Global Business today

Chapter 11. Globalization refers to the shift toward a more integrated and interdependent world economy.True

2. Today's global markets consist largely of industrial and material goods that really meet world demand; consumer products play a secondary role.True

3. The stock of foreign direct investment has become one of the most actively traded securities in world financial markets, including the New York Stock Exchange.False

4. For approximately the last half century, two important trends have been the rise of non-U.S. multinational firms and the growth of mini-multinational enterprisesTrue5. Antiglobalization is resistance on the part of activists and national leaders who see "globalization" as a cultural, ecological, economic and social disaster spearheaded by aggressive multinationals and powerful foreign governments with agendas of their own.True

6. The __________________ was established in 1999 to formulate a response to financial crises in developing nations, but it became the forum to address the worldwide financial crisis that began in 2008-9.G20

7. _______________________ is when a firm invests resources in business activities outside its home country.Foreign direct investment

8. in late 2001, the WTO launched a round of talks to liberalize trade further by focusing on agricultural issues, cross-border flows of investments and limiting the use of antidumping laws. These stalled talks are named after the location in which they began and are known as:the Doha talks.

9. A steep drop in world trade occurred in 2009 due to a drop in global consumer demand and tight credit. The impact seems to be:no long-term effect on the trends in world trade which began in the middle of the 20th century.

10. Which of the following is NOT one of the four major factors that help the U.S. to continue to hold competitive advantages over other national players for global market share?the reputation of U.S. graduate schools of business and management

11. Which of the following reflects the trends of the global economy in the 21st Century?Globalization is not inevitable.

12. Supporters of globalization look at the different results of research on the effect it has on wages of both skilled and unskilled labor, and they recognize that there are significant changes and disparities. Despite the sometimes contradictory findings, one trend that has emerged is that:technological change has a greater impact on earnings and employment than globalization.

13. A number of economic studies predict that as income levels rise, so do pollution levels. This is known as a ___________________________, which shows that resource waste ratios increase until greater environmental protections take hold and begin to reverse the pollution.hump-shaped relationship

14. National sovereignty concerns raised by critics of globalization include:unelected bureaucrats now impose policies on democratically elected governments of nation-states.

15. Where to locate production activities to minimize cost, the ethics implications of lower labor costs and environmental standards, coordination of widely dispersed production facilities and choices among entry modes are among the concerns of:international business managers.

Chapter 2

1. Collectivism shapes any political system regardless of democratic or totalitarian governing institutions if the primacy of collective goals is the norm over individual goals.True

2. In Islamic countries, usury or interest on money presents no problem for international banks or individuals as long as no one cheats or fails to make good on usury payments.False

3. The UN has developed a Human Development Index (HDI) to compare the quality of life in nations, using life expectancy, education attainment and whether average incomes meet basic needs of life as criteria.True

4. Since the 1980s, democracy has spread to many new nation-states, and free market economies have also spread.True

5. Economic risks are the most important basis for planning any business venture offshore because money is always at stake and must be taken into consideration.False

6. Totalitarianism is a political system in which one person or political party exercises absolute control and prohibits other political parties. Four types are usually recognized:Communist, theocratic, tribal and right-wing.

7. Which of the following is not one of the three broad types of economic systems:Entrepreneurial economy

8. All of the following countries were mixed economies which saw significant reductions in state-owned enterprises during the 1980s except:Canada

9. The term "intellectual property" refers to:the product(s) of any intellectual activity

10. Purchasing power parity refers to:adjusting gross domestic product per capita to reflect differences in the cost of living for each country.

11. Terrorism represents a major threat to world peace and economic progress. In 2008, the number of terrorist attacks:declined from the 2007 level.

