Deck 1: The Challenging World of International Business

Question 1

Uncontrollable forces are external forces over which management cannot exert any influence.

Answer 1

False

Question 2

External forces in the international business environment are commonly called uncontrollable forces.

Answer 2

True

Question 3

According to the definitions in the text, a multidomestic firm is an organization that attempts to standardize operations worldwide in all functional areas.

Answer 3

False

Question 4

The international environment is composed of all the uncontrollable forces that surround and influence the firm's life and development.

Question 5

The term international company refers to both global and multidomestic companies.

Question 6

Foreign business refers to the operations of a company outside its home or domestic market.

Question 7

According to the text, environmental elements over which management does have some control-including competitive, labor, and financial forces-are called internal forces.

Question 8

Internal environmental forces are commonly referred to as controllable.

Question 9

A company headquartered in another country is known as a foreign business.

Question 10

The term international business is used to describe an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences.

Question 11

A global company is an organization that attempts to standardize and integrate operations worldwide in most or all functional areas.

Question 12

As the term is used in the text, foreign business is business whose activities are carried out across national borders.

Question 13

A business whose activities are carried out across national borders is known as an international business.

Question 14

International business differs from domestic business in that a firm operating across borders must deal with the forces of two kinds of environments-domestic and foreign.

Question 15

All managers need to have a basic knowledge of international business.

Question 16

The United Nations uses the term transnational to describe an enterprise doing business in more than one country.

Question 17

A multidomestic company is an organization that attempts to standardize and integrate operations worldwide in all functional areas.

Question 18

Only those companies that have foreign operations need to be aware of what is occurring globally in foreign markets and their industry.

Question 19

An international company is an organization with multicountry affiliates, each of which formulates its own business strategy based on perceived market differences.

Question 20

External environmental forces are commonly referred to as controllable.

Question 21

A common cause of the added complexity of foreign environments is managers' unfamiliarity with other cultures and is called self-reference syndrome.

Question 22

Importing refers to the transportation of any good or service to a destination into a country or region, from a foreign origination point.

Question 23

According to the text, the domestic environment is all of the uncontrollable forces originating in the home country that surround and influence the firm's life and development.

Question 24

The Ottoman Empire's powerful location raised the cost of Asian trade for the Europeans and resulted in a search for sea routes to Asia.

Question 25

According to the text, the self-absorption criterion is probably the biggest cause of international business blunders.

Question 26

The world stock of outward foreign direct investment was $19 trillion at the beginning of 2010, which was more than nine times what it was in 1990.

Question 27

The United States has only about 10 percent of the world's population, so the vast proportion of most companies' potential customers are located elsewhere.

Question 28

The forces in the international environment are the same as those in the domestic environment except that they occur in foreign nations.

Question 29

Critics of large global firms compare these firms' sales with nations' total sales to illustrate the tremendous size of these firms.

Question 30

While international business as a discipline is relatively new, international business as a business practice is not.

Question 31

According to the text, the international environment is all of the uncontrollable forces originating outside the home country that surround and influence the firm.

Question 32

Supporters of globalization generally argue that it is the best strategy for advancing the world's economic development.

Question 33

One variable commonly used to measure where and how fast internationalization takes place is the increase in total foreign direct investment.

Question 34

Transnational corporations account for approximately 25 percent of total global output and nearly 50 percent of world trade.

Question 35

There are five major kinds of globalization drivers, all based on changes that are leading international firms to the globalization of their operations.

Question 36

That free trade is the best strategy for advancing the world's economic development is one of the few propositions on which almost all economists agree.

Question 37

The tendency toward an international integration of goods, technology, information, labor, and capital, or the process of making this integration happen, is referred to as economic globalization.

Question 38

Britain was the world's leading manufacturing country for about 1,800 years, until it was replaced by the United States at the end of the 1800s.

Question 39

According to the text, the level of intracompany trade of multinationals in 1930, as a percentage of world trade, may have exceeded the proportion at the end of the 20th century.

Question 40

Exporting refers to the transportation of any good or service to a destination inside a country or region.

