Deck 4: Managing in a Global Environment

Question 1

A(n) ________ attitude is the view that employees in the host country know the best practices for running their operations.

A) ethnocentric
B) polycentric
C) geocentric
D) regiocentric

Answer 1

B

Question 2

A manager who wishes to be successful in international business should avoid a(n) ________ attitude.

A) multicultural
B) multiracial
C) ethnocentric
D) geocentric

Answer 2

C

Question 3

Employers in the global marketplace look for which one of the following?

A) a college degree in multicultural awareness
B) critical thinking skills
C) multi-lingual skills
D) respect for differences

Answer 3

D

Question 4

While talking with her advisor at the university, Jane deduces that she has a(n) ________ attitude, as she has never traveled abroad and relates well only to people from her home country.

A) regiocentric
B) polycentric
C) ethnocentric
D) geocentric

Question 5

Managers with an ethnocentric attitude do not trust foreign employees with key decisions or technology.

Question 6

The advantages of operating globally include ________.

A) higher profits
B) higher employee satisfaction
C) higher stock trading prices
D) lower employee turnover

Question 7

In today's global environment, managers must have a(n) ________ attitude to be successful.

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

Question 8

An ethnocentric attitude ________.

A) prompts managers to have a global view and look for the best approaches and people regardless of origin
B) is the belief that the home country has the best work approaches and practices
C) is the view that employees in the host country know the best work approaches and practices
D) gives a manager a much broader understanding of what it takes to manage in a global environment

Question 9

Bill Sanderson, a manager in a manufacturing firm in New York has a tendency to view the world only through his U.S.-based perspective. What can be deduced about his attitude?

A) He has an elitist attitude.
B) He has a polycentric attitude.
C) He has a parochialistic attitude.
D) He has a geocentric attitude.

Question 10

Managers with a(n) ________ attitude view every foreign operation as different and hard to understand.

A) geocentric
B) polycentric
C) ethnocentric
D) regiocentric

Question 11

An ethnocentric attitude stems from ________.

A) nationalism
B) parochialism
C) polycentrism
D) geocentrism

Question 12

Only speaking one language is one sign that a nation suffers from ________.

A) parochialism
B) ethnocentrism
C) polycentrism
D) geocentrism

Question 13

A(n) ________ attitude is characterized by parochialism.

A) geocentric
B) acculturated
C) multilinguistic
D) ethnocentric

Question 14

Americans tend to suffer from parochialism.

Question 15

Samanex Corporation maintains production facilities in 13 different countries on three continents. Each facility is managed by a native of the country where it is located. This practice is indicative of a(n) ________ attitude.

A) ethnocentric
B) geocentric
C) polycentric
D) multicentric

Question 16

American business students may be at a disadvantage because ________.

A) competition from foreign-born students makes it more difficult to be accepted at the better universities
B) scholarships are being awarded to undocumented students
C) many colleges and universities no longer require courses in foreign language
D) tuition costs have risen beyond the reach of most high school graduates

Question 17

Melanie joined an international student association in order to better understand the views of students from other countries. She is trying to become more ________ in her attitude.

A) parochialistic
B) polycentric
C) ethnocentric
D) geocentric

Question 18

Managers with a polycentric attitude tend to view every foreign operation as different and hard to understand.

Question 19

Parochialism is a tendency to ________.

A) think highly of the foreign country in which the organization is doing business
B) focus on best approaches and people from around the globe
C) view the world solely through one's own eyes and perspectives
D) let employees in the host country figure out how best to do things

Question 20

The polycentric attitude is a world-oriented view focusing on using the best approaches and people from around the globe.

Question 21

The Association of Southeast Asian Nations is a trading alliance of ________.

A) eight Southeast Asian nations and Japan
B) eight Southeast Asian nations
C) ten Southeast Asian nations
D) ten Southeast Asian nations and China

Question 22

The United States belongs to a trade alliance known as CAFTA, which stands for ________.

A) Canadian American Free Trade Alliance
B) Columbian Argentine Free Trade Alliance
C) China Australia Free Trade Agreement
D) Central America Free Trade Agreement

Question 23

The World Trade Organization ________.

