Deck 1: International Business in an Age of Globalization

Question 1

Strategic motives lead firms to participate in international business when they seek to

A) capitalize on distinctive resources.
B) capabilities developed at home.
C) capitalize on economy.
D) only A and B.

Answer 1

D

Question 2

Which of the following is not considered an economic reason for relocating

A) cheaper labor.
B) lower transportation costs.
C) lower tariffs on products imported.
D) consolidation with retailers.

Answer 2

D

Question 3

Economic motives apply when firms

A) expand only domestically.
B) expand internationally to increase their return.
C) expand internationally only to obtain cheap labor.
D) expand both domestically and internationally only in areas where the economic conditions are favorable.

Answer 3

B

Question 4

Market motives can be

A) only defensive.
B) only offensive.
C) defensive or offensive.
D) none of the above.

Question 5

The main motives for going global are

A) market, economic, and social.
B) market, economic, and strategic.
C) consumer, producer, and government.
D) financial, competitive, and profit oriented.

Question 6

Operationally, international business tends to be

A) more difficult and costly to manage than domestic business.
B) less difficult and cheaper to manage than domestic business.
C) more profitable than domestic business.
D) less risky and dynamic than domestic business.

Question 7

When a diversity exists between countries with regard to currency, inflation, interest rates, accounting practices, cultures, social custom, business practices, laws, government regulations, and political stability, the international firm must adapt. This is called adapting to

A) operational dynamics.
B) social dynamics.
C) environmental dynamics.
D) cultural systems.

Question 8

Firms engage in international operations because they can benefit from

A) cheap labor, cheap resources, and fair market opportunities.
B) competitive labor prices, cheap resources, and enormous market opportunities.
C) lax government regulation, low taxes, and few laws.
D) unsophisticated employees and customers, eager learners, and a few consumer goods.

Question 9

To the consumer, globalization means _________

A) more choices, generally lower prices (but not always, as the example of gas prices shows), and an increasingly blurred national identity for products and services
B) Shortages of most consumer goods
C) Increased production costs as a result of economies of scale
D) Doubling of accessibility, per Moore's Law

Question 10

Some people argue that companies operate in developing countries primarily because of lax environmental regulations. Please choose the statement that best addresses this concern.

A) Companies do this commonly - it saves money.
B) While companies do relocate, the reasons are more often related to market and production, rather than environmental justifications.
C) When companies relocate to countries with lax environmental regulations, it is generally known that most companies actually bring with them the technology that can upgrade the level of environmental care they invest in.
D) This doesn't happen at all.

Question 11

One main globalization challenge is to

A) maintain balance between long term public interest and short run economic consequence.
B) maximize short term economic gain while maintaining the public interest.
C) maximize public safety while maximizing the long run public interest.
D) minimize corporate harm while employing everyone who will work.

Question 12

The United States, when compared with other countries on a globalization index,

A) scores especially high.
B) scores especially low.
C) ranks in the top 10%.
D) ranks just about at the middle of the pack.

Question 13

Coca-Cola brand has the

A) name recognition.
B) highest name recognition in the world.
C) lowest name recognition in the world.
D) highest name recognition in only the U.S.

Question 14

Coca Cola's slogan that resembles a main challenge in international business is

A) think locally and act globally.
B) think regionally and act locally.
C) think globally and act locally.
D) think globally and act globally.

Question 15

The ____________ ranked 59th on the Fortune 500 list for 2012 (up 11 slots from 2011), with roughly US$46.54 billion in revenue and US$8.57 billion in profit.

A) IBM consortium
B) Gary Trudeau Conglomerate
C) Coca-Cola Company
D) Pepsico Combination

Question 16

____________ is the acceleration and extension of interdependence of economic and business activities across national boundaries.

A) Internationalization
B) Globalization
C) Domestication
D) Localization

Question 17

___________ influences the availability and pricing of products and services around the world while often blurring their source and identity.

A) Internationalization
B) Globalization
C) Domestication
D) Localization

Question 18

_______________ lead firms to participate in international business when they seek, for instance, to capitalize on distinctive resources or capabilities developed at home.

A) Economic motives
B) Strategic motives
C) Personal motives
D) Global motives

Question 19

Economic motives apply when

A) firms expand internationally to increase their return through higher revenues and/or lower costs.
B) firms decrease internationally to reduce their return through higher revenues.
C) firms decrease internationally to reduce their return through lower costs.
D) none of the above.

Question 20

A _________ motive is to protect and hold a firm's market power or competitive position in the face of threats from domestic rivalry or changes in government policies.

A) defensive
B) offensive
C) forward
D) backward

Question 21

A(n) __________ motive is to seize market opportunities in foreign countries through trade or investment.

