Deck 3: Global Dimensions of Management

Question 1

Insourcing is the process of creating jobs through foreign direct investment.

Answer 1

True

Question 2

Global sourcing is the process of purchasing materials,component parts,or business services from different countries around the world.

Answer 2

True

Question 3

Organizations that have operations and business interests in more than one country are known as international businesses.

Answer 3

True

Question 4

A foreign direct investment is building,buying,or buying part ownership of a business in another country.

Question 5

Because the growth of export industries creates jobs,governments willingly give advice and assistance to businesses trying to grow their export capabilities.

Question 6

Businesses go international to gain new markets to sell products and to enhance profit potential but not to increase access to raw materials,lower-cost labour,or financial resources.

Question 7

In a joint venture,a foreign firm buys the rights to use another's name and operating methods in its home country.

Question 8

Joint ventures and franchising are direct investment strategies for conducting international business.

Question 9

Businesses expand their operations to the international marketplace in order to increase profits and gain access to customers,suppliers,capital,and labour.

Question 10

A franchise is a type of business in which a local firm pays a foreign firm a fee for the rights to make and/or sell the foreign firm' products.

Question 11

Global sourcing,exporting/importing,and licensing/franchising are market entry strategies for conducting international business.

Question 12

Importing enables a company to enter the international market by selling locally-made products in foreign markets.

Question 13

The process of growing independence among the various components of the global economy is referred to as globalization.

Question 14

Global management involves managing businesses in more than one country.

Question 15

A licensing agreement is a form of international business through which a foreign company pays a fee for the rights to manufacture or sell another firm's products in a specified region.

Question 16

Companies like IBM,Boeing,and Nike all still manufacture their products solely in the US.

Question 17

A global economy means that resources,markets,and competition are worldwide in scope.

Question 18

Global businesses conduct for-profit transaction of goods and services across national boundaries.

Question 19

Direct investment strategies require major capital commitments but create rights of ownership and control over foreign operations.

Question 20

Global managers keep informed about international developments and are able to understand and relate to people with diverse cultural backgrounds.

Question 21

Tariffs are taxes governments levy on imports from abroad.

Question 22

Protectionism is used by the members of the European Union to restrict business and government procurement of goods and services from foreign competition.

Question 23

The World Trade organization uses tariffs and quotas to protect favoured nations from foreign competition.

Question 24

The Nations that make up NAFTA facilitate cross-border trade and business development by sharing a common currency.

Question 25

The European Union is a group of European countries that have common trade and customs laws that facilitate the free flow of workers,good and services,and investments across national boundaries.

Question 26

The World Trade Organization WTO)is a global institution that was established to promote free trade and open markets around the world.

Question 27

A foreign subsidiary is a local operation that is completely owned and controlled by a foreign firm.

Question 28

Transnational corporations view the entire world as their domain for acquiring resources,locating production facilities,and marketing goods and services.

Question 29

The European Union is an alliance of European countries that agree to promote mutual economic growth by removing barriers that previously limited cross-border trade and business development.

Question 30

Any company doing business abroad is not necessarily required to abide by local laws,but by their home country laws.

Question 31

Most global firms use a planning technique called a political risk analysis to forecast political disruptions that can threaten foreign investments.

Question 32

Transnational corporations have a domestic perspective yet operate across borders and make multinational decisions.

Question 33

The most favoured nation status allows a nation to choose one other nation to get special treatment regarding quotas and tariffs.

Question 34

Political risk is the potential loss in value of a foreign investment due to instability and political changes in the host country.

Question 35

The expected benefits of a common European currency include higher productivity,lower inflation rates,and steady growth in the member countries.

Question 36

APEC was established to promote free trade and investment in European countries.

Question 37

The North American Free Trade Agreement NAFTA)largely frees the flow of goods and services,workers,and investments between the U.S.and Canada,but limits them between the United States and Mexico.

Question 38

SADC links 14 countries of Southeast Asia in trade and economic development efforts.

Question 39

The Asia-Pacific Economic Forum consists of 27 countries that agree to support economic growth and development by removing trade barriers.

Question 40

A global corporation or multinational corporation is a business firm with extensive international operations in more than one foreign country.

Question 41

Corruption involves engaging in illegal practices to further one's business interests.

Question 42

Sustainable development places greater importance on the needs of the present generation than on the needs of future generations.

