopts a multidomestic approach.

Question 21

Countries that value high power distances normally have cities that are geographically separated and so have the need to transport electrical energy over large distances.

Question 22

In countries with strong masculine social values including Austria and Japan, both men and women subscribe to the dominant masculine value.

Question 23

The countries experiencing political, ethnic, and religious stability face the greatest threat of violence.

Question 24

A company's political risk includes riots, revolutions, civil disorders, and frequent changes in government.

Question 25

Ethnocentrism refers to a natural tendency of people to regard their own culture as superior and to downgrade or dismiss other cultural values.

Question 26

According to Manager's Shoptalk in Chapter 4, the polite way to give your business card to a Japanese business person is when first meeting, presenting your card with both hands.

Question 27

Ethnocentrism refers to a natural tendency of people to regard their own culture as inferior to other cultures.

Question 28

The social value of uncertainty avoidance is evident in countries like Japan which support beliefs that provide stability and conformity among its citizenry.

Question 29

According to Manager's Shoptalk in Chapter 4, being on-time for appointments is very important in Brazil.

Question 30

According to the GLOBE Project, a society with a high performance orientation places high emphasis on performance and rewards people for performance improvements and excellence.

Question 31

When an organization has a humanistic attitude, it values employees as an end in themselves.

Question 32

LDC's are less developed countries and tend to be found in the Southern Hemisphere including Africa, Asia and South America.

Question 33

Linguistic pluralism occurs in countries like India where more than one language exist.

Question 34

The fifth dimension of Hofstede's social values is preliminary-term orientation and extended-term orientation.

Question 35

Changes in the exchange rates can have major implications for the profitability of international operations.

Question 36

When an organization has an instrumental attitude toward people it treats employees as a resource to be used.

Question 37

Because of cheap labor, most international business firms are headquartered in the less developed countries of Asia and South America.

Question 38

The criterion traditionally used to classify countries as developed or developing is per capita income.

Question 39

Collectivism means a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests.

Question 40

According to the GLOBE Project, gender differentiation refers to the extent to which a society maximizes gender role differences.

Question 41

Culture shock refers to a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses.

Question 42

An MNC is managed as an integrated worldwide business system.

Question 43

Wal-Mart's challenges in Germany stem from a difference in __________ culture.

A) business
B) marketing
C) shopping
D) European
E) American

Question 44

An organization developed for the purpose of eliminating tariffs in trading between Canada and the United States is called The North American Freedom of Tariffs Administration (NAFTA).

Question 45

In Japan, workers are motivated to satisfy the company.

Question 46

Cultural intelligence refers to a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses.

Question 47

Companies that think __________ have a competitive edge.

A) globally
B) regionally
C) nationally
D) strategically
E) "customers first"

Question 48

The most familiar nation clause, calls for each member country to grant to every other member country the most familiar treatment it accords to any country with respect to imports and exports.

Question 49

Culture shock refers to the frustration and anxiety that result from constantly being subjected to strange and unfamiliar cues about what to do and how to do it.

Question 50

In Mexico, employees often do not understand participatory decision making.

Question 51

Most managers, given the trend toward globalization, do not need preparation to work in foreign cultures.

Question 52

In which stage, market potential is limited to home country, with all production and marketing facilities located at home?

A) Domestic
B) International
C) Global
D) Multinational
E) Stateless

Question 53

The primary emphasis of polycentric companies is on their home countries.

Question 54

The primary tools GATT uses to increase trade are tariff enhancements, coercion, and most favored nation clause.

Question 55

In which stage does the company usually adopt a multidomestic approach?

A) Global
B) Multinational
C) Stateless
D) International
E) Domestic

Question 56

A tendency to regard their own culture as superior and to downgrade other cultures reflects an attitude called geocentric.

Question 57

Large international firms typically are called multinational corporations.

Question 58

There are three components to cultural intelligence: cognitive, emotional, and physical.

Question 59

Geocentric companies are truly world-oriented and favor no specific country.

Question 60

Which of these statements best describes the importance of international business to the study of management?

A) International business is more important than the study of management.
B) International business is less important than the study of management.
C) Since the management functions are universal, international business in not important to the study of management.
D) If you are not thinking international, you are not thinking business management.
E) International business has noting to do with the study of management.

