Deck 2: The Culture of Management

Question 1

When a firm is going global, its attention to the size of the market, the future wealth of consumers, and the purchasing power of the population are components of which factor affecting international business?

A) The legal system
B) Cultural norms
C) Economic norms
D) The general business environment

Answer 1

D

Question 2

With the global economy becoming more knowledge- intensive and falling national barriers to labor markets, which of the following is most likely to be true?

A) More firms consider the entire world their labor market.
B) More firms are likely to hire only college-educated workers.
C) Only large, multinational firms can recruit global talent.
D) More developed nations have an advantage over the less developed nations in recruiting talent.

Answer 2

A

Question 3

Which of the following is an example of an international firm that has responded to local needs by customizing their products?

A) Mattel
B) Coca Cola
C) Levi Strauss
D) Sony

Answer 3

A

Question 4

Which of the following countries is not a member of the EU?

A) The United Kingdom
B) Ireland
C) China
D) France

Question 5

The trade agreement that allows the free flow of agricultural products between the United States and Mexico is

A) NAFTA.
B) GATT.
C) WTO.
D) APEC.

Question 6

Which of the following reflects a major development in the global business community?

A) Higher trade barriers
B) The United States no longer dominates the world economy
C) Stable world output
D) Isolated economic markets

Question 7

Which of the following is true of changing demographics?

A) Diversity has become less important with less immigration.
B) The birthrate continues to trend upward globally.
C) The population is getting older in the industrialized nations.
D) More developed countries have younger populations in general.

Question 8

Which type of risk is represented by government changes, terrorism, and social unrest?

A) Economic
B) Political
C) Demographic
D) Legal

Question 9

Which of the following factors is not one of the factors which has made today's large international businesses feasible?

A) Advances in communication
B) Advances in transportation technology
C) Advances in cross-cultural management
D) Advances in information processing

Question 10

The legal system of the United States is considered

A) civil law.
B) common law.
C) Muslim law.
D) Anglo-Saxon law.

Question 11

The success of Coca Cola globally demonstrates the trend toward

A) the dominance of American firms in the global economy.
B) customized products in the global arena.
C) converging global consumer tastes and preferences.
D) less global production.

Question 12

The Paris Union addresses

A) the protection of industrial property.
B) currency exchange rates.
C) taxation of expatriate managers.
D) the repatriation of corporate profits.

Question 13

The term global shift refers to

A) the growing importance of national barriers.
B) the effects of changes in the competitive landscape prompted by worldwide competition.
C) the focus on individual national markets.
D) the shift of markets to the EU.

Question 14

The legal system in which the interpretation of meaning and intent of legal statutes is based on past decisions is referred to as

A) civil law.
B) common law.
C) Muslim law.
D) Anglo-Saxon law.

Question 15

The three forms of risk involved in international operations are

A) economic, consumer, and exchange rate risk.
B) political, economic, and legal risk.
C) exchange rate risk, intellectual property, and political risk.
D) economic, intellectual property, and legal risk.

Question 16

Two major Asian regional economic groups are

A) NAFTA and APEC.
B) APEC and ASEAN.
C) NAFTA and CAFTA.
D) CAFTA and ASEAN.

Question 17

When developing countries establish artificially high prices for foreign producers, it is known as

A) buy American.
B) NAFTA.
C) an anti-nationalistic policy.
D) import substitution.

Question 18

The concern with software piracy in some Asian countries is an example of ________ risk.

A) economic
B) political
C) demographic
D) legal

Question 19

Taxation and the fluctuation of exchange rates are examples of what factor affecting global business?

A) General business environment
B) The legal system
C) Economic conditions
D) Cultural norms

Question 20

The comprehensive treaty signed by 120 nations to remove tariffs is

A) NAFTA.
B) GATT.
C) WTO.
D) APEC.

Question 21

Which of the following is not one of the cultural dimensions identified by Hofstede?

A) Power distance
B) Uncertainty avoidance
C) Aggressiveness
D) Long-term/short-term orientation

Question 22

When Mary has difficulty adjusting to her new assignment in Shanghai after living and working in New York all her life, she is likely to be experiencing

A) uncertainty avoidance.
B) repatriation difficulties.
C) power distance.
D) culture shock.

Question 23

A manufacturing firm might be expected to begin globalization by which entry mode?

A) Turnkey projects
B) Franchising
C) Wholly owned subsidiaries
D) Exporting

Question 24

In the international razor blade market, Gillette was considered

A) to have no advantage in market timing.
B) a first-mover.
C) the lowest cost provider.
D) a late mover.

