Deck 7: Global Management

Question 1

In which method does a company build a new business or buy an existing business in a foreign country?

A)strategic alliance  
B)foreign direct investment  
C)global new venture  
D)joint venture

Answer 1

B

Question 2

The signing of which of the following created a regional trading zone?

A)the Maastricht Treaty  
B)the Pact for Free Trade Agreement  
C)the Global Agreement for Transactional Trading  
D)the South-East Asia Pact

Answer 2

A

Question 3

Europe boycotts Canadian seal products because they argue hunting seals for fur is inappropriate. What is this boycott an example of?

A)a trade roadblock  
B)nationalism  
C)nationalization  
D)a trade barrier

Answer 3

D

Question 4

The Canadian government imposes tariffs on imported textiles-between 10 and 12 percent-in part to support the Canadian textile industry. What is the tariff on imported textiles an example of?

A)a voluntary government restriction  
B)geocentrism  
C)protectionism  
D)a security quota

Question 5

What is the term for a nontax method of increasing the cost or reducing the volume of imported goods?

A)tariff  
B)nontariff barrier  
C)trade roadblock  
D)risk-aversive boycott

Question 6

Canada is a bilingual country,so it requires that all products,whether domestic or imported,be labelled in a bilingual manner. What has the government instituted?

A)a tariff  
B)a government subsidy  
C)a voluntary export restraint  
D)a government import standard

Question 7

Canadians are able to purchase teas from Asia,furniture from Mexico,and receive help from a customer service agent in the Philippines. Canadian companies can export their Canadian-made products for people all over the world to enjoy. What does all of this activity exemplify?

A)global business  
B)foreign direct investment  
C)multinational corporations  
D)trade agreements

Question 8

What does protectionism-the use of trade barriers to protect local companies and their workers-safeguard against?

A)international unions  
B)foreign competition  
C)trademark infringements  
D)patent violations

Question 9

Canada imposes limits on how much poultry and poultry products can enter the country. What type of nontariff barrier does Canada use to control the amount of poultry imports?

A)quotas  
B)subsidies  
C)boycotts  
D)customs classifications

Question 10

Nestlé is a company based in Switzerland with manufacturing plants in Colombia,Australia,Canada,Egypt,Kenya,and more than 90 other nations. What type of company is Nestlé an example of?

A)multidomestic global company  
B)multinational corporation  
C)ethnocentric organization  
D)acculturated corporation

Question 11

What is the term for a direct tax on imported goods designed to make it more expensive to buy those goods,in hopes of reducing the volume of those imported goods in a given country?

A)tariff  
B)nontariff barrier  
C)trade roadblock  
D)boycott quota

Question 12

Which trade agreement represented the most significant change to the regulations governing global trade during the 1990s?

A)Maastricht Treaty of Europe  
B)North American Free Trade Agreement  
C)General Agreement on Tariffs and Trade  
D)Mercosur

Question 13

Which of the following countries has the largest foreign direct investment in Canada?

A)China  
B)Scotland  
C)Mexico  
D)United Kingdom

Question 14

To protect its cheese manufacturing industry,Canada put limitations on the amount of cheese that could be imported into Canada from the European Union. What is this limitation an example of?

A)a voluntary import restraint  
B)a subsidy  
C)an agricultural import standard  
D)a quota

Question 15

What is the term for long-term,low-interest loans,cash grants,and tax deductions used to develop and protect companies or special industries?

A)quotas  
B)voluntary export restraints  
C)government subsidies  
D)tariffs

Question 16

The Canadian Food Inspection Agency identifies specific foreign companies that are allowed to export meat products to Canada. What is this list an example of?

A)a subsidy  
B)an involuntary import restraint  
C)expropriation  
D)a government import standard

Question 17

Mexico has imposed a 5 percent tax on many U.S. products entering Mexico,including pork. It has done so in retaliation to the United States stopping Mexican trucks at its border. As a result,Canada's pork,which has no tax imposed,enters Mexico at a cheaper price. What is the tax on U.S. pork an example of?

A)an import duty  
B)a voluntary import restraint  
C)a subsidy  
D)a tariff

Question 18

Canada restricts goods that can enter the country,and charges an 11 percent tax on sweetened waters from most countries. What,in other words,does Canada impose on sweetened waters?

