Deck 3: The Global Environment

Question 1

Labor unions in the United States are more concerned with social issues than they are in most other countries.

Answer 1

False

Question 2

In the context of the strategies that organizations use for competing in the international environment, a direct foreign investment occurs when a firm owns physical assets in another country.

Answer 2

True

Question 3

Future orientation is one of the four dimensions of national culture identified by Dutch scholar Geert Hofstede.

Answer 3

False

Question 4

Every aspect of the human resources management (HRM) process in a geocentric company must be undertaken from a domestic perspective.

Question 5

Florence is an expatriate manager at a multinational corporation. Her managers expect her to act independently and acquire specialized knowledge and transfer it to her subordinates. The only issue she faces is being unable to get the local employees to go along with her ideas. As a result, there is a high risk of agency problems. In the context of the four international strategies proposed by Bartlett and Goshal, Florence is working with a company that uses a(n) _____.

A) transnational strategy
B) international strategy
C) global strategy
D) regional strategy

Question 6

Which of the following is a reason why host-country nationals are usually hired as nonmanagerial employees in international businesses?

A) They demand lesser hardship premium than parent-country nationals.
B) They are cheaper to employ than parent-country or third-country nationals.
C) They do not require training and eliminate the training costs of organizations.
D) They are not eligible for the provisions of international labor standards.

Question 7

In the context of selecting expatriates, which of the following is a type of recruiting firm that actively seek qualified managers and other professionals for possible placement in positions in other organizations?

A) Career services centers
B) Employment contractors
C) Gatekeepers
D) Headhunters

Question 8

The most important index that international HR managers need to consider while hiring a workforce in a host country is hourly wage.

Question 9

John prefers to work alone on projects and avoids tasks that require him to work in a group with other employees in his organization. He believes in self-reliance and gives precedence to his own ideas and values over the beliefs of others. In the context of the dimensions of national culture identified by Geert Hofstede, John is likely to score high on _____.

A) gender egalitarianism
B) individualism
C) femininity
D) in-group collectivism

Question 10

In the context of the dimensions of national culture identified by Dutch scholar Geert Hofstede, uncertainty avoidance refers to the status and authority differences between a superior and a subordinate.

Question 11

In the context of the strategies that organizations adopt for competing in the international environment, the process of making products in the domestic marketplace and then selling them in other countries is called importing.

Question 12

Which of the following is an advantage of exporting as an international business strategy?

A) It allows a firm to have its own company-owned facilities in a foreign market.
B) Products exported to other countries are exempt from trade controls like tariffs and taxes.
C) There is no need to adapt the products to be exported to local conditions as they are sold "as is".
D) It reduces the transportation expenses incurred by a firm.

Question 13

More than half the world's workforce outside the United States belongs to labor unions.

Question 14

GeNext, a leading mobile software developer in Japan, agrees to develop exclusive software application programs for a new line of affordable smartphones to be launched by CelCom, a smartphone manufacturer in China. The brand reputation and pricing strategies of both of these companies are expected to bring in large volumes of smartphone sales. The profits from the sales will be divided between these two firms. In the given scenario, GeNext and CelCom have _____.

A) entered into a licensing agreement
B) formed a strategic alliance
C) entered into an agreement for a merger
D) made a direct foreign investment

Question 15

Which of the following dimensions of national culture identified by Dutch scholar Geert Hofstede refers to the status and authority differences between a superior and a subordinate?

A) Power distance
B) Collectivism
C) Assertiveness
D) Uncertainty avoidance

Question 16

One of the domestic issues in international human resource management is that firms have to:

A) replace host-country nationals with parent-country nationals for nonmanagerial jobs as the former are more expensive to employ.
B) provide a hardship premium to all local employees as part of their pay packages.
C) provide equal compensation to all workers, irrespective of their place of work.
D) invest additional money to bring the workforce in underdeveloped countries up to the expected performance standards.

Question 17

Which of the following dimensions of national culture identified by Robert House's GLOBE project (Global Leadership and Organizational Behavior Effectiveness) refers to equal opportunities for men and women in society?

