Deck 4: Global Management: Managing Across Borders

Question 1

The global economy has had a revitalizing effect on some parts of industrial America.

Answer 1

True
Explanation: Foreign firms are building plants in the United States, revitalizing parts of industrial America.Indeed, foreign direct investment makes up 15% of the country's gross domestic product (total value of all goods and services).Companies based overseas provide jobs for approximately 10% of the U.S.workforce.

Question 2

The global economy refers to worldwide conditions by which goods, people, and money can move more freely.

Answer 2

True
Explanation: By the late 1980s, there were several events that set up conditions by which goods, people, and money could move more freely throughout the world, or a global economy.The global economy refers to the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets.

Question 3

Among the negative effects of global interdependency are outsourcing and higher-priced goods.

Answer 3

False
Explanation: One negative effect of global economic interdependency is the movement, or outsourcing, of formerly well-paying jobs overseas as companies seek cheaper labor costs, particularly in manufacturing.But globalization typically leads to better and more affordable products.

Question 4

Bay-traders are those who trade seafood from the Chesapeake Bay for other goods rather than selling it on the open market.

Question 5

Globalization is defined as the elimination of all trade barriers worldwide.

Question 6

The term global village refers to the tendency for various cultural groups to cluster in small pods throughout the world.

Question 7

Air travel and electronic media have made the global village phenomenon possible.

Question 8

Great communications systems have been a hallmark of great civilizations.

Question 9

Becoming a world citizen includes learning how not to be an "ugly American."

Question 10

The World Health Organization is an example of a multinational organization.

Question 11

A multinational corporation is a nonprofit organization with operations in several countries.

Question 12

The recent recession has caused an increasing number of Americans to look for work overseas.

Question 13

The global economy refers to the heightened economic regulation of many national markets as they protect themselves from one another.

Question 14

Among cultural patterns of which one should be aware is the importance of making direct eye contact most of the time with Japanese businesspeople.

Question 15

The Internet has made it more difficult for small firms to get started because now everyone must compete on a global scale.

Question 16

One advantage of small companies over large ones is the former's ability to change direction faster.

Question 17

E-commerce refers to the buying and selling of products and services through computer networks.

Question 18

Smart phones, e-mail, and videoconferencing have all but eliminated the need for international business travel.

Question 19

Unless you work outside of the United States, international management is likely to have little relevance during your career.

Question 20

Mergers have surged in the past 20 years because many industries are not suited to midsize or small companies.

Question 21

A tariff is a limitation on the numbers of products allowed into a country, imposed by its government to protect domestic industries.

Question 22

Deglobalization is a trend to move production back to the United States over fears about geopolitics or energy prices.

Question 23

If you can describe a job precisely, or write rules for doing it, it is protected against offshoring.

Question 24

Countertrading refers to a company producing goods domestically and selling them outside the country.

Question 25

When U.S.companies hire UPS to conduct some of their logistics functions for them it is known as outsourcing.

Question 26

Successful international managers are most likely to be geocentric rather than ethnocentric or polycentric.

Question 27

The reasons that companies expand internationally typically have to do with making or saving money.

Question 28

Geocentric policies have been linked to recruiting difficulties and high turnover.

Question 29

Ethnocentrism is a form of parochialism.

Question 30

Offshoring is defined as using suppliers outside the home country to provide labor, goods, or services.

Question 31

As of 2011, the United States was the world's top exporter.

Question 32

Maquiladoras are manufacturing plants allowed to operate in South and Central America with special privileges in return for employing citizens in these countries.

Question 33

For international expansion, joint ventures have a lower level of risk than franchising.

Question 34

A wholly owned subsidiary is the global expansion strategy with the highest risk and investment.

Question 35

Jobs that requires face-to-face or physical contact, or those that require recognition of complex patterns, are unlikely to be offshored.

Question 36

A parochial manager is able to consider decisions and events from a variety of viewpoints.

Question 37

Two of the reasons companies expand internationally are to take advantage of the availability of suppliers, or to charge tariffs or impose import quotas.

Question 38

One way to avoid a tariff is to create a subsidiary to produce the product in the foreign country imposing that tariff.

Question 39

Managers who take the view that native managers in foreign offices best understand native personnel and practices, and so the home office should leave them alone, are called polycentric managers.

Question 40

Polycentric 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.

Question 41

A foreign subsidiary that is totally owned and controlled by an organization is called a multinational.

Question 42

The United States exports more to China than to any other nation.

