Deck 1: The Challenging World of International Business

Question 1

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.

Answer 1

False

Question 2

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

Answer 2

True

Question 3

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

Answer 3

False

Question 4

The international environment is composed of all the uncontrollable forces originating in the home country.

Question 5

American companies want their managers to have a basic knowledge of international business.

Question 6

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

Question 7

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

Question 8

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

Question 9

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 10

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 11

Foreign business is business whose activities are carried out across national borders.

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

Internal environmental forces are commonly referred to as controllable.

Question 17

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

Question 18

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 19

External environmental forces are commonly referred to as controllable.

Question 20

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

Question 21

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

Question 22

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

Question 23

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

Question 24

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

Question 25

Globalization has produced uneven results across nations and people.

Question 26

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

Question 27

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

Question 28

The world stock of outward foreign direct investment was $16.2 trillion in 2008,which was 9 times what it was in 1990.

Question 29

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 30

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 31

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

Question 32

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

Question 33

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

Question 34

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 35

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

Question 36

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

Question 37

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

Question 38

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 20^th century.

Question 39

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

Question 40

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

Question 41

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

Question 42

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 and uncontrollable.
B)domestic and foreign.
C)internal and external.
D)competitive and distributive.
E)external (uncontrollable)and internal (controllable).

Question 43

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

Question 44

An international business

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

Question 45

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

A)three kinds of environments - domestic,foreign,and international.
B)only domestic and foreign environment.
C)the foreign environment.
D)the international environment.
E)the domestic environment.

Question 46

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)international company.

Question 47

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

Question 48

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 49

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 50

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

A)internal but not controllable.
B)external and controllable.
C)foreign.
D)internal (controllable).
E)external.

Question 51

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)an organization that operates outside its home or domestic market.

Question 52

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)Domestic,foreign,and international

Question 53

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)overseas

Question 54

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.

Question 55

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

Question 56

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)forces have different values and can be difficult to assess.
E)managers are most familiar with them

Question 57

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

A)competitive.
B)technological.
C)gravitational.
D)competitive and technological.
E)competitive,technological,and gravitational.

Question 58

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)focus on the strategic plan.
C)lobbying.
D)factors of production.
E)lobbying for a change in a law and heavily promoting a new product to change cultural attitude.

Question 59

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

Question 60

A multidomestic 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.

Question 61

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)120,000
E)over 800,000

Question 62

The worldwide stock of outward FDI is estimated to have increased _______ between 1980 and 2008.

A)Threefold
B)Fivefold
C)Ninefold
D)Twelvefold
E)Seventeenfold

Question 63

The trend toward unification and socialization of the global community is illustrated by which of the following

A)Preferential trading arrangements that group several nations into a single market.
B)Progressive increases in barriers to foreign investment by most governments.
C)Increased public ownership of much of the industry in formerly communist nations.
D)Preferential trading arrangements that group several nations into several markets.
E)Progressive increases in barriers to foreign investment by few governments.

Question 64

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 65

The international environment is the interactions between

A)the domestic environmental forces and the foreign environmental forces.
B)the foreign uncontrollable 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)the domestic environmental forces and foreign environmental forces,and exists between the foreign environmental forces of two countries when an affiliate in one country does business in another country.
E)the foreign internal and external forces.

Question 66

According to supporters of the globalization of trade and investment,free trade

A)creates more and better jobs.
B)benefits all nations and workers.
C)does not cause the loss of high-paying jobs.
D)creates poverty.
E)impairs socioeconomic development.

Question 67

Which of the following are identified in the text as being drivers of globalization?

A)Political
B)Social
C)Cultural
D)Economic
E)Geographic

Question 68

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)easier than

Question 69

According to the text,the tendency toward an international integration of goods,technology,information,labor and capital,or the process of making this integration happen,is termed:

A)international business.
B)economic globalization.
C)foreign direct investment.
D)political globalization.
E)technological globalization.

Question 70

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

A)legal action by the host country.
B)legal action by the host country and the country of the parent company.
C)seizure by the host government.
D)cancellation by the parent company of its right to do business in the host country.
E)legal action or government seizure.

Question 71

The level of service exports worldwide increased more than _______ between 1980 and 2008.

A)Fourfold
B)Sixfold
C)Tenfold
D)Twelvefold
E)Seventeenfold

Question 72

Environmental forces can be classified as:

A)external
B)uncontrollable
C)internal
D)controllable
E)external (uncontrollable)and internal (controllable)

Question 73

__________ 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)China

Question 74

Historically,international business:

A)is relatively new.
B)existed before the time of Christ.
C)existed before the time of Christ and was influenced by the rise of Ottoman Empire.
D)was influenced by the rise of the Ottoman Empire.
E)existed only after the time of Christ.

Question 75

According to the text,the tendency toward an international integration of goods,technology,information,labor,and capital,or the process of making this integration happen,is called

A)internationalization.
B)international business.
C)economic globalization.
D)multinationalization.
E)global integration.

Question 76

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

A)if they work and live in a foreign 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)if they are responsible for exporting or the management of other affiliates.

Question 77

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)more competitive

Question 78

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 79

The major globalization drivers include all of the following except:

A)Political
B)Social
C)Technological
D)Market
E)Cost

Question 80

_______ refers to the transportation of any domestic good or service to a destination outside a country or region.

A)Importing
B)Foreign direct investment
C)Exporting
D)International business
E)Franchise