A) advises developing countries on issues of trade barriers
B) promotes long-term economic development and poverty reduction
C) exists to help countries conduct trade through a system of rules
D) facilitates trade among third-world countries and developed nations

Question 24

Heinrich, a purchaser for an optics company in Germany, must place an order for materials for use in its production process. He is most likely to order from a company ________.

A) within the European Union because there would be no barriers to trade
B) in the United States because we have the same quality as any European company
C) in Switzerland because the Swiss are known for their fine detail work
D) in Asia because labor is cheaper there

Question 25

Critics of the WTO claim that ________.

A) global trade destroys jobs and the natural environment
B) it favors third-world countries over developed countries
C) shifting jobs to developing countries harms the economies of member nations
D) has too little power to be effective

Question 26

One advantage of NAFTA has been ________.

A) less illegal immigration into the U.S.
B) lower unemployment in the U.S.
C) a higher standard of living in Mexico
D) lower costs for consumers in the United States

Question 27

The North American Free Trade Agreement includes ________.

A) Mexico, Canada, and the United States
B) Canada, Mexico, the United States, and Costa Rica
C) the United States, Canada, Mexico, and Honduras
D) Canada, Mexico, Panama, and the United Sates

Question 28

The ________ is a group of five closely associated institutions, all owned by its member countries, that provides vital financial and technical assistance to developing countries around the world.

A) International Chamber of Commerce
B) World Bank Group
C) Organization for Economic Cooperation and Development
D) World Economic Forum

Question 29

List and discuss the three attitudes managers might have toward international business.

Question 30

The forerunner of the Organization for Economic Cooperation and Development was the ________ that was formed in 1947 to administer American and Canadian aid under the Marshall Plan for the reconstruction of Europe after World War II.

A) Organization of European States
B) Organizational Council of Europe
C) Organization for European Economic Cooperation
D) Organization for European Investment

Question 31

Define parochialism. Discuss why parochialism is a problem for U.S. managers and discuss reasons why it is important to overcome parochialism in today's business environment.

Question 32

The purpose of the World Trade Organization is to ________.

A) facilitate trade among member nations through a system of rules
B) recommend legislation to lessen the advantages of more advanced nations relative to developing countries
C) manage foreign currency exchanges to alleviate the effects of inflation
D) enforce quotas and tariffs imposed by member nations

Question 33

The ________ was formed by twelve member countries with the primary motivation of reasserting the region's economic position against the United States and Japan.

A) African Union
B) European Union
C) Central America Free Trade Agreement
D) Association of South-East Asian Nations

Question 34

The International Monetary Fund is an organization that ________.

A) rules on disputes over tariffs and subsidies
B) helps countries conduct trade through a system of rules
C) provides technical advice to developing countries
D) promotes international monetary cooperation

Question 35

The OECD was formed to ________.

A) settle disputes arising from trade between developed and third-world countries
B) help member countries achieve sustainable economic growth
C) raise the standard of living in South American countries
D) control interest rates and inflation in member countries

Question 36

The World Trade Organization evolved from which of the following?

A) Mercosur
B) General Agreement on Tariffs and Trade
C) Truman Doctrine
D) Marshall Plan

Question 37

The single European Union currency is called the ________.

A) deutchmark
B) krona
C) pound
D) euro

Question 38

One of the more recent trade alliances, which came into existence in 2002, is the ________ made up of 54 nations.

A) East African Community
B) African Union
C) South Asian Association for Regional Cooperation
D) Trans-Pacific Partnership

Question 39

The World Trade Organization was formed in the year ________.

A) 1995
B) 1967
C) 1971
D) 1983

Question 40

The purpose of the OECD is ________.

A) to settle disputes arising from trade between developed and third-world countries
B) to help member countries achieve sustainable economic growth
C) to raise the standard of living in South American countries
D) to control interest rates and inflation in member countries

Question 41

One case currently before the WTO involves ________.

