http://highered.mcgrawhill.com/sites/0073102555/student_view0/chapter6/multiple_choice_quiz.

html C1 1 INCORRECT While workers in manufacturing industries are considered to be vulnerable to the negative effects of globalization, workers in service industries are relatively secure. B) FalseFeedback: 2 UNANSWERED The globalization of markets refers to the merging of historically distinct and separate national markets into one huge global marketplace. A) True B) False 3 CORRECT The globalization of production refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production. A) True

4 UNANSWERED The World Bank's primary responsibility is to maintain order in the international monetary system. A) True B) False 5 INCORRECT International trade occurs when a firm exports goods or services to consumers in another country. 6 A) True CORRECT A) unemployment in developed nations CORRECT A) the globalization of markets and

Globalization has been blamed for 7

The two main components of globalization are: the globalization of production

8 CORRECT A company that designs its product in one country, sources parts of the product in other countries, and assembles its product in still another country is a developed country C) is probably from

9 INCORRECT According to former Secretary of Labor Robert Reich, the propensity of firms to outsource many of their productive activities to different suppliers around the world has resulted in the creation of __________ products. C) global

10 INCORRECT Which of the following institutions promotes the lowering of barriers to cross-border trade B) the World Trade Organization 11 CORRECT The role of the __________ is to maintain international peace and security, to develop friendly relations among nations, to cooperate in solving international problems and promoting respect for human rights, and to be a center for harmonizing the actions of nations C) the United Nations

12

INCORRECT

Which of the following was not an outcome of the Uruguay Round of the GATT? A) Increased trade barriers 13 UNANSWERED The acronym WTO stands for A) Western Trade Organization. B)

World Tax Organization. C) World Trade Organization. D) World Tariff Organization. 14 INCORRECT Approximately 95 percent of the changes countries have made pertaining to foreign direct investment regulations have: enter their markets 15 B) made it easier for foreign companies to INCORRECT

Moore's Law predicts that D) the power of microprocessor technology doubles and its cost of production falls in half every 18 months 16 CORRECT By 2003, approximately _______ percent of the population in the United States was using the Internet 17 C) 60 INCORRECT A)

The greatest current potential of the Web seems to be in the _______ arena. business-to-business 18

INCORRECT

Which country was the world's most dominant industry power in the early 1960s D) The United States: 19 CORRECT The World Bank estimates that by 2020 developing nations will account for more than ____ percent of world economic activity C) 60 20 INCORRECT The foreign direct investment by non-U.S. firms was motivated primarily by the following two factors: A) the desire to disperse production activities to optimal locations; and the desire to build a direct presence in major foreign markets 21 INCORRECT The shares of the total stock of FDI accounted for by France, Japan, and other Asian nations 22 A) increased markedly from 1980 to 2002 INCORRECT B) a relative decline in the

The globalization of the world economy has resulted in dominance of U.S. firms in the global marketplace

23 INCORRECT Which of the following statements is not true regarding the majority of Latin American countries? take hold: D) Neither democracy nor free market reforms have seemed to

24 INCORRECT All of the following except __________ are reasons for economic stagnation in countries such as Afghanistan, Cambodia, Cuba, Haiti, and Iraq. B) strong protection for property rights

25 Any firm that engages in international trade or investment is business

INCORRECT B) an international

C2 INCORRECT Norms are abstract ideas about what a group believes to be good, right, and desirable B) False 2 INCORRECT

Mores are the routine conventions of everyday life B) False 3 CORRECT A group is an association of two or more individuals who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other's behavior. 4 A) True INCORRECT

There is a strict one-to-one correspondence between a society and a nation-state B) False 5 INCORRECT Islam is the most widely practiced religion in the world B) False 6 INCORRECT There is beginning to be a change to allow greater emphasis on individualism as compared to group identification in D) Japan 7 INCORRECT _____ can be defined as a system of values and norms that are shared among a group of people and that when taken together constitute a design for living C) culture 8 INCORRECT The keen awareness of the passage of time that is shared by the U.S. and Northern European cultures is an example of 9 D) folkways INCORRECT D) the INCORRECT B)

Which of the following is not true of culture and the nation-state? relationship between culture and country is clearly defined 10 All of the following are determinants of culture except A) geography

religion C) language D) education 11 INCORRECT An association of two or more individuals who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other's behavior is referred to as a 12 B) group INCORRECT

In Saudi Arabia, ______ is most important in explaining success. D) the family group 13 INCORRECT The lack of loyalty and commitment to an individual company that is common in the U.S. reflects D) the high degree of individualism in American society 14 INCORRECT In Japan, the primary unit of social organization is B) the group

15 INCORRECT The extent to which individuals can move out of the strata into which they were born is known as A) social mobility 16 INCORRECT A closed system of stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual's lifetime is known as A) a caste system A system of shared beliefs and rituals that are concerned with the realm of the sacred is C) religion 18 INCORRECT _____ made the connection between Protestant ethics and the spirit of capitalism D) Max Weber 19 INCORRECT Which of the following is not a major principle of Islam? pretentious towards others 20 D) being overly INCORRECT

________ is not just a religion, it is also the source of law C) Islam 21 INCORRECT According to Max Weber, devout ______ would be less likely to engage in entrepreneurial activity than ______. 22 INCORRECT D) Hindus, Protestants