12. Which of the following is not one of the steps in a shift toward a market-based economic system?A stable price of petroleum and other natural resources

13. Which of the following is NOT one of the characteristic problems affecting business during the transition of legal systems toward a more market-based economic system?Application of anti-bribery and anti-corruption laws conflicts with the US FCPA14. Two broad implications for international business arising from the political, economic and legal systems in a country are ______________ and the attractiveness of the country as a market or investment site.ethical issues

15. Managers need to be concerned with legal risks regarding outside foreign trading partners because:they can face the likelihood that a trading partner will opportunistically break a contract or steal property rights.

Chapter 31. Norms are the abstract ideas about what a group believes to be good, right and desirable; values are social rules and guidelines for appropriate behavior.False

2. Nation-states are political creations and may contain a single culture or many different cultures.True

3. A society's social structure refers to its basic organization. Two important dimensions are the primacy of the individual or group as the basic unit and the degree to which the society is stratified into classes or castes.True

4. A murabaha contract is an agreement between a buyer and seller to pay for a good or service at the agreed upon price without interest. This arrangement permits extra charges for doing business like mark ups to be inserted so that both parties are satisfied with their bargain.True

5. The Confucian ethic is central to the Chinese concept of guanxi, which refers to the relationship networks supported by reciprocal obligations.True

6. Which of the following is NOT true about the impact of the emphasis on individual performance in the United States?The emphasis on individuals makes teamwork more effective since individuals can develop effective division of labor and specialization.

7. Economists Robert Baro and Rachel McCleary argue that ______________ encourage economic growth because they sustain certain aspects of individual behaviors that lead to higher productivity.strong religious beliefs

8. Max Weber coined the term "Protestant work ethic" to explain why some Protestant Northern European countries were wealthier than some Catholic Southern European countries from the 16th century forward. Weber's assertions unfairly characterized highly motivated ascetic practitioners of _______________ in the world today as not having any entrepreneurial focus or work ethic because their faith was quite unlike his brand of Christianity.Hinduism

9. The nature of ____________ structures the way we perceive the world and can direct the attention of a society's members to certain features of the world rather than others.language

10. The ___________________ is a good index of the kinds of products that might sell in a country and the kinds of promotional material that should be used.general education level of a country

11. Hofstede's four original cultural dimensions are:Masculinity versus femininity, uncertainty avoidance, power distance, and individualism versus collectivism.

12. As a result of critics of Hofstede's work on a number of different points, managers should:use his findings as a starting point to explore how cultures differ and the implications for management practices.

13. World-wide cultural change:includes important countertrends to economic advancement and free trade.

14. Ethnocentrism:is a belief in that one's own ethic group is superior.

15. The connections between culture and competitive advantage are important because:where to locate facilities and develop markets may be profoundly affected by cultural factors and considerations.

Chapter 41. "Business ethics" refers to the notion that individuals who engage in business should accept principles of right and wrong governing their conduct as businesspeople.True

2. The tragedy of the commons explains how countries and individual companies can indulge in practices such as uncontrolled pollution and over-fishing without being called to account.True

3. Just as societies have cultures, so do organizations, and the values and norms of the organization have important influences of the ethics of the business's decision making.True

4. Kantian ethics is a contemporary approach as it focuses on people as instruments not as ends in themselves.False

5. Moral courage enables managers to walk away from a decision that is profitable but unethical.True

6. An ethical question for international businesses concerning global warming is:Is it ethical to move production to countries with low environmental standards to avoid tight regulation in others?

7. Several economists have argued that in the context of pervasive and cumbersome regulations in developing countries, corruption may:improve efficiency and help growth.

