Deck 4: Global Management Managing Across Borders

Question 1

NAFTA is a trading bloc consisting of the United States, Canada, Panama, and Mexico.

Answer 1

False
Explanation: Formed in 1994, the North American Free Trade Agreement (NAFTA) is a trading bloc consisting of the United States, Canada, and Mexico.

Question 2

Kayla, a teacher, is interested in helping children in other countries learn how to read. She has formed an international nonprofit organization, Read to the World, whose employees travel to Africa to donate books and work in schools as tutors. Read to the World is an example of a multinational corporation.

Answer 2

False
Explanation: A multinational corporation, or multinational enterprise, is a business firm with operations in several countries. A multinational organization is a nonprofit organization with operations in several countries. Examples are the World Health Organization and the International Red Cross.

Question 3

Scott, a manager at the Rome, Italy, store of an American-owned clothing company, understands the differences and similarities between American and Italian customers, customs, culture, and practices. As a result, Scott uses his understanding of Italian culture, tastes, and business practices to help him market his products to Italian customers in Rome-and he uses his understanding of American culture to sell his products to American tourists who are visiting Rome. Scott is an example of a geocentric manager.

Answer 3

True
Explanation: The successful international manager is geocentric, not ethnocentric or polycentric. Geocentric managers accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective. Being an ethnocentric or polycentric manager takes less work, but even with the extra work, the payoff for being a geocentric manager can be far greater.

Question 4

In 1999, the top exporting nation was the United States, but in 2016, the world's top exporting nation was China.

Question 5

Which of the following is NOT true about the concept of traveling for business?

A) Air travel and the electronic media have made it easier for the people around the globe to communicate with one another.
B) Exported services include travel, transportation, and computer services, valued at just over $500 billion.
C) A recent survey found that 70 percent of millennials cite their desire to travel as the primary reason they work in the first place.
D) The number of U.S. passports issued per year has grown steadily over the last several years, reaching more than 21.3 million for 2017, according to the Department of State.
E) Traveling abroad is a way to develop cultural awareness, a career readiness competency that can help ensure your international experience enhances your career success.

Question 6

Technology philosopher Nicholas Negroponte proposed that the global market driven by electronic information

A) "causes products to become more expensive."
B) "increases technical literacy within organizations but results in information overload."
C) "results in new laws but less synergy and less ethical behavior."
D) "causes an increase in the types of goods available but decreases in product quality."
E) "forces things to get bigger and smaller at the same time."

Question 7

Great systems of ________ are the hallmark of great civilizations.

A) laws
B) thinking
C) leadership
D) communications
E) manufacturing

Question 8

Foster, who owns a successful business with two locations and a few international clients, was approached by a large organization about dramatically expanding his company. Foster later told his wife that he is happy with his success, but he wants to stay small because if he decides to add new products, small companies

A) take more time to start new endeavors.
B) typically maneuver slowly with new ideas.
C) can get started more easily and maneuver faster.
D) tend not to change due to inexperienced management.
E) can adjust more easily to capital shortages.

Question 9

Last week Gary, CEO of Quality Furniture in North Carolina, traveled to Europe to visit customers. While overseas, Gary checked his e-mail daily and showed his company's website to customers, explaining how the website will help them place orders and receive merchandise more quickly. After visiting the last customer Friday morning, Gary was able to return to the corporate office in North Carolina to meet with his board of directors that night. ________ is the "shrinking" of time and space with air travel and the electronic media.

A) The intranet
B) A flat world
C) The small-world philosophy
D) E-commerce
E) The global village

Question 10

A greenfield venture is a strategic alliance with individuals and organizations in developing nations; the venture's goals are to assist, educate, and share the risks and rewards of starting a new nonprofit organization in the developing country.

Question 11

Two managers from Appliance King were talking to Uri, their district manager, about Hannah, the unpopular store manager. Vivian, the assistant manager, said, "I believe I speak for other managers and employees when I say that Hannah acts like she knows it all. We all feel that Hannah does not listen to any of us because she always thinks her way is right and does not want to consider any other opinion." Hannah is an example of a geocentric manager.

Question 12

The "most favored nation" trading status describes a condition in which a country grants other countries favorable trading treatment, such as the reduction of import duties.

