Deck 8: Global Management

Question 1

When conducting global business,companies should attempt to identify the two types of political risk that are political uncertainty and economic uncertainty.

Answer 1

  False

Question 2

Toasty Inc.,a chain of fast food restaurants,uses the same recipes,menu,and policies in all its branches throughout the world.This is an example of global consistency.

Answer 2

  True

Question 3

_____ are specific limits on the number or volume of imported products.

A) ​Tariffs 
B) ​Quotas 
C) ​Subsidies 
D) ​Embargoes

Answer 3

  B

Question 4

Which of the following statements is true of global consistency? 

A) ​It modifies a company's standard operating procedures. 
B) ​It occurs when two existing companies collaborate to form a third company. 
C) ​It allows managers to adapt to differences in foreign customers. 
D) ​It simplifies decisions for managers at company headquarters.

Question 5

Which of the following statements is true of the World Trade Organization? 

A) ​It ensures that trade flows as predictably and freely as possible. 
B) ​It transforms different economies and currencies into one common economic market. 
C) ​It aims to create a unified South America by permitting free movement between nations. 
D) ​It aims to establish regions in Europe as a single market by eliminating all tariffs by 2019.

Question 6

The North American Free Trade Agreement (NAFTA)is a regional trade agreement between the United States,Canada,and Mexico.

Question 7

_____ is selling domestically produced products to customers in foreign countries.

A) ​Domestic trade 
B) ​Free trade  
C) ​Importing 
D) ​Exporting 

Question 8

Purchasing power is 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.

Question 9

Global new ventures are foreign offices,facilities,and manufacturing plants that are 100 percent owned by the parent company.

Question 10

_____ is a government's use of trade barriers to shield domestic companies and their workers from foreign competition.

A) ​Protectionism 
B) ​Developmentalism 
C) ​Economic nationalism 
D) ​Centralism

Question 11

Which of the following trade barriers is established to protect the health and safety of citizens? 

A) ​Tariffs 
B) ​Quotas 
C) ​Government import standards 
D) ​Voluntary export restraints

Question 12

Two factors that help companies determine the growth potential of foreign markets are purchasing power and foreign competitors.

Question 13

The criteria for choosing an office location are the same as the criteria for entering a foreign market.

Question 14

Which of the following best defines a tariff? 

A) ​It is a specific limit on the volume of imported goods. 
B) ​It is a direct tax on imported goods. 
C) ​It is a complete ban on trade of a certain item. 
D) ​It is a limit on the number of products exported to a particular country.

Question 15

Local adaptation is typically preferred by managers who are charged with making the international business successful in their countries,whereas managers at company headquarters value global consistency because it simplifies decisions.

Question 16

If companies focus too much on local adaptation,they run the risk of: 

A) ​using management procedures poorly suited to particular countries' markets, cultures, and employees. 
B) ​losing the cost effectiveness and productivity that result from using standardized rules and procedures throughout the world. 
C) ​losing control over the quality of the product or service sold by the foreign licensee.  
D) ​failing to benefit from an active global strategy.

Question 17

According to the World Trade Organization,voluntary export restraints are legit and cannot be questioned.

Question 18

Which of the following is a regional trade agreement between most European countries? 

A) ​The Maastricht Treaty of Europe 
B) ​The Single European Act 
C) ​EEC and EURATOM treaties 
D) ​Brussels Treaty

Question 19

Which of the following statements is true of the Maastricht Treaty of Europe? 

A) ​Its purpose was to liberalize trade between countries so that businesses could plan for one market rather than for three separate markets. 
B) ​Its purpose was to transform twelve different economies and currencies into one common economic market with one common currency. 
C) ​Its purpose was to eliminate most product tariffs and prevent the member countries from increasing existing tariffs or introducing new ones. 
D) ​Its purpose was to permit free movement between nations, creating a common infrastructure that includes an interoceanic highway.

Question 20

Adaptability screening is used to assess how well managers and their families are likely to adjust to foreign cultures.

Question 21

Which of the following is the most important factor in determining the success and failure of an international assignment? 

A) ​The willingness of an expatriate's spouse to leave his or her present job 
B) ​How fluent an expatriate is in foreign languages 
C) ​An expatriate's willingness to go for a preassignment trip 
D) ​How well an expatriate's spouse and family adjust to the foreign culture

Question 22

_____ is a technique in which trainees are placed in an ethnic neighborhood for three to four hours to talk to residents about cultural differences.

A) ​Field simulation training 
B) ​Documentary training 
C) ​Cultural simulation 
D) ​Adaptability screening

Question 23

Which of the following is a disadvantage of wholly owned affiliates? 

A) ​The risk of losing intellectual property 
B) ​The slow execution of strategic priorities 
C) ​The cost of selling existing business 
D) ​The expense of building new operations

Question 24

_____ are new companies that are founded with an active global strategy and have sales,employees,and financing in different countries.

A) ​Joint ventures 
B) ​Strategic alliances 
C) ​Global new ventures 
D) ​Global new acquisitions

Question 25

The two kinds of cooperative contracts are: 

A) ​exporting and importing. 
B) ​joint ventures and consortium. 
C) ​strategic alliances and wholly owned affiliates. 
D) ​licensing and franchising.

Question 26

_____ is the risk of major changes in political regimes that can result from war,revolution,death of political leaders,or other influential events.

A) ​Political conflict 
B) ​Political uncertainty 
C) ​Political failure 
D) ​Political corruption

Question 27

_____ is an agreement in which companies combine key resources,costs,risks,technology,and people.

A) ​Strategic alliance 
B) ​Business acquisition 
C) ​Merger 
D) ​Divestiture

Question 28

Which of the following is a disadvantage of exporting? 

