Question 1

Which of the following would NOT be the best illustration of a NGO (nongovernmental organization) group?

Accepted Answer

Nongovernmental organizations (NGOs) are often associated with political activism and are increasingly affecting policy decisions made by governments. Many are involved in peaceful protests, lobbying, and even collaborations with governmental organizations.

Question 2

Which of the following represents a new and powerful tool of PSAs?

Accepted Answer

The Internet has become an effective tool of PSAs to spread the word about whatever cause they sponsor.

Question 3

The newest form of terrorism directed toward a peaceful world is:

Accepted Answer

Cyberterrorism and cybercrime is still in its infancy, and the Internet provides a vehicle for terrorist and criminal attacks by foreign and domestic antagonists wishing to inflict damage on a company with little chance of being caught.

Question 4

Why do terrorism experts predict multinational businesses will be targeted by terrorists more frequently?

Accepted Answer

There are reasons to expect that businesses will become increasingly attractive to terrorists, both because they are less well defended than government targets and because of what they symbolize.

Question 5

All of the following would be considered to be strategies that multinational corporations can use to minimize vulnerability and risk EXCEPT:

Accepted Answer

The strategies used by MNCs to minimize political vulnerability and risk are joint ventures, expanding the investment base, licensing, planned domestication, political bargaining, and political payoffs.

Question 6

Brian is attempting to forecast political instability and help management identify and evaluate political events and their potential influence on current and future international business decisions. Brian is engaged in:

Accepted Answer

Political risk assessment is an attempt to forecast political instability to help management identify and evaluate political events and their potential influence on current and future international business decisions.

Question 7

While expanding the investment base of a company, which of the following can be used as a powerful ally in dealing with threats of government takeovers or harassment?

Accepted Answer

The approach of including several investors has the advantage of engaging the power of the banks whenever any kind of government takeover or harassment is threatened. This strategy becomes especially powerful if the banks have made loans to the host country.

Question 8

Which of the following best describes the U.S. government's policy toward multinational corporations that are confronted with situations where bribery is an issue?

Accepted Answer

Bribery poses problems for the marketer at home and abroad, because it is illegal for U.S. citizens to pay a bribe even if it is a common practice in the host country.

Question 9

Although some products are more vulnerable than others with regard to political sensitivity in foreign markets, _____ have often been the lightning rods for groups opposed to foreign companies.

Accepted Answer

Products that have or are perceived to have an effect on the environment, exchange rates, national and economic security, and the welfare of people (and particularly children) or that are publicly visible, subject to public debate, or associated with their country of origin are more likely to be politically sensitive. Fast-food restaurants, which are intended to be visible, have often been lightning rods for groups opposed to foreign companies.

Question 10

Which of the following statements most accurately describes the impact of boycotts?

Accepted Answer

History indicates that sanctions are almost always unsuccessful in reaching desired goals, particularly when other major nations' traders ignore them.

Question 11

Meteora Inc. is planning to enter the African market through its mobile phone manufacturing operations in Kenya. Which of the following could favor a positive relation with the host country?

Accepted Answer

Relations between governments and MNCs are generally positive if the investment (1) improves the balance of payments by increasing exports or reducing imports through import substitution; (2) uses locally produced resources; (3) transfers capital, technology, and/or skills; (4) creates jobs; and/or (5) makes tax contributions.

Question 12

Juliet is concerned with the potential for political harassment when her company enters a new international market. To reduce the risk of political harassment she will consider using _____ to enter the market.

Accepted Answer

Typically less susceptible to political harassment, joint ventures can be with locals or other third-country multinational companies; in both cases, a company's financial exposure is limited.

Question 13

The most effective solution to a situation where a foreign government is demanding local participation in a multinational corporation's business activities in the host country is:

Accepted Answer

In those cases in which a host country is demanding local participation, the most effective long-range solution is planned phasing out, that is, planned domestication.

Question 14

All of the following strategies can be effective in forestalling or minimizing the effect of a total takeover of a multinational corporation's holdings by a foreign government EXCEPT:

Accepted Answer

The strategies used by MNCs to minimize political vulnerability and risk are joint ventures, expanding the investment base, licensing, planned domestication, political bargaining, and political payoffs.

Question 15

Which of the following strategies minimizes political risks for the multinational corporation in situations in which the technology is unique and the risk is high?

Accepted Answer

A strategy that some firms find eliminates almost all risks is to license technology for a fee. Licensing can be effective in situations in which the technology is unique and the risk is high. Of course, there is some risk assumed, because the licensee can refuse to pay the required fees while continuing to use the technology.

Question 16

One approach to dealing with political vulnerability is the _____ an attempt to lessen political risks by paying those in power to intervene on behalf of the multinational company.

Accepted Answer

One approach to dealing with political vulnerability is the political payoff- an attempt to lessen political risks by paying those in power to intervene on behalf of the multinational company.

Question 17

Which of the following is used by MNCs as a political bargaining tool with foreign publics and governments?

Accepted Answer

Considering the lobbying and other sorts of political bargaining MNCs engage in, a cynical way to look at the motivation behind corporate social responsibility in general is its use as a bargaining chip with foreign publics and governments.

Question 18

Slammer, Melissa, and "Goner worm" are all examples of:

Accepted Answer

The Melissa virus and the denial of service (DoS) attacks that overloaded the Web sites of CNN, ZDNet, Yahoo!, and Amazon.com with a flood of electronic messages, crippling them for hours, were considered purposeful attacks on specific targets. The "Slammer" brought Internet service to a crawl. It doubled its numbers every 8.5 seconds during the first minute of its attack and infected more than 75,000 hosts within 10 minutes. After infecting hundreds of thousands of computers in Europe and North America, the "Goner worm" traveled to Australia overnight and brought down government agencies, financial and manufacturing sites, and at least 25 MNCs.

Question 19

Relations between governments and MNCs are generally positive if the investment leads to all of the following EXCEPT:

Accepted Answer