8. The idea of social responsibility requires businesspeople to __________ when making business decisions.consider the social consequences

9. Real-world decisions that may be complex, difficult to frame and involve consequences that are hard to quantify can cause __________________ for executives in international business.ethical dilemmas

10. Expatriate managers (home-country managers working abroad in multinational firms) may _______________ as they are away from their ordinary social context and supporting culture, they are psychologically and physically distant from the parent company, and they may be based in a culture that does use the same norms they usually use.experience more than the usual degree of pressure to violate their personal ethics

11. Straw men approaches to business ethics are used to demonstrate that they offer inappropriate guidelines for ethical decision making in a multinational business enterprise. Which of the following is NOT one of these straw man approaches?Justice theories12. Developed in the 20th century, _____________________ recognize that human beings have fundamental rights and privileges that transcend national boundaries and cultures.rights theories

13. Justice theories focus on:attaining a just distribution of economic goods and services.

14. Which of the following is not one of the important elements in building an ethical organizational culture?Locating operations only in countries with ethical political leaders

15. If you as a manager stand in the shoes of a stakeholder, your analysis should contain a degree of what is called ________.moral imagination

Chapter 51. Under mercantilism, trade surpluses with other countries were beneficial if the countries were allies.False

2. As predicted by the theory of comparative advantage, countries that adopt an open stance toward international trade enjoy higher growth rates than those that close their economies to trade.True

3. The Heckscher-Ohlin Theory focuses on "factor endowments" and their variances among nations to explain comparative advantage more empirically.True

4. Economies of scale have a number of sources, including the ability to spread fixed costs over a large volume and the ability of large-volume producers to utilize specialized employees and equipment.True

5. Underlying most of the theories of international trade is the idea that different countries have specific advantages, and a firm that takes advantage of these can develop a global web of productive activities that maximize the potential in different countries.True

6. While most theories of international trade that support unrestricted free trade exclude governments, new trade theory and ______________________ argue for some limited government intervention to support the development of certain export-oriented industries.Porter's theory of national competitive advantage

7. ____________________ suggests a zero-sum game, which represents a major limitation.Mercantilism

8. In 1776, Adam Smith published The Wealth of Nations, in which he argued that:a country has an absolute advantage when it is more efficient than any other country in producing it.

9. An important criticism of the benefits of free trade that focuses on the relationships between richer and poorer economies is known as:the Samuelson Critique.

10. The Leontief Paradox states that:the US exports are less capital intensive than US imports.

11. Vernon's product life-cycle theory seems to provide an accurate explanation of international patterns during a period of American global dominance, but it has become less effective because:new products have originated in places other than the United States.12. New trade theory gives ________ credit for market dominance under certain conditions over entrants starting out later.first movers

13. Under new trade theory, government subsidies could ________________ the chances of its firms becoming first movers in emerging industries.increase

14. Michael Porter invented a "diamond" model to show how competitive advantage best works. Which of these is not a component of his diamond model?operative restrictions

15. Since businesses are often prime beneficiaries of free trade, under Porter's theory businesses should:lobby governments to support each component of the diamond.

Chapter 61. The modern trading system is based on the World Trade Organization, the successor to the General Agreement on Trade and Tariffs.True

2. Subsidies, which include cash grants, low-interest loans, tax breaks and government equity participation, are made to foreign firms exporting into the country.False

3. A local content requirement demands that some specific fraction of a good be produced domestically, either in value terms or in physical terms as a set percentage.True

4. Strategic trade policy can create problems by creating a beggar-thy-neighbor policy and by focusing on special interest groups.True

5. Because of their pivotal role in international trade, firms can and do exert a strong influence on government policy toward trade.True

6. Tariffs are taxes on imports or exports, and fall into two categories: ____________ tariffs and ad valorem tariffs.specific

7. When foreign imports flood a domestic market to attract customers or threaten local firms, most governments will:impose countervailing duties.

8. Which of the following is not one of the political arguments for government intervention in international trade?Balancing the federal government budget with increased tariffs

9. Economists who have studied whether firms relocate firms to move to locations with relatively lax environmental regulations have found:there is little evidence that firms move production in response to pollution regulations.

10. The infant industry argument, which was proposed about 20 years after the publication of The Wealth of Nations, continues to be used today. In case after case where industries were protected by governments using high tariffs:the main effect has been to create inefficient industries with little hope of competing in the world market.

