Deck 11: Global and International Issues

Question 1

A global strategy means considering individual countries distinctly when designing, producing, and marketing products.

Answer 1

False

Question 2

Organizations that conduct business operations across national borders are called

A) protectionists.
B) national firms.
C) multinational corporations.
D) domestic companies.
E) born global.

Answer 2

C

Question 3

The various opportunities and threats that face multinational corporations are almost limitless, and the number and complexity of these factors ________ the number of products and the number of geographic areas served.

A) decrease dramatically with
B) dramatically increase with
C) drop slightly with
D) are constant despite
E) are unaffected by

Answer 3

B

Question 4

The strategic-management process for multinational firms is ________ for purely domestic firms, but the process is ________ for the purely domestic firms.

A) conceptually the same as; more complex
B) conceptually the same as; more simple
C) conceptually different than; more simple
D) conceptually different than; more complex
E) conceptually the same; less important

Question 5

Asian-based multinational firms have historically kept cash earned offshore in U.S. subsidiaries and banks to take advantage of low U.S. corporate taxes.

Question 6

Which of the following is a European country in which union membership is growing?

A) Australia
B) Austria
C) France
D) Italy
E) Sweden

Question 7

Mass communication and high technology have ________ in diverse cultures worldwide.

A) created similar patterns of consumption
B) resulted in highly individualized patterns of consumption
C) rendered patterns of consumption identical
D) had little to no effect on patterns of consumption
E) ignored patterns of consumption

Question 8

High corporate tax rates

A) encourage investment in new factories.
B) provide strong incentives to avoid and evade taxes.
C) attract foreign investors.
D) make a nation a desirable location for investment.
E) have been a growing trend since the 1980s.

Question 9

The average level of union membership across the whole European Union, weighted by the numbers employed in the different member states, is ________ percent compared to about ________ percent in the United States.

A) 11; 23
B) 15; 44
C) 23; 11
D) 51; 26
E) 70; 30

Question 10

In an industry that is, or is rapidly becoming global, the riskiest possible posture is to

A) become a global competitor.
B) remain a domestic competitor.
C) remain a global competitor.
D) expand beyond the role of domestic competitor.
E) embrace strategic alliances.

Question 11

Communication between domestic headquarters and overseas operations is often made difficult by

A) type of products.
B) cultural differences.
C) type of services.
D) location of headquarters.
E) age of firm.

Question 12

The average level of union membership across the whole European Union, weighted by the numbers employed in the different member states, is close to 25 percent.

Question 13

The U.S. government's OPIC

A) offers insurance to offset some risks of doing business internationally.
B) provides insurance to eliminate all of the risks of doing business internationally.
C) is a leading source of humanitarian aid worldwide.
D) requires that paperwork be filed by U.S. companies desiring to do business internationally.
E) discourages foreign companies from doing business in the United States.

Question 14

Which of the following nations has the highest corporate tax rate?

A) Ireland
B) United Arab Emirates
C) Great Britain (United Kingdom)
D) France
E) Germany

Question 15

As of 2018 which of the following countries had the highest corporate tax rate?

A) Bermuda
B) Cayman Islands
C) United Arab Emirates
D) USA
E) Turkey

Question 16

________ is a process of doing business worldwide, so strategic decisions are made based on global profitability of the firm rather than just domestic considerations.

A) Multinational corporation
B) Protectionism
C) Globalization
D) Assimilation
E) World recession

Question 17

The average tax rate across Europe is ________ percent.

A) 32
B) 18
C) 24
D) 16
E) 40

Question 18

In Nordic countries Denmark, Sweden, and Finland, about 70 percent of all employees are in unions.

Question 19

Exports constitute ________ percent of Singapore's gross domestic product (GDP).

A) 78
B) 102
C) 87
D) 221
E) 172

Question 20

Multinational corporations face unique and diverse risks, which include all of the following EXCEPT

A) favorable foreign court interpretations of contracts and agreements.
B) currency losses through exchange rate fluctuations.
C) social/political disturbances.
D) import/export restrictions.
E) tariffs.

Question 21

________ can enable firms to learn the technology, culture, and business practices of other people and to make contacts with potential customers, suppliers, creditors, and distributors in foreign countries.

A) Economies of scale
B) Joint ventures
C) Low-cost production facilities
D) Reduced tariffs
E) Domestic operations

Question 22

While multinational corporations face almost limitless social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive opportunities and threats, the number and complexity of these factors do not dramatically increase with the number of products produced and the number of geographic areas served.