23 INCORRECT Western nations such as the U.S. tend to score _______ on Hofstede's individualism scale and _____ on the power distance scale. C) high, low 24 INCORRECT According to Hofstede ________ captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors. D) Confucian dynamism 25 INCORRECT When a manager believes that his own ethnic group or culture is superior to those of others, the manager is demonstrating a(n) __________ attitude C3 1 B) ethnocentric CORRECT

A specific tariff is levied as a fixed charge for unit of an imported good. A) True 2 INCORRECT Both government and consumers realize significant gains as a result of tariffs, while domestic producers typically see a negative effect B) False CORRECT Agriculture tends to be one of the largest beneficiaries of subsidies in most countries. A) True 4 CORRECT The extra profit that producers make when supply is artificially limited by an import quota is referred to as quota rent. 5 A) True CORRECT A)

Countries may impose trade barriers in an effort to protect national security. True

6 INCORRECT Subsidies, quotas, voluntary export restraints, and antidumping duties are all examples of 7 When tariffs are imposed, prices generally 8 C) rise INCORRECT D) nontariff barriers INCORRECT

Ad valorem tariffs are D) levied as a proportion of the value of the imported good 9 INCORRECT A direct restriction on the quantity of some good that may be imported into a country is a(n) ___________. 10 D) import quota INCORRECT

Import quotas and VERs effectively B) raise prices 11 INCORRECT When a domestic industry lacks the capacity to meet demand, import quotas can _____ prices for domestically produced products and ______ prices for imported products. D) raise, raise 12 INCORRECT A requirement that some specific fraction of a good be produced domestically is known as A) a local content requirement 13 INCORRECT If a country requires that all imports of a certain product arrive through a small customs entry point that is both remote and poorly staffed, the country is using _______ as a means of limiting imports 14 C) administrative policies INCORRECT

Antidumping policies are also known as B) countervailing duties 15 CORRECT If France threatens punitive trade sanctions to force Canada to "play by the rules," France is employing a _____ policy. 16 A) retaliation INCORRECT

Granting a country MFN status is part of the U.S.' _______ policy. C) protection of human rights 17 INCORRECT Many economist criticize ______ for trade intervention arguing that it leads to prolonged inefficiency C) the infant industry argument 18 INCORRECT According to Krugman, trade policy designed to retaliate against another country's trade policy 19 D) would hurt the citizens of both countries INCORRECT

GATT was replaced in 1995 by B) the WTO 20 CORRECT The _______, passed in 1930 by the U.S., raised tariff barriers in an effort to protect domestic industries and encourage Americans to buy domestically produced products. A) Smoot-Hawley Act 21 Which of the following was not a goal of the Uruguay Round? regulate trade in textiles INCORRECT C) to better

22 CORRECT ____________is an attempt to narrow the gaps in the way intellectual property rights are protected around the world, and to bring them under common international rules. A) TRIPS 23 INCORRECT The WTO's role as a global policeman for trade has so far been 24 A) successful INCORRECT C) $300 INCORRECT

In 2003, OECD countries spent more than ________ subsidizing agriculture billion 25 The Doha Round is focusing on all of the following issues except the establishment of anti-dumping laws

D) encouraging

http://www.pearsonhighered.com/daniels/ Chapter 2: The Cultural Environments Facing Business

1.Culture _____ consists of specific learned norms based on attitudes, values, and beliefs. 2.What are the advantages and shortcomings of using the nation as a proxy for a culture? Why is the concept of national culture useful in international business? Similarity is both a cause and effect of national boundaries. 3 What are major ways that societies rank people (what social stratification systems exist)? Why is an understanding important in international business? Which of the following is an example of an affiliation, which is an acquired rather than ascribed group membership? political affiliation 4.Describe the major theories that explain why work motivation may differ from one country to another. The Protestant Ethic is an example of _____. a work motivation theory 5.Describe the relationship preferences explained by power distance and individualism versus collectivism. In a country where power distance is high, which would probably be the most effective way to manage? As a boss, you give orders rather than asking subordinates for advice 6.What cultural factors help to explain risk taking behavior? How do differences affect business? In which of the following cultures are workers most likely to prefer to work for their existing organizations for a long time, rather than seeking advancement opportunities elsewhere? high uncertainty avoidance cultures 7.Explain the concepts of low-context versus high-context cultures, monochronic versus polychronic cultures, and idealistic versus pragmatist cultures. In a low context culture, there is a tendency for people to _____. consider high context individuals as time-wasters 8.What problems occur when moving either from one language to another or from one country to another that share the same official language? What are some suggestions to deal with these problems? A suggestion for improving communications when dealing with people whose first language is different from your own is to_____. find a translator who knows the technical vocabulary of your business 9. What are ethnocentrism, polycentrism, and geocentrism, and what are the problems and/or advantages of each? Under which of the following attitudes would organizational control most likely be decentralized so that managers in the foreign locale would make most decisions? Polycentric 10.What factors should companies consider when trying to minimize resistance to changes they might introduce to foreign societies? Which of the following describes useful advice for instituting changes when operating in another culture? The more that changes disrupt basic values, the more people will resist. 11.Why is cultural awareness important in international business? What are methods and problems in building cultural awareness? There is general agreement that because cultural sensitivity is innate, people cannot improve on it through training. False

