Deck 4: Managing in a Global Environment

Question 1

A manager is said to have a global mindset when they have an ability to appreciate and influence individuals,groups,organisations and systems that represent different social,cultural,political and psychological characteristics.

Answer 1

True

Question 2

Global outsourcing means engaging in the international division of labour so that manufacturing occurs in countries with the cheapest sources of labour and supplies.

Answer 2

True

Question 3

According to Hofstede's cultural dimensions,high uncertainty avoidance means that members of a society feel uncomfortable with ambiguity and therefore support beliefs that promise conformity.

Answer 3

True

Question 4

In the multinational stage,exports increase and the organisation usually adopts a multi-domestic approach,probably using an international division to deal with the marketing of products in several countries individually.

Question 5

Countertrade refers to any situation where a purchaser from a foreign country argues for a reduction in the terms of trade (especially with regards to export purchases).

Question 6

The primary tools GATT (now the WTO)uses to increase trade are tariff enhancements,coercion and most-favoured-nation clauses.

Question 7

The basic management functions of planning,organising,leading and controlling are not as relevant when an organisation operates across national borders.

Question 8

A company in the international stage often uses an international division to deal with the marketing of products in several countries individually.

Question 9

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

Question 10

A company in the domestic stage often has marketing and production facilities located in many countries across the world.

Question 11

An organisation's risk of loss of assets,earning power or managerial control due to politically based events or actions by host governments is known as its level of political instability.

Question 12

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

Question 13

A multinational corporation generates 25 per cent or less of its total sales revenues from operations inside its parent companies home country.

Question 14

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

Question 15

Interest rates measure the annual rate of growth of prices in the Australian economy,while inflation rates measure the cost of borrowing money.

Question 16

A country's physical facilities that support economic activities are defined as its 'infrastructure'.

Question 17

The cultural attitude characterised by a tendency to regard one's own culture as superior,or at least equal to all others is known as 'ethnocentrism'.

Question 18

According to Hofstede's cultural dimensions,masculinity reflects the values of relationships,cooperation,group decision making and quality of life.

Question 19

A company in the global stage of international development transcends any single home country of operation.

Question 20

The exchange rate is the rate at which the average household income of one country is compared with the average household income of another country.

Question 21

Hofstede's listed cultural variables include: power distance,uncertainty avoidance,individualism,collectivism,masculinity and femininity.

Question 22

Franchising is a form of direct investment.

Question 23

A wholly owned foreign affiliate is a foreign subsidiary over which an organisation has complete control.

Question 24

International management refers to the situation whereby business recruits managers from more than one country to help run its business internationally.

Question 25

In addition to the dimensions identified by Hofstede,the GLOBE project identifies the following cultural characteristics: assertiveness,future orientation,gender differentiation,performance orientation and human orientation.

Question 26

In the __________ stage,an organisation has marketing and production facilities located in many countries,and more than one third of its sales emanates from outside the home country.

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

Question 27

The process of globalisation typically passes through all of the following stages except the:

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

Question 28

When a company builds a new subsidiary in a foreign country it is often called a greenfield venture.

Question 29

A high-context culture is one where people used communication primarily to exchange facts and information.

Question 30

The management of business operations conducted in more than one country is called:

A) global management
B) international management
C) outsourcing management
D) planning management
E) domestic management.

Question 31

The most risky direct investment,in which a company builds a subsidiary from scratch in a foreign company,is known as a:

A) wholly owned foreign affiliate
B) indirect investment
C) brownfield venture
D) greenfield venture
E) multidomestic venture.

Question 32

Croc Sporting Supplies operates in a truly 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 33

In the __________ 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 34

A company in the international stage often uses an international division to deal with the marketing of products in several countries individually.

Question 35

The stateless stage is also referred to as the __________ stage.

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

Question 36

Licensing refers to an entry strategy whereby an organisation in a host country provides license to organisations in other countries to trade in the host country.

Question 37

In which stage does the company usually adopt a multi-domestic approach?

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

Question 38

The ability to appreciate and influence individuals,groups,organisations and systems that represent different social,cultural,political,institutional,intellectual and psychological characteristics is associated with a:

A) global mindset
B) international mindset
C) outsourcing mindset
D) planning mindset
E) domestic mindset.

Question 39

A low-context culture emphasises the importance of communication as a way to build personal relationships.

Question 40

An organisation that receives more than 25 per cent of its total sales revenues from operations outside the parent company's home country is called a transnational company.

Question 41

A nation's __________ includes the shared knowledge,beliefs and values,as well as the common modes of behaviour and ways of thinking,among members of a society.

A) power distance
B) culture
C) masculinity
D) individualism
E) uncertainty avoidance

Question 42

The economic factor in the international environment includes all of the following,except:

A) resource and product markets
B) per capita income
C) infrastructure
D) economic development
E) formal education literacy

Question 43

The management of a business operation conducted in more than one country is known as:

A) global management
B) international management
C) outsourcing management
D) All of these choices.
E) None of these choices.

Question 44

__________________ is the degree to which people accept inequality in power among institutions,organisations and people.

A) Power distance
B) Uncertainty avoidance
C) Individualism
D) Collectivism
E) Masculinity

Question 45

Difficulties in mining operations in Bougainville,Papua New Guinea,have been extremely costly to a number of Australian companies.The inherent form of risk here is __________ risk.

A) economic
B) social
C) environmental
D) political
E) cultural

Question 46

The management of a business operation conducted in more than one country is known as:

A) global management
B) international management
C) outsourcing management
D) All of these choices.
E) None of these choices.

Question 47

Political risk is defined as an organisation's risk of ________________ due to politically based events or actions by host governments.