Question 25

Which of the following is not considered a mode of entry to foreign markets?

A) Exporting
B) Pioneering
C) Turnkey projects
D) Strategic alliances

Question 26

Scale of involvement is

A) lowest when the firm exports its products to the foreign country.
B) lowest when the firm has a wholly owned subsidiary in the foreign country.
C) unrelated to the mode of entry.
D) highest with franchising in the foreign country.

Question 27

Late entrants to a market

A) face higher pioneering costs.
B) preempt rivals.
C) may learn from the experience of first movers.
D) have no advantages.

Question 28

According to Hofstede, countries whose employees believe they should attend to their own interests are high in which culture dimension?

A) Power distance
B) Individualism
C) Uncertainty avoidance
D) Masculinity

Question 29

Which mode of international entry is Prestwick House using if it handles the design, construction, start-up operations and workforce training of a foreign plant?

A) Strategic alliance
B) Joint venture
C) Exporting
D) Turnkey project

Question 30

When deciding what country in which to sell products when going global, the decision should be based on

A) language.
B) cultural alignment.
C) distance.
D) long-term profit potential.

Question 31

In giving advice to employees of an American firm entering a joint venture with a company in another country, which of the following would you recommend?

A) Remember that you may need to take responsibility for more rather than sharing responsibilities.
B) Be prepared to work with others who may be very dissimilar to you.
C) Focus on the technical issue or task at hand and avoid wasting time on social ties.
D) Create a position of superiority as an American.

Question 32

Starbucks' decision to enter the Chinese market was based on

A) the present high wealth of consumers in the market.
B) the large size of the market.
C) the existence of a positive business climate.
D) the readily available needed resources.

Question 33

When choosing which foreign country to enter, a country will be less appealing when

A) the size of the domestic market is large.
B) the purchasing power of consumers is projected to grow.
C) long-term profit potential is low.
D) political risk is high.

Question 34

When an international HR manager from an American multinational firm researches the cultural dimensions of a country in which they are establishing new operations, what advice would most likely lead to success for the operation?

A) Ensure management practices conform to prevailing societal norms.
B) Disregard how other countries' cultural values mesh with the new location's values.
C) Ensure the culture scores high on individualism.
D) Ensure the culture scores high on uncertainty avoidance.

Question 35

What is considered a major advantage of exporting?

A) The exporting firm receives high royalties.
B) A local partner provides important local know-how.
C) Savings are realized through economies of scale.
D) Firms share development costs.

Question 36

A first-mover advantage

A) preempts rivals.
B) captures demand by establishing a strong brand name.
C) makes it difficult for later entrants to win business.
D) all of the above

Question 37

Employees from a culture that is high in individualism would likely value which of the following?

A) Team accomplishment
B) Belief in the hand of fate
C) Personal accomplishment
D) Sacrifice for others

Question 38

Which mode of international entry is Prestwick House using if they decide to transfer the rights to produce and sell their products overseas to a foreign firm in return for a royalty?

A) Exporting
B) Turnkey project
C) Licensing
D) Strategic alliance

Question 39

A mode of international entry frequently used by McDonald's whereby the cooking methods, ingredients, and physical appearance of their restaurants comply with McDonald's standards is known as

A) strategic alliances.
B) franchising.
C) exporting.
D) turnkey projects.

Question 40

Turnkey projects

A) involve a company transferring the rights to produce products overseas to a foreign firm.
B) result in two independent firms establishing a separate firm.
C) are a specialized type of exporting.
D) are cooperative arrangements.

Question 41

Which of the following is not considered a reason why international assignments end in failure?

A) Family problems
B) Culture shock
C) A poor benefits package
D) Lack of pre-departure cross-cultural training

Question 42

Two considerations when developing expatriate compensation plans are

A) hazard pay for less desirable locations and distance from home country.
B) distance from home country and number of family members moving.
C) children's education and length of international assignment.
D) disposable income equivalent to what would be earned in the home office and add-on incentives.

Question 43

A major disadvantage of a strategic alliance is that

A) the firm runs the risk of quality control standards not being uniformly met and thus hurting the reputation of the firm.
B) the firm runs the risk of losing its competitive advantage by giving away proprietary know-how to the partner.
C) demand will be reduced as other firms develop manufacturing facilities.
D) the firm may lose its cost advantage.

Question 44

Which of the following is a key reason for the recent growth of strategic alliances?

A) Pooling resources enables firms to keep pace with technological change that they may not have been able to afford alone.
B) It allows firms to expand rapidly with little risk.
C) It enables firms to borrow technological know-how for other firms.
D) The firm does not have to open a facility overseas.