12.What features influence cultural stability and cultural change? Countries that have a language not shared by other countries are more apt to accept things from other cultures than countries that share a language with other countries. False 13.What are major ways that societies rank people (what social stratification systems exist)? Why is an understanding important in international business? In every society, people perceive certain occupations as having greater economic and social prestige than others. True 14.Describe the major theories that explain why work motivation may differ from one country to another. The belief that it is better to "live to work" than "work to live" is a characteristic of a masculine society. True 15.Describe the relationship preferences explained by power distance and individualism versus collectivism. The preference for how to interact between superiors and subordinates is known as power distance. True 16.What cultural factors help to explain risk taking behavior? How do differences affect business? Where future orientations are low, companies can better motivate people through delayed compensation. True 17.Explain the concepts of low-context versus high-context cultures, monochronic versus polychronic cultures, and idealistic versus pragmatist cultures. A culture where people prefer to work sequentially (e.g. people prefer to finish with one customer before dealing with another) is a low context culture. False 18.What problems occur when moving either from one language to another or from one country to another that share the same official language? What are suggestions to deal with these problems? Although written and spoken languages differ, gestures are universal. False 19.What influences how much adjustment companies and managers must make when operating in different cultures? People and companies generally have to make fewer adjustments in countries, which share a common language and religion with them than in other countries. True 20.What are the major scenarios about the future of national cultures? How does cultural imperialism fit into these scenarios? Cultural imperialism refers to a situation in which people's culture changes through imposition. True 21.What are some of the difficulties in developing cultural awareness? Although cultural differences are easily agreed upon, they are very difficult to define clearly. It is also difficult to ascertain whether the differences are deep-seated or superficial, particularly when doing market surveys on likely sales of a product. We are also likely to project our stereotypes onto other peoples, feeling they will act in ways similar to us, despite apparent differences. Furthermore, even if we do manage to characterize a norm of behavior that seems to apply to a certain culture, there is a good deal of variation among individuals making up a norm. 22.What factors contribute to the identification and dynamics of cultures? What is the criticism made of the nation as a factor? The major factors are the nation, language and religion. The nation is an imperfect criterion in many cases because although laws apply along national lines, strong subcultures and language differences exist with some nations. Also some subcultures exist that cross national boundaries and are shared between groups in different nations. 23. What kinds of behavior seem to impact business practices most? The text refers to behavior related to social stratification systems, work motivation, relationship preferences, risk-taking behavior, information and task-processing, and communication as being the most important. 24.Work Motivation attitudes are among the most debated aspects of cultural differences. What are the main differences in these attitudes we are likely to find between cultures? The main differences will be to what extent leisure is valued over material things; the degree of expectation that success is linked to performance, that rewards will follow and what kind of rewards will be linked to success; the degree to which assertiveness is expected; and the way the needs hierarchy may be structured from one culture to another.

25.What are some of the main problems that may occur in communications between different cultures?In spoken communication, literal translation of words in one language may mean something entirely different in another. Humor may also be entirely different: what is considered funny in one culture may not be at all in another. Silent language is very important and very different between cultures. It includes gestures (kinesics) , body distance, perceptions of time, and signs of hierarchical position. 26.Do you or have you gone to school with classmates from different cultures? How would you describe those differences in meaningful approaches borrowed from your text? The most common differences you are likely to encounter are food tastes, degrees of assertiveness, questions of politeness and perceptions of time and its importance. This will also depend on the degree to which your classmates have been acclimated to US or regional state culture. 27.If you have worked in a context of international business, interrelating with customers, suppliers or employees from another culture, what differences in attitudes or behavior have you noticed? This is similar to question 1, except that you will probably have been struck mostly by different attitudes to politeness, frankness (assertiveness) and time. 28.In your foreign language studies, have you run into words or expressions that do not exist in the other language, or words that have very different meanings? Refer to page 67 of your text for humorous examples that are but a few that people who travel widely have encountered

Chapter 3: The Political and Legal Environments Facing Business

1. What is the individualistic paradigm and how does it influence how governments' intervene in the economy? The term __________ refers to a political system that stresses the primacy of the individual goals over collective goals. individualism 2.What is a political ideology? In a practical sense, the term __________ is meant to signify the working government in a country. political system 3. What is a political ideology? Generally, ______________ differ from country to country in terms of their treatment of any number of variables, including the right to free speech and vote. political systems 4. What is a political ideology? What is meant by democracy and totalitarianism? _________ is the form of government in which one person or political part exercises absolute control, whereas __________ refers to a political system in which government is by the people, exercised either directly or through elected representatives. totalitarianism, democracy 5. What are the fundamental features and elements of a totalitarian system? Which of the following restrictions is inconsistent with a totalitarian state? citizens' freedom to speak their minds 6. What sorts of political systems exist in the world today? What conditions have spurred political change? How do political systems change and evolve? A notable development of the past 15 years has been the reduction in the scope of __________. communism 7.What are the principal types of legal systems? A system of law based on a general set of principles is commonly referred to as a(n) __________. common law system 8.How does a country's legal system affect operational aspects of the local business activity of domestic and foreign companies? Reports suggest that the relationship between the per capita income of a country and its tendency to regulate business activity is___________. an inverse relationship 9.What is intellectual property? What types are there? What is an intellectual property right? A creation of the mind that has commercial value,