Question 43

Multinational corporations are often criticized at home for: diverting labour-intensive jobs from the domestic labour force to foreign labour markets,diverting capital investments away from the domestic market,and encouraging corrupt practices in their foreign subsidiaries.

Question 44

Transnational corporations seek integration of their operations,operating across borders without home-based prejudices and making major decisions from a global perspective.

Question 45

Self-awareness and reasonable sensitivity are the basic building blocks of cultural intelligence.

Question 46

When large multinationals gain disproportionately from the forces of globalization,while smaller firms and countries do not,there occurs what is referred to as a "globalization gap."

Question 47

Culture shock is the tendency to view one's culture as superior to other cultures.

Question 48

Culture shock is the confusion and discomfort that a person goes through in adjusting to a new culture.

Question 49

Citizens of many nations are putting increased pressure on global corporations to protect the natural environment,pursue safe industrial practices,and pursue sustainable development.

Question 50

In the United States,the Foreign Corrupt Practices Act makes it illegal for U.S.firms to engage in U.S.corrupt practices overseas.

Question 51

People who have a high degree of cultural intelligence are likely to be more successful as international managers.

Question 52

Sweatshops employ workers at very low wages and often in poor working conditions.

Question 53

The use of child labour has been effectively eliminated as an ethical issue that faces managers of MNCs.

Question 54

Host-country complaints about multinational corporations MNCs)include foreign exchange restrictions,pressure to buy raw materials at inflated prices,failure to protect intellectual property,and failure to uphold contracts.

Question 55

Technology transfer,capital development,increased employment opportunities,and the development of local resources benefits that host countries can obtain from relationships with multinational corporations.

Question 56

The Foreign Corrupt Practices Act fails to recognize the reality of business practices and values of other nations.

Question 57

High-context cultures are those in which most communication takes place via the spoken or written word.Low-context cultures are those in much communication takes place through nonverbal and situational cues in addition to the written or spoken word.

Question 58

The silent language of culture refers to the common practices and beliefs that are similar across different cultures.

Question 59

Ethnocentrism is the confusion or discomfort that someone may experience when in an unfamiliar culture.

Question 60

Culture is the shared set of beliefs,values,and patterns of behaviour common to a group of people.

Question 61

The masculinity-femininity dimension of Hofstede's study of national cultures refers to the degree to which men and women differ in the way they deal with risk,change,and dealing with situational uncertainty.

Question 62

According to Hofstede's framework for comparing national cultures,time orientation refers to the degree to which a society focuses on short-term considerations versus planning for the future.

Question 63

The GLOBE Study found that cultural practices were less similar within a cluster than across clusters.

Question 64

In terms of proxemics,Japanese culture places little emphasis on how space is used or managed.

Question 65

Margaret Shaffer's research indicates that the Big Five traits are not effective predictors of expatriate effectiveness.

Question 66

The power dimension in Hofstede's framework is defined as the degree to which a society encourages individual autonomy to make decisions versus depending on others for direction.

Question 67

The importance of Hofstede's research lies in drawing attention to the impact that differences in national culture have on international management.

Question 68

The five cultural dimensions identified by Hofstede are power distance,uncertainty avoidance,individualism-collectivism,masculinity-femininity,and time orientation.

Question 69

In monochronic cultures time is used to accomplish many different things at once.

Question 70

Hofstede's research supports his conclusion that management practices are universal.

Question 71

The Japanese approach to management emphasizes rapid advancement,individual decision making,and long-term employment.

Question 72

In polychronic cultures people tend to do one thing at a time.

Question 73

The study of how management practices differ among countries and cultures is called comparative management.

Question 74

According to Hofstede's research,managers in the United States are less democratic and place less emphasis on participation compared to managers in Sweden and Israel.

Question 75

Comparative management demonstrates that management practices are the same across countries and cultures.

Question 76

In low-context cultures,contracts tend to be viewed as binding agreements;in high-context cultures,written contracts continue to emerge and are modified as the parties work together.

Question 77

In Hofstede's framework for comparing national cultures,individualism-collectivism concerns the degree to which a society values assertiveness and material concerns versus greater concerns for human relationships and feelings.

Question 78

In Hofstede's framework for comparing national cultures,uncertainty avoidance refers to the degree to which a society is uncomfortable with risk,change,and situational uncertainties.

Question 79

Geert Hofstede concludes that United States management theories can be applied universally overseas because they have been proven to be successful in the United States.

Question 80

The ecological fallacy assumes that a generalized cultural value applies equally well to all members of the culture.