A) Gender egalitarianism
B) Power distance
C) In-group collectivism
D) Humane orientation

Question 18

Organizations using the ethnocentric staffing model have a fully functioning human resource (HR) department in each foreign subsidiary that is responsible for managing all local HR issues for lower- and upper-level employees alike.

Question 19

Tanya, a social activist, works closely with a local nonprofit organization (NGO) to spread awareness about the importance of education in rural areas. She is actively involved in planning and organizing programs conducted by the community. Together, they have helped enroll 500 students in public schools and have also been responsible for setting up 15 new schools. Tanya takes a lot of pride in her work and her association with the NGO. In the context of the dimensions of national culture as identified by Robert House in his GLOBE project (Global Leadership and Organizational Behavior Effectiveness), Tanya belongs to a culture that is likely to score:

A) low on femininity.
B) high on in-group collectivism.
C) high on masculinity.
D) low on uncertainty avoidance.

Question 20

The actions of management toward labor and the actions of labor toward management are heavily restricted by law.

Question 21

Who among the following individuals is most likely to receive a hardship premium?

A) An intern who puts in extra hours of work on a daily basis
B) A business development manager on a foreign client visit
C) An expatriate manager posted in a war-torn country
D) A physician volunteering to serve the poor in his locality

Question 22

In the context of managing international transfers and assignments, repatriation occurs when a manager is:

A) sent by his or her company on a second foreign assignment.
B) brought back home from a foreign assignment.
C) deported from his home country to a foreign country.
D) expelled from the foreign country where he or she is sent on an assignment.

Question 23

In the context of managing international transfers and assignments, which of the following is instruction directed at enhancing specific job-related skills and abilities and most often focuses on operating employees and technical specialists?

A) Training
B) Learning
C) Development
D) Management

Question 24

Which of the following is a difference between labor relations in Japan and labor relations in most European nations?

A) Unlike Japan, the use of a third-party mediator to solve disputes is rare in most European nations.
B) Unlike most European nations, confrontation and hostility are encouraged in Japan.
C) Unlike Japan, temporary work stoppages and strikes are rare in most European nations.
D) Unlike most European nations, unions and management in Japan tend to work together cooperatively.

Question 25

Which of the following international business approaches involves cooperation between firms but may not involve sharing of ownership?

A) Direct foreign investment
B) Licensing
C) A strategic alliance
D) A joint venture

Question 26

Forrest & Barnes, a pharmaceutical company in the United States, builds a research and development facility in Japan. This helps the company make the best use of the efficient labor and technology available in Japan. Which of the following international business strategies does Forrest & Barnes most likely use?

A) Exporting
B) A joint venture
C) Licensing
D) Direct foreign investment

Question 27

Which of the following companies is an example of an international business that uses the ethnocentric staffing model?

A) ComCor, a computer manufacturing company that heavily uses host-country nationals at all levels of the organization in its foreign offices
B) Albits, a beverage-producing company that hires parent-country nationals to staff higher-level positions and host-country nationals for entry-level positions in its foreign offices
C) LifePro, an investment company that has fully-functioning human resource departments in all its foreign offices to handle HR issues for both upper- and lower-level employees
D) Denkins, a software development company that undertakes all human resource management processes from an international perspective

Question 28

In the context of corporate international strategies, a firm using a transnational strategy:

A) expects its expatriate managers to rely heavily on direction from the home office.
B) has centralized decision-making, with the lowest risk of agency problems.
C) can implement a knowledge contract to obtain all the information acquired by an expatriate manager.
D) faces the least number of threats for opportunistic behavior and the lowest information asymmetry.

Question 29

Which of the following is a disadvantage of the international business strategy of licensing?

A) It subjects the original firm to high transportation expenses.
B) The profits of a firm using this strategy are limited to those it receives from royalty payments.
C) It allows a firm to enter a foreign market in high-risk conditions.
D) The costs of licensing are quite high and must be borne solely by the original firm.

Question 30

In the context of the four international strategies as proposed by Bartlett and Goshal, if an expatriate manager is expected to acquire, leverage, and transfer specialized knowledge with much independence, he is most likely working with a firm that uses a _____.

