Deck 4: Managing in a Global Environment

Question 1

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

Answer 1

True

Question 2

The goal of the European Union is to create a powerful single market system for Europe's millions of consumers.

Answer 2

True

Question 3

A form of direct investment is franchising.

Answer 3

False

Question 4

Fifteen member states of the EU have adopted the rupee, as a single European currency.

Question 5

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 6

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

Question 7

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

Question 8

Direct investing means that the company is involved in managing the productive assets, which distinguishes it from other entry strategies that permit less managerial control.

Question 9

The least costly and least risky direct investment is called a greenfield venture.

Question 10

The term top of the pyramid refers to the more than four billion people who earn the least, as defined by per capita income.

Question 11

One advantage to acquiring a wholly owned foreign affiliate is that the company that acquires it would then have complete control.

Question 12

Licensing means engaging in the international division of labor so that work activities can be done in countries with the cheapest sources of labor and supplies.

Question 13

Seeking cheaper sources of materials or labor offshore is called offshoring.

Question 14

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

Question 15

Large international firms typically are called multinational corporations.

Question 16

The basic management functions of planning, organizing, leading, and controlling are the same whether a company operates domestically or internationally.

Question 17

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

Question 18

An example of global outsourcing is seen when Gap, Inc uses low-cost Caribbean labor to cheaply produce its clothing, and then finishes off and sells its clothing in the United States.

Question 19

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

Question 20

Business has become a unified, global field as trade barriers fall, communication becomes faster and cheaper, and consumer tastes converge.

Question 21

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

Question 22

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

Question 23

Social values greatly influence organizational functioning and management styles.

Question 24

Unfortunately, many U.S. managers fail to realize that the values and behaviors that typically govern how business is done in the United States do not translate to the rest of the world.

Question 25

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 26

A multinational corporation typically receives more than 25 percent of its total sales revenues from operations inside the parent's home country.

Question 27

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

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

Market risk is defined as the risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments.

Question 30

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 31

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

Question 32

A low-context culture is a culture in which communication is used to enhance personal relationships.

Question 33

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

Question 34

According to the GLOBE Value Dimensions, Japan and Russia both have very high performance orientation.

Question 35

A high performance orientation means that a society encourages toughness, assertiveness, and competitiveness.

Question 36

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 37

The estimated 2010 misery index figures suggest significantly less misery for almost every country as compared to figures at the beginning of the century.

Question 38

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

Question 39

The countries experiencing political stability face the greatest threat of violence.

Question 40

An MNC is managed as an integrated worldwide business system.

Question 41

Which of the following refers to engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country?

A) Franchising
B) Licensing
C) Market entry strategy
D) Outsourcing
E) Activity

Question 42

Which of the following 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 43

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 44

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

Question 45

The Nissan plant in Mississippi is an example of a _____.

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

Question 46

Today's companies compete in a _____.

A) growingly domestic
B) low-context culture
C) high-context culture
D) Greenfield economy
E) borderless world

Question 47

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

Question 48

A high-context interaction requires more time because a relationship has to be developed, and trust and friendship must be established.

Question 49

Exporting, licensing, and direct investing are called _____ strategies because they represent alternative ways to sell products and services in foreign markets.

A) globalized
B) expansion
C) retrenchment
D) market entry
E) concentrated business

Question 50

The extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries is called _____.

A) standardization
B) industrialization
C) globalization
D) internationalism
E) linguistic pluralism

Question 51

The Maquiladora industry along the Texas-Mexico border on the Mexico side 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 52

_____ places an emphasis on a worldwide perspective.

A) Polycentric companies
B) Geocentric companies
C) Ethnocentric companies
D) Regiocentric companies
E) Domestic companies

Question 53

German, Swiss, and North American cultures are among the high-context cultures.

Question 54

The Digitec company has recently decided to design and manufacture a laptop that retails for under $50, in an effort to make information technology available to people in places like rural Africa and rural India. This is known as what type of strategy?

A) Bottom of the pyramid strategy
B) Skimming the barrel strategy
C) Cream of the crop strategy
D) Top of the peak strategy
E) Base price strategy

Question 55

Companies that think _____ have a competitive edge.

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

Question 56

All of the following are components of cultural intelligence, except _____.

A) physical
B) cognitive
C) emotional
D) analytical
E) all of these

Question 57

_____ is a concept that proposes that corporations can alleviate poverty and other social ills by selling to the world's poorest people.

A) Cream of the crop
B) Skimming the barrel
C) Bottom of the pyramid
D) Top of the peak
E) Base hierarchy

Question 58

Most firms begin with which strategy to enter foreign markets?

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

Question 59

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 60

As a first step into international business, which two countries are most companies going to today?

A) Russia and Japan
B) Sweden and Germany
C) China and India
D) Brazil and Philippines
E) Indonesia and Brazil

Question 61

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 62

____ generally are located in Asia, Africa and South America.

A) MNCs
B) EUs
C) LDCs
D) WTOs
E) MFNs

Question 63

CRL, a European plastics manufacturer, is considering forming an alliance with a U.S. military goods manufacturer to develop a new type of polymer that can be used for international industrial and military applications. Such a partnership represents what type of direct investment?

A) Franchising
B) Joint Venture
C) Wholly owned affiliate
D) Greenfield venture
E) Outsourcing

Question 64

Which of the following is a sociocultural factor in the international environment?

A) Language
B) Exchange rates
C) Tariffs, taxes, and quotas
D) Per capita income
E) Infrastructure

Question 65

Exchange rates are included in which of the following international environments?

A) The legal-political sector
B) The economic environment
C) The sociocultural environment
D) The barter system environment
E) The government sector

Question 66

In international operations, the economic environment includes:

A) shared knowledge, beliefs and values.
B) political risks.
C) social organizations.
D) infrastructure.
E) tariffs, quotas, and taxes.

Question 67

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 68

____ aspects of management do not change when doing business internationally.

A) Planning
B) Organizing
C) Controlling
D) Leading
E) All of these

Question 69

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

A) Importing
B) Exporting
C) Manufacturing
D) Outsourcing
E) Greenfield venture

Question 70

Language, values, religion, and education all describe which dimension in the international environment?

A) Economic
B) Legal
C) Political
D) Sociocultural
E) Technological

Question 71

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 72

Resource development, infrastructure, and exchange rates all describe which dimension in the international environment?

A) Economic
B) Legal
C) Political
D) Sociocultural
E) Technological

Question 73

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

A) infrastructure.
B) resource and product markets.
C) laws and regulations.
D) inflation.
E) exchange rates.

Question 74

Which of the following is a form of franchising?

A) Direct investing
B) Licensing
C) Exporting
D) Countertrade
E) Barter trade

Question 75

_____ is normally used to classify countries as developed or developing.

A) Exchange rates
B) Interest rates
C) Gross national product
D) Per capita income
E) Inflation rates

Question 76

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 77

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 78

A form of exporting to less-developed countries is called:

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

Question 79

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 80

Your grocery store in India is having trouble getting the local farmers to supply you with the proper produce. This is a problem with India's:

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