Deck 11: Global and International Issues

Question 1

Before entering international markets, firms should do research to try and diminish the risk of doing business in new markets.

Answer 1

True

Question 2

While multinational corporations face almost limitless social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive opportunities and threats, the number and complexity of these factors do not dramatically increase with the number of products produced and the number of geographic areas served.

Answer 2

False

Question 3

More time and effort are required to identify and evaluate external trends and events in domestic corporations than in multinational ones.

Answer 3

False

Question 4

With the rise in world commerce, government regulatory bodies are no longer able to closely monitor foreign business practices.

Question 5

The social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive opportunities and threats that face a multinational corporation are almost limitless.

Question 6

Although growth in revenues and profits is a common expectation of shareholders, it is not a measure of organizational success.

Question 7

To see and appreciate the world from the perspective of others has become a matter of survival for business.

Question 8

It is possible to obtain insurance from the U.S. government 's OPIC to eliminate all risks associated with doing business internationally.

Question 9

Geographic distance and cultural differences are two of the factors that can make communication between domestic headquarters and overseas operations difficult.

Question 10

Perhaps the greatest advantage of international operations to a firm is the ability to gain new customers for its products and services, thus increasing revenues.

Question 11

Mass communication and high technology have led to highly individualized and distinct patterns of consumption in diverse cultures worldwide.

Question 12

In today's global climate, many companies may find it difficult to survive by relying solely on domestic markets.

Question 13

The strategic-management process is more complex for international firms due to more variables and relationships.

Question 14

The strategic-management process is conceptually different for multinational firms than for purely domestic firms.

Question 15

It is an exaggeration to say that in an industry that is global, the riskiest possible posture is to remain a domestic competitor.

Question 16

One of the dangers of remaining a local competitor is that more aggressive companies will use their global growth to capture economies of scale and learning.

Question 17

Strategists in multinational corporations are often confronted with the need to be globally competitive and nationally responsive at the same time.

Question 18

Trade barriers are one of the unique and diverse risks that face multinational corporations.

Question 19

Organizations that conduct business operations across national borders are called international firms or multinational corporations.

Question 20

As long as the price and quality of a firm's products and services are competitive on a local basis, it has nothing to worry about.

Question 21

A primary reason why most domestic firms are engaging in global operations is that growth in demand for goods and services outside the USA is considerably higher than inside.

Question 22

One aspect of the global challenge faced by U.S. business involves the complications of having to deal with two or more monetary systems.

Question 23

Keeping informed about the number and the nature of competitors is easier when doing business internationally.

Question 24

In the three Nordic countries of Denmark, Sweden, and Finland about 70 percent of all employees are in unions.

Question 25

Although a firm's power and prestige in domestic markets may be significantly enhanced when the firm competes globally, this rarely translates into improved negotiating power among creditors, suppliers, or distributors.

Question 26

Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people.

Question 27

Though China has more than 1.3 billion residents, the middle class segment that is able to buy goods and services is rapidly shrinking.

Question 28

Weaknesses of competitors in foreign lands are often underestimated, and strengths are often overestimated.

Question 29

Shifts in the nature and location of production systems, especially to China and India, are reducing the response time to changing market conditions.

Question 30

The availability, depth, and reliability of economic and marketing information in different countries vary extensively.

Question 31

Protectionism refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people.

Question 32

Many countries became less protectionist during the recent global economic recession.

Question 33

Firms are often motivated to initiate international operations because competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.

Question 34

Labor markets have become steadily more international with more and more countries around the world welcoming foreign investment and capital.

Question 35

Investors are now looking closely at Africa in the wake of low interest rates and slow growth elsewhere on the planet.

Question 36

The drive to improve the efficiency of global business operations is leading to lesser functional specialization.

Question 37

Foreign banks currently operate and compete in most parts of the United States.

Question 38

American firms that seem insulated from foreign competition today may be vulnerable tomorrow.

Question 39

A potential advantage to initiating, continuing, or expanding international operations is that foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

Question 40

Brazil offers skilled labor and technology, while Germany offers abundant natural resources and rapidly developing markets.

Question 41

In China, one should eat heartily to demonstrate enjoyment of the food.

Question 42

In socialist countries such as France or Belgium, the only grounds for immediate dismissal from work is a criminal offense.

Question 43

A global strategy means considering individual countries distinctly, one at a time, when designing, producing, and marketing products.

Question 44

The need to amortize massive R&D investments over many markets is a major reason why the aircraft manufacturing industry became global.

Question 45

The smile is one form of communication that works the same worldwide.

Question 46

In China, business relations revolve around guanxi, or personal relations.

Question 47

In the United States, an amicable relationship is often mandatory before conducting business.

Question 48

While there are a few U.S. industries that are not yet greatly challenged by foreign competitors, many products and components within these industries too are now manufactured in foreign countries.

Question 49

Joint ventures and partnerships between domestic and foreign firms are becoming the exception rather than the rule.

Question 50

Time spent with the family and the quality of relationships are more important in some cultures than the personal achievement and accomplishments espoused by the traditional U.S. manager.

Question 51

Foreign revenue as a percentage of total company revenues is approaching 20 percent for Colgate-Palmolive.

Question 52

In Mexico, business associates usually entertain each other at their homes.

Question 53

Punctuality is generally revered in all cultures of the world.

Question 54

Europeans are especially motivated by pay-for-performance, commission salaries, and objective measurement and reward systems.

Question 55

An important business activity in Japan is entertaining because it strengthens Wa.

Question 56

The understanding of Asian cultures is a strength U.S. firms have in competing with Pacific Rim firms.

Question 57

The U.S. furniture manufacturing industry is not yet greatly challenged by foreign competitors.