11. Because _________________________, governments do not always act in the national interest when they intervene in the economy.politically important groups often exert their influence

12. In comparing the effectiveness of the WTO in its first fifteen years and GATT in its forty plus years.the WTO has handled about twice as many trade disputes.

13. The TRIPS Agreement obligates WTO members to:enforce registered patents.

14. Although the WTO and the GATT have made great strides in reducing tariff rates on nonagricultural products,the WTO would like to bring down tariff rates on imports of nonagricultural goods into developing nations.

15. Which of the following is NOT one of the ways trade barriers constrain a firm's strategy?Quotas and trade barriers are temporary in nature and make strategic planning difficult.

Chapter 71. More and more laws and regulations are creating favorable situations for foreign direct investment throughout the world.False

2. The United States was been the largest source for FDI from immediately after WWII through the next half century.True

3. Internalization theory - or the market imperfections approach - seeks to explain why firms often prefer foreign direct investment to licensing as a strategy for entering foreign markets.True

4. F.T. Knickerbocker created a theory of oligopolistic firm behaviors whereby the major players are interdependent on one another to enhance mutual success at competitors' expense.True

5. Licensing is an especially good option for three kinds of industries: high-tech industries with firm-specific expertise, global oligopolies in competitive situations, and industries with intense cost pressures.False

6. Which of the following is not a reason why firms would prefer a merger or acquisition instead of a greenfield investment?Greenfield investments can be environmentally challenging.

7. Theories explaining why a firm will favor direct investment instead of exporting or licensing, and theories exploring why firms in the same industry often undertake FDI at the same time, are brought together in a theory known as ___________________.the eclectic paradigm

8. By the end of the 1980s, the radical view toward FDI in a nation was in retreat almost everywhere due to the collapse of communism in Eastern Europe, the generally abysmal economic performance of countries with the radical view, and ____________.the strong economic performance of developing countries that embraced capitalism

9. The hostility of Venezuela and Bolivia toward foreign enterprises in the extractive enterprises, the hostile political reaction in Europe to the takeover of the largest steel company by an Indian entrepreneur and the negative reaction in the United States to China's proposed takeover of Unocal are all incidents that:are isolated from the prevailing 30-year trend toward declining barriers to cross-border investment.10. Research suggests that when FDI takes the form of an acquisition, employment in the host country:falls soon after but then tends to grow faster than domestic rivals.

11. FDI as a substitute for imports or goods and services does one of the following:improves the current account of the host country's balance of payments.

12. ___________ of FDI to the _______ country include the impact of balance of payments from inward flows of foreign earnings, the impact of employment effects with increased demand for products and learning new skills from exposure to foreign markets.Benefits; home

13. Ownership restraints and performance requirements are two common controls host countries use to:restrict inward FDI

14. As might be expected the WTO has worked to liberalize regulations of FDI. It has had success in telecommunications and financial services, and _______________ in the establishment of a universal set of rules to promote liberalization of FDI.less success

15. From the perspective of a firm negotiating the terms of an investment with a host government, the firms bargaining power is _____ when the host government values what the firm has to offer, the number of alternatives for the firm is greater and the firm has a long time to complete the negotiations.high

Chapter 81. The political union is the most popular level of economic integration, due partially to its attractive cost savings and reduced bureaucracy.False

2. In theory, the WTO should ensure that a free trade area does not result in trade diversion, but that would mean increasing the scope of the WTO.True

3. The Free Trade Area of the Americas (FTAA) has made significant progress due to the unusual cooperation and leadership between Venezuela and the United States.False

4. Regional free trade blocs in Africa are developing rapidly by putting aside differences between countries and focusing on models of other free trade areas.False

5. U.S. firms that do not have subsidiaries in Europe would be well advised to consider opening them to avoid being shut out of the EU by nontariff barriers.True

6. A(n) ____________________ has no barriers to trade between member countries, includes a common external trade policy and allows factors of production to move freely between members.common market

7. Which level of economic integration is the least integrated?a free trade area

8. The countries of Western Europe gained incentive to cooperate and form the EC from all of these except:all of the above were incentives.

