Deck 1: The Challenging Context of International Business

Question 1

Only a company that has foreign operations needs to be aware of what is occurring globally in its markets and in its industry.

Answer 1

False
Explanation: Even companies with no foreign operations of any kind need their managers to embody a global perspective, because it will help them not only to be alert for both sales and sourcing opportunities in foreign markets but also to be watchful for new foreign competitors preparing to invade their domestic market.

Question 2

Britain was the world's leading manufacturing country for about 1,800 years,until it was replaced by the United States at the end of the 1800s.

Answer 2

False
Explanation: China was the world's leading manufacturing country for about 1,800 years, until it was replaced by Britain about 1840.

Question 3

An international company (IC)is a company headquartered in another nation.

Answer 3

False
Explanation: An international company (IC) is a company with operations in multiple nations.

Question 4

Unconscious reference to your own cultural values when judging behaviors of others in a new and different environment is known as the self-reference criterion.

Question 5

The internal forces,such as the factors of production and the activities of the organization,are called the uncontrollable forces.

Question 6

The external forces are commonly called uncontrollable forces,which are the external forces that management has no direct control over,although it can exert influence.

Question 7

International business differs from domestic business in that a firm operating across borders must deal with the forces of three kinds of environments-domestic,foreign,and global.

Question 8

While international business as a discipline is relatively new,international business as a business practice is not.

Question 9

Those who work in the international environment find that decision making is more complex than it is in a purely domestic environment.

Question 10

International experience is valuable for mid-career individuals who aspire to higher positions and greater responsibility,but not for students seeking their first job beyond university.

Question 11

The operations of a company outside its home or domestic market are known as foreign business.

Question 12

All managers need to have a basic knowledge of international business.

Question 13

The international environment refers to all the uncontrollable forces originating outside the home country that surround and influence the firm.

Question 14

When an affiliate in one country does business with customers in another,it is operating in the foreign environment.

Question 15

The 17^th and 18^th centuries have frequently been termed the age of mercantilism because the power of nations depended directly on the sponsorship and control of merchant capital,which expanded under the direct subsidization and protection of national governments.

Question 16

The domestic environment is all the controllable forces originating in the home country that surround and influence the life and development of the firm.

Question 17

Foreign business refers to the operations of a company between its home market and markets elsewhere in the world.

Question 18

As used in the text,the term environment means all the forces influencing the life and development of the firm.

Question 19

The Ottoman Empire's powerful location raised the cost of Asian trade for the Europeans and resulted in a search for sea routes to Asia.

Question 20

International trade has historically had a major influence on industry,agriculture,and the economy of nations,but not on public health or politics.

Question 21

Opponents of free trade point out that globalization has contributed to a decline in environmental and health conditions.

Question 22

Foreign business denotes

A) a business whose activities involve crossing national borders.
B) business conducted within a foreign country.
C) an organization with multicountry affiliates.
D) an organization that attempts to standardize operations worldwide.
E) a business with operations in multiple nations.

Question 23

A survey of CEOs of the 162 largest firms on Fortune's list of the 500 largest American corporations found that the CEOs strongly believed all of the following except

A) an international orientation should be an important part of a college business education.
B) international business skills and knowledge were important for promotion to senior executive positions.
C) international business skills and knowledge were important for appointment to entry-level positions.
D) the importance of international business skills and knowledge was magnified for companies that anticipated increasing importance of international activities in the next five years.
E) foreign language proficiency was essential for promotion to senior executive positions.

Question 24

A survey of CEOs of the 162 largest firms on Fortune's list of the 500 largest American corporations found that for developing international skills,respondents believed that a number of courses in the international business curriculum are relevant to their companies,including courses on topics related to:

A) international legal and political issues.
B) introduction to international business.
C) international strategy and competitiveness.
D) international marketing.
E) foreign language.

Question 25

Expanded international trade is linked with the creation of more and better jobs.

Question 26

A survey of CEOs of the 162 largest firms on Fortune's list of the 500 largest American corporations found that the CEOs strongly believed that

A) all business students should major in international business.
B) an international orientation should be an important part of a college business education, but only for those students planning to work internationally.
C) international business skills and knowledge were important for appointment to entry-level positions.
D) international business skills and knowledge were critical for promotion to senior executive positions in all companies.
E) foreign language proficiency should be required of all business students.