Question 41

There are many outstanding international career opportunities for people with desirable interpersonal and language skills that are not in mainstream business but may require basic business expertise.

Question 42

An examination of the 2009 Human Development Report shows that only 23 of the 182 countries for which data were available had average annual GDP per capita growth rates that were higher than the U.S. growth rate for the period 1990-2007.

Question 43

Opponents of free trade point out that globalization has contributed to a decline in environmental and health conditions.

Question 44

Changing the method of going abroad from exporting to overseas production is often necessary to protect foreign markets.

Question 45

Expanded international trade is linked with the creation of more and better jobs.

Question 46

Greater profits may be obtained by either increasing total revenue or decreasing the cost of goods sold.

Question 47

In organizing their international activities, there are five dimensions along which management can globalize or standardize these activities.

Question 48

As stated in the text, an international business is:

A) a business whose activities involve crossing national borders.
B) the operations of a company outside its home or domestic market.
C) an organization with multicountry affiliates that each formulate their own business strategy.
D) an organization that attempts to standardize operations worldwide.
E) all of the above.

Question 49

Foreign business denotes:

A) a business whose activities involve crossing national borders.
B) the domestic operations within a foreign country.
C) an organization with multicountry affiliates.
D) an organization that attempts to standardize operations worldwide.
E) all of the above.

Question 50

A survey of CEOs of the 162 largest firms on Fortune's list of the 500 largest American corporations found that the CEOs strongly believed that:

A) an international orientation should be an important part of college business education.
B) international business skills and knowledge were important for promotion to senior executive positions but not for appointment to entry-level positions.
C) the importance of international business skills and knowledge for promotion to senior executive positions was higher for companies anticipating an increased level of importance of international activities in the next five years.
D) all of the above.
E) two of A, B, and C.

Question 51

The reasons international firms enter foreign markets are all linked to either (1) the desire to increase profits or (2) the desire to increase sales.

Question 52

A global company is:

A) a business whose activities involve crossing national borders.
B) the domestic operations within a foreign country.
C) an organization with multicountry affiliates.
D) an organization that attempts to standardize operations worldwide.
E) two of the above.

Question 53

If you already have a job, you can enhance your opportunities for international experience by:

A) making your boss and the human resource management department personnel aware of your interest.
B) meeting people in the home office who work with the company's foreign subsidiaries.
C) taking additional international business courses and making sure that people in your company know what you are doing.
D) all of the above.
E) two of A, B, and C.

Question 54

An international company is:

A) a global company.
B) amultidomestic company.
C) an affiliated company.
D) all of the above.
E) two of A, B, and C.

Question 55

A survey of CEOs of the 162 largest firms on Fortune's list of the 500 largest American corporations found that the internationally oriented courses that were viewed as being the most important for early career positions included topics related to:

A) an introduction to international business.
B) international strategy and competitiveness.
C) international legal and political issues.
D) all of the above.
E) two of A, B, and C.

Question 56

A multidomestic company is:

A) none of B, C, D, orE
B) a business whose activities involve crossing national borders.
C) the domestic operations within a foreign country.
D) an organization with multicountry affiliates.
E) an organization that attempts to standardize operations worldwide.

Question 57

The increased internationalization of business requires __________ to have a basic knowledge of international business.

A) all managers
B) managers of multinationals
C) managers of transnationals
D) managers of purely domestic operations
E) none of A, B, C, or D

Question 58

Firms that have substantial operations in more than one country are called:

A) global companies.
B) multidomestic firms.
C) affiliated companies.
D) all of the above.
E) two of A, B, and C.

Question 59

Opponents of globalization argue that globalization has contributed to an improvement in environmental and health conditions.

Question 60

Globalization has produced uneven results across nations and people.

Question 61

According to the text, personnel working in a foreign subsidiary are working in the international environment:

A) if they work and live in the foreign subsidiary's country.
B) if they are responsible for the subsidiary's exports.
C) if they are also responsible for the management of another foreign subsidiary.
D) all of the above.
E) two of A, B, and C.