Question 13

According to Rosabeth Moss Kantor of the Harvard Business School, which three events of the 1980s paved the way for the global economy?

A) The Berlin Wall came down, countries worldwide opened their economies to foreign investors, and there was a worldwide trend of governments increasingly regulating their economies.
B) The Berlin Wall was built, Asian countries formed their own stock market, and NAFTA was implemented.
C) The Berlin Wall came down, Asian countries opened their economies to foreign investors, and there was a worldwide trend of governments deregulating their economies.
D) The governments of China and India implemented certain aspects of capitalism, Nixon opened China to international trade, and the value of the U.S. dollar skyrocketed.
E) The Berlin Wall came down, NAFTA and CAFTA were implemented, and the Dow Jones Industrial Average hit 10,000.

Question 14

Deondre, who owns an investment firm with customers worldwide, has witnessed how dangerous global economic interdependency can be. During a lunch meeting, he mentioned to a customer, "In my opinion, ________ have been two negative effects of global economic interdependency for the United States."

A) other countries stealing U.S. technology and the loss of well-paying jobs in the United States
B) a huge surplus of funds from global investments flowing into the United States and huge cost increases
C) reduced foreign direct investment (FDI) into the United States and lower-quality goods being produced domestically
D) more expensive goods being produced domestically and bigger markets for American imports
E) fewer organizations utilizing MBO and poorer-quality goods imported from abroad

Question 15

Globalization is the trend

A) of the world economy becoming a less dependent system.
B) of the world economy adding more independent markets.
C) toward one world language and culture.
D) of the world economy toward becoming a more interdependent system.
E) toward one world economy and banking system.

Question 16

While in Italy, Sam was able to communicate important information to Fred, his business partner, via e-mail. Later that day, Sam remarked to Fred about how helpful it was that he was able to return to their office in New York in less than nine hours. The "global village" refers to this "shrinking" of time and space as air travel and the electronic media have made it easier for people around the globe to communicate with one another.

Question 17

Michelle grew up helping her father work on cars in his auto repair shop and developed into an excellent auto technician. Because of stereotypes regarding women in this field, she is interested in finding a shop that minimizes gender discrimination and gender role inequalities. Michelle wants to work for a company that highly values gender egalitarianism.

Question 18

Linda, the human relations manager, is having lunch with Kellyanne, who will be leaving to manage the company office in Hiroshima, Japan. As the bill for lunch comes, Linda asks Kellyanne if she is aware of tipping practices in Japan. Kellyanne says, "Yes, it is 15-20 percent." Linda thanks Kellyanne for the information and notes that she when she was in Europe, she learned that a 10% charge is added only for exceptional service. In both cases, Kellyanne is correct.

Question 19

Eloise, an engineer for an oil company, is interested in working overseas at this stage of her life because she knows that foreign work experience demonstrates ________ to potential employers.

A) independence, resourcefulness, and discipline
B) good management skills
C) independence and strong leadership skills
D) independence, resourcefulness, and entrepreneurship
E) discipline and a strong will

Question 20

When thinking about interpersonal space, which country has the smallest social distance in feet?

A) Germany
B) United States
C) India
D) Canada
E) China

Question 21

A company is licensing its products when it

A) allows another company to pay it a fee to train its employees.
B) allows a foreign company to pay it a fee to make or distribute the first company's product or service.
C) pays a competitor a fee to stop the competitor from selling its products in the company's territory.
D) develops a strategic plan for another organization.
E) barters goods for goods in lieu of a monetary payment.

Question 22

Based on the text, many companies are interested in expanding globally in order to

A) gain access to supplies, new markets, and lower labor costs.
B) gain access to natural resources, new markets, and a diverse workforce.
C) implement tariffs and import quotas.
D) utilize export embargoes to increase business.
E) increase the diversity and creativity of their workforce.

Question 23

Pietro, the vice president of marketing, is talking to Ryan, a sales manager in a foreign office, about several local situations that Ryan's reps are facing in their territory. Pietro tells Ryan that he believes there are differences and similarities between home and foreign personnel and practices, and that Ryan should use whatever techniques are most effective. Pietro is a(n) ________ manager.