Question 45

To be more cost efficient, companies today are consolidating their production facilities in central locations.

Question 46

When Toshiba and IBM shared the $1 billion of developing a memory chip facility to transfer to a new IBM plant in Virginia, which entry mode were the firms using?

A) Franchising
B) Licensing
C) Strategic alliance
D) Exporting

Question 47

The rules of the International Convention for the Protection of Industrial Property have enabled countries to agree on what constitutes industrial espionage.

Question 48

With the shift in dominance of the world economy, many small and medium-sized businesses from rapidly industrializing Asian countries are becoming mini-multinationals.

Question 49

A major advantage of using joint ventures in the international arena is

A) achieving economies of scale.
B) gaining local know-how.
C) reducing risk.
D) reducing government interference.

Question 50

A recent trend in U.S. expatriate assignments to reduce costs and trauma for families is to

A) use more short-term assignments.
B) provide housing costs.
C) offer fewer expatriate assignments.
D) use more locals.

Question 51

Which of the following is considered an advantage of hiring expatriates?

A) It lowers labor costs.
B) It permits closer control and coordination of international subsidiaries.
C) It increases the acceptance of the company by the local community.
D) It demonstrates trust in local citizenry.

Question 52

Which approach to managing an international subsidiary involves filling top management and key positions with people from the home country?

A) Ethnocentric approach
B) Expatriate approach
C) Polycentric approach
D) Geocentric approach

Question 53

The law that governs international business and forbids payments by American firms to foreign officials to influence decisions is

A) the Napoleonic Code.
B) the U.S. Foreign Corrupt Practices Act of 1977.
C) the North American Free Trade Agreement.
D) the General Agreement on Tariffs and Trade.

Question 54

Martin works for the Acme Company which is based in the United States. He is interested in a marketing director's position in the company's new Paris facility, but recognizes that he stands little chance of being considered since the firm regularly staffs international facilities with local nationals. Which approach to managing the international subsidiary is the Acme Company taking?

A) Ethnocentric approach
B) Expatriate approach
C) Polycentric approach
D) Geocentric approach

Question 55

Which mode of international entry requires that the firm bears the full business risk since there is no local partner?

A) Franchising
B) Strategic alliance
C) Licensing
D) Wholly owned subsidiary

Question 56

The upward trend in birth rates worldwide is having a significant impact on global workforces.

Question 57

IKEA is an example of a company that has successfully responded to local customer needs and tastes by customizing their products.

Question 58

Which mode of entry involves a collaborative effort between firms on specific projects such as the sharing of laser printing technology between Canon and Hewlett Packard?

A) Licensing
B) Franchising
C) Strategic alliances
D) Turnkey projects

Question 59

An example of a multinational firm that engages in wholly owned subsidiaries is

A) McDonald's.
B) Walmart.
C) Canon-Hewlett Packard.
D) Fuji-Xerox.

Question 60

The most expensive way of operating in foreign markets is

A) strategic alliances.
B) wholly owned subsidiaries.
C) exporting.
D) franchising.

Question 61

The selection criteria for an expatriate manager should include cultural sensitivity.

Question 62

The geocentric approach to managing an international subsidiary is likely to result in the hiring of more third-country nationals.

Question 63

Discuss the advantages and disadvantages of exporting.

Question 64

Discuss the impact of globalization on ethical dilemmas for managers.

Question 65

Discuss the five dimensions of culture identified by Hofstede.

Question 66

A potential disadvantage of turnkey projects is that the selling firm may be creating a competitor by giving away its technological superiority.

Question 67

What are the disadvantages of a wholly owned subsidiary as an entry mode to foreign markets?

Question 68

List the seven modes of entry to foreign markets.

Question 69

What are the three key entry decisions firms must make when considering international expansion?

Question 70

Discuss two integrated economic markets.

Question 71

Describe the three approaches to managing an international subsidiary.

Question 72

The trend today is for multinational organizations to hire fewer executives from foreign countries.

Question 73

What are the four major changes in the world output and world trade picture that have occurred over the last few decades?

Question 74

Discuss the advantages of a first-mover and a late mover.

Question 75

What are the three forms of risk companies face when operating in a foreign country?

Question 76

Discuss the advantages and disadvantages of using locals to staff international subsidiaries.

Question 77

Globalization reduces the possibility that a manager will face an ethical dilemma.

Question 78

What are the reasons for the failure of international assignments?

Question 79

What is a joint venture?

Question 80

Discuss today's trend toward short-term expatriate assignments.