Question 1

Exporting, licensing and foreign direct investing are called _____ strategies because they represent ways to sell products and services in foreign markets.
A) globalized
B) expansion
C) retrenchment
D) market entry
E) concentrated business

Accepted Answer

Exporting, licensing, and foreign direct investing are all ways to enter or sell products and services in foreign markets, making them market entry strategies.

Question 2

An industry uses cheap overseas labour for assembling products. This lowers the price for consumers and is an example of:
A) licensing.
B) joint venture.
C) outsourcing.
D) franchising.
E) None of these.

Accepted Answer

Outsourcing involves hiring another company or individual to perform a task or service. In this case, the industry is outsourcing its labor to a foreign country to reduce costs and offer a lower price to consumers. This is a common strategy used by many industries to remain competitive in the global market.

Question 3

Which have been the two most attractive countries for global companies so far?
A) Russia and Japan
B) Sweden and Germany
C) China and India
D) Brazil and Philippines
E) Indonesia and Brazil

Accepted Answer

China and India have been the two most attractive countries for global companies due to their large population, rapid economic growth, and potential for expansion.

Question 4

Which of the following refers to engaging in the international division of labour so as to obtain the cheapest sources of labour regardless of country?
A) Franchising
B) Licensing
C) Market entry strategy
D) Outsourcing
E) Activity

Accepted Answer

Outsourcing refers to engaging in the international division of labour so as to obtain the cheapest sources of labour regardless of country. Franchising and licensing refer to different modes of business expansion, market entry strategy involves strategies for entering a new market, and activity is a broad term with no clear definition in this context.

Question 5

_____ places an emphasis on a worldwide perspective.
A) Polycentric companies
B) Geocentric companies
C) Ethnocentric companies
D) Regiocentric companies
E) Domestic companies

Accepted Answer

Geocentric companies place an emphasis on a worldwide perspective, meaning they view the world as a single, integrated market and seek to establish a global presence. They are not limited by national boundaries and make decisions based on global considerations rather than just the interests of their home country or region.

Question 6

A company designs and manufactures £50 laptops in an effort to make information technology available to poor 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

Accepted Answer

The strategy of designing and manufacturing affordable products for people living in poverty-stricken areas is known as the Bottom of the Pyramid (BoP) strategy. The company is aiming to capture a large, untapped market by offering products at a low price point.

Question 7

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

Accepted Answer

Ethnocentrism is a real phenomenon observed in human cultures, where individuals tend to judge the values and norms of other cultures using their own cultural standards as a reference point. This can result in a biased evaluation of other cultures and an underestimation of their achievements or worth.

Question 8

A company wants to produce and market a line of coffee to sell in the Chinese market. The company will supply the entire business system to entrepreneurs, including the equipment, products, product ingredients, trademarks and standardized operating systems. Which type of entry strategy is this?
A) Wholly owned foreign affiliate
B) Greenfield venture agreement
C) Franchise
D) Export agreement
E) Barter trade

Accepted Answer

This is a franchise strategy where the company supplies the entire business system to entrepreneurs, including equipment, products, product ingredients, trademarks, and standardized operating systems.

Question 9

A company operates globally, making sales and acquiring resources in whichever state offers the best opportunities and lowest cost. The company can be called a:
A) Stateless
B) Multinational
C) International
D) Domestic
E) Multidomestic

Accepted Answer

A stateless company operates globally without being tied to any specific country, seeking the best opportunities and lowest costs worldwide.

Question 10

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

Accepted Answer

German, Swiss and North American cultures are actually considered low-context cultures, as they tend to rely on explicit communication and verbal agreements rather than implicit understanding and nonverbal cues. Examples of high-context cultures include those found in Asia, the Middle East, and some Latin American countries.

Question 11

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

Accepted Answer

Ethnocentrism is the belief that one's own culture is superior to others, not inferior.

Question 12

For most western companies, ____ of their manufacturing has led to massive job creation in China and India.
A) Importing
B) Exporting
C) Insourcing
D) Outsourcing
E) Transferring

Accepted Answer

Outsourcing refers to the practice of contracting out a business process to another company, often in a different country, to save costs or take advantage of specialized expertise. In the case of western companies, outsourcing their manufacturing to China and India has resulted in massive job creation in those countries.

Question 13

Which of the following is an entry strategy in which organizations maintain their production facilities within their home countries but ship their products to foreign markets for sale?
A) Franchising
B) Licensing
C) Exporting
D) Greenfield venture
E) Joint venture

Accepted Answer

Exporting is the entry strategy in which organizations maintain their production facilities within their home countries but ship their products to foreign markets for sale. Franchising involves giving the right to use a company's name and operating system in exchange for a fee. Licensing involves granting permission to use a company's intellectual property in exchange for a fee. Greenfield venture involves establishing a new, wholly-owned subsidiary in a foreign market. Joint venture involves partnering with a local company to start a new business together.