A) the hyperinflation experienced by some small African nations that limits their ability to trade with developed countries
B) copyright infringement-the use of intellectual materials created in the United States by mass producers in Asia without payment of royalties to the creators
C) China's export limits of rare earth metals that are necessary for the production of high-tech devices
D) the sale of pirated software by terrorist organizations

Question 42

Explain some of the benefits and challenges faced by American businesses because of America's membership in NAFTA.

Question 43

What is the purpose of the WTO? Give an example of the type of issue that might come before this organization.

Question 44

What is the World Bank Group and what does it do?

Question 45

What is the International Monetary Fund? What does it do?

Question 46

Which one of the following would be considered a multinational corporation?

A) Westernet buys electricity from Canada and provides it to customers in Washington State.
B) Sherri's Shipping transports manufactured goods between the U.S. and Asia, maintaining offices in both countries.
C) Willy's Websites maintains Internet sites for clients the world over from his offices in New Jersey.
D) Betty's Bonnets makes women's hats in Jamaica and sells them to retailers in seven Caribbean countries.

Question 47

The United States, Canada, Mexico, and Honduras are parties to the North American Free Trade Association.

Question 48

Cypress Exports would like to establish retail outlets in Mongrovia, a quasi-democratic African country with a growing middle class. But the national and local officials all want "gratuities" to process the applications for permits. Cypress Exports should appeal to ________.

A) the World Trade Organization
B) the International Monetary Fund
C) the African Union
D) the Organization for Economic Cooperation and Development

Question 49

Which of the following is a feature of a multidomestic corporation?

A) all decisions are made in the home country
B) reflects an ethnocentric attitude
C) eliminates artificial geographic borders
D) has a decentralized management

Question 50

Solidarity in the European Union is being undermined by protectionist pressures in some member countries.

Question 51

Explain why countries would choose to participate in a regional trading alliance.

Question 52

Multidomestic corporations reflect the ________.

A) ethnocentric attitude
B) polycentric attitude
C) geocentric attitude
D) xenophobic attitude

Question 53

The United States, Canada, and Mexico are parties to the North American Free Trade Association.

Question 54

Multidomestic corporations ________.

A) maintain operations in multiple countries, but do not allow managers in each country to make their own decisions
B) reflect ethnocentric attitudes
C) decentralize management and other decisions to the local country
D) attempt to replicate their domestic successes by managing foreign operations from the home country

Question 55

The ________ decentralizes its management and other decisions to the local country.

A) multidomestic corporation
B) global company
C) transnational organization
D) borderless organization

Question 56

According to the text, which of the following is a typical definition of a multinational corporation?

A) It is a company that maintains operations in multiple countries.
B) It is a company that maintains franchises in multiple countries.
C) It is a company that has multiple home bases and manufacturing plants.
D) It is a company that pays corporate taxes in at least two countries.

Question 57

Mercosur is a trading group made up of ten South American countries.

Question 58

Which one of the following represents the basic difference between multidomestic corporations and global companies?

A) Multidomestic corporations typically do business with more countries than global companies.
B) Multidomestic corporations are run by global companies but must be owned by a local, national company.
C) Multidomestic corporations decentralize management to the local country, while global companies centralize management in the home country.
D) Multidomestic corporations reflect an ethnocentric attitude, while global companies reflect a polycentric attitude.

Question 59

When the original members formed the European Union in 1992, the primary motivation was to reassert the region's economic position against the United States and Japan.

Question 60

Which of the following is a multinational corporation that tailors marketing strategies to the host country's unique characteristics?

A) borderless organization
B) global company
C) multidomestic corporation
D) transnational organization

Question 61

Granval manages a production facility in Aughmenistan for a multinational company headquartered in Paris. His Paris bosses emphasize the importance of operating his plant efficiently so as to conserve scarce resources. It is likely Granval's employer is

A) polycentric company
B) global company
C) transnational company
D) multidomestic corporation

Question 62

Theodore and James decide to enter into an agreement with a firm in Europe allowing them to use the rights to their software, brand name, and software specifications in return for a lump sum payment. The firm is a service organization that plans to use the software to assist its customers. Their agreement is a(n) ________.