including copyrighted property such as literary or artistic works, is referred to as __________. intellectual property 10.What is intellectual property? What types are there? What is an intellectual property right? The vigor of IPR protection is highly related to a country's stage of __________. economic development 11.What is the individualistic paradigm and how does it influence how governments' intervene in the economy? The term individualism refers to a political system that emphasizes the supremacy of collective goals over individual goals. False 12.What is a political ideology? Political systems can be assessed in terms of two related dimensions. The first is the degree to which they emphasize collectivism versus totalitarianism. The second dimension is the degree to which they are democratic versus individualistic. False 13.What is a political ideology? Democracy and totalitarianism are on the same end of the political spectrum. False 14.: What are the fundamental features and elements of a democracy? Democracy basically involves broad participation by citizens in a decision-making process. True 15.What are the fundamental features and elements of a totalitarian system? In a totalitarian state, a single party, individual, or group of individuals control political power. True 16.What sorts of political systems exist in the world today? What conditions have spurred political change? How do political systems change and evolve? Presently, fewer people live in countries with elected democratic governments than at any other time in history. False 17.What is meant by political risk? What are the major causes and costs of political risk? Political risk is the chance that political decisions, events, or conditions in a country lead to a lower than projected rate of return for a company's investments. True 18.What are the characteristics of an active versus passive approach to managing political risk? Companies that see political risk as a systematic hazard of international business are more likely to take a passive approach to managing it. False 19.What are the principal types of legal systems? A common law system anchors itself in the wisdom of daily experience or, more intellectually, great spiritual or philosophical traditions. False 20.What are the consequences and outcomes of intellectual property rights violation? The protection of intellectual property rights is quite similar from country to country. True 21. In discussing ways to profile differences and similarities between political systems, your text refers to individualism and collectivism. What are the major characteristics of each approach? According to your text, in countries with an individualistic approach, political officials and authorities have a limited role in society. Such countries would encourage businesses to support the good of the larger community by promoting fair and just competition. In collectivist-orientated countries, public officials would play a large role in the structure of industries, conduct of companies and actions of managers for the greater good of society. 22.In your text, what are the major criteria used in ranking countries as democratic or not? The possibility and degree of competition between parties, free elections, freedom of expression, assembly and association and the degree to which private business activity is regulated. 23.The text suggests that the trend towards democracy is increasing. What phenomena does it cite as manifestations of this trend? The increasing number of democratic states in the world. This means that they have freely elected governments, an active media and stronger judiciary and property rights. This has been accompanied by a greatly increased per capita GDP in these countries. 24.What are the major forms of political risk that firms operating abroad face?

These are: risk to property through expropriation; risks to persons operating in the country; risks to freedom of business operations through government mandated restrictions; risks to respect of contract. 25.How does a country's legal environment impact the strategic concerns of a firm operating internationally? Local standards may require product customization; marketing methods practiced on the domestic market may be hindered by regulation of advertising, pricing ad promotion; manufacturers may be required to use local components in producing their products; litigation and arbitration may be subject to local courts. 26.In your opinion, how important is the issue of political risk in firms setting up abroad? You can form an opinion on this by searching country risk on Internet. You will find a large number of agencies specialize in advising firms and insuring risk related to political conditions or uncertainty in foreign ventures. This is a major business because firms are well aware of the often high risk of investing abroad. 27.Your text mentions differences in hiring and firing in some countries in the world but does not discuss the labor legislation in Europe. However, American firms have often hesitated to set up operations in Europe due to this legislation. Do you know about some of the employee protection that exists in many countries of Europe that might hinder what Americans consider operational business freedom? Research on the Internet about workweeks, types of work contracts and dismissal policies will teach you that employees in many European companies have far shorter workweeks, great restrictions on work times and overtime, as well as greatly limit the employers' freedom to dismiss. This has been a discouraging factor for many American businesses that wished to set up operations in Europe. 28.Your text sets out certain criteria for assessing a country as a democracy or not. Do you think all the criteria have been mentioned? Can you find others that should be included? Seeking information about the criteria used in ranking democracies on the Internet might lead you to add questions about rights of citizenship, economic and social rights, civilian control of the military and police, minimizing corruption, etc.

Chapter 4: The Economic Environment

What is GNI? Per capita GNI is determined by____ the size of GNI of a country by its total population. dividing 2. What is a political ideology? Technically, the ____ PPP ___ index is the number of units of a country's currency required to buy the same amounts of goods and services in the domestic market that one unit of income would buy in the other country. 3.What is the implication of Human Development Index to measuring economic development? The Human Development Index is ________. A measure of the average achievements in a country in terms of longevity, knowledge, and standard of living 4.What is meant by an economic system? The three broad types of economic systems are: ____________ . market economy, command economy, mixed economy 5: Identify the fundamental features of a market economy system. The key concept to the successful functioning of a market economy is the_________ . concept of consumer sovereignty 6. Identify the fundamental features of a command economy. Historically, command economies were found in communist countries where _______ goals were given the highest priority. collectivist