Question 14

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

Accepted Answer

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

Question 15

_____ is a concept that proposes that corporations can take measures to alleviate the poverty and social ills of the world's poorest people.
A) Cream of the crop
B) Skimming the barrel
C) Helping those at the bottom of the pyramid
D) Top of the peak
E) Base hierarchy

Accepted Answer

The concept of "Helping those at the bottom of the pyramid" refers to the idea that corporations can develop business models and strategies that target the world's poorest people, who are often ignored by traditional market-based approaches. The concept was popularized by C.K. Prahalad's book "The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits."

Question 16

Today's companies compete in a _____.
A) growingly domestic
B) low-context culture
C) high-context culture
D) Greenfield economy
E) borderless world

Accepted Answer

The phrase "borderless world" means that companies are competing without borders, meaning they are not limited to one specific location or country. Therefore, option E is the best choice. Option A is incorrect as it suggests that companies are only competing domestically. Option B and C relate to communication styles and do not directly address the international competition factor. Option D refers to a type of investment rather than the current state of competition among companies.

Question 17

Stateless stage is also referred to as the _____ stage.
A) multinational
B) global
C) multidomestic
D) international
E) domestic

Accepted Answer

The term "stateless" implies the lack of a home country or dominant base of operations, indicating a global or borderless approach. Therefore, the stateless stage is also referred to as the global stage.

Question 18

A company wants to build a new factory from scratch overseas. This is an example of:
A) franchising.
B) greenfield venture.
C) joint venture.
D) exporting.
E) licensing.

Accepted Answer

Building a new factory from scratch overseas is an example of a greenfield venture, which refers to a company starting a new business from the ground up in a foreign location. Franchising involves granting others the right to use one's business model and brand name, joint venture refers to a partnership between two or more companies to operate in a foreign market, exporting involves sending goods or services from one country to another, and licensing involves granting the rights to use one's intellectual property to another party.

Question 19

A company is considering forming an alliance with a foreign manufacturer to develop a new type of polymer that can be used for industrial applications. Such a partnership represents what type of direct investment?
A) Franchising
B) Joint Venture
C) Wholly owned affiliate
D) Greenfield venture
E) Outsourcing

Accepted Answer

A Joint Venture is a direct investment where two or more companies enter into a partnership to pursue a specific project or business activity together, sharing both risks and rewards. In this case, the company is forming an alliance with a foreign manufacturer to develop a new product, which falls under the definition of a joint venture.

Question 20

Which of the following pairs of alternatives closely resemble each other in the amount of ownership, control and risk in international business?
A) Foreign direct investment / reselling
B) Wholly owned foreign affiliate / countertrade
C) Export / Import
D) Franchising / licensing
E) All of these

Accepted Answer

Franchising and licensing both involve transferring ownership and control of intellectual property to a foreign entity without significant financial risk, making them similar in terms of ownership, control, and risk. Foreign direct investment and wholly owned foreign affiliates involve a greater level of financial risk and control, while reselling and countertrade involve a lower level of ownership and control. Exporting and importing also involve different levels of ownership and control, with exporting typically involving less risk and control than importing.

Quiz 5: Managing in a Global Environment

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

An industry uses cheap overseas labour for assembling products. This lowers the price for consumers and is an example of:

Which have been the two most attractive countries for global companies so far?

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

_____ places an emphasis on a worldwide perspective.

A company designs and manufactures £50 laptops in an effort to make information technology available to poor people in places like rural Africa and rural India. This is known as what type of strategy?

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

A company wants to produce and market a line of coffee to sell in the Chinese market. The company will supply the entire business system to entrepreneurs, including the equipment, products, product ingredients, trademarks and standardized operating systems. Which type of entry strategy is this?

A company operates globally, making sales and acquiring resources in whichever state offers the best opportunities and lowest cost. The company can be called a:

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

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

For most western companies, ____ of their manufacturing has led to massive job creation in China and India.

Which of the following is an entry strategy in which organizations maintain their production facilities within their home countries but ship their products to foreign markets for sale?

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

_____ is a concept that proposes that corporations can take measures to alleviate the poverty and social ills of the world's poorest people.

Today's companies compete in a _____.

Stateless stage is also referred to as the _____ stage.

A company wants to build a new factory from scratch overseas. This is an example of:

A company is considering forming an alliance with a foreign manufacturer to develop a new type of polymer that can be used for industrial applications. Such a partnership represents what type of direct investment?

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