Deck 1: Globalizing Business

Question 1

Global business includes both international (cross-border) activities as well as domestic business activities.

Answer 1

True

Question 2

Possessing intimate knowledge about the formal and informal rules governing competition in various countries is sufficient to succeed globally.

Answer 2

False

Question 3

International premium is a significant pay raise awarded to expatriate employees working abroad.

Answer 3

True

Question 4

Expatriate managers make ideal candidates for top management positions.

Question 5

Expatriate employees face fewer and lower-ranked employment opportunities upon return to the US.

Question 6

The institution- and resource-based views are two core perspectives answering the fundamental question: What determines the success and failure of firms around the globe?

Question 7

Liability of foreignness is the inherent disadvantage experienced by foreign firms in host counties because of their non-native status.

Question 8

The term international business always refers to business activities conducted abroad.

Question 9

A multinational enterprise is a firm that engages in foreign direct investment by directly investing in, controlling, and managing value-added activities in other countries.

Question 10

Due to informal rules such as culture and ethics, some developed economies have a hard time fostering entrepreneurship.

Question 11

Approximately 80 million people worldwide are employed by foreign-owned firms.

Question 12

Expatriate managers are usually paid salaries coinciding with the salaries paid to foreign local managers of similar rank.

Question 13

The terms international business (IB) and global business are synonymous.

Question 14

Formal rules refer to government regulations regarding foreign and domestic firms. In most modern emerging environments, formal rules ensure equal playing field for all companies, regardless of origin.

Question 15

Most opponents of globalization view globalization as a long-run historical evolution since the dawn of human history.

Question 16

The greatest number of opportunities for global businesses is opened at the top of the pyramid, where individuals have the greatest purchasing power.

Question 17

Emerging markets contribute about 25% of global GDP when adjusted for purchasing power parity, PPP.

Question 18

Firms that are able to succeed in difficult, harsh, even hostile foreign environments, established by unfavorable formal and informal rules, possess unique firm-specific resources and capabilities not shared by competitors.

Question 19

The term base of the pyramid represents economies in which individuals make less than $2,000 a year.

Question 20

Most top managers of large firms lack significant global competence.

Question 21

According to the pendulum view, globalization has been perceived both positively and negatively throughout history.

Question 22

Which of the following definitions of the international/global business represents the author s view?

A) A business that engages in international economic activities
B) The action of doing business abroad
C) Business around the globe including international and domestic business activities
D) All of these answers

Question 23

According to the text, most MNEs are ____ the base of the pyramid.

A) Focusing on
B) Ignoring
C) Aware of countless opportunities of
D) Considering FDI in the economies at

Question 24

Many proponents of globalization are nongovernmental organizations (NGOs).

Question 25

Globalization is a relatively new phenomenon triggered by the information revolution of the late 1980s.

Question 26

In order to better compare/contrast costs of living in the various environments GNP/GDP may be adjusted to:

A) PPP (purchasing power parity)
B) Foreign exchange rate
C) Country s inflation rate
D) Five-year national bond appreciation/depreciation

Question 27

The global economy can be viewed as a pyramid. The Triad represents:

A) US, Germany, England
B) US, Western Europe, China
C) Brazil, India, China
D) North America, Western Europe, Japan

Question 28

____ is/are measured as the sum of value added by resident firms, households, and government operating in an economy.

A) Gross national product
B) Gross national income
C) Gross domestic product
D) National reserves

Question 29

In the 1990s, the term emerging economy/market replaced the commonly used term:

A) Fast growing economy/market
B) Developing economy/market
C) Undeveloped economy/market
D) Third world economy/market

Question 30

The firm that engages in foreign direct investment is a:

A) Global firm
B) Multinational enterprise
C) International enterprise
D) Foreign direct investor

Question 31

In addition to their regular compensation, managers working abroad are awarded with

A) Global fringe benefits
B) Foreign pension plan
C) International premium
D) Health insurance

Question 32

Why study global business?

A) In order to increase one s employability
B) In order not to get Bangalored or Shanghaied
C) In order to better understand how to become a sought-after, globe-trotting manager
D) All of these answers

Question 33

Which of the following definitions best defines an expatriate manager?

