Deck 11: Globalinternational Issues

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

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.

Question 6

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 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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 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

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

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

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

Question 22

Wynn and Las Vegas Sands report their net revenue in Brazil is growing more than triple their U.S. properties.

Question 23

Yum Brands, which owns KFC and Pizza Hut, reported in 2011 that its China division overtook the U.S. in profits generated.

Question 24

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

Question 25

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

Question 26

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

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

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

Question 30

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

Question 31

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

Question 32

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

Question 33

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 34

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 35

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 36

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

Question 37

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

Question 38

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

Question 39

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

Question 40

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 41

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 42

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

Question 43

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

Question 44

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

Question 45

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

Question 46

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

Question 47

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

Question 48

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

Question 49

Punctuality is generally revered in all cultures of the world.

Question 50

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

Question 51

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

Question 52

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

Question 53

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 54

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

Question 55

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

Question 56

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

Question 57

Almost 70 percent of the world's population lives outside of the U.S.

Question 58

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

Question 59

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

Question 60

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

Question 61

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 62

________ 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 63

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 64

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 65

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 66

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; simplistic

Question 67

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 68

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 69

Exports of goods and services from the U.S. were valued at $1.6 trillion in 2009, which accounted for ________ percent of the U.S. gross domestic product.

A) 5
B) 11
C) 25
D) 31
E) 51

Question 70

________ is the fastest-growing market for pocket book maker Coach and the second-largest market for Dell.

A) America
B) China
C) Brazil
D) Japan
E) Mexico

Question 71

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) made too much of; ignored

Question 72

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 73

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 74

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 75

________ 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 76

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 77

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 78

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.

Question 79

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 American companies desiring to do business internationally.
E) discourages foreign companies from doing business in the United States.

Question 80

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