A)import quotas  
B)customs classifications  
C)import standards  
D)tariffs

Question 19

What are the two general kinds of trade barriers?

A)government import standards and industry import standards  
B)qualitative and quantitative barriers  
C)voluntary and involuntary barriers  
D)tariff barriers and nontariff barriers

Question 20

Canada requires that all products,domestic or imported,be labelled in a bilingual manner. What is this an example of?

A)a tariff  
B)a nontariff barrier  
C)an import boycott  
D)an industry subsidy

Question 21

Which of the following approaches tends to be most important to making an international business successful in any given country?

A)global consistency  
B)local adaptation  
C)domestic synergy  
D)predetermined benchmarks

Question 22

Historically,which of the following have most companies used to successfully enter foreign markets?

A)a phase model of globalization  
B)a global new venture approach  
C)a ripple approach  
D)a market echo approach

Question 23

Quebec produces about 75 percent of the world's maple syrup,and distributes it globally. What does Quebec use to distribute this tasty product?

A)franchising  
B)direct investment  
C)licensing  
D)exporting

Question 24

If Canada were to seek admittance as a full member to the Association of Southeast Asian Nations (ASEAN),what would Canada be preparing to become part of?

A)a zone of ethnocentricity  
B)a regional trading zone  
C)a neutral trading area  
D)an international cartel

Question 25

All global new ventures share two common factors. One factor is that the company founders successfully develop and communicate the company's global vision. What is the other factor?

A)the bringing of a good or service to several different foreign markets at the same time  
B)the use of local adaptation strategy  
C)a mechanistic organizational culture  
D)the ability to respond quickly and efficiently to any changes in the external environment

Question 26

T.I.P Ltd. was featured on the Discovery Channel for its ability to encapsulate very fragile natural items into a solid clear medium. After the Discovery Channel feature,T.I.P's customer base expanded beyond Canada. T.I.P started selling its products all over North America,Europe,Asia,and the Caribbean. What is T.I.P's expansion of sales to other countries an example of?

A)foreign direct investment  
B)franchising  
C)licensing  
D)exporting

Question 27

What is a multinational company said to be acting with when it has offices,manufacturing plants,and distribution facilities in different countries and runs them all based on the same rules,guidelines,policies,and procedures?

A)policy certainty  
B)global consistency  
C)global adaptation  
D)global certainty

Question 28

Mountain Province Diamonds and De Beers partnered to open Gahcho Kué,a diamond mine in the Northwest Territories,in late 2016. What does the two companies working together to open the mine exemplify?

A)exporting  
B)licensing  
C)a joint venture  
D)a cooperative contract

Question 29

Typically,what major question must a company answer once it has decided to go global?

A)How many additional employees will the company need?  
B)To what extent should the company standardize or adapt business procedures?  
C)To what extent should a company abide by global or regional trade agreements?  
D)Will the organization's mission statement need to be changed?

Question 30

All global new ventures share two common factors. One factor is the bringing of a good or service to several different foreign markets at the same time. What is the other factor?

A)the development of culturally specific implementation policies  
B)the company founders successfully developing and communicating the company's global vision from inception  
C)a mechanistic organizational culture  
D)the ability to respond quickly and efficiently to any changes in the external environment

Question 31

Which of the following do managers in a multinational firm at company headquarters typically prefer to emphasize in order to simplify decisions?

A)local consistency  
B)local adaptation  
C)global adaptation  
D)global consistency

Question 32

Sodima is a French cooperative that owns the name,the trade secrets,and the patents on Yoplait yogurt. Ultima Foods pays Sodima for the right to sell Yoplait yogurt in Canada. What is this arrangement an example of?

A)licensing  
B)a global joint venture  
C)exporting  
D)a strategic alliance

Question 33

What does the acronym GATT stand for?

A)Global Agreement on Temporal Trade  
B)Governing Agreement on Trade and Transactions  
C)General Agreement on Tariffs and Trade  
D)Government Aid of Trade and Transactions

Question 34

Which of the following regional trade agreements liberalizes trade between countries more than any other such agreement?