Question 23

It is an exaggeration to say that in an industry that is global, the riskiest possible posture is to remain a domestic competitor.

Question 24

Since the 1980s, the average corporate tax rate globally has been steadily falling.

Question 25

Discuss some things firms can do to diminish the risk of doing business internationally.

Question 26

Strengths of competitors in foreign lands are often ________, and weaknesses are often ________.

A) overestimated; overestimated
B) overestimated; underestimated
C) underestimated; underestimated
D) underestimated; overestimated
E) ignored; downplayed

Question 27

All of the following are potential advantages to initiating, continuing, and/or expanding international operations EXCEPT

A) firms can gain new customers for their products.
B) foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.
C) foreign operations can allow firms to establish low-cost production facilities in locations close to raw materials and/or cheap labor.
D) foreign operations could be seized by nationalistic factions.
E) foreign operations may result in reduced tariffs, lower taxes, and favorable political treatment.

Question 28

Discuss union membership across Europe.

Question 29

List some of the diverse and unique risks that face multinational corporations (MNCs).

Question 30

Mass communication and high technology have led to highly individualized and distinct patterns of consumption in diverse cultures worldwide.

Question 31

In today's global climate, many companies may find it difficult to survive by relying solely on domestic markets.

Question 32

All of the following are potential disadvantages to initiating, continuing, or expanding business across national borders EXCEPT

A) firms confront different social, cultural, and political forces when doing business internationally, which can make communication in the firm difficult.
B) keeping informed about the number and nature of competitors is more difficult when doing business internationally.
C) foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.
D) dealing with two or more monetary systems can complicate international business operations.
E) foreign operations could be seized by nationalistic forces.

Question 33

The United States has the highest corporate tax rate among the G-7 nations.

Question 34

The strategic-management process is more complex for international firms due to more variables and relationships.

Question 35

The social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive opportunities and threats that face a multinational corporation are almost limitless.

Question 36

Which of the following is a valid reason for a firm's power and prestige in domestic markets to be significantly enhanced if it competes globally?

A) This can translate into improved negotiating power among important groups.
B) This rarely results in a practical advantage.
C) This can hurt its bargaining power with suppliers and distributors.
D) This does nothing to improve its position with creditors.
E) This can alienate the firm from its domestic creditors, suppliers, and distributors.

Question 37

The strategic-management process is conceptually different for multinational firms than for purely domestic firms.

Question 38

Organizations that conduct business operations across national borders are called international firms or multinational corporations.

Question 39

An increasing number of U.S. companies are reincorporating in foreign countries to reduce their tax burden and doing this typically involves acquiring a foreign firm.

Question 40

Which of the following is a potential advantage of conducting international operations?

A) Competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.
B) Dealing with two or more monetary systems can complicate international business operations.
C) Differing language, culture, and value systems can make communication difficult.
D) Gaining an understanding of regional organizations is difficult, but is often required in doing business internationally.
E) The need to deal with two or more monetary systems.

Question 41

With the rise in world commerce, government regulatory bodies are no longer able to closely monitor foreign business practices.

Question 42

Trade barriers are one of the unique and diverse risks that face multinational corporations.

Question 43

List at least five potential advantages to initiating, continuing, and/or expanding international operations.

Question 44

Perhaps the greatest advantage of international operations to a firm is the ability to gain new customers for its products and services, thus increasing revenues.

Question 45

Although a firm's power and prestige in domestic markets may be significantly enhanced when the firm competes globally, this rarely translates into improved negotiating power among creditors, suppliers, or distributors.

Question 46

Potential advantages to initiating, continuing, or expanding international operations is that foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

Question 47

Although growth in revenues and profits is a common expectation of shareholders, it is not a measure of organizational success.

Question 48

It is possible to obtain insurance from the U.S. government's OPIC to eliminate all risks associated with doing business internationally.

Question 49

Weaknesses of competitors in foreign lands are often underestimated, and strengths are often overestimated.

Question 50

One of the dangers of remaining a local competitor is that more aggressive companies will use their global growth to capture economies of scale and learning.

Question 51

Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people.

Question 52

Geographic distance and cultural differences are two of the factors that can make communication between domestic headquarters and overseas operations difficult.

Question 53

U.S. firms doing business internationally face the complications of having to deal with two or more monetary systems.