9. Trade diversion is an outcome of which one of these:when lower-cost external suppliers are replaced by higher-cost free trade area suppliers.10. The ultimate authority in the EU is:the Council of the European Union.

11. In December 2007, the members of the EU signed _____________________, which increases the power of the European Parliament.The Treaty of Lisbon

12. Which of the following is not one of the benefits of the Euro?The new currency is aesthetically more pleasing.

13. The contents of NAFTA are all of the following except:open public procurement to non-national suppliers.

14. ________________ signed a free trade agreement with China, which went into effect January 1, 2010.ASEAN

15. The concern about the fortress mentality arises from:firms outside the trading area might be shut out.

Chapter 91. One of the functions of the foreign exchange market is to provide some insurance against adverse consequences of unpredictable fluctuations in exchange rates.True

2. Hedging is when a firm insures itself against adverse consequences from unpredicted changes in future exchange rate.True

3. Currency swap is another term for the spot exchange rate since it is often used by travelers and tourists who exchange only small amounts of currency.False

4. Arbitrage is the purchase of securities in one market for immediate resale in another market to profit from a price discrepancy.True

5. Both lead and lag strategies involve accelerating payments from weak-currency to strong-currency countries and delaying inflows from strong-currency to weak-currency countriesTrue

6. A form of speculation that has become more common in recent is years is the _______________, which involves borrowing in one currency where interest rates are low, and then using the proceeds to invest in another currency where the interest rates are highcarry trade

7.The spot exchange rate:can change on a minute-by-minute basis.

8. To insure or hedge against risk, an importer might want to engage in a _____________, which occurs when two parties agree to exchange currency and execute the deal at some specific time in the future.foreign exchange

9. The ___________________ states that in competitive markets, free of transportation costs and trade barriers, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.Law of One Price

10. When the growth in the ____________ is faster than the growth in __________, price inflation is fueled.a country's money supply; its output

11. Relative monetary growth, relative inflation rates and nominal interest rate differentials are all moderately good predictors of ____________________.long-run changes in exchange rates

12. _______________ is when residents and nonresidents in a country rush to convert their holdings into a foreign currency.A capital flight

13. Countertrade is used to overcome the _______ problem.nonconvertibility

14. Which of the following is NOT one of the three main categories of foreign exchange risk?Forward rate exposure

15. Translation exposure refers to ____________ on the reported financial statements of a company.the impact of changes in currency exchange rates

Chapter 101. The theory of balance-of-trade equilibrium states that when a country's national income earned from exports is equal to its current account of import payments there is a perfect balance.True

2. The original Bretton Woods agreement established a new system of discipline and flexibility that would be policed by the governing board of the World Bank.False

3. Most economists trace the breakup of the fixed exchange rate system in 1973 to the policies of Lyndon Johnson, who was financing a war and expanding domestic spending while refusing to raise taxes. It is generally agreed that this was a unique event and has no modern corollary.False

4. The case in support of floating exchange rates has two main elements: monetary policy autonomy and automatic trade balance adjustments.True

5. The case for fixed exchange rates rests on arguments about monetary discipline, speculation, uncertainty and the lack of connection between the trade balance and exchange rates.True

6. Which of these has not been a "shock" to exchange rate stability since 1973?the 1991 defaulting of Brazil and Yugoslavia on their debts7. Critics of _______________ exchange rates argue that speculation can cause fluctuations in exchange rates and create uncertainty.floating

8. According to the IMF, the most frequently used exchange rate policy among its members is a(n) _____________ policy.managed float

9. Under a _________________ regime, which is popular among many smaller nations, a country ties its currency to that of a major currency.pegged exchange rate

10. A country that introduces a ________________ holds reserves of foreign currency equal at the fixed exchange rate to at least 100 percent of the domestic currency issued.currency board

11. Which of the following is not one of the three broad types of crises that have required IMF intervention?Exchange rate crisis

12. In response to criticisms of inappropriate policies and lack of accountability, among others, the IMF has:started to change its approach.