A)Maastricht Treaty of Europe  
B)Association of South East Nations  
C)Asia-Pacific Economic Cooperation agreement  
D)North American Free Trade Agreement

Question 35

Ernst & Young,an international accounting and management consulting company,entered Hungary first by establishing a joint venture with a local firm. Ernst & Young later acquired the company with which it had the alliance. Which type of entity did Ernst & Young then have in Hungary?

A)a franchise  
B)a licensing arrangement  
C)a cooperative contract  
D)a wholly owned affiliate

Question 36

What is the correct sequence for the phase model of globalization?

A)exporting;wholly owned affiliates;cooperative contracts;strategic alliances  
B)exporting;cooperative contracts;wholly owned affiliates;strategic alliances  
C)exporting;cooperative contracts;strategic alliances;wholly owned affiliates  
D)exporting;strategic alliances;cooperative contracts;wholly owned affiliates

Question 37

What did the General Agreement on Tariffs and Trade (GATT)attempt to accomplish?

A)decreasing both tariff and nontariff barriers  
B)eliminating taxes on trading goods between Canada,the United States,and Mexico  
C)eliminating tariffs between China and Japan  
D)protecting the exploitation of workers in third world countries

Question 38

Which of the following are two kinds of cooperative contracts?

A)licensing and joint ventures  
B)franchising and licensing  
C)direct investment and indirect investment  
D)direct exporting and indirect exporting

Question 39

What is the term for an agreement in which a foreign business owner pays a company a fee for the right to conduct that business in his or her country?

A)exporting agreement  
B)cooperative contract  
C)joint venture  
D)strategic alliance

Question 40

Starbucks is expanding its global operations into South America in spite of the real probability of civil wars and terrorist activities in many of the continent's nations. Which of the following must Starbucks deal with as it expands into South America?

A)political uncertainty  
B)economic uncertainty  
C)infrastructure regulation  
D)nationalistic equity

Question 41

Which of the following factors helps a company determine the growth potential of a foreign market?

A)political uncertainty  
B)purchasing power  
C)type of infrastructure  
D)land availability

Question 42

What is the primary disadvantage of using wholly owned affiliates as the means of entering a foreign market?

A)dumping  
B)countertrading  
C)nontariff barriers  
D)costs

Question 43

What is the term for a strategic alliance in which two existing companies collaborate to form a third,independent company?

A)joint venture  
B)franchise  
C)wholly owned affiliate  
D)global new venture

Question 44

Uganda is one of only two countries in the world that produce a mineral required in the manufacturing of cellphones. Several mining companies recently moved their operations out of the region due to a bloody civil war resulting from a change in rulers. Which of the following influences on global business were the companies responding to?

A)political uncertainty  
B)policy uncertainty  
C)economic risk  
D)infrastructure failure

Question 45

What trend has allowed companies to skip the phase model when going global?

A)quick,reliable air travel  
B)the globalization of the cocooning trend  
C)a critical need for resources  
D)the metamorphosis of marketplaces

Question 46

What is the most important factor used by a globalizing company for determining whether a country or a region has an attractive business climate?

A)easy access to growing markets  
B)marketplace metamorphosis  
C)global synergy  
D)a large,unskilled workforce

Question 47

What are the two types of political risk that affect companies conducting global business?

A)political uncertainty and policy uncertainty  
B)policy uncertainty and expropriation potential  
C)infrastructure dynamism and expropriation potential  
D)infrastructure dynamism and political uncertainty

Question 48

Anthony is expanding his business into foreign markets. Anthony is providing a licence to a foreigner to use his business model,name,and know-how. Anthony will help the foreigner get the business started and provide ongoing support. To whom is Anthony providing a licence as he grows his business globally?

A)a sales agent  
B)a franchisee  
C)a distributor  
D)an importer

Question 49

A cosmetics company that is considering entering the South American market would be especially interested in the discretionary income within that country. In other words,what would be a determining factor in the company's global strategy?

A)purchasing power  
B)political uncertainty  
C)expropriation potential  
D)infrastructure

Question 50

In Canada,General Motors and Suzuki have entered into an agreement to create CAMI Automotive. Suzuki management runs the plant,which makes GM's Geo cars. The agreement gives Suzuki access to GM dealers to sell its brand of vehicles. What kind of agreement do General Motors and Suzuki have?