7.Identify the fundamental features of a mixed economy. In a __________ economy, the government retains significant ownership in certain sectors yet lets private ownership and free market mechanisms prevail in other sectors of the market. mixed 8.Identify the fundamental features of a mixed economy. Some countries opt for a mixed economic system in the belief that while an economic system should aspire to achieve the efficiencies endemic to free markets, it must also apply the policies needed to:________________ . equitably distribute wealth 9.Describe the idea of economic freedom and what it means to the economic development of a country. The results of the Economic Freedom Index strongly suggest that market economies exhibited _______ economic freedom, whereas command economies exhibited _________economic freedom. high, low 10.Most former command economies are going through a transition to a market economy. What does this mean? Which is the most likely combination of economic and political systems to be found in a country? market and democracy 11. What is GNP?A country's gross national product is the value of all production that takes place within a country's borders. False 12.What is the implication of Human Development Index to measuring economic development?The Human Development Index measures the average achievements in a country on three basic dimensions of human development: mortality, knowledge, and income and wealth. False 13. What do we mean by Unemployment and Debt? How does it affect the business environment? The so-called "misery index" is the sum of a country's inflation, unemployment, and poverty rates. False 14. What do we mean by Income Distribution and Poverty? How does it affect the business environment? Uneven income distribution is largely a problem confined to richer nations that have extreme splits between those who live in urban settings versus those who live in rural areas. False 15.What is the balance of payments? What is the current account component of the balance of payments? What is the capital account component of the balance of payments? The fundamental notion of balance means that all BOP transactions have an offsetting receipt. True 16.Identify the fundamental features of a market economy. Market economies are typically free from extensive government restraints. True 17.Identify the fundamental features of a market economy. In countries where individual goals are given primacy over collective goals, we are less likely to find free market economic systems. False 18.Identify the fundamental features of a command economy.Historically, command economies were found in communist countries where collectivist goals were given priority over individual goals. True 19Describe the idea of economic freedom and what it means to the economic development of a country. There is a strong consensus that innovation and entrepreneurial activity are the engines of economic growth. True 20.Most formerly command economies are going through a transition to a market economy. What does this mean? Movement to a market-based economic system entails a number of steps, including deregulation, the establishment of private enterprise, and privatization of state-owned assets. True 21.What are the major elements in the economic framework of a country that a manager should review when envisaging investment or operating in a foreign country? They should look at GNP and GNI both in absolute terms and in per capital terms, because they are general indicators of the wealth creation capabilities of the country and purchasing power of its inhabitants. However, such figures should be corrected to terms of Purchasing Power Parity for a correct measurement of ability to purchase. Also, the Human Development Index would provide a more complete picture of the inhabitants as

employees and customers. 22.Why is it important to measure the inflation rate in a country? Inflation rates can affect consumer willingness and ability to spend or save. Very high inflation rates make it difficult for firms and their customers to plan in the long-term and make enlightened business or purchase decisions. 23.Apart from the humanitarian aspects, why should managers running businesses in foreign countries be concerned about poverty levels? Widespread poverty, like narrow income distribution, means that a firm's customer base will be reduced unless it focuses on goods directed to the wealthy. Secondly, great poverty impacts the functioning of national infrastructures, will inevitably increase criminal behavior levels, and lessens the government's ability to regulate society or adopt economic policies based on business logic. 24.What are the three types of economic systems described and what are their major characteristics? Market, command and mixed economies. In market economies there is an open exchange of goods and services; in command economies, a central government plan determines all dimensions of economic activity; in mixed economies, economic decisions are largely market driven, but the government intervenes in many of them. 25.What is the meaning of transition in your chapter? Transition refers to the gradual conversion of command and mixed economies to more market economies after the realization of operational and strategic inefficiencies of the former. 26.The US was mostly built by waves of immigrant population seeking a better life from Europe, and more recently from Latin America, Asia and India. If you have friends from these areas, or whose parents came from these areas, have you asked them if economic conditions in their home country affected their decision to immigrate? Depending on the area of the worldand on more personal than economic motives you may find that unemployment was high or that job opportunities were lacking in their field. 27.In the news, have you seen any signs of transition in other economies? Do research on the Internet under the heading "economies in transition" and see what examples strike you most and what difficulties accompany transition. What areas of the world are most often mentioned? There is a plethora of sites, papers, articles and books on the subject. The most common reference is to ex-COMECON countries: Central Europe and the ex-USSR. These countries were ruled for some 50 years or more by a very clear command economy and are making the strongest, and often most difficult move to a market economy. 28.Do you think inflation is important to you? Are its effects as serious as those described in the text for certain foreign countries? What do we do to try and control inflation and why? This is a complex question if you have not had a course in macro-economics. A little research on the inflation rate and the role of the Federal Reserve will show how we fear that inflation will reduce our purchasing power and how the Federal Reserve acts on interest rates to try to curtail it.

Chapter 1: Globalization and International Business

What are international business and globalization? What is the relationship between them? All commercial transactions between two or more countries are known as _____. international business 2. What is the relationship between international market segments and target markets? How might companies adjust to tap them successfully? Which of the following is one of the major factors causing the recent growth in international business? development of institutions to support and facilitate trade

How is technology affecting the growth of international business? Which of the following describes a result of expansions in transportation technology? More countries can compete for sales in a given market. 4.Why have most governments lowered restrictions on international trade? Governments today impose fewer restrictions on cross-border movements than they did decades ago. One reason is to _____. respond to consumers' desires to access greater variety and lower prices 5. Why do countries cooperate with other countries? How does this cooperation affect international business? The commercialization of areas that lie outside the territory of any country is _____. partially agreed upon by cooperative treaties among countries 6.What are the main criticisms of globalization? Critics contend that a downside of globalization is that it causes _____. an increase in the use of non-renewable resources 7.What is meant by off-shoring? What are the major arguments for and against it? Which of the following is an example of off-shoring? A U.S. manufacturer uses components made in Canada. Why do companies engage (What advantages do they gain) in international business? Which of the following is a major operating objective that may induce companies to engage in international business? to acquire resources 9.Define and give examples of merchandise and service imports and exports. Which of the following is a service export for Australia? a Japanese tourist's visit to Australia 10.What is a multinational enterprise (MNE)? A multinational enterprise (MNE) is a company with _____. a global approach to foreign markets and production 11.Why should you study international business? Today, global events affect almost all companies, large or small.t 12.Explain how globalization has changed over time and differs both among countries and within countries. The countries that are the most globalized economically are also the most globalized technologically.f 13.How is technology affecting the growth of international business? The growth in technology has made countries more independent from the global environment.f 14. What is the relationship between competition and globalization? Once a few companies respond to foreign markets and production opportunities, other companies tend to follow their lead.t 15. What are the main criticisms of globalization? globalization has caused more income inequality.t Critics claim that