A) ​There is a decrease in the sales potential of a company. 
B) ​There is no scope for companies exporting products to diversify their business. 
C) ​Transportation costs can significantly increase the price of an exported product. 
D) ​Exporting goods decreases sales, market share, and profit.

Question 29

 _____ are foreign offices,facilities,and manufacturing plants that are 100 percent owned by the parent company.

A) ​Joint ventures 
B) ​Wholly owned affiliates 
C) ​Strategic alliances 
D) ​Business acquisitions

Question 30

_____ is the degree to which societies believe that individuals should be self-sufficient.

A) ​Individualist anarchism 
B) ​Individuation 
C) ​Individual reclamation 
D) ​Individualism

Question 31

Which of the following is an advantage of licensing? 

A) ​It allows companies to earn additional profits without investing more money. 
B) ​It provides licensors an exclusive right to conduct business in a particular location. 
C) ​It helps smaller local partners to link up with larger, more experienced foreign firms. 
D) ​It gives the parent company complete control over the foreign facilities.

Question 32

Which of the following is a disadvantage of franchising? 

A) ​Franchisors face tariff and nontariff barriers when trying to enter a market. 
B) ​Franchisors face a loss of control when they sell businesses to franchisees who are thousands of miles away. 
C) ​Franchisors give up control over the quality of a product or service sold by foreign licensees. 
D) ​Franchisors can eventually become competitors, especially when a licensing agreement includes access to important technology or proprietary business knowledge.

Question 33

A franchise is a collection of networked firms in which the manufacturer or marketer of a product or service licenses the entire business to another person or organization called the _____.

A) ​licensee 
B) ​franchisor 
C) ​licensor 
D) ​franchisee

Question 34

In the context of global markets,which of the following factors helps companies determine the growth potential of foreign markets?​ 

A) ​Political uncertainty 
B) ​Purchasing power 
C) ​Organizational structure 
D) ​Land availability

Question 35

_____ can help reduce uncertainty about how to act and decrease misunderstandings between expatriates and their families and locals.

A) ​Cross-cultural training 
B) ​Intercultural training 
C) ​Transculturation 
D) ​Interculturalism

Question 36

In the context of cross-cultural training,the practice of adapting to cultural differences is called: 

A) ​intercultural competence. 
B) ​cultural conservatism. 
C) ​cultural simulation. 
D) ​multiculturalism.

Question 37

Which of the following trends has allowed companies to skip the phase model of globalization when going global? 

A) ​Countries with growing levels of purchasing power are good choices for attractive global markets. 
B) ​Low-cost communication technologies make it easier to communicate with global customers. 
C) ​Companies do not have to establish a manufacturing location in each country they enter. 
D) ​Masculinity and femininity capture the difference between highly assertive and nurturing cultures.

Question 38

Which of the following is an advantage of joint ventures? 

A) ​They provide companies an exclusive right to conduct business in a particular location. 
B) ​They give companies training and assistance with marketing and advertising. 
C) ​They help companies avoid tariff and nontariff barriers to entry. 
D) ​They allow companies to earn additional profits without investing more money.

Question 39

Crimsom Corp.,an electronics manufacturer in Mallowdeer,plans to enter a foreign market.It wants to establish its new office in Ostview.Which of the following is a qualitative factor that Crimsom Corp.should consider while choosing the new office location? 

A) ​Company strategy 
B) ​Tariff and nontariff barriers 
C) ​Transportation costs 
D) ​Exchange rates

Question 40

Political uncertainty is the risk associated with: 

A) ​policies affecting foreign companies. 
B) ​changes in government policies. 
C) ​social unrest. 
D) ​changes in law.

Question 41

According to Professor Geert Hofstede's research on cultural dimensions,_________ cultures emphasize the importance of relationships,modesty,caring for the weak,and quality of life.

Question 42

A(n)_________ is someone who lives and works outside his or her native country.

Question 43

_________ include government loans,grants,and tax deferments given to domestic companies to protect them from foreign competition.
A.Export restraints
B.Import standards
C.Quotas
D.Subsidies

Question 44

Aldhurst Corp.,a software manufacturing firm in the state of Lochmount,bought Fairden Corp.,a software manufacturing firm in the state of Vertholt.This scenario is an example of _________.
A.strategic alliance
B.direct foreign investment
C.direct export
D.joint venture

Question 45

The most common _____ is a joint venture,which occurs when two existing companies collaborate to form a third company.
A.business acquisition
B.merger
C.divestiture
D.strategic alliance

Question 46

A _________ is a strategic alliance in which two existing companies collaborate to form a third,independent company.

Question 47

Westburn In
C.,a fast food restaurant in the state of Beachden,starts its chain of restaurants in the state of Valcoast.It changes its menu for the customers in Valcoast.This scenario is an example of _________.
A.global consistency
B.local adaptation
C.licensing
D.franchising

Question 48

The cultural difference of _________ is the degree to which people in a country are uncomfortable with unstructured,ambiguous,unpredictable situations.

Question 49

A _________ is a nontax method of increasing the cost or reducing the volume of imported goods.

Question 50

_________ is a worldwide trade agreement that reduced and eliminated tariffs,limited government subsidies,and established protections for intellectual property.
A.Asia-Pacific Economic Cooperation
B.General Agreement on Tariffs and Trade
C.Free Trade Agreement
D.The Maastricht Treaty