Question 43

The organization that assists in smoothing the flow of money between nations is the International Monetary Fund.

Question 44

Trade protectionism is a term for government measures that promote and preserve free trade globally.

Question 45

As a result of recent negotiations, the General Agreement on Tariffs and Trade (GATT) is expected to supersede the WTO by 2015.

Question 46

Recently, the International Monetary Fund has had a high-profile role in assisting some weaker European countries, including making loans to Greece, Portugal, and Ireland.

Question 47

Tariffs are common today and still growing in number since they have a long history of successfully protecting jobs in this country.

Question 48

If Toys R Us provides the use of its name plus its operating know-how to a company in Poland in return for an upfront fee plus a percentage of the profits, Toys R Us would be participating in franchising.

Question 49

A revenue tariff is designed to protect domestic products from foreign imports by raising the price of the latter.

Question 50

When DuPont agrees to let a Brazilian company make its product Teflon, the nonstick coating, in its local market for a fee it is called franchising.

Question 51

Cuban cigars and sugar cannot legally be imported into the United States because of a trade embargo.

Question 52

An import quota is a trade barrier in the form of a customs duty, or tax, levied mainly on imports.

Question 53

Dumping is the practice of a foreign company exporting products abroad at a lower price than the price in the home market, or even below the costs of production, in order to drive down the price of the domestic product.

Question 54

An example of a trading bloc is the European Union.

Question 55

The rate at which one country's currency can be swapped for another country's currency is called the substitution rate.

Question 56

If a country's currency drops dramatically and it is unable to import the goods it needs, then an exporter who trades with that country may turn to countertrading.

Question 57

Mexico is part of NAFTA.

Question 58

A greenfield venture is a foreign subsidiary created to exploit previously untapped natural resources in another country.

Question 59

General Motors working with Shanghai Automotive Industry Group to build Buicks in China is an example of a strategic alliance.

Question 60

Free trade is the movement of goods and services among nations without political or economic obstruction.

Question 61

The trend of the world economy toward becoming a more interdependent system is called

A)international cooperation.
B)globalization.
C)world partnership.
D)economic defragmentation.
E)international unification.

Question 62

Most of what we know about our native culture we have learned through formal education.

Question 63

Knowing the cultural tendencies of foreign business partners and competitors can give you a strategic competitive advantage.

Question 64

The GLOBE project is a large, ongoing effort to find technological improvements to assist world trade.

Question 65

Which of the following is a negative effect for the United States of global economic interdependency?

A)Decreased economic activity
B)Poorer quality goods
C)Lower standards of living
D)Loss of well-paying jobs
E)More expensive products

Question 66

The earliest forms of communication, the hallmark of great civilizations, were based on

A)personal relationships.
B)technology.
C)transportation.
D)warfare.
E)agriculture.

Question 67

An inherent weakness of the European Union is that stronger countries may have to rescue weaker ones that are in financial crisis.

Question 68

The religion with the most followers worldwide is Hinduism.

Question 69

In China, it is permissible for office colleagues to inquire about the size of your apartment and your salary.

Question 70

According to the GLOBE project, the United States is among the countries highest in the cultural dimension of performance orientation.

Question 71

The purpose of granting "most favored nation" status to another country is to promote tourism.

Question 72

Turnover rates are higher among managers returning from overseas assignments than for those who do not go abroad.

Question 73

The Mercosur is composed of countries in southeast Asia.

Question 74

Arabs prefer a larger interpersonal space when communicating than Americans.

Question 75

The GLOBE cultural dimension that examines the extent to which a society should minimize gender discrimination and role inequalities is known as gender egalitarianism.

Question 76

Which of the following is an event that helped spur the inception of the global economy?

A)The opening of Asian markets to foreign investors.
B)Improved race relations worldwide.
C)The industrial revolution.
D)The invention of the Internet.
E)The increasing regulation of economies across the world.

Question 77

In polychronic time, time is viewed as being flexible and multidimensional.

Question 78

Which of the following is a way to become a world citizen?

A)Dress comfortably and casually, so you are ready for any activity.
B)To gain an early upper hand, be very vocal and assertive.
C)Be and think globally.
D)Speak English at all times since it is the world's language.
E)Learn rituals of respect.

Question 79

Which form of technology was exploding when the notion of a "global village" was first developed?

A)Newspapers
B)Telephones
C)Television
D)Cell phones
E)The Internet

Question 80

Power distance refers to how loosely or tightly people are socially bonded.