A) parochial
B) ethnocentric
C) global
D) geocentric
E) polycentric

Question 24

Betsy, the vice president of sales for an international organization, believes that employees in her foreign offices understand best how to handle the personnel and practices in their offices. So when the corporate HR manager approached Betsy about reprimanding Francois, a native Parisian who is the Paris office manager, for not doing things according to corporate policy, Betsy backed Francois and said, "I believe that the home office should leave Francois alone because he best understands the local culture." Betsy is a(n) ________ manager.

A) ethnocentric
B) global
C) native
D) polycentric
E) parochial

Question 25

Countertrading is ________ goods for goods.

A) outsourcing
B) sourcing
C) bartering
D) selling
E) licensing

Question 26

________ is another word for ethnocentrism.

A) Geocentrism
B) Ecocentrism
C) Parochialism
D) Open-mindedness
E) A flexible management style

Question 27

Kishore owns an international grocery store, the Global Market, where customers can purchase foods and canned goods from other countries. Global Market is an example of a company that

A) exports.
B) globalizes.
C) inputs.
D) imports.
E) countertrades.

Question 28

Henry, a regional manager for a global corporation, is meeting with several upset managers from the Rome plant about Michael, who is originally from Texas but moved to Italy to manage the Rome facility. Antonio, the assistant manager, tells Henry, "We all feel that Michael sees things only one way-his-and very seldom considers our perspective on things." Michael is employing a ________ management style.

A) traditional
B) ecocentric
C) geocentric
D) polycentric
E) parochial

Question 29

Ethnocentric managers believe that their native country, culture, language, and behavior

A) are equal to all other cultures.
B) are hurtful to others.
C) need to be changed.
D) make them citizens of the world.
E) are superior to all others.

Question 30

Pablo, a construction manager with employees working in Puerto Rico, is having a hard time with employee turnover. While speaking with his human resources manager, Avery, he says he does not understand why the workers come to work late, take longer lunches, and yet still punch out at five o'clock. He feels they should want to work to get the country back on its feet and do what it takes to get the job done. Based on this example, Pablo is most likely a(n) ________ manager.

A) geocentric
B) ethnocentric
C) innovative
D) open-minded
E) polycentric

Question 31

Fresh Toppings is based in Sacramento, California and has restaurants in 25 countries. In the United States, Fresh Toppings would be viewed as which of the following?

A) multinational corporation
B) conglomerate
C) multinational organization
D) international enterprise
E) foreign firm

Question 32

Sox for All is a global nonprofit organization that works with schools and various companies to donate socks and shoes to poor children throughout the world. Sox for All is an example of a

A) multinational corporation.
B) conglomerate.
C) foreign firm.
D) philanthropic corporation.
E) multinational organization.

Question 33

Alpha Computing is a U.S. company that specializes in IT research. It has formed a joint venture with Microchips Inc., a Belgium organization that has a reputation for producing quality PCs. The two companies will work together to market laptops in China, sharing the risks and rewards of starting the new enterprise together. Alpha Computing and Microchips Inc. are partners in a(n)

A) strategic alliance.
B) global strategy.
C) export strategy.
D) import strategy.
E) franchising strategy.

Question 34

Sometimes a country's laws forbid foreigners from owning a business in the nation. In the presence of such laws, a(n) ________ is one way for an American company to have a presence in that foreign country.

A) export agreement
B) MBO pact
C) import agreement
D) 50/50 ownership split
E) joint venture

Question 35

Luke is the owner of Fun Times, a U.S. event-planning company. He plans to open an event-planning company, Events & Adventures, in Germany. Events & Adventures will be totally owned and controlled by Fun Times, which makes Events & Adventures a ________ of Fun Times.

A) joint venture
B) total investment agreement
C) strategic alliance
D) wholly owned subsidiary
E) maquiladora

Question 36

Airbus Inc., a company that builds airplanes, typically orders parts for its airplanes from other companies. ________ is the practice Airbus Inc. is using.

A) Countertrading
B) Bartering
C) Trading
D) Outsourcing
E) Diversifying

Question 37

In exchange for $1,000 of office supplies, Anthony's IT Services uses ________ to install new network computers and printers at no cost to Quality Office Supply.

