Deck 4: Managing in a Global Environment

Question 1

The three original partners of NAFTA are the United States, Canada, and Mexico.

Answer 1

True

Question 2

Multinational corporations maintain significant operations in two or more countries simultaneously, but are based in one home country.

Answer 2

True

Question 3

Norway is a member of the European Union.

Answer 3

False

Question 4

Americans tend to suffer from parochialism.

Question 5

Multinational corporations became commonplace in the mid-1960s.

Question 6

Transnational corporations run their businesses from their home country.

Question 7

The Council of Arab Economic Unity (CAEU) was established by Egypt, Saudi Arabia, Qatar, and Oman in 1972.

Question 8

Managers with a polycentric attitude would view every foreign operation as difficult and hard to understand.

Question 9

A drawback of the geocentric perspective is that it is inflexible.

Question 10

When organizations first go international, they often start with global sourcing.

Question 11

In the early stages of doing business internationally, managers may license or franchise to another firm the right to use their organization's brand name, technology, or product specifications.

Question 12

The GCC refers to the Gulf Coordination Committee

Question 13

Managers with an ethnocentric attitude would not trust foreign employees with key decisions or technology.

Question 14

The polycentric attitude is a world-oriented view focusing on using the best approaches and people from around the globe.

Question 15

The transnational corporation characterizes the ethnocentric attitude toward the management of an organization's global business.

Question 16

The European Union (EU) and the North American Free Trade Agreement (NAFTA) created regional trading and cooperative agreements.

Question 17

The primary motivation for the creation of the EU was to allow Europeans to reassert their position against the industrial strength of the United States and Japan.

Question 18

Yemen is part of the GCC.

Question 19

The process of exporting involves acquiring products made abroad and selling them domestically.

Question 20

GAFTA refers to the Greater Association of Free Trade for Arabs.

Question 21

Which of the following is the least favorable attitude for a manager who wishes to be successful in international business?

A) multicentric
B) multicultural
C) ethnocentric
D) polycentric

Question 22

The GLOBE framework for assessing cultures is similar to Hofstede's framework, but measures fewer dimensions.

Question 23

The United States is an example of a country with smaller power distance.

Question 24

An increased level of anxiety among its people characterizes a society with high uncertainty avoidance.

Question 25

GLOBE stands for Global Leadership and Organizational Behavior Effectiveness.

Question 26

Licensing is commonly used by both manufacturing and services organizations.

Question 27

The legal-political environment is an important factor of managing in a foreign environment.

Question 28

Ethnocentric views concentrate on their ________.

A) world orientation
B) host country
C) racial orientation
D) home country

Question 29

Successful global management requires an attitude that is best described as ________.

A) parochial
B) polycentric
C) geocentric
D) ethnocentric

Question 30

One reason for parochialism in the United States is that Americans tend to study ________ in school.

A) English and Spanish
B) only English
C) English and French
D) only two languages

Question 31

Research indicates that organizational culture has a stronger impact on employees than does national culture.

Question 32

Which of the following describes the use of language in the Arab World?

A) Because of colonization, French is widely spoken in Bahrain.
B) Besides Arabic, French and English are widely spoken in many Arab countries.
C) Arabic is the only spoken language in most Arab countries.
D) Besides Arabic, the Armenian language is the second spoken language in Lebanon.

Question 33

In a strategic alliance, both partners share the risks and rewards of the alliance.

Question 34

Parochialism is ________.

A) a tendency to view the world through a single perspective
B) a desire to leave one's own culture for a foreign culture
C) acceptance of diverse points of view
D) recognition of diverse religious beliefs

Question 35

Managers with a(n) ________ attitude view every foreign operation as different and hard to understand.

A) ethnocentric
B) geocentric
C) transnational
D) polycentric

Question 36

Mexico is an example of a collectivist nation.

Question 37

Arab countries rank extremely high on uncertainty avoidance.

Question 38

Hofstede found that the Italian culture is well above average on uncertainty avoidance measures of culture.

Question 39

Only when a country's legal-political environment is unstable or revolutionary is it of concern to managers.

Question 40

One challenge that arises out of the openness of globalization is the threat of terrorism.

Question 41

The Gulf Cooperation Council does not include ________.

A) Yemen
B) Saudi Arabia
C) The UAE
D) Kuwait

Question 42

The Association of Southeast Asian Nations includes ________.

A) a membership of 10 Southeast Asian nations
B) the members of the European Union and India
C) the members of NAFTA and CAFTA
D) none of the above

Question 43

The ________ was created by the unification of 12 countries in Europe.

A) Western European Alliance
B) Trans-European Market (TEM)
C) European Common Market
D) European Union

Question 44

GAFTA refers to ________.

A) The General Arab Free Trade Area
B) The Greater Arab Free Trade Area
C) The Gulf Arab Free Trade Area
D) The Gulf Association for Free Trade Agreement

Question 45

How many member nations belong to the African Union (AU)?

A) 53
B) 67
C) 46
D) 62

Question 46

The North American Free Trade Agreement includes ________.

A) Mexico, Canada, and the United States
B) the United States, Canada, and Honduras
C) Canada, Mexico, and Brazil
D) Columbia, Mexico, and the United Sates

Question 47

The Council of Arab Economic Unity was established in

A) 1947
B) 1957
C) 1977
D) 1967

Question 48

Nepal belongs to which of the following regional trade alliances?

A) AU
B) ASEAN
C) SAARC
D) EU

Question 49

The World Trade Organization evolved from which of the following?

A) GATT
B) Marshall Plan
C) UNIDIR
D) Mercosur

Question 50

Which of the following countries is not a member of the European Union?

