Exam 3: Business in a Global Environment

Most U.S. companies are attracted to international contract manufacturing, or outsourcing, because of high shipping, material, and marketing costs in the United States.

If a country buys more goods and services than it sells over a specified period of time, it has a _____.

McDonald's, Burger King, Pizza Hut, and KFC restaurants, all of which operate in many different countries, are best characterized as _____ corporations.

Nations practice dumping in order to _____.

Nations engage in trade primarily because no nation can produce all of the goods and services that it needs.

Which of the following is not among possible advantages of membership in the European Union (EU)

By the year 2010, international trade in merchandise and services had topped _____.

All of the following are conducive to economic growth except _____.

Ben Franklin's adage "Time is money" is now a universally accepted principle.

Centralized decision making allows Wentworth Productions, a multinational film production company, to be more sensitive to local market conditions in other nations.

SCENARIO-BASED Cajun Chicken, a growing franchise chain based in Lafayette, Louisiana, has expanded to 185 locations in the United States. Because they realize that domestic growth is limited, the owners are contemplating expansion to selected foreign countries. Thus far, research has shown that the rights to use many of the firm’s recipes can be sold to other restaurants, cafeterias, and food stores. Cajun can also sell prepackaged food products, complete with spices, to other markets. At this point, whether to start by opening company-owned outlets or selling franchises is still a toss up. In any case, the long-term picture looks good. -RJR Nabisco (a U.S. company) allows a company in Singapore to use its brand name and recipe to produce and sell one of its products- Planters Nuts. In return RJR Nabisco receives a royalty fee. This type of international arrangement is called _______

It is parents weekend and your parents will arrive at your dorm in an hour. There are two tasks left to be done: washing the dishes and vacuuming. You and your roommate have agreed to divide up the work. In the past, you have been able to do the dishes in 30 minutes and vacuum in 15 minutes. Your roommate takes 40 minutes to do the dishes and 60 minutes to vacuum. Based on this scenario:

Because the small Mideastern country of Asiana has experienced an unfavorable balance of payments for the past 22 years, the stability of its _____ may be in jeopardy.

U. S. exports are greater than U.S. imports.

When they started overseas operations, top managers at Keyboard Electronics had to learn to appreciate other countries' systems of shared beliefs, values, customs, and behaviors. In other words, they had to come to grips with elements of what is best characterized as the social environment.

According to the concept of opportunity cost, a country that decides to specialize in the production of a particular product may sacrifice the production of another.

SCENARIO-BASED Cajun Chicken, a growing franchise chain based in Lafayette, Louisiana, has expanded to 185 locations in the United States. Because they realize that domestic growth is limited, the owners are contemplating expansion to selected foreign countries. Thus far, research has shown that the rights to use many of the firm’s recipes can be sold to other restaurants, cafeterias, and food stores. Cajun can also sell prepackaged food products, complete with spices, to other markets. At this point, whether to start by opening company-owned outlets or selling franchises is still a toss up. In any case, the long-term picture looks good. -If Cajun Chicken opens companyowned stores and restaurants in Europe, it will be engaged in _____.

A strategic alliance is a working partnership between companies in different countries who pool resources to achieve goals and benefits for both firms.

SCENARIO-BASED Yokahama Sports Equipment Ltd. is a successful manufacturer and distributor of sports equipment in the Far East, Australia, and Europe. Top management sees attractive opportunities in the U.S. market because of the stable economy and government. In addition, of course, Americans have disposable income to spend and are willing to buy imported goods. Yokahama executives realize, however, that entering the U.S. market can be difficult and that they’ll need a well-planned strategy. -If Yokahama tried to get a foot in the door of some foreign markets by pricing certain products lower than it would for its own domestic market, importing nations would see the tactic as an unfair trade practice.

When nations continue to run large and ever-growing trade deficits over extended periods of time, creditor nations will eventually stop taking IOUs and trade will cease.