13. IMF rescue efforts for troubled domestic economies may involve enabling weak governments a way out of their management messes. This is known to economists as:moral hazard.

14. Which of the following is not a business strategy for dealing with the risks in exchange rate movements?Insisting payments be made in gold certificates

15. Businesses are major players in the international trade and investment environment, and it seems to be in the best of interest of businesses to:use its influence with governments to promote an international monetary system that facilities growth of international trade and investment.

Chapter 111. Value is the difference between the costs of production and the value consumers perceive in its products or services.True

2. Only primary activities – not support activities – contribute to a competitive advantage.False

3. Core competence refers to skills within any firm that its competition cannot easily match or imitate.True

4. Firms that pursue a global standardization strategy concentrate on increasing profitability and profit growth, essentially following a low cost strategy on a global scale.True

5. International strategy is when a firm customizes its products for international markets and customers, sometimes involving a wide range of new options.False

6. The strategy that focuses primarily on increasing the attractiveness of a product is known as ___________________.differentiation strategy

7. Central to the basic strategy paradigm, a firm must pick a position on the efficiency frontier with enough demand to support that choice, configure its internal operations to support that position and _________________________.make sure the firm has the right organizational structure8. Firms that operate internationally are able to expand markets, realize location economies, realize great cost economies and leverage valuable skills learning in foreign operations, all of which contribute to increasing ____________ in ways not available to purely domestic enterprises.profitability and rate of profit growth

9. _____________________ refers to the systematic reduction in production costs over the life of a product based on learning effects and economies of scale.The experience curve

10. Products serve ______________________ when the tastes and preferences of consumers in different nations are similar if not identical.universal needs

11. Pressures for local responsiveness arise from all of the following EXCEPT:ways to cut production costs.

12. A localization strategy seeks to increase profitability by:customizing the firm's products to match local tastes

13. Firms pursuing a transnational strategy are trying to:achieve low costs through location economies.

14. Which of the following is not one of the disadvantages of strategic alliances?There are fewer options for organizational learning in strategic alliances.

15. To maximize the learning benefits of an alliance, the firm must:make use of new knowledge within its own organization.

Chapter 12

1. Some firms in the chemical, pharmaceutical, petroleum refining and metal refining industries use turnkey projects. They may design, construct or start-up plants, but they do not retain ownership of the facility.True

2. Franchising is another term for licensing.False

3. The optimal entry mode for a firm will depend to some degree on whether the firm's core competence is in technical know-how or management know-how.True

4. One reason acquisitions fail is the "hubris hypothesis" that postulates top managers overestimate their ability to create value from an acquisition primarily due to an exaggerated sense of their own abilities.True

5. Acquisitions and mergers give a firm greater flexibility to build the kind of organization where and how they want, but they are slower to establish and risky.False

6. There are three basic decisions that a firm contemplating foreign expansion must make:entrance, timing, scale.

7. First mover disadvantages include:spending a great deal of time and money learning the rules of the game in another market.

8. The risk-averse firm that enters a foreign market on a small scale may limit its potential losses but also:miss the chance to capture first-mover advantages.

9. Risks associated with licensing can be avoided largely by:cross-licensing.

10. Which of the following is NOT one of the advantages of a joint venture?It is one of the least risky forms of entry.

11. Wholly owned subsidiaries in foreign countries usually take one of two forms - an acquisition or __________________.a greenfield investment

12. When selecting an entry mode:trade-offs are inevitable.

13. The greater the pressures for cost reductions, the more likely a firm will want to pursue some combination of ___________ and wholly owned subsidiaries.exporting

14. Which of the following is not an approach a firm can use to reduce the risk of failure in acquisitions:Moving slowly to integrate the firm to ensure that cultural taboos are not violated.

