Exam 3: Business in a Global Environment

Besides enhancing political and social cooperation, the European Union (EU) allows unrestricted trade among member nations and permits people with EU passports to work in any EU nation.

High domestic ____ costs have made international contract manufacturing, or outsourcing, attractive to many U.S. companies.

Compare and contrast absolute advantage and comparative advantage.

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

Which of the following arguments is advanced in favor of increased MNC activities

Having set up factories, sales offices, and branch stores in several foreign nations, U.S.based Crenco has gone global through a form of expansion called a "joint venture."

The formal establishment of business operations on foreign soil, such as factories, sales offices, or branch stores, is called _____.

Chic Clothing Inc. has expanded to six locations in four different countries. Having seized the opportunity to make this move two years ago, top managers are now very glad they did (as are shareholders). Business is booming in both the U.S. and foreign markets. Current plans call for opening four new stores every year—two in the United States and two in Europe—for each of the next ten years. Chic’s managers are well aware that they’ll have to put a great deal of effort into learning new languages, traditions, customs, exchange rates, religions, and political practices. -By studying a nation's economic environment, Chic managers can better calculate currency valuations and exchange rates.

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. -Which of the following is not an argument given in support of U.S. headquartered multinational corporations (MNCs)

Lumber can be produced in Canada at a lower cost than in the U.S. When Canadian lumber is shipped into the U.S., its price is raised about 20% to allow the U.S. lumber industry to remain competitive. This is accomplished through a(n) _______

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:

Under a franchising agreement between a U.S.based company and a foreign firm, in return for the rights to use its brand name and sell its products, the U. S. franchiser requires the foreign company to adhere to an established business model.

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

The _____ prohibit(s) the distribution of bribes and other favors among American businesspeople conducting business with foreign officials and businesspeople.

In terms of sales revenue, the oil and gas company Royal Dutch Shell is the world's second largest multinational corporation, behind only ______

The Foreign Corrupt Practices Act, which prohibits the distribution of bribes, can put American businesspeople at a competitive disadvantage.

In _____ cultures, personal and work relationships tend to be compartmentalized.

As a representative for an international trade organization, GATT (General Agreement on Tariffs and Trade) and the WTO (World Trade Organization) are the two most important trademonitoring institutions with which Greco Pondiloupolous will probably work.

Policies that restrict free trade among nations are called _____.

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. -Even if Cajun opens company-owned restaurants in a foreign country, it may have to buy local food products to supplement the menu; in fact, it may have to buy chicken from local producers for the standard menu. In doing so, the company would be engaged in _____.