16.Why do companies engage (What advantages do they gain) in international business? Companies enter foreign markets to prevent competitors from gaining advantages therein.t

17What are the types of foreign investment? The ownership of a foreign bond is an example of a portfolio investment.t 18.What do we mean by a company's physical and societal environments? Why should companies understand them when engaging in international business? A country's geography explains its ability to purchase goods and services from abroad.f

19.How does a company's competitive environment affect its international operations? How might its competitive environment differ from one country to another? A company from a small country generally depends less on international business than a company from a large country.f 20.What are the three main viewpoints about the future of globalization? The view that globalization will slow in the future is based largely on the premise that countries have recently acted in their self-interest rather than an international interest.t 21.The text lists seven factors that have contributed to the increased growth in globalization in recent decades. List four of the seven factors that seem most important to you and give an example of each. Increase in and expansion of technology; Liberalization of cross-border trade and resource movements; Development of services that support international business; Growing consumer pressures; Increased global competition; Changing political situations; Expanded cross-national cooperation. 22.There is much debate about whether globalization is inevitable or not. What arguments are advanced to support the idea that it is inevitable? Technical advances in transportation and communications will lead consumers to demand the best products, regardless of their origins. Nobel Prize winners have stressed that trade barriers must be lowered to enable the movement of goods and foods to reduce poverty. 23.Chapter 1 talks about the 'downside' of globalization. What are some examples of the effects of globalization that could be considered a 'downside'? Increasing competition may mean that people will have to work harder. Firms will be required to invest more in R & D and other competitive advantages. Competitors will be more numerous. 24.The text describes the different "modes of international business." What are three of those modes and the major differences between them? The six modes are: 1) importing and exporting; 2) tourism and transportation; 3) licensing and franchising; 4) turnkey operations; 5) management contracts; 6) direct and portfolio investment. The major differences are levels of involvement in the foreign country and questions of non-product or product international earnings. 25.What is the importance of the competitive environment on operating in international business? Companies with different strategies may choose different locations to reflect their strategic needs. Market size may vary greatly from country to country, thus smaller country firms may seek international markets more. 26.In Chapter 1 the text mentions competitive factors that influence firms' international operations. Which ones do you believe are the most important for companies in your state or region? Can you give a couple of examples of firms in your state or region that deal with firms abroad? Do they mention these dealings on their

Websites? Based on your research, what do you believe are the most important factors in going international? You will usually find that exporting is the most frequent form of international business engaged in by local companies, supplying components or possibly software. Internationalization on a larger level has much to do with firm size. Companies are happy to mention such activity on their Web sites. 27.Your text mentions the controversial nature of offshoring-the transferring of production abroad. Do you know any examples of this practice among firms in your state or region? Do you feel the practice has affected the business landscape in a major way? What have been its effects? Usually you will find numerous examples of offshoring in manufacturing of non artisanal production and in IT services and software design, call centers, etc. 28.Chapter 1 suggests that the study of international business is important for you because understanding it will help you to make better career decisions. Do you agree with this? In what ways do you think knowledge of international business will help your career decisions? In what ways is it not important? Definitely, even if you do directly join an international company. It will increase your awareness of business opportunities and make you more ready to work with people from other countries or deal with international customers or suppliers.

Chapter 1: Globalization and International Business

1.All commercial transactions between two or more countries are known as ________. Your foreign trade Answer: Correct international business Answer: Review "What Is International Business" Page 5 2.Which of the following is not a reason to study international business? Your A company operating internationally may engage in modes of business Answer: that differ from those it is accustomed to domestically. Correct All business taking place outside your home country is international. Answer: Review "The Study of International Business" and "Understanding the Environment/Operations Relationship" Page 5-6 3.A difficulty in comparing the globalization of business over time is that ________. Your companies adopt different operating forms Answer: Correct shifting borders obsolesce figures on what is international Answer: Review "The Forces Driving Globalization" Page 7 4.Which of the following has been a major force behind recent globalization? Your Institutional development of services that aid foreign trade Answer: investment.

and

5.Which of the following is a result of the recent expansion of transportation technology? Your Transportation costs have risen more rapidly than costs in general. Answer: Correct Producers from farther away are competing for sales in a given Answer: market. Review "Advances in Communications and Transportations" Page 8