A) export agreement
B) licensing agreement
C) franchise agreement
D) import agreement

Question 63

Harley Davidson makes motorcycles but in its retail stores it also sells clothing, motorcycle accessories, jewelry, and many related products carrying the Harley trademarks made by other companies. Harley Davidson is engaging in ________.

A) global sourcing
B) exporting
C) franchising
D) licensing

Question 64

If Shana's company decides to open another company in France but centralizes its management in the United States, it would be considered a ________.

A) transnational corporation
B) global company
C) borderless organization
D) multidomestic corporation

Question 65

Nathan uses ethnic craftsmen to make high quality oak furniture. If he decides to offer his furniture for sale in other countries, he will be engaging in ________.

A) importing
B) exporting
C) licensing
D) franchising

Question 66

A corporation drops its organizational structure based on countries and reorganizes into industry groups. This is an example of the company becoming a(n) ________.

A) ethnocentric company
B) polycentric organization
C) borderless organization
D) global company

Question 67

Marco works for a multinational corporation as a plant manager but must receive approval from the home office for any management changes to production processes. Marco most likely works for a ________.

A) global company
B) multidomestic corporation
C) polycentric company
D) transnational company

Question 68

As the international operations of their firm continues to grow, Theodore and James have realized that decentralized management using foreign nationals to run operations in the host countries works best. Their firm has developed into a ________ organization.

A) transnational
B) multidomestic
C) borderless
D) global

Question 69

A domestic firm and a foreign firm sharing the cost of developing new products or building production facilities in a foreign country constitute a ________.

A) franchising agreement
B) strategic alliance
C) foreign subsidiary
D) joint venture

Question 70

Which one of the following types of global organizations reflects the geocentric attitude?

A) multidomestic corporation
B) transnational organization
C) global company
D) regional organization

Question 71

In 1984 Toyota and General Motors formed a company called NUMMI to build cars carrying both the General Motors and Toyota brands. NUMMI is an example of a(n) ________.

A) equity strategic alliance
B) joint venture
C) global venture
D) nonequity strategic alliance

Question 72

Melanie had been buying raw materials locally but she is being underpriced by her competitors. She thinks there might be lower-cost materials elsewhere. What advice would you give Melanie?

A) She should engage in global sourcing.
B) She should engage in licensing.
C) She should engage in franchising.
D) She should develop strategic alliances with foreign companies.

Question 73

Transnational organizations are also known as ________.

A) ethnocentric organizations
B) polycentric organizations
C) borderless organizations
D) multidomestic organizations

Question 74

Adam has been hired by an organization that has a partnership with a foreign company. Both the partners share resources and knowledge while developing new products. Adam's organization has formed a ________.

A) licensing company
B) franchising company
C) strategic alliance
D) foreign subsidiary

Question 75

A global company reflects the ________.

A) pancentric attitude
B) ethnocentric attitude
C) geocentric attitude
D) polycentric attitude

Question 76

Melanie would like to become a part of the global retail community. Which of the following options should Melanie consider as her first step?

A) She should engage in global sourcing.
B) She should engage in licensing.
C) She should engage in franchising.
D) She should develop strategic alliances with foreign companies.

Question 77

If Marla's company changed its organizational structure from one based on country to one based on industry groups, it would best be considered a ________.

A) borderless organization
B) foreign subsidiary
C) global company
D) multidomestic corporation

Question 78

Theodore and James decide to enter into an agreement with a firm in Europe allowing them to use their software, brand name, and business methods in return for a lump sum payment and a percentage of sales. The European firm is a service organization that plans to use the software to serve its customers. Their agreement is a(n) ________.

A) export agreement
B) licensing agreement
C) franchise agreement
D) import agreement

Question 79

Natalya operates a retail store in Romania. She buys consumer electronics from vendors in China and Japan to sell in her store. Natalya is engaging in ________,

A) global sourcing
B) licensing
C) importing
D) franchising

Question 80

Joint ventures are a type of ________.

A) license
B) franchise
C) foreign subsidiary
D) strategic alliance