A) Iceland
B) Cyprus
C) Ireland
D) Slovenia

Question 51

A(n) ________ attitude is the view that host-country managers know the best practices for running their operations.

A) geocentric
B) international
C) polycentric
D) ethnocentric

Question 52

Each of the following is a member of ASEAN except ________.

A) Laos
B) Japan
C) Singapore
D) Brunei

Question 53

The principle reason for the formation of a regional trading alliance in Europe was to reassert members' economic positions against the strength of the United States and ________.

A) Russia
B) Mexico
C) Japan
D) Canada

Question 54

The European Union covers ________.

A) employment, investment, and trade
B) nationalistic policies and travel
C) border controls, taxes, and subsidies
D) all of the above

Question 55

The North American Free Trade Agreement eliminated all of the following except ________.

A) the need for import licensing
B) customs user fees
C) tariffs on traded commodities
D) China's role as a U.S. trading partner

Question 56

The geocentric attitude is a ________ view.

A) franchise-based
B) world-oriented
C) culture-bound
D) nationalistic

Question 57

The single EU currency is called the ________.

A) pound
B) franc
C) franc-mark
D) euro

Question 58

CAEU refers to ________.

A) Committee of Arab Economic Unity
B) Congress of Arab Economic Union
C) Congress of Arab Economic Unity
D) Council of Arab Economic Unity

Question 59

Among the member countries of the North American Free Trade Agreement, trade has ________ since the treaty was signed.

A) decreased
B) decreased initially, but increased steadily
C) increased in commodities, but decreased in manufactured goods
D) increased

Question 60

A(n) ________ attitude is characterized by parochialism.

A) geocentric
B) polylinguistic
C) ethnocentric
D) acculturated

Question 61

Multidomestic corporations are known for ________.

A) ethnocentric attitudes
B) polycentric attitudes
C) having their holdings in one country
D) multicentric attitudes

Question 62

Transnational organizations are also known as ________.

A) borderless organizations
B) polycentric organizations
C) multidomestic organization
D) ethnocentric organizations

Question 63

In the later stages of doing business globally, if an organization is ready to make a more direct investment, it might utilize ________.

A) joint ventures
B) strategic alliances
C) foreign subsidiaries
D) all of the above

Question 64

Transnational organizations are focused on ________.

A) reinforcing structural divisions
B) increasing efficiency
C) developing INVs
D) all of the above

Question 65

Which of the following is the basic difference between multidomestic corporations and global companies?

A) Multidomestic corporations decentralize management to the local country, while global companies centralize management in the home country.
B) Multidomestic corporations pay more in taxes than global companies do.
C) Multidomestic corporations typically do business with more countries than global companies do.
D) Multidomestic corporations are run by global companies but must be owned by a local, national company.

Question 66

Which of the following is an MNC that tailors marketing strategies to the host country's unique characteristics?

A) multidomestic corporation
B) global company
C) borderless organization
D) transnational organization

Question 67

An international company is most likely to develop foreign subsidiaries ________.

A) before it develops franchising agreements
B) after it establishes strategic alliances
C) before it develops licensing agreements
D) before it begins importing and exporting

Question 68

International businesses have been around since about what date?

A) the twentieth century
B) the seventeenth century
C) the nineteenth century
D) the fifteenth century

Question 69

Importing and exporting represent a more significant global investment than which of the following?

A) strategic alliance
B) licensing
C) franchising
D) global sourcing

Question 70

When an organization drops its structure based on countries and reorganizes according to industries, it is pursuing a global organizational operation known as ________.

A) multinational organization
B) polycentrism
C) borderless organization
D) ethnocentrism

Question 71

Which of the following is not a feature of a multidomestic corporation?

A) Decision making takes place at the local level.
B) Marketing strategies are tailored to each country's culture.
C) Products are manufactured only in the local country.
D) Nationals are typically hired to run operations in each country.

Question 72

Which of the following is usually found in the final stage of an organization's global evolution?

A) cross-culturally training its managers
B) licensing another firm to use its brand name
C) establishing strategic alliances with partners
D) exporting its products to other countries

Question 73

In an attempt to be more aggressive, a company might export and import more. These steps usually require ________.

A) conducting business in a polycentric manner
B) the establishment of strategic alliances
C) minimal investment and minimal risk
D) abnormal operations for a geocentric organization

Question 74

The process of making products domestically and selling them abroad is known as ________.

A) importing
B) franchising
C) joint ventures
D) exporting

Question 75

Which of the following types of global organizations reflects the geocentric attitude?

A) regional organization
B) global company
C) transnational organization
D) multidomestic corporation

Question 76

Multidomestic corporations ________.

A) follow the tastes, preferences, and values of the home country
B) utilize decentralization to make decisions in management in local countries
C) maintain operations in multiple counties, but do not allow managers in each country to make their own decisions
D) utilize ethnocentric attitudes in financial decisions, but favor polycentric views in human resources issues

Question 77

The World Trade Organization is centered around which of the following?

A) economic sanctions
B) peace treaties
C) trade agreements
D) public protests

Question 78

Franchising is primarily used by ________.

A) service organizations
B) legal organizations
C) manufacturing organizations
D) political organizations

Question 79

Multinational corporations (MNCs) have only become commonplace since approximately what date?

A) 1945
B) mid-1970s
C) mid-1960s
D) mid-1980s

Question 80

Which of the following is a basic definition of a multinational corporation?

A) a company that has multiple home bases and manufacturing plants
B) a company that maintains operations in multiple countries
C) a company that maintains franchises in multiple countries
D) a company that pays corporate taxes in at least two countries