6.Which of the following is a reason for recent governmental decreases in restrictions on cross-border trade or resource movements? Your Governments hope to induce other nations to reduce their barriers in Answer: return. 7.Potental pressures of increased foreign competition can persuade companies to ________. Your use more domestic inputs in their production Answer: Correct expand their business into international markets Answer: Review "Increased Global Competition" Page 9 8.Which of the following is a reason why governments cooperate through treaties, agreements, and consultation? Your To assure that all countries get an equitable share of taxes from Answer: multinational enterprises. Correct To deal with areas of concern that lie outside the territory of all Answer: countries. Review "Expanded Cross-National Cooperation" Page 10 9.All of the following are major criticisms of globalization except ________. Your countries lose control to act in their own best interest Answer: Correct globalization increases the cost of production Answer: Review "What's Wrong With Globalization" Pages 12 10.The major argument companies use to support off-shoring is that it ________. Your reduces home-country unemployment Answer: Correct saves costs Answer: Review "Growing Income Inequality" Page 14 11.An advantage that an international company may have over a purely domestic one is that it can ________. Your more easily control its opening units Answer: Correct acquire cheaper resources to use in production Answer: Review "Acquiring Resources" Page 16 12.An example of a Mexican merchandise export would be a shirt made ______ and sold _______. Your in the United States by a Mexican company; in the United States Answer: Correct in Mexico by either a Mexican or a U.S. company; outside Mexico Answer: Review "Merchandise Exports And Imports" Page 17 13.When a company owns foreign bonds or bills, this is an example of a ________. Your portfolio investment Answer:

14.A company that takes a global approach to foreign markets and production is called a _______. Your strategic alliance enterprise Answer: Correct multinational enterprise Answer: Review "Multinational Enterprises" Page 19 15.In Japan, baseball games may end in a tie; in the United States, teams play until one wins. This difference is most likely due to ________ factors. Your economic Answer: Correct behavioral Answer: Review "Behavioral Factors" Page 21 16.All commercial transactions between two or more countries are known as globalization. Your False Answer: 17.Understanding some of the complexities of international business help you to make more informed decisions in support of government policies. Your False Answer: Correct True Answer: Review "Understanding the Environment/Operations" Pages 7 18.World production has grown more rapidly than world trade in almost every year since World War II. Your False Answer: 19.Globalization of business has been stimulated by consumers' greater efficiency in using the Internet to compare prices worldwide. Your False Answer: Correct True Answer: Review "Advances in Communications and Transportation" Page 8 20.As a result of expansions in transportation technology, more countries can compete for sales in a given market. Your False Answer: Correct True Answer: Review "Advances in Communications and Transportation" Page 8 21.Countries have reduced import trade barriers because they believe their domestic producers will become more efficient as a result of foreign competition. Your False Answer: Correct True Answer: Review "Liberalization of Cross-Border Trade and Resource Movements" Page 8 22.A born-global company is one that starts out with a global focus. Your False Answer:

Correct True Answer: Review "Increased Global Competition" Pages 9 23.Governments cooperate through treaties, agreements, and consultation to assure that they all get an equitable share of taxes from multinational enterprises. Your False Answer: 24.People favoring globalization contend that the biggest problem of environment despoliation occurs in the countries that are least globalized. Your False Answer: 25.The major argument companies use to support off-shoring is that it saves costs. Your False Answer: Correct True Answer: Review "Is Offshoring Good Strategy?" Page 14 26.The televising of sports competition to viewers in multiple countries is an example of an international objective of sales expansion. Your False Answer: Correct True Answer: Review "Expanding Sales" Page 16 27.The production by a U.S. company in Canada for sale in Canada is a U.S. merchandise export. Your False Answer: 28.A direct investment occurs when foreign ownership is in private rather than government securities. Your False Answer: 29.Stateless company is a term used by the United Nations as a synonym for multinational enterprise. Your False Answer: 30.Managers need a working knowledge of their physical and societal environments to help them understand the aggregate of conditions outside their companies that influence their success. Your True Answer: 31.The text lists seven factors that have contributed to the increased growth in globalization in recent decades. List four of the seven factors that seem most important to you and give an example of each. ncrease in and expansion of technology; Liberalization of cross-border trade and resource movements; Development of services that support international business; Growing consumer pressures; Increased global competition; Changing political situations; Expanded cross-national cooperation.

32.There is much debate about whether globalization is inevitable or not. What arguments are advanced to support the idea that it is inevitable? Technical advances in transportation and communications will lead consumers to demand the best products, regardless of their origins. 33.Chapter 1 talks about the 'downside' of globalization. What are some examples of the effects of globalization that could be considered a 'downside'? The three broad categories of problems with Globalization. They are threats to national sovereignty, growth and environmental stress, and growing income inequality. 34.The text describes the different "modes of international business." What are three of those modes and the major differences between them? The six modes are: 1) importing and exporting; 2) tourism and transportation; 3) licensing and franchising; 4) turnkey operations; 5) management contracts; 6) direct and portfolio investment. The major differences are levels of involvement in the foreign country and questions of non-product or product international earnings. 35.What is the importance of the competitive environment on operating in international business? Companies with different strategies may choose different locations to reflect their strategic needs. Market size may vary greatly from country to country, thus smaller country firms may seek international markets more.

Chapter 2: The Cultural Environments Facing Business

1.Culture may be defined as ________. Your leisure time activity as opposed to work activity Answer: Correct the learned norms based on attitudes, values, and beliefs of a group of Answer: people Review "Introduction" Page 49 2.All of the following are problems of building national cultural awareness except ________. Your cultures evolve, thus studies and descriptions may be outdated Answer: Correct systematic comparative studies have covered only high-income Answer: countries Review "A Little Learning Goes A Long Way" Page 50-51 3.The nation offers a workable reference for studying cultural differences because _______. Your different groups within the same country always have more in common Answer: with each other than with groups in other countries Correct the laws governing business operations apply primarily along national Answer: lines Review "The Nation As A Point of Difference" Page 51 4.In hch of the following situations would culture spread more easily between country A and country B? Your Both A and B have several significant subcultures. Answer: Correct People from A and B speak the same language. Answer: Review "Language As Both A Diffuser And Stabilizer Of Culture" Page 53 5.________ is often referred to as the "international language of business."