A) A manager who works outside his or her native country
B) A manager of great expertise
C) An ex-manager rehired for advisory purposes
D) None of these answers

Question 34

The world economy at the beginning of the 21 st century is an approximately $55 trillion economy (GDP calculated at official, nominal exchange rates).

Question 35

In order to answer the question: What determines the success and failures of firms around the globe?, the author introduces which two core perspectives?

A) Capability- and asset-based views
B) Formal- and informal-rule-based views
C) Institution- and resource-based views
D) Ability- and mobility-based views

Question 36

Which of the following is NOT a reason why global business should be studied?

A) Because many ambitious students aspire to join the top ranks of large firms.
B) To acquire hands-on global experience in global business.
C) Because many top rank managers are selected from the pool of expatriate managers
D) In order for one s earning potential to be maximized.

Question 37

Executives, policymakers, and scholars have carefully evaluated the social, political, and environmental costs associated with globalization.

Question 38

Which of the following terms best describes foreign direct investment?

A) Directly investing in, controlling, and managing value-added activities in other countries.
B) Directly investing in, controlling, and managing value-added activities in other markets.
C) Directly investing in shares of multinational enterprise.
D) All of these answers

Question 39

How many individuals are employed by foreign-owned firms throughout the world?

A) About 80 million
B) About 40 million
C) About 18 million
D) About 1 million

Question 40

When an expat employee returns to her or his current employer but the employer does not provide attractive opportunities, she/he often may be hired by a competitor firm. Why?

A) Competitor firms are also interested in globalizing their business.
B) Former expats bring instant expertise and experience.
C) Competing firms will pay a higher premium for expertise.
D) All of these answers

Question 41

What defines the field of global business more than anything else?

A) The focus on firm performance around the globe
B) The focus on ROI of the global venture
C) The focus on maximizing profits while minimizing expenses
D) The focus on global expansion

Question 42

The world economy at the beginning of the 21 st century is an approximately:

A) $10 trillion economy
B) $23 trillion economy
C) $60 trillion economy
D) $72 trillion economy

Question 43

The ____-based view suggests that in order to achieve remarkable success, a firm must possess some very rare and powerful firm-specific resources and capabilities that are the envy of their rivals around the globe.

A) Resource
B) Asset
C) Capability
D) Institution

Question 44

Which of the following is NOT a view on globalization stressed by the author?

A) A new force sweeping through the world in recent times
B) A long-run historical evolution since the dawn of human history
C) A pendulum that swings from one extreme to another from time to time
D) A force empowered by recent political decisions

Question 45

The ____-based view suggests that the formal and informal rules of the game, known as institutions, shed a great deal of light on what is behind firm performance around the globe.

A) Resource
B) Asset
C) Capability
D) Institution

Question 46

Explain in your own words how, according to the author, this book will focus on international business.

Question 47

The global economy may be viewed as a pyramid. The growing number of opportunities at the base of the pyramid highlights the role this bottom tier will play in the years to come. How would you take advantage of this often-ignored level if you were occupying a top management position at a prominent MNE?

Question 48

The pendulum view of globalization is embraced by:

A) Globalization s opponents and skeptics
B) Globalization s proponents and enthusiasts
C) Globalization s realists aware of historical cycles that globalization has gone through
D) Most MNEs and their lobbyists

Question 49

Explain the benefits of gaining international business experience and working as an expat.

Question 50

Explain how the pendulum view attempts to describe globalization as a cyclical phenomenon with many difficulties.

Question 51

More than half of the world GDP growth in recent years comes from ____.

A) The Four Tigers (Hong-Kong, Singapore, South Korea, and Taiwan)
B) Latin America
C) Central and Eastern Europe
D) Emerging economies, such as BRIC (Brazil, Russia, India, and China)

Question 52

Explain how a country s gross domestic product (GDP) is changed after adjusting for purchasing power parity (PPP).

Question 53

Which expression does the author use to describe contemporary globalization?

A) Global localization
B) Total globalization
C) Semiglobalization
D) Global standardization

Question 54

Explain the correlation between the success and failure of global firms and the institution- and resource-based views.