A) outsourcing
B) sourcing
C) inputting
D) countertrading
E) importing

Question 38

Pinetops Resorts, an American company, sells the rights to other hospitality companies globally to open resorts with the Pinetops name for a fee and a share of the profit, in return for using Pinetops' brand name and a package of materials and services. Pinetops is engaged in

A) franchising.
B) importing.
C) offshoring.
D) exporting.
E) countertrading.

Question 39

Wendy's Truffles makes quality desserts and sells its products to customers in other countries. Wendy's Truffles is ________ its products.

A) bartering
B) countermarketing
C) exporting
D) dumping
E) importing

Question 40

________ are Mexican manufacturing plants with low labor costs that give special privileges to their American owners in return for employing Mexican citizens.

A) Diversedoras
B) Barteristas
C) Globalists
D) Internationaladoras
E) Maquiladoras

Question 41

What caused the World Bank's chief economist to step down in 2018?

A) Morocco implemented a more flexible exchange system.
B) The European Union lost one million in trading capacity.
C) Brexit was announced.
D) President Trump threatened to pull the United States out of NAFTA.
E) Chilean officials claimed it deliberately skewed the country's economic data.

Question 42

________ is prevented by quotas.

A) Outsourcing
B) Tariffs
C) Exporting
D) An embargo
E) Dumping

Question 43

________ is a trading bloc consisting of 28 trading partners in Europe.

A) The WTO
B) Mercosur
C) The European Union
D) The Eastern Union
E) The Atlantic-Mediterranean Union

Question 44

Shrimpers in South Louisiana have accused China of selling shrimp in the United States at a lower price than U.S. suppliers. The goal of the Chinese, they argue, is to drive down the price of U.S. shrimp. The U.S. shrimpers are accusing the Chinese of

A) outsourcing.
B) applying import quotas.
C) trade protectionism.
D) dumping.
E) establishing an embargo.

Question 45

The purpose of the World Trade Organization is to

A) provide low-interest loans to developing nations for improving transportation.
B) monitor and enforce trade agreements.
C) provide medium-interest loans to developing nations for improving health.
D) assist in smoothing the flow of money between nations.
E) provide low-interest loans to developing nations for improving telecommunications.

Question 46

The IMF has

A) helped support some weaker European countries during the recent financial crisis.
B) been very helpful in monitoring international terrorists.
C) ignored the cause of income inequality.
D) provided significant funding for business start-ups globally.
E) provided support to least-developed nations.

Question 47

A tax on automobiles imported into the United States that raises prices on imported vehicles to make the price of cars produced in the United States more competitive is a(n) ________; a tax on all oil imported into the United States, which is implemented to raise money for the U.S. government, is a(n) ________ tariff.

A) protective tariff; revenue
B) revenue tariff; protective
C) quota tariff; revenue
D) embargo agreement; income
E) import barrier; income

Question 48

NAFTA and the EU are both

A) greenfield ventures.
B) world banks.
C) terrorist-monitoring associations.
D) monetary funds.
E) trading blocs.

Question 49

The WTO

A) oversees mergers between large multinational corporations.
B) monitors business start-ups globally.
C) monitors and enforces trade agreements.
D) ensures that multinational organizations are behaving ethically.
E) assists developing countries by loaning them money.

Question 50

Prior to 1990, the United States imposed a tax, known as a(n) ________, on automobiles imported from Mexico.

A) licensing fee
B) tariff
C) embargo
D) import quota
E) export quota

Question 51

The United States limits the amount of cheese purchased from other countries; this is a(n) ________ policy.

A) export quota
B) import dump
C) import quota
D) trade embargo
E) import tariff

Question 52

During the Cold War, the U.S. had a(n) ________with anyone importing Cuban cigars and sugar.

A) tariff
B) limit agreement
C) export ban
D) embargo
E) protective quota

Question 53

The United States uses government regulations, such as tariffs, embargoes, and import quotas, to limit the import of goods and services and to protect U.S. industries against foreign competition. ________ is the use of these regulations.