A)a licensing agreement  
B)a subsidiary arrangement  
C)a cooperative contract  
D)a joint venture

Question 51

Starbucks is a chain that is rapidly expanding its global operation. As it expanded into South America,its research showed that Chileans,on average,drink only 150 cups of coffee annually,and people in Argentina drink only about half that amount. An average citizen in Canada drinks 950 cups annually. What do these variations in annual coffee consumption most likely reflect?

A)policy uncertainties  
B)nationalistic motivations  
C)cultural differences  
D)economic uncertainties

Question 52

Ford Motor Company owns and operates a $1.9 billion manufacturing plant in Brazil. Which method of organizing for global business has Ford used in Brazil?

A)joint venture  
B)strategic alliance  
C)cooperative contract  
D)wholly owned affiliate

Question 53

What type of entity are companies with sales,employees,and financing in different countries that are founded with an active global strategy?

A)global new ventures  
B)strategic alliances  
C)wholly owned affiliates  
D)franchisees

Question 54

Which of the following is an attribute of a country or region that has an attractive business climate for companies that want to go global?

A)a large population of unskilled workers  
B)an effective but cost-efficient location  
C)a small youth population  
D)natural boundaries

Question 55

Which of the following is an attribute of a country or region that has an attractive business climate for companies that want to go global?

A)easy access to stagnant markets  
B)experienced marketplace metamorphosis  
C)no political risks  
D)a limited infrastructure

Question 56

Before the Japanese government announced that Japanese snow was different from all other snow and required that all snow equipment marketed in the country be made in Japan for safety reasons,several companies from the United States and Europe had marketed their snow equipment in Japan. Which of the following influences on global business is the elimination of non-Japanese companies from the Japanese market an example of?

A)infrastructure uncertainty  
B)policy uncertainty  
C)political uncertainty  
D)competitive uncertainty

Question 57

When McDonald's initially entered into an agreement with a French entrepreneur who wanted to own and operate a McDonald's fast-food restaurant in Paris,it saw the new restaurant as an opportunity. Unfortunately,the restaurant in Paris was not maintained at the cleanliness standards prescribed by McDonald's but at the cleanliness standards acceptable to the French. McDonald's brought legal action to have the restaurant closed. What does this situation provide an example of?

A)an opportunity for McDonald's to enter into more joint ventures  
B)a need for McDonald's to curtail its international franchising  
C)a cultural threat against McDonald's  
D)a problem with franchising in different cultures

Question 58

A Canadian company that operates cinemas wants to open a chain of movie theatres in Brazil. What is the most important factor to the company as it tries to grow in the Brazilian market?

A)workforce quality  
B)the strategy of the movie theatre chain  
C)tariff and nontariff barriers  
D)purchasing power

Question 59

German chip manufacturer Infineon Technologies AG has joined with Motorola Inc. and Agere Systems Inc. to establish a new company to develop and license chip designs for cellphones. What type of entity have these three companies created?

A)a licence facilitator  
B)a subsidized corporation  
C)a global new venture  
D)a joint venture

Question 60

Which type of global organization is most likely to suffer problems associated with being culture bound?

A)licensing  
B)franchising  
C)joint ventures  
D)global new ventures

Question 61

Narrative 7-1
India has the fastest-growing demand for consumer products in the world. In recent years,Coca-Cola attempted to enter the Indian market once again. Coca-Cola's first attempt to enter the Indian market a decade earlier was grossly mismanaged,which led to the company losing 20 billion Indian rupees. In that first attempt,Coca-Cola purchased Thumbs Up,the leading India-based carbonated soft drink. The company hoped to replace Thumbs Up with Coke while maintaining the Thumbs Up distribution strategy. For its return to the market,Coca-Cola built five plants,cut costly staff,revamped transport,shrunk bottles,and made the bottles lighter to increase a truck's carrying capacity. It also increased its number of distributors and dumped a global advertising campaign that proved irrelevant to the Indian market.
Refer to Narrative 7-1. Which kind of strategy has Coca-Cola used for its second entry into the Indian market?