A) regional strategy
B) global strategy
C) multidomestic strategy
D) transnational strategy

Question 31

In the context of economic communities, unlike the European Union (EU), the North American Free Trade Agreement (NAFTA) _____.

A) has unified the human resource management practices and laws of its member nations
B) has a common currency designed to eliminate exchange-rate fluctuations
C) is a comprehensive and commonly cited economic community
D) attempts to reduce the trade barriers that exist among Canada, the United States, and Mexico

Question 32

Which of the following terms is defined as the set of values that helps an organization's members understand what it stands for, how it does things, and what it considers important?

A) Culture
B) Diversity
C) Ethnicity
D) Folkway

Question 33

Which of the following statements is true of the international business strategy of licensing?

A) It allows a firm to enter a foreign market with relatively little risk.
B) It provides a firm with its own company-owned facilities in a foreign country.
C) It requires a huge outlay of capital.
D) It does not provide market exposure to a firm.

Question 34

Axtara, an automobile manufacturer, has several factories in foreign countries. The management strongly believes in giving precedence to the values and perspectives of its home office over those of its foreign subsidiaries. As a result, the management hires workers from the home country to staff the upper-management positions in all the foreign offices of the company. In the context of the different staffing strategies used by international businesses, Axtara most likely uses the _____.

A) geocentric staffing model
B) regiocentric staffing model
C) polycentric staffing model
D) ethnocentric staffing model

Question 35

Which of the following companies uses a strategic alliance to compete in the international business environment?

A) Manolo, a large organic farming business that partners with a chain of retail supermarkets to sell its produce
B) Frentech, a large consulting organization that has several operating facilities in another country
C) Mellissa, a clothing business that purchases subsidiaries in another country to expand its business
D) Benedicts, a frozen food producer that permits other firms to manufacture and market its products using its logo

Question 36

Brooks & Bill is an organic chemicals and fertilizer manufacturer. It allows Fixit Chemicals, a company based in another country, to manufacture Brooks & Bill's products using the Brooks & Bill name, logo, and materials. Fixit Chemicals then sells these products in its own local market. Fixit Chemicals also pays a royalty to Brooks & Bill for every unit that it sells. Which of the following international business strategies does Brooks & Bill most likely use?

A) Exporting
B) Licensing
C) A joint venture
D) A strategic alliance

Question 37

Philip, a French national, is hired by an international corporation based in Japan for its London office. After joining, Philip learns that two other candidates, one from the company's home office in Japan and the other from its London branch, were also considered for the same position. After a complete assessment, however, the management hired Philip because they found him better qualified for the job. In the context of the different staffing strategies used by international businesses, the company that hired Philip most likely uses the _____.

A) polycentric staffing model
B) geocentric staffing model
C) regiocentric staffing model
D) ethnocentric staffing model

Question 38

In the context of the four international strategies proposed by Bartlett and Goshal, which of the following strategies poses the highest risk of agency problems?

A) The multidomestic strategy
B) The transnational strategy
C) The regional strategy
D) The global strategy

Question 39

Which of the following statements is true of selecting expatriates for international assignments?

A) People with foreign-language skills and international travel experience are attractive expatriate candidates.
B) Success in foreign assignments is based more on technical skills than on cultural skills.
C) More firms are increasingly hiring global managers because of their abundance in the international market.
D) The first step in selecting expatriates is to employ a headhunter to identify a pool of qualified applicants.

Question 40

Hannah is a relationship-oriented manager at a multinational corporation. She ensures her subordinates know that she values their positive rapport with each other. She also makes it a point to reward her subordinates for improving as well as for showing excellence in their work. In the context of the dimensions of national culture identified by Robert House's GLOBE project (Global Leadership and Organizational Behavior Effectiveness), Hannah most likely displays high _____.

A) power distance
B) performance orientation
C) masculinity
D) individualism

Question 41

Which of the following statements is true of the local compensation issues that international businesses face?