A)loss of assets
B)managerial control
C)earning power
D)All of these choices.
E)A and B.

Question 48

____________________ includes riots,revolutions,civil disorders and frequent changes in government.

A) Liability
B) Political risk
C) Tariffs
D) Political instability
E) Terrorism

Question 49

In international operations,the economic environment includes which of the following?

A) Shared knowledge, beliefs and values
B) Political risks
C) Social organisations
D) Infrastructure
E) Tariffs, quotas and taxes

Question 50

Which of the following is not a legal-political factor in the international environment?

A) Laws and regulations
B) Language barriers
C) Tariffs, quotas and taxes
D) Political risk
E) Government takeovers

Question 51

Your restaurant in Malaysia is having trouble getting the local farmers to supply you with the necessary produce.This is a problem with Malaysia's:

A) product market
B) resource market
C) infrastructure
D) economy
E) power distance.

Question 52

Countries whose social values reflect low power distance:

A) are highly democratic
B) accept inequality in power among institutions, organisations and people
C) expect equality in power
D) avoid uncertainty
E) None of these choices.

Question 53

Which of the following sectors present the greatest potential for international mistakes?

A)Economic sector
B)Sociocultural sector
C)Legal-political sector
D)All of these choices.
E)B and C.

Question 54

The __________ rate is the rate at which one country's currency is exchanged for another country's currency.

A) interest
B) inflation
C) exchange
D) economic
E) swapping

Question 55

Germany's cultural preference is for achievement,heroism,assertiveness and material success.This would be considered:

A) power distance
B) individualism
C) masculinity
D) ethnocentrism
E) collectivism.

Question 56

In international operations,the economic environment represents all of the following factors,except:

A) Infrastructure
B) Resource and product markets
C) Demand and supply of government regulations
D) Inflation
E) Exchange rates

Question 57

While on a tour of company facilities in an overseas country,your organisation's CEO is kidnapped.This is a harsh example of:

A) economic development
B) infrastructure
C) political risk
D) international law
E) social risk.

Question 58

Which of the following is not an example of an international trade alliance?

A) NAFTA
B) GATT
C) EU
D) ASEAN
E) All of these choices are examples of trade alliances.

Question 59

A country's road system is usually publically owned.Therefore,road systems must be considered as which of the following?

A) Resource constraints
B) Infrastructure
C) Physical goods
D) Products
E) Plant and equipment

Question 60

A population's preference for a loosely knit social framework in which people are expected to take care of themselves is called:

A) culture
B) individualism
C) ethnocentrism
D) masculinity
E) power distance.

Question 61

National culture in which people use communication to build personal relationships is known as:

A) feminine national culture
B) international context culture
C) low-context culture
D) high-context culture
E) None of these choices.

Question 62

In the ____________________ stage,exports increase,and the company usually adopts a multi-domestic approach,probably using an international division to deal with the marketing of products in several countries individually.

Question 63

An entry strategy in which the organisation maintains its production facilities within its home country and transfers its products for sale in foreign markets is referred to as:

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

Question 64

____________ is an arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner.

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

Question 65

The single European currency that replaced 17 national currencies in the European Union is known as the:

A) GATT
B) euro
C) NAFTA
D) ASEAN
E) None of these choices.

Question 66

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

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

Question 67

A value characterised by people's intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity is referred to as a(n):

A) power distance
B) uncertainty avoidance
C) certainty avoidance
D) long-term orientation
E) None of these choices.

Question 68

Each of the following is a characteristic of a multinational company,except:

A) They are managed as an integrated worldwide business system.
B) They can earn up to 80% of their total sales revenue from their home country operations.
C) Capital, technology and people are transferred among country affiliates.
D) Top managers are presumed to exercise a global perspective.
E) All of these are characteristics of a multinational company.

Question 69

Franchising is a form of:

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

Question 70

A value characterised by an emphasis on thrift and perseverance is known as a(n):

A) power distance
B) uncertainty avoidance
C) certainty avoidance
D) long-term orientation
E) None of these choices.

Question 71

In relationship-oriented societies,leaders should:

A) take a strong personal interest in employees
B) feel free to criticise as much as they feel they need to
C) reprimand in public whenever possible; it is an especially effective technique in these societies
D) minimise the emphasis on relations given the society's interest
E) maintain the traditional command-and-control management style.

Question 72

A cultural attitude marked by the tendency to regard one's own culture as superior to others is called:

A) ethnocentrism
B) polycentrism
C) geocentrism
D) technocentrism
E) Polytheism.

Question 73

____________ is an entry strategy in which an organisation in one country makes certain resources available to organisations in other countries in order to participate in the production and sale of its products abroad.

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

Question 74

An international entry strategy in which the organisation is involved in managing its production facilities in a foreign country is known as:

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

Question 75

Which of these reflect a cultural preference for cooperation,group decision making and quality of life?

A) Individualism
B) Collectivism
C) Masculinity
D) Femininity
E) None of these choices.

Question 76

Each of the following dimensions are included in the GLOBE project,except:

A) assertiveness
B) humane orientation
C) power distance
D) performance orientation
E) gender differentiation.

Question 77

Your company is interested in producing and marketing a line of outdoor wear that will penetrate the Chinese market.Your organisation is willing to supply the equipment,products,product ingredients,trademark and standardised 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) Mercantilism

Question 78

In __________,a company shares costs and risks with another organisation.

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

Question 79

Tim's Tools operates in Indonesia using cheap labour for assembling products.This lowers the price for Australian consumers and is an example of:

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

Question 80

____________ is an entry strategy in which the organisation 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