A)global consistency  
B)market differentiation  
C)local adaptation  
D)acculturation

Question 62

Which strategies can be used to minimize or adapt to the political risk inherent to global business?

A)protectionist,avoidance,and offensive strategies  
B)creative,offensive,and defensive strategies  
C)cooperative,customary,and protectionist strategies  
D)control,avoidance,and cooperation strategies

Question 63

Companies pursuing a differentiation strategy may prefer to open an office or manufacturing location in a country where they have which of the following?

A)access to growing markets and minimal political risk  
B)access to high quality materials and a skilled workforce  
C)a skilled workforce and access to growing markets  
D)minimal political risk and access to high quality materials

Question 64

What is the term for the set of shared values and beliefs that affects the perceptions,decisions,and behaviour of the people from a particular country?

A)national mindset  
B)national culture  
C)cultural nationalization  
D)cultural diversity

Question 65

What is the purpose of pre-departure language and cross-cultural training?

A)to cater to employees who require affective learning  
B)to increase job empathy  
C)to encourage job specialization  
D)to reduce the uncertainty for those becoming expatriates

Question 66

A friend has received a job offer for $100,000 a year in Norway. She's excited,until you make which of the following points?

A)she could likely earn more in Japan  
B)she could likely earn more in Switzerland  
C)her purchasing power is higher than in Canada  
D)her purchasing power is lower than in Canada

Question 67

Which of the following is the best explanation for Canada's higher purchasing power relative to many nations?

A)many trade barriers and high competition exist between domestic and foreign firms  
B)relatively few trade barriers and high competition exist between domestic and foreign firms  
C)many trade barriers and low competition exist between domestic and foreign firms  
D)relatively few trade barriers and high competition exist between domestic and foreign firms

Question 68

A firm trying to prevent or reduce political risks will lobby foreign governments or international trade agencies to change laws,regulations,or trade barriers that hurt its business in various countries. Which strategy is described by this statement?

A)defensive strategy  
B)control strategy  
C)cooperation strategy  
D)protectionist strategy

Question 69

Narrative 7-1
India has the fastest-growing demand for consumer products in the world. In recent years,Coca-Cola attempted to enter the Indian market once again. Coca-Cola's first attempt to enter the Indian market a decade earlier was grossly mismanaged,which led to the company losing 20 billion Indian rupees. In that first attempt,Coca-Cola purchased Thumbs Up,the leading India-based carbonated soft drink. The company hoped to replace Thumbs Up with Coke while maintaining the Thumbs Up distribution strategy. For its return to the market,Coca-Cola built five plants,cut costly staff,revamped transport,shrunk bottles,and made the bottles lighter to increase a truck's carrying capacity. It also increased its number of distributors and dumped a global advertising campaign that proved irrelevant to the Indian market.
Refer to Narrative 7-1. Which of the following is reflected by the need for Coca-Cola to create a promotional strategy specifically targeted to the Indian market?

A)a diversification strategy  
B)an awareness of cultural differences  
C)the desire to maintain a high contribution margin  
D)an insular approach to strategy

Question 70

Narrative 7-1
India has the fastest-growing demand for consumer products in the world. In recent years,Coca-Cola attempted to enter the Indian market once again. Coca-Cola's first attempt to enter the Indian market a decade earlier was grossly mismanaged,which led to the company losing 20 billion Indian rupees. In that first attempt,Coca-Cola purchased Thumbs Up,the leading India-based carbonated soft drink. The company hoped to replace Thumbs Up with Coke while maintaining the Thumbs Up distribution strategy. For its return to the market,Coca-Cola built five plants,cut costly staff,revamped transport,shrunk bottles,and made the bottles lighter to increase a truck's carrying capacity. It also increased its number of distributors and dumped a global advertising campaign that proved irrelevant to the Indian market.
Refer to Narrative 7-1. To increase distribution,Coca-Cola provided the financing needed for the retailers to purchase refrigeration units,and the refrigeration manufacturer gave deep price discounts. What type of agreement did Coca-Cola enter into with this manufacturer?