A) Multinational corporations must pay a hardship premium to their local employees and their families.
B) Firms must pay equal compensation to their employees in different foreign locations.
C) Compensation issues must be addressed at an international level for multinational corporations.
D) Differences in lifestyles cause a variation in the way in which firms compensate their employees in different foreign locations.

Question 42

Sera Pharma, a pharmaceutical company, produces medicines in its home country. It recently started selling its products to foreign companies in order to expand its business and enter new markets. Which of the following international business strategies does Sera Pharma use in the given scenario?

A) Exporting
B) Licensing
C) An acquisition strategy
D) A strategic alliance

Question 43

Which of the following is the first step in the process of selecting an expatriate manager?

A) Defining the skills necessary to carry out the foreign assignment
B) Evaluating the adaptability skills of the prospective candidates
C) Identifying managerial candidates with foreign-language skills
D) Developing cultural orientation sessions for a pool of qualified applicants

Question 44

Which of the following statements is true of the training of expatriate managers?

A) It solely focuses on familiarizing expatriates with the language of their foreign destination.
B) It involves teaching managers general skills that will be useful for both present and future jobs.
C) It is typical to have a training component that deals with social manners and issues involved in social exchanges.
D) It is uncommon to send expatriates for short trips to their ultimate foreign destination before their permanent move as part of the training.

Question 45

Jared has been working as a manager in a foreign subsidiary of Constructo Inc. for 5 years. When his assignment ends, the company starts the process of bringing Jared and his family back home. The human resource department briefs Jared on new openings and opportunities available within the company. In this scenario, Constructo Inc. is involved in Jared's _____.

A) selection
B) repatriation
C) compensation
D) training

Question 46

Robert, an executive manager, works in a firm with a clearly-defined hierarchical structure. He prefers to strictly follow the work schedule designed by the top management and assigns tasks to his subordinates well in advance. He expects his subordinates to follow his directions without questioning them and favors a standardized and structured approach to work. In the context of Geert Hofstede's dimensions of national culture, Robert belongs to a culture that is likely to score:

A) low on power distance.
B) low on assertiveness.
C) high on uncertainty avoidance.
D) high on femininity.

Question 47

According to the new approaches to determining the success of an expatriate's assignment, the assessment of an expatriate's success should be:

A) equated with how long the expatriate stayed in the foreign location.
B) tied to the strategic goals the assignment was meant to accomplish.
C) equated with how early the expatriate returned from the foreign location.
D) tied to how well he or she assimilated the local culture and values.

Question 48

Companies that use the geocentric staffing model:

A) heavily employ host-country nationals to better deal with local-market conditions.
B) have a common HR unit in their parent countries to handle employment issues for all foreign subsidiaries.
C) undertake every aspect of their human resource management process from an international perspective.
D) primarily hire home-country nationals to fill higher-level positions in their foreign offices.

Question 49

In a technology company named X-Core Inc., the managers are friendly with their team members and everyone is on a first-name basis with each other. The work environment is open, and team members are encouraged to discuss ideas with their managers. The teams often go on informal lunches with their managers, and the conversations are free and friendly. In the context of studies of national culture and its influence on behavior at work conducted by Dutch scholar Geert Hofstede, X-Core Inc. is most likely to score:

A) low on individualism.
B) high on masculinity.
C) low on power distance.
D) high on assertiveness.

Question 50

In the context of Robert House's GLOBE project (Global Leadership and Organizational Behavior Effectiveness), which of the following refers to the degree to which people value long-term planning and investing?

A) Individualism
B) In-group collectivism
C) Future orientation
D) Uncertainty avoidance

Question 51

Aimi Corporation, based in Japan, decides to open a big manufacturing and distribution center in China. It does this by acquiring operating facilities from another company in China. The management at Aimi believes that adopting this approach will provide the company with instant access to new markets. In this context, the HR function at Aimi Corporation will:

A) need to extend and expand its scope and operations to provide the appropriate contributions to firm performance.
B) need to be extended to include another set of employees but will not change in any other meaningful way.
C) become complicated because of the disparate relationship between the staff in Aimi's home-country and the staff of the acquired company.
D) need to be extended to include employees of the Chinese company involved in the acquisition.