15. If a firm is considering entering a country where there are no current competitors or where the competitive advantage of the firm is based on the transfer of organizationally embedded competencies, skills, routines and cultures, it is probably preferable to use _________________ entry mode.a greenfield investment

Chapter 13

1. Both smaller and larger firms tend to be proactive about seeking export opportunities.False

2. One big impediment to export success is a lack of knowledge regarding opportunities available for a firm's product.True

3. Both the US Department of Commerce and the Small Business Administration actively provide information for US companies that wish to export.True

4. An EMC is a specialty firm whose managers are export specialists.True

5. The letter of credit, usually issued at the request of the exporter, stands at the center of international commercial transactions.False

6. Which of the following is not one of the significant problems encountered by beginning exporters?Too much time spent cultivating business in foreign markets7. With voluminous paperwork, complex regulations and potential delays and errors, a UN report calculated that these costs often amount to __________ of the final value of the goods exported.about 10 percent

8. Which of the following is not one of the simple, strategic steps a firm can undertake to increase the chances of success in exporting?Develop a shotgun approach with the understanding that a few of the markets will succeed and cover the losses encountered in not so successful markets

9. In international trade, the buyer and seller may not know each other, and there can be a profound lack of trust due to differences in culture, legal systems and distance. The problem is usually solved by using ___________________ to function as intermediaries.

reputable third parties, often banks

10. Once an exporter has seen a letter of credit, he or she knows ___________________, and the merchandise can be shipped.payment is guaranteed11. A ________ is payable on presentation to the drawee, while a(n) __________allows for a delay in payment.sight draft; time draft

12. The _______________________ is an independent agency of the U.S. government providing financing aid to facilitate imports, exports and the exchange of commodities between the United States and other countries.Export-Import Bank

13. The Foreign Credit Insurance Association provides coverage against political and commercial risks, and it operates under the guidance of the:Export-Import Bank

14. Which of the following activities is NOT one of the types of countertrade?Cash-free auctions

15. One of these is NOT a drawback of countertrade:Access to marketing opportunities.

Chapter 141. Formal trade barriers, transportation costs, and foreign direct investment rules are some factor costs for a firm to take into account when relocating its value chain segment.True

2. The minimum efficient scale represents the point at which economies of scale start to be realized.False

3. Global learning refers to the process where the practices, knowledge and skills of headquarters are transferred to foreign locations.False

4. One way to reap benefits of vertical integration without adding organizational problems is to enter into strategic alliances with suppliers.True

5. Web-based systems play a crucial role in materials management by tracking parts and optimizing schedules.True

6. Production and logistics can be performed internationally to lower the costs of value creation and _________________.add value by better serving customer needs

7. The EU requires firms to demonstrate achievement of _______ before allowing it entrance to the market.ISO 9000

8. Which of these is not one of the most important product factors in determining location:location to distance ratio.

9. Concentration of production makes sense when:the product serves universal needs.

10. Decentralization of production makes sense when:trade barriers are high.

11. The strategic role of foreign factories evolves into a more important role as they upgrade their capacities to improve cost structures and _____________.the increased sources of advanced factors of production in the countries where the factories are located12. The volatility of countries' political economies, exchange rate movements and changes in relative factor costs make international outsourcing decisions:more complicated than the already difficult domestic outsourcing decisions.

13. Which of the following is not one of the advantages of "buy" in a make-or-buy decision?Proprietary product knowledge and technology are protected.