Question 62

The kinds of forces in the foreign environment are __________ those in the domestic environment except that they occur in foreign nations.

A) different from
B) the same as
C) less than
D) more stringent than
E) none of the above

Question 63

International business really began:

A) with the East India Company, chartered in 1600.
B) when Singer Sewing Machine put up a factory in Scotland in 1868.
C) before the time of Christ.
D) when Colt Fire Arms set up a plant in England.
E) when the Ottoman Empire was established.

Question 64

Examples of the kinds of uncontrollable forces listed in the text are:

A) competitive.
B) technological.
C) personnel.
D) all of the above.
E) all of A, B, and C.

Question 65

Historically, international business:

A) is relatively new as a discipline and as a business practice.
B) existed before the time of Christ.
C) two of A, B, and D
D) was influenced by the rise of the Ottoman Empire.
E) none of the above.

Question 66

Management has no direct control over the external environment of the firm but can exert influence by:

A) heavy promotion of new products to change cultural attitudes.
B) only competing in the domestic market.
C) lobbying.
D) all of the above.
E) two of A, B, and C.

Question 67

Environmental forces can be classified as:

A) all of B, C, andD
B) external.
C) uncontrollable.
D) Each of B, C, and D is correct, so A is the right answer.
E) two of B, C, and D.

Question 68

Unconscious reference to one's own cultural values when judging behavioral actions of others in a new and different environment is called:

A) self-reference culture.
B) self-reference values.
C) self-reference criterion.
D) self-reference customs.
E) self-reference environment.

Question 69

Foreign environmental forces often operate differently than domestic environmental forces because:

A) they are uncontrollable.
B) force values are different.
C) changes are difficult to assess.
D) two of the above.
E) all of A, B, and C.

Question 70

International business differs from domestic business in that a firm operating across borders must deal with what environmental forces?

A) International
B) Foreign
C) Political
D) Competitive
E) Two of the above

Question 71

Foreign subsidiaries must obey the local laws. If they don't, according to the text they are subject to:

A) legal action by the host country.
B) two of A, C, andD
C) seizure by the host government.
D) Both A and C are correct, so B is the proper response to this question.
E) all of A, C and D.

Question 72

The forces over which management does have some command are called:

A) internal.
B) controllable.
C) foreign.
D) external
E) two of the above.

Question 73

The domestic environment is composed of all the uncontrollable forces originating in the __________ that surround and influence the life and development of the firm.

A) international arena
B) host nation
C) home country
D) foreign country
E) two of the above.

Question 74

Decision making in the international environment is __________ it is in a purely domestic environment.

A) less complex than
B) less demanding than
C) more complex than
D) about the same as
E) two of the above

Question 75

International business differs from domestic business in that a firm operating across borders must deal with:

A) all of C, D, andE
B) two of C, D, and
C) the foreign environment.
D) the international environment.
E) the domestic environment.

Question 76

Due to the expanding importance of foreign-owned firms in local economies, host governments have made their policies toward these companies:

A) more strict.
B) more liberal.
C) harsher.
D) more confronting.
E) two of the above.

Question 77

__________ was the world's leading manufacturing country for about 1,800 years, until it was replaced by Britain in about 1840.

A) The United States
B) Germany
C) India
D) France
E) none of the above.

Question 78

Environment as used in the textbook is the forces surrounding and influencing the life and development of the firm and is classified as:

A) controllable or uncontrollable.
B) domestic or foreign.
C) internal or external.
D) all of the above.
E) A and C.

Question 79

UNCTAD, an agency of the United Nations, estimates there are __________ international firms in the world.

A) 5,500
B) 12,000
C) 64,000
D) 82,000
E) over 800,000

Question 80

The international environment is the interactions between:

A) the domestic environmental forces and the foreign environmental forces.
B) the domestic controllable forces and the domestic uncontrollable forces.
C) the foreign environmental forces of two countries when an affiliate in one country does business in another country.
D) two of the above.
E) all of A, B, and C.