Question 27

According to the text,you can improve your chances for obtaining an overseas post by doing all of the following except

A) taking advanced classes in accounting or information systems.
B) making your boss aware of your interest in international business.
C) trying to meet people who work with your company's foreign subsidiaries.
D) working in another country as a child care provider.
E) taking classes in the area of international business.

Question 28

According to the text,you can improve your chances for obtaining an overseas post by doing all of the following except

A) taking classes in the area of international business.
B) going abroad to study.
C) going abroad to work as a teacher or bartender.
D) getting a well-paid domestic internship.
E) volunteering in community development activities in another country.

Question 29

That free trade is the best strategy for advancing the world's economic development is one of the few propositions on which almost all economists agree.

Question 30

A survey of CEOs of the 162 largest firms on Fortune's list of the 500 largest American corporations found that the CEOs strongly believed that

A) all business students should major in international business.
B) an international orientation should be an important part of college business education, but only for those students planning to work internationally.
C) international business skills and knowledge were important for promotion to senior executive positions but not for appointment to entry-level positions.
D) the importance of international business skills and knowledge for promotion to senior executive positions was higher for companies anticipating an increased level of importance of international activities in the next five years.
E) foreign language proficiency should be required of all business students.

Question 31

According to the text,the level of intracompany trade of multinationals in 1930,as a percentage of world trade,may have exceeded the proportion at the end of the 20^th century.

Question 32

The increased internationalization of business requires __________ to have a basic knowledge of international business.

A) all managers
B) managers of multinationals
C) managers of transnationals
D) managers of purely domestic operations
E) marketing managers

Question 33

As mentioned in the text,managers in companies with no foreign operations of any kind still need a global perspective,for all of the following reasons except

A) it will help them to be watchful for new foreign competitors preparing to invade their domestic market.
B) it will help them to be alert for sales and sourcing opportunities in foreign markets.
C) it will enable them to be effective leaders across different cultures and political systems.
D) it will help them to manage diversity within teams.
E) foreign experience reflects independence, resourcefulness, and entrepreneurship.

Question 34

Rapid urbanization of populations combined with industrialization in the emerging markets is quickly shifting the world's economic center of gravity from Europe and the Americas and back to Asia.

Question 35

Although they represent less than 1 percent of all transnational corporations,state-owned transnationals account for more than 11 percent of the world's foreign direct investment.

Question 36

The five major kinds of drivers,all based on changes that are leading international firms to the globalization of their operations,include political,sociocultural,technological,market,and competitive drivers.

Question 37

Transnational corporations account for approximately 25 percent of total global output and nearly 50 percent of world trade.

Question 38

Globalization has produced uneven results across nations and people.

Question 39

Supporters of globalization generally argue that it is the best strategy for advancing the world's economic development.

Question 40

An international business

A) is a business whose activities involve crossing national borders.
B) denotes the domestic operations within a foreign country.
C) is an organization with multicountry affiliates.
D) is an organization that attempts to standardize operations worldwide.
E) is engaged in international trade.

Question 41

Which of the following is not true about uncontrollable forces?

A) Management can influence them by heavy promotion of new products to change cultural attitudes.
B) They include competitive and distributive forces.
C) Management can influence them by lobbying.
D) Management has no direct control over them.
E) They include political forces and human resource activities.

Question 42

Foreign environmental forces often operate differently than domestic environmental forces because

A) they are uncontrollable.
B) force values are different.
C) changes are readily assessed.
D) they are unable to be observed.
E) they are unrelated to each other.

Question 43

Examples of the kinds of external forces listed in the text are each of the following except

A) sociocultural.
B) labor.
C) human resources.
D) technological.
E) physical.

Question 44

According to the text,the international environment consists of which of the following interactions?

A) The domestic environmental forces and global environmental forces.
B) The foreign uncontrollable forces and the domestic uncontrollable forces.
C) The domestic environmental forces and the foreign environmental forces, as well as the foreign environmental forces of two countries when an affiliate in one country does business in another country.
D) The domestic environmental forces and the foreign environmental forces, as well as the foreign environmental forces of all other countries.
E) All interactions outside the home country.

Question 45

Environment as used in the textbook is the forces surrounding and influencing the life and development of the firm and is classified as

A) controllable and uncontrollable.
B) controllable and uncontrollable as well as internal and external.
C) domestic and foreign.
D) internal and external.
E) domestic and foreign as well as controllable and uncontrollable.