A) Domestic protectionism
B) Blocking
C) Trade protectionism
D) Dumping
E) Export protectionism

Question 54

ASEAN is a(n)

A) trading bloc consisting of 10 countries in Asia.
B) association of American and Southeast Asian nations.
C) trading bloc consisting of 10 countries along the Atlantic Ocean.
D) worldwide banking association.
E) union of global nations that strives to bring about world peace.

Question 55

________ is the group of 21 Pacific Rim countries whose purpose is to improve economic and political ties, and to reduce tariffs and other trade barriers across the region.

A) PEC
B) ASEAN
C) EU
D) APEC
E) CAFTA

Question 56

When planning a trip to Spain, Brett and his wife, both Americans, were concerned about how much they could afford to spend in Europe because sometimes the U.S. dollar will buy more goods and sometimes it will buy less, based on changing economic conditions. The ________ rate is the rate at which the currency of one area or country can be exchanged for the currency of another's.

A) fluctuation
B) dividend
C) exchange
D) transaction
E) international

Question 57

Free trade is the

A) movement of customers between nations that do not have trade embargoes.
B) policy of cost-free exchange of goods.
C) bartering of goods or services locally or globally.
D) bartering or sale of goods without taxes.
E) movement of products between countries without political or economic obstruction.

Question 58

An import quota is a(n)

A) trade barrier.
B) embargo.
C) sanction
D) export fee
E) type of dumping

Question 59

Which of the following is true about the United States as a member of NAFTA?

A) It has lost high-skilled jobs.
B) It has gained employment in autos and aerospace.
C) It is a member with Canada and China.
D) It has signed an agreement that will last until 2025.
E) It helped to form NAFTA in 2008.

Question 60

The World Bank

A) finances worldwide mergers.
B) provides low-interest loans for improvements in developing nations.
C) facilitates banking operations for multinational organizations.
D) provides loans to communist nations.
E) monitors banks and credit unions globally.

Question 61

Will and his fiancée Christy decided to have their wedding on a beach in Acapulco, Mexico. Local businesses provided most of the services for the wedding, such as the limousine and the catering services. Throughout the weekend of the wedding, the couple found that workers and limos arrived late; so did the priest who was performing the wedding. In response to the couple's frustration, the Mexican workers remarked, "Ustedes tienen que ser flexibles," which in English means "You have to be flexible with time." This attitude regarding time is

A) inflexible.
B) polychronic.
C) cultural.
D) monochronic.
E) one-dimensional.

Question 62

During global culture training for a group of employees who are being transferred to Egypt, Charmaine, the HR training manager, remarked that "in the Arab world, men often hold hands, which is meant to express ________."

A) the acceptance of a business deal
B) solidarity and friendship
C) the acceptance of a future son-in-law into the family
D) friendship and collegiality
E) personal dominance

Question 63

Which statement is NOT true of the BRICS countries?

A) They are five major emerging economies in the world: Brazil, Russia, India, China, and South Africa.
B) The BRICS countries are home to 40 percent of the world's population.
C) In recent years, growth in China has slowed, and it is gradually losing its existing cheap labor pool.
D) The BRICS countries have joined together to form a trading bloc.
E) A key advantage for India in the world economy is the fact that it has a large English-speaking population.

Question 64

Kevin, a geologist from Arkansas who works for ExxonMobil, has decided to transfer to one of ExxonMobil's offices in Saudi Arabia. Kevin is a(n) ________ while living in Saudi Arabia.

A) globalist
B) internationalist
C) traitor
D) expatriate
E) migrator

Question 65

Which of the following is NOT one of the BRICS countries?

A) Brazil
B) Russia
C) Indonesia
D) China
E) South Africa

Question 66

According to the findings of the GLOBE project, which country would be considered most assertive?

A) United States
B) Greece
C) Germany
D) Spain
E) Denmark

Question 67

According to the GLOBE project, in-group collectivism refers to

A) how much patriotism and loyalty people should have for their country.
B) the degree to which a society's members expect power to be distributed.
C) the extent that individuals are encouraged and rewarded for group loyalty versus pursuing individual goals.
D) the extent to which a society encourages investment in the future, as by planning and saving.
E) the extent to which people should take pride in being members of their family, circle of close friends, and work organization.