A) defensive
B) offensive
C) forward
D) backward

Question 22

Joan is highly concerned about the unpredictability of environmental or organizational conditions that affect her firm's performance. This is an example of

A) risk.
B) uncertainty.
C) hedging.
D) none of the above

Question 23

Harry is planning to expand abroad. Harry is concerned about the unpredictability of operational and financial outcomes. This is an example of

A) risk.
B) uncertainty.
C) hedging.
D) none of the above

Question 24

A firm that has directly invested abroad and has at least one working affiliate in a foreign country (e.g., a factory, a branch office) over which it maintains effective control, is defined as a

A) multinational enterprise.
B) domestic enterprise.
C) foreign enterprise.
D) none of the above.

Question 25

_______________ occurs when the company invests resources in business activities outside its home country.

A) International trade
B) International investment
C) International services
D) Exchange of goods

Question 26

_______________ include technology and innovation, organizational and managerial skills, and intellectual property rights such as copyrights, trademarks, and brand names.

A) Knowledge and skills
B) Goods
C) Services
D) All of the above

Question 27

Example of services transferred internationally are

A) accounting and management.
B) legal counsel and insurance.
C) banking.
D) all of the above.

Question 28

____________ refers to business activities that involve the transfer of resources, goods, services, knowledge, skills, or information across national boundaries.

A) International business
B) Local Business
C) Domestic Business
D) None of the above

Question 29

Globalization infrastructure is the institutional framework and market efficiency that supports fair and transparent transactions of products and services and streamline flows of commodities, ________, labor, knowledge, and information.

A) economy
B) society
C) culture
D) environment

Question 30

Another complaint against globalization is that it comes at the expense of the ______________.

A) economy
B) society
C) culture
D) environment

Question 31

Coca Cola's slogan, which is a good international business rule to follow, is

A) think locally and act globally.
B) think regionally and act locally.
C) think globally and act locally.
D) think globally and act globally.

Question 32

Piggybacking is a term used to describe a strategic move for firmsto follow the company's major customers abroad.

Question 33

International business is the outgrowth of domestic business.

Question 34

One measure of globalization across various industries involves the industry's international linkages.

Question 35

Motorola has made it clear that it will not pursue the development, design, manufacturing and sales facilities in multiple countries.

Question 36

Variations in international currency exchange usually don't affect the costs of operation or profitability of international firms.

Question 37

International transactions are manifested mainly in international trade and investment.

Question 38

The principles that steer management of corporations are the same worldwide.

Question 39

Firm activities and exchanges that involve the crossing of national boundaries are called international transactions.

Question 40

International business is particularly attractive since the business environment with regard to currency, inflation, interest, accounting, culture, laws, and governmental regulation is very predictable.

Question 41

International entrepreneurs are companies or individuals that actively invest and operate businesses from a home base in a developed economy.

Question 42

Most firms that operate internationally got their start in a domestic market.

Question 43

Market efficiency consists of efficiency of international capital markets or foreign exchange markets.

Question 44

Components of institutional framework consist of unilateral agreements, investment and service.

Question 45

Economic motives apply when firms expand internationally to increase their profit through higher revenues and/or lower costs.

Question 46

When firms want to increase their market share, or to address supply or distribution issues in other countries, these are strategic motivation issues.

Question 47

International business is only seen as an extension of domestic business.

Question 48

Presence in multiple international markets provides a measure of diversification, which mitigates risk.

Question 49

Firms like Coca-Cola have not established production facilities in China due to the high cost of regulation requirements.

Question 50

Firms may benefit from vertical integration involving different countries.

Question 51

Strategic motives may lead firms to participate in international business when they are seen to capitalize on distinctive resources.

Question 52

Low-wage Mexican labor has brought more than 2,000 plants near the U.S.-Mexico border.

Question 53

One prime strategic reason firms go global is to gain a foothold against a weaker global competitor.

Question 54

Economic motives apply when firms expand internationally to increase their return through higher revenues and/or lower costs.

Question 55

Mary Kay has opened up customer 'learning centers' as a substitute for direct door-to-door marketing and sales.

Question 56

Foreign auto makers such as French conglomerate Peugeot-Citroen have established operations in China.

Question 57

When firms desire to increase their market share, or to address supply or distribution issues in other countries, we can attribute the international motivation to strategic issues.

Question 58

One prime economic reason firms go global is to secure cheaper supplies or raw material.

Question 59

When firms go global to increase their return through higher revenues or lower costs, we can attribute this motivation to economic motives.

Question 60

China's strong culture and close-knit family units helped make the country the world's biggest mass-marketing strategy.

Question 61

As China became an active area for firms to enter, Amway, Avon, and Mary Kay entered quickly in 2000.

Question 62

Market motives can be offensive or defensive.

Question 63

Presence in multiple international markets provides a measure of diversification, which lowers risk.