Your Answer:

English

6.Among the ascribed group memberships is ________. Your national origin Answer: 7.The hierarchy-of-needs and Weber's Protestant ethic theories are examples of ________. Your dual-development theories Answer: Correct work motivation theories Answer: Review "Work Motivation" Pages 59-61 8.In societies with low power distance, most employees prefer a management style that ________. Your is autocratic Answer: Correct is consultative Answer: Review "Power Distance" Page 62 9.If employees prefer to set rules that are not to be broken even if breaking them is sometimes in the company's best interest, their preference is explained by high ________. Your collectivism Answer: Correct uncertainty avoidance Answer: Review "Uncertainty Avoidance" Pages 63-64 10.A society characterized by considering relevant only firsthand information that bears directly on the decision they need to make is a(n) ________ culture. Your low-context Answer: 11.The term silent language refers to ________. Your different local contexts for the same words, such as summer meaning Answer: different months in different countries Correct messages communicated through such means as color, distance, time, Answer: and body movements Review "Silent Language" Pages 68 12.The frustration people encounter when having to learn and cope with a vast array of new cultural cues and expectations is ________. Your polycentrism Answer: Correct culture shock Answer: Review "Culture Shock" Page 71 13.A potential problem of polycentrism in international business is ________. Your failure to introduce innovative superiority Answer:

14.Participation in decision-making and support of opinion leaders are ________. Your distinguishing characteristics of Western business practices Answer: Correct strategies for firms to consider when introducing change in their Answer: foreign operations Review "Participation" and "Opinion Leadership" Page 76-77 15.The example of a Japanese tourist listening to a Filipino group sing a U.S. song in a British hotel chain in Indonesia is evidence that ________. Your new hybrid cultures are developing Answer: 16.People have more than one cultural membership. Your False Answer: Correct True Answer: Review "Introduction" Page 49 17.As cultures evolve, studies and descriptions of the cultures may become outdated. Your True Answer: 18.Different groups within the same country always have more in common with each other than with groups in other countries. Your True Answer: Correct False Answer: Review "The Nation as Cultural Mediator" Page 52 19.The process of adding elements of an outside culture is known as creolization. True

20.The intrusion of English into some other languages may result in the development of a hybrid tongue. Corre ct True

Review "Why English Travels So Well" Page 54-55 21.Unless MNEs hire and promote on the basis of competence, they meet resistance to the introduction of new management practices. Your False Answer: 22.In applying the hierarchy-of-needs theory, one should expect higher-order needs to be a better motivator in poor countries. Your False Answer: 23.Low dependence on the organization and a desire for personal time, freedom, and challenge are attributes of collectivism.

Your Answer:

False

24.In societies with high uncertainty avoidance, employees tend to prefer set rules. Your True Answer: 25.A society characterized by preferring to finish one task before starting another is a low-context society. Correct False Answer: 26.The term silent language refers to written as opposed to oral communications. Correct False Answer: 27.The term cultural distance refers to the degree to which countries share attributes that help mold their cultures. Your True Answer: 28.The process by which a company bases foreign operations on an informed knowledge of its organizational culture along with home and host country needs, capabilities, and constraints is geocentrism. Your True Answer: 29.Participation in decision-making can aid companies in making organizational changes only when the work force has a good educational background.f 30.As companies gain more experience in overseas operations, they may learn as well as impart valuable knowledge that proves just as useful in the home country as in a host country. 31.What are some of the difficulties in developing cultural awareness? Although cultural differences are easily agreed upon, they are very difficult to define clearly. It is also difficult to ascertain whether the differences are deep-seated or superficial, particularly when doing market surveys on likely sales of a product. We are also likely to project our stereotypes onto other peoples, feeling they will act in ways similar to us, despite apparent differences. Furthermore, even if we do manage to characterize a norm of behavior that seems to apply to a certain culture, there is a good deal of variation among individuals making up a norm. 32.What factors contribute to the identification and dynamics of cultures? What is the criticism made of the nation as a factor? The major factors are the nation, language and religion. The nation is an imperfect criterion in many cases because although laws apply along national lines, strong subcultures and language differences exist with some nations. Also some subcultures exist that cross national boundaries and are shared between groups in different nations. 33.What kinds of behavior seem to impact business practices most? The text refers to behavior related to issues in social stratification, work motivation, relationship preferences, risk-taking behavior, information and task-processing, and communications as being the most important. 34.Work Motivation attitudes are among the most debated aspects of cultural differences. What are the main differences in these attitudes we are likely to find between cultures? The main differences will be to what extent leisure is valued over material things; the degree of expectation that success is linked to performance, that rewards will follow and what kind of rewards will be linked to success; the degree to which assertiveness is

expected; and the way the needs hierarchy may be structured from one culture to another. 35.What are some of the main problems that may occur in communications between different cultures?In spoken communication, literal translation of words in one language may mean something entirely different in another. Humor may also be entirely different: what is considered funny in one culture may not be at all in another. Silent language is very important and very different between cultures. It includes gestures (kinesics), body distance, perceptions of time, and signs of hierarchical position.