Question 46

Examples of the kinds of internal forces listed in the text are each of the following except

A) human resources.
B) capital.
C) taxation.
D) labor.
E) production.

Question 47

The domestic environment is composed of all the uncontrollable forces originating in the __________ that surround and influence the life and development of the firm.

A) international arena
B) host nation
C) home country
D) foreign country
E) adjoining nations

Question 48

Examples of the kinds of external forces listed in the text are each of the following except

A) competitive.
B) technological.
C) legal.
D) production.
E) labor.

Question 49

International business differs from domestic business in that a firm operating across borders must deal with

A) the foreign environment and the international environment.
B) two of the international environment, the domestic environment, and the global environment.
C) all three of the domestic environment, the foreign environment, and the global environment.
D) the international environment.
E) all three of the international environment, the domestic environment, and the foreign environment.

Question 50

Decision making in the international environment is __________ it is in a purely domestic environment.

A) less complex than
B) less demanding than
C) more complex than
D) about the same as
E) exactly the same as

Question 51

According to the text,an international business is

A) a company that exports.
B) a company that has foreign direct investment.
C) a company with both exports and foreign direct investment.
D) a company with operations in multiple nations.
E) a company from a foreign country.

Question 52

Examples of the kinds of uncontrollable forces listed in the text are each of the following except

A) economic.
B) sociocultural.
C) marketing.
D) labor.
E) technological.

Question 53

The forces over which the management does have some command are called

A) domestic.
B) external.
C) foreign.
D) internal.
E) uncontrollable.

Question 54

Examples of the kinds of internal forces listed in the text are each of the following except

A) human resources.
B) finance.
C) raw materials.
D) labor.
E) natural resources.

Question 55

The kinds of forces in the foreign environment are __________ those in the domestic environment except that they occur in foreign nations.

A) different from
B) the same as
C) less than
D) more stringent than
E) the opposite of

Question 56

Domestic business differs from international business in that a firm operating within the borders of one country

A) needs to be concerned solely with the domestic environment.
B) must be concerned with the international environment but not the foreign environment.
C) must be concerned with the foreign environment but not the international environment.
D) is not entirely free from the international and foreign environments.
E) cannot survive in a world that is globalizing.

Question 57

International business differs from domestic business in that a firm operating across borders must deal with which of the following additional environmental forces?

A) Geographic
B) Foreign
C) Political
D) Competitive
E) Sociocultural

Question 58

Examples of the kinds of internal forces listed in the text are each of the following except

A) raw materials.
B) capital.
C) finance.
D) labor.
E) marketing.

Question 59

According to the text,personnel working in a foreign subsidiary are working in the international environment

A) if they work and live in the foreign subsidiary's country.
B) if they are responsible for the subsidiary's exports.
C) if they are responsible for the management of the foreign subsidiary.
D) if they are responsible for manufacturing activities within the foreign subsidiary.
E) if they are of a different race or religion than what is most common in the foreign subsidiary's country.

Question 60

The foreign environment is composed of all the uncontrollable forces originating _______ that surround and influence the life and development of the firm.

A) in the host country
B) in the home country
C) outside the host country
D) outside the home country
E) globally

Question 61

Foreign subsidiaries must obey the local laws.If they don't,they are subject to

A) legal action by the United Nations.
B) legal action by the host country and the country of the parent company.
C) seizure by the host government.
D) cancellation by the parent company of its right to do business in the host country.
E) seizure by the company's home country government.

Question 62

_______ refers to the transportation of any domestic good or service to a destination outside a country or region.

A) Importing
B) Foreign direct investment
C) Exporting
D) International business
E) International logistics

Question 63

When nations and corporations are ranked by GNI and total sales,respectively,for 2013 data,how many of the top 100 on the list are corporations?

A) 23
B) 32
C) 41
D) 49
E) 57

Question 64

_______ refers to the transportation of any domestic good or service to a destination inside a country or region,from a foreign origination point.

A) Importing
B) Foreign direct investment
C) Exporting
D) International business
E) International logistics

Question 65

Which of the following is not true regarding state-owned transnational corporations?