14. The benefits of in-house production when highly specialized assets are involved, when protecting intellectual property is important and when the firm is highly efficient at a process should be balanced against ____________ in make-or-buy decisions.the risk of strategic inflexibility and organization problems

15. The potential for reducing costs though logistics:is enormous, which can positively affect profitability.

chapter 151. An important element of a company's marketing mix is its distribution strategy, which is determined by how a product is delivered and the firm's entry strategy.True

2. Three critical variables affect a firm's communications strategy: cultural barriers, source effects and foreign exchange rates.False

3. Source effects relate to procuring materials for distribution when all other factors like price, availability and demand are taken into consideration by an international firm.False

4. Demand is said to be elastic when a large change in price produces only a small change in demand.False

5. Multipoint pricing occurs when a pricing strategy in one market may have an impact on a rival's pricing strategy in another market, which means pricing decisions need to be centrally monitored.True

6. Because different segments exhibit different ________________, marketers will often adjust the marketing mix for each segment.patterns of purchasing behavior

7. When using segmentation in foreign markets, an international marketer must be aware of two main issues: differences among countries in the structure of market segments and _____________________.the existence of segments that transcend national borders

8. When considering channel length in foreign markets, the more fragmented the retail system, _______________________________.the more expensive it is for the firm to make and maintain contact with each individual retailer

9. One of the benefits of a longer distribution channel is that:the firm gains market access - the ability to enter an exclusive channel.

10. Factors that determine the relative attractiveness of push and pull strategies include product type relative to consumer sophistication, channel length, and ___________.media availability

11. Which of the following is not one of the three main aspects of international pricing strategy?transaction exposure

12. Price discrimination exists wherever:consumers are charged differently for the same product in different countries.

13. A firm might vary its marketing mix from country to country because of local differences in culture, economic conditions, competitive conditions, product and technical standards, distribution strategies, government regulations, etc. These differences may require variation in:product attributes, distribution strategy, communications strategy and pricing strategy.

14. "Creative destruction" refers to:the replacement of older products with innovations with more application or value

15. The rate of new-product development tends to be greater in countries where basic and applied R&D is well funded, consumers are affluent, underlying demand is _______, and competition is____________.greater; intense.

Chapter 16

1. In general, an ethnocentric approach to staffing is compatible with an international strategy, a polycentric approach is compatible with a localization strategy, and a geocentric approach is compatible with both global standardization and transnational strategies.True

2. Research by R. L. Tung revealed that for all cultures, the inability of the spouse to adjust to the new assignment was the primary reason for expatriate failure.False

3. Cultural, language and practical training all seem to reduce expatriate failures.True

4. Unintentional bias on the part of home-country managers makes it difficult to evaluate the performance of expatriate managers objectively.True

5. Many firms have moved toward a compensation structure that is based on consistent global standards with employees having access to the same bonus pay and benefits no matter where they work.True

6. For a firm to outperform its rivals in the global market place, it must have:the right people in the right postings.

7. The polycentric staffing policy has the drawback of:isolating subsidiaries.

8. A geocentric staffing policy seeks to:place the best people in key jobs.

9. Which of the following is not one of the four dimensions identified by Mendenhall and Oddou that predict expatriate success?An advanced degree in business or economics

10. Repatriation:should be characterized by the same careful planning and training before the expatriate went abroad.

11. To balance what could be a hostile performance evaluation due to a cultural misunderstanding by a foreign on-site manager of an expatriate, it is a good policy to:require consultation with a home-office manager.12. An expatriate's compensation may be up to three times what it would cost the firm in a home-country posting, often with the inclusion of many elements. Those elements could include all of the following allowances EXCEPT:foreign exchange allowances.

13. From a strategic perspective, a firm's ability to integrate and consolidate its global operations to realize experience curve and location economies can be limited by:organized labor constraining the pursuit of a transnational or global standardization strategy.

14. All of the following are concerns of organized labor in dealing with global or multinational enterprises EXCEPT:the possibility that wage increases could outpace costs-of-living and cause problems with some nations' laws and regulations.

15. Historically, most international businesses have ____________ labor relations activities, but the current trend is toward __________________.decentralized; greater centralization