Question 52

In the context of the dimensions of national culture as identified by Robert House's GLOBE project (Global Leadership and Organizational Behavior Effectiveness), who among the following individuals is most likely to belong to a culture with high performance orientation?

A) Frieda, who believes in offering equal job opportunities to both men and women
B) Martin, who is very proud of his company and the team that he manages
C) Belinda, who acknowledges the work of her best employees by rewarding them
D) Carlos, who plans projects and allocates resources to them well in advance

Question 53

Identify a form of trade control that places a limit on the number or value of goods that can be traded.

A) Quotas
B) Tariffs
C) Embargoes
D) Subsidies

Question 54

Azus is an international food products company with subsidiaries in many countries. It employs host-country nationals extensively in each of its foreign locations. The corporate human resources (HR) function in Azus focuses primarily on coordinating relevant activities with their counterparts in each foreign location. Each subsidiary has its own fully functioning HR department that is responsible for managing all local HR issues for lower- and upper-level employees. In the given scenario, which of the following staffing models does Azus employ?

A) Regiocentric staffing model
B) Polycentric staffing model
C) Ethnocentric staffing model
D) Geocentric staffing model

Question 55

Feel Good Inc. is a multinational sports goods manufacturer that uses a different strategy in each of its subsidiaries and operations. Moreover, all decision-making is decentralized, which leaves the company open to the threat of opportunistic behavior. Since the expatriate managers do not rely on headquarters expertise, there is also an asymmetry in the transfer of information and specialized knowledge. In the context of the four international strategies proposed by Bartlett and Goshal, Feel Good Inc. uses a(n) _____.

A) global strategy
B) international strategy
C) universal strategy
D) multidomestic strategy

Question 56

If the corporate human resource function in an organization is primarily concerned with selecting and training managers for foreign assignments, developing appropriate compensation packages for those managers, and handling adjustment issues when the manager is reassigned back home, it is evident that the organization has adopted the _____.

A) ethnocentric staffing model
B) regiocentric staffing model
C) geocentric staffing model
D) polycentric staffing model

Question 57

Which of the following international business strategies has the least effect on the HR function of a firm?

A) Mergers and joint partnerships
B) Direct foreign investments and corporate acquisitions
C) Exporting and licensing
D) Joint ventures and strategic alliances

Question 58

Which of the following statements is true of the polycentric staffing model?

A) This model makes extensive use of host-country nationals (HCNs) as employees in foreign subsidiaries.
B) This model assumes that parent-country nationals (PCNs) are better equipped to deal with local market conditions.
C) Organizations using this approach have one central HR department that is responsible for managing all HR issues for lower- and upper-level employees.
D) This model assumes that home-office perspectives and issues take precedence over local perspectives.

Question 59

Suave Inc. is an accessories and jewelry retailer based in France. The company wants to enter new markets to expand its business. As a result, it decides to sell its goods to retailers in other countries. Which of the following is an advantage that Suave Inc. is most likely to have using this approach?

A) This approach will reduce the transportation costs incurred by Suave.
B) This approach will allow Suave to purchase factory units in other countries.
C) This approach will allow Suave to realize its full profit potential.
D) This approach will involve relatively little risk for Suave.

Question 60

Which of the following companies is an example of an international business that uses the geocentric staffing model?

A) Hydracore, a web development company that hires employees from a pool of qualified candidates from across the world
B) Franelli, an international convenience store chain that hires employees from its parent country to staff higher-level positions in its foreign offices
C) Infinite Sports, a sports shoes manufacturing company that only hires local workers to staff its foreign subsidiaries
D) Cielo Vista, a commercial airline that hires parent-country nationals to staff all positions in its foreign offices

Question 61

List the dimensions of national culture as identified by Geert Hofstede.

Question 62

Briefly discuss international labor relations.

Question 63

How do international businesses compensate expatriates?

Question 64

What are the various strategies that organizations can adopt to compete in the international environment? What are the challenges that these strategies pose for human resource managers?

Question 65

Briefly explain some of the local training issues that a multinational company faces when it hires host-country nationals.