Question 58

Mexican workers expect and desire a work environment in which self-expression and initiative are encouraged.

Question 59

Since the 1980s, most countries including the USA have been steadily lowering their tax rates.

Question 60

Exactly 70 percent of the world's population lives outside of the USA.

Question 61

In an industry that is, or is rapidly becoming global, the riskiest possible posture is to

A) become a global competitor.
B) remain a domestic competitor.
C) remain a global competitor.
D) expand beyond the role of domestic competitor.
E) none of the above

Question 62

Mass communication and high technology have ________ in diverse cultures worldwide.

A) created similar patterns of consumption
B) resulted in highly individualized patterns of consumption
C) rendered patterns of consumption identical
D) had little to no effect on patterns of consumption
E) ignored patterns of consumption

Question 63

Strengths of competitors in foreign lands are often ________, and weaknesses are often ________.

A) overestimated; overestimated
B) overestimated; underestimated
C) underestimated; underestimated
D) underestimated; overestimated
E) none of the above

Question 64

The ________ opportunities and threats that face a multinational corporation are almost limitless.

A) social
B) cultural
C) environmental
D) political
E) all of the above

Question 65

________ can enable firms to learn the technology, culture, and business practices of other people and to make contacts with potential customers, suppliers, creditors, and distributors in foreign countries.

A) Economies of scale
B) Joint ventures
C) Low-cost production facilities
D) Reduced tariffs
E) Domestic operations

Question 66

Most economists argue that protectionism ________ the world economy because it ________ trade among countries.

A) helps; inhibits
B) helps; encourages
C) harms; inhibits
D) harms; encourages
E) doesn't impact; doesn't affect

Question 67

Multinational corporations face unique and diverse risks, which include all of the following EXCEPT

A) favorable foreign court interpretations of contracts and agreements.
B) currency losses through exchange rate fluctuations.
C) social/political disturbances.
D) import/export restrictions.
E) tariffs.

Question 68

The U.S. government's OPIC

A) offers insurance to offset some risks of doing business internationally.
B) provides insurance to eliminate all of the risks of doing business internationally.
C) gives informational seminars about the risks associated with doing business internationally.
D) requires that paperwork be filed by U.S. companies desiring to do business internationally.
E) discourages foreign companies from doing business in the United States.

Question 69

Which of the following is a potential advantage of conducting international operations?

A) Competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.
B) Dealing with two or more monetary systems can complicate international business operations.
C) Differing language, culture, and value systems can make communication difficult.
D) Gaining an understanding of regional organizations is difficult but is often required in doing business internationally.
E) All of the above

Question 70

The various opportunities and threats that face multinational corporations are almost limitless, and the number and complexity of these factors ________ the number of products and the number of geographic areas served.

A) decrease dramatically with
B) drastically increase with
C) drop slightly with
D) are constant despite
E) are unaffected by

Question 71

A firm's power and prestige in domestic markets may be significantly enhanced if the firm competes globally

A) which can translate into improved negotiating power among important groups.
B) though this rarely results in a practical advantage.
C) but this can hurt its bargaining power with suppliers and distributors.
D) yet this does nothing to improve its position with creditors.
E) which can alienate the firm from its domestic creditors, suppliers, and distributors.

Question 72

Communication between domestic headquarters and overseas operations is often made difficult by

A) geographic distance.
B) cultural differences.
C) variations in business practices.
D) national differences.
E) all of the above

Question 73

Which of the following statements is NOT true?

A) America's economy is becoming much less American.
B) A world economy and monetary system are emerging.
C) Corporations in every corner of the globe are taking advantage of the opportunity to obtain customers globally.
D) Markets are shifting slowly and in many cases diverging in tastes, trends, and prices.
E) Innovative transport systems are accelerating the transfer of technology.

Question 74

The average level of union membership across the whole of the European Union, weighted by the numbers employed in the different member states, is ________ percent compared to about ________ percent in the USA.

A) 11; 23
B) 15; 44
C) 23; 11
D) 51; 26
E) 70; 30

Question 75

In 2012, ________ African countries held democratic elections.

A) 3
B) 13
C) 23
D) 31
E) 43

Question 76

Organizations that conduct business operations across national borders are called

A) protectionists.
B) national firms.
C) multinational corporations.
D) domestic companies.
E) all of the above.

Question 77

The strategic-management process for multinational firms is ________ for purely domestic firms, and the process is ________ for international firms.

A) conceptually the same as; more simple
B) conceptually the same as; more complex
C) conceptually different than; more simple
D) conceptually different than; more complex
E) conceptually the same; less important

Question 78

All of the following are potential disadvantages to initiating, continuing, or expanding business across national borders EXCEPT

A) firms confront different social, cultural, and political forces when doing business internationally, which can make communication in the firm difficult.
B) keeping informed about the number and nature of competitors is more difficult when doing business internationally.
C) foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.
D) dealing with two or more monetary systems can complicate international business operations.
E) foreign operations could be seized by nationalistic forces.

Question 79

________ countries are market leaders in labor-intensive industries and ________ offers abundant natural resources and rapidly developing markets.

A) East Asian; Brazil
B) South American; Germany
C) East Asian; Germany
D) South American; Brazil
E) European; Japan

Question 80

All of the following are potential advantages to initiating, continuing, and/or expanding international operations EXCEPT

A) firms can gain new customers for their products.
B) foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.
C) foreign operations can allow firms to establish low-cost production facilities in locations close to raw materials and/or cheap labor.
D) foreign operations could be seized by nationalistic factions.
E) foreign operations may result in reduced tariffs, lower taxes, and favorable political treatment.