Question 54

The availability, depth, and reliability of economic and marketing information in different countries vary extensively.

Question 55

Before entering international markets, firms should do research to try and diminish the risk of doing business in new markets.

Question 56

Keeping informed about the number and the nature of competitors is easier when doing business internationally.

Question 57

A motivation for initiating international operations is that competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.

Question 58

Strategists in multinational corporations are often confronted with the need to be globally competitive and nationally responsive at the same time.

Question 59

More time and effort are required to identify and evaluate external trends and events in domestic corporations than in multinational corporations.

Question 60

As long as the price and quality of a firm's products and services are competitive on a local basis, it has nothing to worry about.

Question 61

Foreign revenue as a percentage of total company revenues ________ in hundreds of U.S. firms, including ExxonMobil, Gillette, Dow Chemical, and Citicorp.

A) is almost 10 percent
B) approaches 20 percent
C) is 25 percent
D) exceed 50 percent
E) is at least 70 percent

Question 62

________ refers to U.S. companies moving a portion of their manufacturing back to the United States.

A) Outsourcing
B) Offshoring
C) Vertical integration
D) Reshoring
E) Strategic alliance

Question 63

In which of the following industries is the United States NOT yet greatly challenged by foreign competitors?

A) Auto industry
B) Electronics
C) Manufacturing
D) Retailing
E) Pharmaceuticals

Question 64

Discuss at least four potential disadvantages to initiating, continuing, and/or expanding international operations.

Question 65

Most economists argue that protectionism harms the world economy because it inhibits trade among countries and invites retaliation.

Question 66

Which of the following statements is NOT true?

A) America's economy is becoming much less American.
B) A world economy and monetary system are emerging.
C) Corporations in every corner of the globe are taking advantage of the opportunity to obtain customers globally.
D) Markets are shifting slowly and in many cases diverging in tastes, trends, and prices.
E) Innovative transport systems are accelerating the transfer of technology.

Question 67

Most economists argue that protectionism ________ the world economy because it ________ trade among countries.

A) helps; inhibits
B) helps; encourages
C) harms; inhibits
D) harms; encourages
E) doesn't impact; doesn't affect

Question 68

Brazil offers skilled labor and technology, while Germany offers abundant natural resources and rapidly developing markets.

Question 69

Protectionism involves all of the following EXCEPT

A) tariffs against firms outside the country.
B) imposing taxes on firms outside the country.
C) imposing regulations on firms outside the country.
D) liberalizing restrictions on the import of foreign goods.
E) Protectionism involves all of the above.

Question 70

The lowest cost source for precision machinery is

A) Japan.
B) Sri Lanka.
C) Malaysia.
D) Europe.
E) Mexico.

Question 71

Approximately what percent of the world's population lives in the United States?

A) 5
B) 10
C) 15
D) 85
E) 95

Question 72

Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people.

Question 73

Which U.S. industry is already greatly challenged by foreign competitors?

A) Printing
B) Retailing
C) Retail banking
D) Consumer packaged goods
E) Automobile

Question 74

Which of the following U.S. industries is NOT yet greatly challenged by foreign competitors?

A) Aircraft manufacturing
B) Auto manufacturing
C) Heavy equipment manufacturing
D) Tire manufacturing
E) Furniture manufacturing

Question 75

American firms that seem insulated from foreign competition today may be vulnerable tomorrow.

Question 76

________ involves companies hiring other companies to take over various parts of their functional operations, such as human resources, information systems, payroll, accounting, customer service, and even marketing.

A) Reshoring
B) Vertical integration
C) Onshoring
D) Outsourcing
E) Strategic alliances

Question 77

For many years, the Omega Company manufactured all of its products in Brazil. In early 2018, the company made the decision to bring back its manufacturing by establishing several large plants in the state of Florida. What the Omega Corporation did is called

A) reshoring.
B) strategizing.
C) consolidation.
D) outsourcing.
E) offshoring.

Question 78

The domestic food industry ________, so Kraft Foods is focusing on foreign acquisitions.

A) is falling 5 percent per year
B) is falling 1 percent per year
C) is stagnant
D) is growing 3 percent per year
E) is growing 7 percent per year

Question 79

Foreign banks currently operate and compete in most parts of the United States.

Question 80

What percent of the world's population lives outside the United States?

A) 55
B) 65
C) 75
D) 85
E) 95