Question 68

Craig owns an international grocery store in New York, the World Market. He has benefited highly from the trading bloc that allows him to purchase food products from Central American nations at a nice discount. With many of his customers from Costa Rica, the Dominican Republic, and Guatemala, he is particularly grateful for ________, a trading bloc.

A) APEC
B) CAFTA-DR
C) NAFTA
D) EU
E) Mercosur

Question 69

The ________ is the law that makes it illegal for employees of U.S. companies to make "questionable" or "dubious" contributions to political decision makers in foreign nations.

A) Global Ethics Accord
B) Internationalist Agreement
C) PATRIOT Act
D) Expatriate Accord
E) Foreign Corrupt Practices Act

Question 70

________ is a government's seizure of a domestic or foreign company's assets.

A) Expropriation
B) Diversification
C) Nationalization
D) An embargo
E) Appropriation

Question 71

A nation's culture is

A) the shared set of beliefs, values, knowledge, and patterns of behavior common to its people.
B) synonymous with its religious beliefs.
C) a shared set of business traditions common to the nation.
D) its constitution and written codes of behavior.
E) embedded in its laws that are accepted as moral imperatives by most of the citizens.

Question 72

Monochronic time is a

A) preference for multitasking.
B) desire to do as little as possible for a period of time.
C) time for the open discussion of problems or challenges.
D) time when little is accomplished.
E) preference for doing one thing at a time.

Question 73

The GLOBE project is an ongoing cross-cultural investigation of nine cultural dimensions involved in ________ processes.

A) family and relationship
B) leadership and organizational
C) MBO and planning
D) studying leadership
E) profit and cost-cutting

Question 74

The United States granted most favored nation trading status to China, which means that

A) Chinese tourists pay lower sales taxes when they visit the United States.
B) the United States has promised to aid China in its counterterrorist activities.
C) China receives favorable trading treatment, such as the reduction of import duties.
D) more Chinese immigrants are allowed to enter the United States.
E) China and the United States have agreed to place a trade embargo on certain nations in Southeast Asia.

Question 75

________ in a low-context culture.

A) E-mail is a very popular method of communicating
B) Citizens prefer to meet face-to-face rather than electronically
C) Shared meanings are derived primarily from written and spoken words
D) Meanings are derived primarily from situational cues
E) Life moves at a very slow pace

Question 76

Hayley, from California, arrived in Saudi Arabia and immediately noticed that the way Saudi men treat women is vastly different than the way men in the United States treat women. Hayley was feeling uncomfortable and disoriented because she was experiencing

A) culture shock.
B) ethnocentrism.
C) reverse assimilation.
D) acculturation.
E) gender inequality.

Question 77

Jillian will be relocating to Singapore in the next six months. Although many people speak English, what would be a good use of her time in the next six months?

A) Learn the local language.
B) Teach a native how to speak English.
C) Employ a translator.
D) Rely on the goodwill and knowledge of others.
E) Use a translation app or device.

Question 78

Acme, Inc., which manufactures the fireworks that municipal governments buy to put on their annual fireworks shows on the Fourth of July, moved most of its manufacturing operations from the United States to China a decade ago. Now, Spark is moving production back to the United States because the company's managers are uncomfortable with many Chinese business practices. Acme, Inc. engages in ________ when it moves its operations back to the United States.

A) offshoring
B) outsourcing
C) reshoring
D) globalizing
E) countertrading

Question 79

Which of the following statements is FALSE?

A) The United States was the most competitive economy in 2017.
B) Global trade has helped lift hundreds of millions of Chinese out of poverty.
C) The presence of a few dominant companies in an industry makes it more difficult for entrepreneurs to start a business in that sector.
D) Around the world, consumers are showing a robust appetite for the sharing-based economy.
E) Most Americans use their mobile devices for getting directions or listening to music rather than making purchases.

Question 80

Victor works for a company that highly values performance-oriented traits, such as achieving a certain level of sales and increasing market share by a certain percentage. In analyzing this aspect of Victor's company, Geert Hofstede would examine the company's ________ dimension.

A) individualism/collectivism
B) masculinity/femininity
C) power distance
D) uncertainty avoidance
E) assertiveness