A)franchise agreement  
B)direct investment  
C)strategic alliance  
D)brokered agreement

Question 71

Besides qualitative factors,which quantitative factors are relevant to firms seeking to open a foreign office or manufacturing location?

A)currency exchange rates,tariff and nontariff barriers,and transportation and labour costs  
B)quantifiable political risk,currency exchange rates,and transportation and labour costs  
C)transportation and labour costs,materials costs,and quantifiable political risk  
D)quantifiable political risk,tariff and nontariff barriers,and currency exchange rates

Question 72

Minimizing or adapting to the political risk inherent to global business makes use of joint ventures and collaborative contracts. What strategy does this statement describe?

A)defence strategy  
B)control strategy  
C)cooperation strategy  
D)avoidance strategy

Question 73

Narrative 7-1
India has the fastest-growing demand for consumer products in the world. In recent years,Coca-Cola attempted to enter the Indian market once again. Coca-Cola's first attempt to enter the Indian market a decade earlier was grossly mismanaged,which led to the company losing 20 billion Indian rupees. In that first attempt,Coca-Cola purchased Thumbs Up,the leading India-based carbonated soft drink. The company hoped to replace Thumbs Up with Coke while maintaining the Thumbs Up distribution strategy. For its return to the market,Coca-Cola built five plants,cut costly staff,revamped transport,shrunk bottles,and made the bottles lighter to increase a truck's carrying capacity. It also increased its number of distributors and dumped a global advertising campaign that proved irrelevant to the Indian market.
Refer to Narrative 7-1. What process did Coca-Cola engage in during its first attempt to enter the Indian market?

A)acculturation  
B)direct foreign investment  
C)internal importing  
D)globalization

Question 74

Green Giant learned that it could not use the Jolly Green Giant character in parts of Asia where a green hat worn by a man signifies that he has an unfaithful wife. What is this an example of?

A)geocentric attitude  
B)control strategy  
C)cooperation strategy  
D)cultural difference

Question 75

Narrative 7-1
India has the fastest-growing demand for consumer products in the world. In recent years,Coca-Cola attempted to enter the Indian market once again. Coca-Cola's first attempt to enter the Indian market a decade earlier was grossly mismanaged,which led to the company losing 20 billion Indian rupees. In that first attempt,Coca-Cola purchased Thumbs Up,the leading India-based carbonated soft drink. The company hoped to replace Thumbs Up with Coke while maintaining the Thumbs Up distribution strategy. For its return to the market,Coca-Cola built five plants,cut costly staff,revamped transport,shrunk bottles,and made the bottles lighter to increase a truck's carrying capacity. It also increased its number of distributors and dumped a global advertising campaign that proved irrelevant to the Indian market.
Refer to Narrative 7-1. Why is Coca-Cola called a multinational company?

A)It owns businesses in more than one country. 
B)It is not affected by protectionism. 
C)It is able to avoid trade barriers. 
D)It pays no tariffs.

Question 76

What process is used to assess how well managers and their families are likely to adjust to foreign cultures?

A)cultural awareness screening  
B)socio-cultural analysis  
C)sensitivity screening  
D)adaptability screening

Question 77

Which statement best describes an expatriate?

A)An expatriate claims dual citizenship. 
B)An expatriate lives and works outside of his or her own country  
C)An expatriate believes strongly in nationalization. 
D)An expatriate is unhappy with his or her present residence.

Question 78

What are two qualitative factors that influence companies' choice of foreign offices or manufacturing locations?

A)access to growing markets and minimal political risk  
B)minimal political risk and workforce quality  
C)workforce quality and company strategy  
D)company strategy and access to growing markets

Question 79

Uganda is one of only two countries in the world that produce a mineral required in the manufacturing of cellphones. A company that mines the rare mineral decided against investing in the country due to a bloody civil war resulting from a change in rulers. What strategy did the mining company use?

A)avoidance strategy  
B)control strategy  
C)cooperation strategy  
D)elimination strategy

Question 80

What is the most important factor in determining the success or failure of an international assignment?

A)how much language training was provided to the expatriate  
B)how much cross-cultural training was provided to the expatriate  
C)how well an expatriate's spouse and family adjust to the foreign culture  
D)how willing the expatriate was to accept the foreign assignment