A) There is an estimated minimum of 550 state-owned transnationals.
B) State-owned transnationals are from both developed and developing countries.
C) They have over $2 trillion in assets.
D) They have more than 15,000 foreign affiliates.
E) They account for more than 11 percent of all transnational corporations.

Question 66

The rise of the Ottoman Empire before 1300

A) eliminated trade between Europe and Asia.
B) reduced the cost of Asian trade for Europeans.
C) reduced the cost of European trade for Asians.
D) raised the cost of Asian trade for Americans.
E) promoted a search for sea routes from Europe to Asia.

Question 67

The worldwide stock of outward FDI is estimated to have increased _______ between 1990 and 2014.

A) threefold
B) fivefold
C) ninefold
D) thirteenfold
E) seventeenfold

Question 68

International business really began

A) with the East India Company chartered in 1600.
B) when Singer Sewing Machine put up a factory in Scotland in 1868.
C) before the time of Christ.
D) when Colt Fire Arms set up a plant in England.
E) when the Ottoman Empire was established.

Question 69

The 17^th and 18^th centuries have frequently been termed the age of mercantilism because

A) the merchant class was created during this time.
B) the Americas were discovered.
C) business became more important than politics.
D) national power depended on the sponsorship and control of merchant capital.
E) free trade replaced trade controlled by national governments.

Question 70

The level of merchandise exports worldwide were _____ larger in 2013 than they were in 1980.

A) four times
B) nearly six times
C) nearly eight times
D) nearly 10 times
E) 23 percent

Question 71

__________ was the world's leading manufacturing country for about 1,800 years,until it was replaced by Britain in about 1840.

A) The United States
B) Germany
C) India
D) France
E) China

Question 72

Which of the following is not true regarding foreign direct investment?

A) The world stock of outward FDI was $26.3 trillion at the beginning of 2014.
B) FDI refers to direct investments in a foreign country, at a level sufficient to obtain significant management control.
C) FDI includes foreign investment in stock markets.
D) FDI calculations include direct investments in equipment, structures, and organizations in a foreign country.
E) FDI does not include exports.

Question 73

According to the text,personnel working in a foreign subsidiary are not working in the international environment

A) if they work and live in the foreign subsidiary's country.
B) if they are responsible for the subsidiary's exports.
C) if they are the sales manager responsible for selling product in the home country and the foreign subsidiary's nation.
D) if they are responsible for manufacturing activities within the foreign subsidiary, including purchasing inputs from another country.
E) if they manage workers in another country.

Question 74

Rapid urbanization of populations combined with industrialization in the emerging markets is quickly shifting the world's economic center of gravity from

A) the United States to South America.
B) the Americas and Europe to Asia.
C) Europe and Asia to Africa.
D) China to India.
E) East Asia to South America.

Question 75

Which of the following statements is not true?

A) The first multinational company, Singer Sewing Machine, built a factory in Scotland in 1868.
B) By 1914, at least 37 U.S. companies had production facilities in two or more overseas locations.
C) In the 1920s, all cars sold in Japan were made in the United States.
D) Friedrich Bayer purchased an interest in a New York plant in 1865.
E) The level of intracompany trade of multinationals in 1930, as a percentage of total world trade, may have exceeded the proportion at the end of the 20^th century.

Question 76

UNCTAD,an agency of the United Nations,estimates there are __________ transnational corporations with international production activities.

A) 5,500
B) 12,000
C) 82,000
D) 120,000
E) more than 800,000

Question 77

Due to the expanding importance of foreign-owned firms in local economies,host governments have made their policies toward these companies

A) more strict.
B) more liberal.
C) harsher.
D) more confronting.
E) inflexible.

Question 78

Unconscious reference to one's own cultural values when judging behavioral actions of others in a new and different environment is called

A) self-reference culture.
B) self-reference values.
C) self-reference criterion.
D) self-reference customs.
E) self-reference environment.

Question 79

Historically,international business

A) is relatively new.
B) existed before the time of Christ.
C) began in China.
D) was a result of the rise of the Ottoman Empire.
E) had limited impact beyond its economic effects.

Question 80

Which of the following is not true regarding transnational corporations?

A) They employ more than 78 million people.
B) They account for approximately 50 percent of total global output.
C) They account for approximately two-thirds of world trade.
D) They have approximately 810,000 foreign affiliates.
E) The sales of their foreign affiliates have grown about 700 percent in the past 20 years.