Question 61

The process of globalization typically passes through all of the following stages EXCEPT

A) domestic stage.
B) global stage.
C) international stage.
D) interdomestic stage.
E) multinational stage.

Question 62

Your company is interested in producing and marketing a line of coffee that will penetrate the Chinese market. Your firm is willing to supply the equipment, products, product ingredients, trademark, and standardized operating system. What type of strategy are you going to use?

A) Wholly owned foreign affiliate
B) A greenfield venture agreement
C) A franchise
D) An export agreement
E) Barter trade

Question 63

Zaman Telecom with an international division would be participating in what stage of the international arena?

A) Domestic stage
B) International stage
C) Multinational stage
D) Global stage
E) Binational stage

Question 64

The Maquiladora industry along the Texas-Mexico border uses cheap labor for assembling products. This lowers the price for U.S. consumers and is an example of

A) licensing.
B) joint venture.
C) outsourcing.
D) franchising.
E) none of these.

Question 65

Engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country is referred to as

A) franchising.
B) licensing.
C) market entry strategy.
D) outsourcing.
E) activity.

Question 66

The Write Pens, Inc. wants to reduce transferring costs by producing closer to the consumer in a foreign country. This will also help in reducing transportation and storage costs. Which strategy would be the best to use given the circumstances?

A) Franchising
B) Exporting
C) Direct investing
D) Barter agreement
E) Licensing

Question 67

Color Copiers operates in a true global fashion, making sales and acquiring resources in whatever country offers the best opportunities and lowest cost, what stage of international development is it in?

A) Stateless stage
B) Multinational stage
C) International stage
D) Domestic stage
E) Multidomestic stage

Question 68

A foreign subsidiary over which an organization has complete control is called a

A) joint venture.
B) licensing agreement.
C) franchise.
D) wholly owned foreign affiliate.
E) foreign venture.

Question 69

To enter foreign markets, most firms begin with which strategy?

A) Exporting
B) Greenfield venture
C) Joint venture
D) Acquisition
E) Direct investment

Question 70

Heineken begins by exporting its product into new markets, and then __________ to a local brewer to establish its position in the market.

A) countertrades
B) licenses
C) exports
D) franchises
E) markets

Question 71

Global Dandelion, with marketing and production facilities located in many countries, is participating at what stage in the international arena?

A) International stage
B) Global stage
C) Domestic stage
D) Multinational stage
E) Interdomestic stage

Question 72

A form of exporting to less-developed countries is called

A) licensing.
B) franchising.
C) greenfield venture.
D) joint venture.
E) countertrade.

Question 73

What is exporting?

A) Countertrade
B) The barter of products for products, often used in developing nations
C) Items produced in the home country for sale in foreign markets
D) All of these
E) None of these

Question 74

Stateless stage is also referred to as the __________ stage.

A) multinational
B) global
C) multidomestic
D) international
E) domestic

Question 75

__________ is an entry strategy in which the organization maintains its production facilities within its home country and transfers its products for sale in foreign markets.

A) Franchising
B) Licensing
C) Exporting
D) Greenfield venture
E) Joint venture

Question 76

Franchising is a form of

A) direct investing.
B) licensing.
C) exporting.
D) countertrade.
E) barter trade.

Question 77

Which of the following pairs of alternatives closely resemble each other in the amount of ownership, control and risk obtained in operating international businesses?

A) Direct investment/franchising
B) Wholly owned foreign affiliate/countertrade
C) Exporting/licensing
D) Franchising/licensing
E) All of these

Question 78

The Mercedes-Benz plant in Alabama is an example of a __________.

A) greenfield venture
B) joint venture
C) direct investment
D) foreign affiliate
E) direct acquisition

Question 79

Go RVing, a U.S. company, built a subsidiary from scratch in England. This is an example of

A) franchising.
B) greenfield venture.
C) joint venture.
D) exporting.
E) licensing.

Question 80

According to Unlocking Innovative Solutions Through Technology in Chapter 4, start-up companies are using __________ to help meet the demand for radiologists.

A) exporting
B) licensing
C) franchising
D) outsourcing
E) countertrade