Deck 17: Globalization and International Business: Going Global Isnt Just for Travelers

Question 1

An economy in which resources, markets, and competition are worldwide in scope is called a(n) __________ economy.*

A) foreign
B) domestic
C) outsourced
D) global

Answer 1

D

Question 2

When a firm grants licenses internationally, it is giving foreign companies access to it's:

A) technologies, patents, or trademarks.
B) facility designs and equipment.
C) product ingredients.
D) management systems.

Answer 2

A

Question 3

The paying of a fee to use another firm's name, resources, and operating systems is called __________.

A) licensing
B) franchising
C) importing
D) leasing

Answer 3

A

Question 4

Doing business internationally can be justified by all of the following EXCEPT:

A) to expand profit potential.
B) to gain access to more customers.
C) to reduce access to capital.
D) to lower the cost of materials and supplies.

Question 5

McDonald's has outlets in Japan. McDonald's provides the Japanese operation with the rights to use McDonald's name, material, and processes, but the operation is owned and managed by Japanese. The Japanese operation would be considered a(n) __________.*

A) outlet
B) subsidiary
C) franchise
D) licensed importer

Question 6

Which of the following countries is the top outsourcing destination?

A) Mexico
B) China
C) United States
D) Japan

Question 7

Better Boots Inc. wishes to market their products in the Far East. Although Better Boots has the design and manufacturing capability, the company lacks the distribution channels and knowledge of the Far East cultures necessary to market their products. Bill Somebody, president of Better Boots, has decided to form a partnership with Far East Boots, an Asian company. Far East boots will provide the marketing know how that Better Boots lacks. The company will be jointly owned and independently operated. Better Boots is forming a(n) __________ with Far East Boots.*

A) franchise
B) joint venture
C) licensing agreement
D) operating subsidiary

Question 8

Purchasing the rights to make or sell another company's products is called __________.*

A) insourcing
B) outsourcing
C) franchising
D) licensing

Question 9

A __________ operates through co-ownership with local partners.

A) franchise
B) wholly owned subsidiary
C) joint venture
D) licensed partner

Question 10

Business go global for all of the following reasons EXCEPT:

A) to avoid domestic customers.
B) to increase profits through expanded operations.
C) to increase access to low-cost, talented workers.
D) all of the above.

Question 11

A business that conducts commercial transactions across national boundaries is called a(n) __________ business.*

A) outsourced
B) franchised
C) international
D) foreign licensed jobs

Question 12

The process of buying foreign products for sale in domestic markets is called __________.

A) importing
B) insourcing
C) exporting
D) franchising

Question 13

A joint venture arrangement normally might involve all of the following EXCEPT:

A) pooling of resources.
B) sharing risks.
C) jointly operating the venture.
D) one firm buying out the other firm.

Question 14

Because this type of international business creates jobs locally, governments often support __________ endeavors.*

A) green ventures
B) importing
C) licensing
D) exporting

Question 15

__________ is used to describe the interdependence among elements of the global economy.

A) Nationalization
B) Industrialism
C) Globalization
D) Internationalism

Question 16

The creation of domestic jobs by foreign employers is called __________.

A) insourcing
B) outsourcing
C) international operations
D) domestic operations

Question 17

A company that conducts business across national boundaries is called a(n) __________.

A) global economy
B) international business
C) trade association
D) conglomerate

Question 18

The term used to describe the selling of products to foreign countries is __________.

A) importing
B) deporting
C) outsourcing
D) exporting

Question 19

Which of the following is a direct investment strategy?

A) Global sourcing
B) Joint ventures
C) Exporting
D) Licensing

Question 20

Global sourcing involves:

A) exporting products for sale.
B) purchasing materials, components, or services from around the world for local use.
C) selling a foreign firm the right to make your products.
D) building a plant to produce goods for sale in foreign countries.

Question 21

The __________ is a global institution whose purpose is to promote free trade and open markets around the world.

A) United Markets Institute
B) World Bank
C) World Trade Organization
D) U.S. Chamber of Commerce

Question 22

A __________ establishes a foreign subsidiary by building an entirely new operation in a foreign country.

A) joint venture
B) strategic alliance
C) greenfield venture
D) franchise

Question 23

__________ is the application of tariffs and special treatment for local firms from foreign competition.*

A) Idealism
B) Internationalism
C) Globalism
D) Protectionism

Question 24

Corporations, for tax purposes, may decide to keep their profits in a foreign country or to transfer them to their corporate headquarters in their home country. The decision of what to do is often a matter of __________.*

A) national interest
B) currency risk
C) banking practice
D) competitive action

Question 25

A trading partner who receives the most favorable treatment for imports and exports is said to have __________ status.*

A) international
B) unfair
C) most protected nation
D) most favored nation

Question 26

__________ involves illegal practices to protect one's own business.*

A) Bad faith
B) Corruption
C) Conspiracy
D) Control

Question 27

When Argentina's president nationalized the oil industry without consideration for the foreign companies operating there, the loss to the foreign countries was considered a __________ risk.

A) national
B) currency
C) global
D) political

Question 28

When an American business is being mistreated in foreign countries, the U.S. government can help by appealing to which of the following?

A) The European Union
B) The World Trade Organization
C) The military
D) The United Nations

Question 29

The Foreign Corrupt Practices Act prevents U.S. firms from:*

A) paying bribes or giving excess commissions in exchange for favors.
B) using "sweatshops" to produce goods for sale in the U.S.
C) employing child labor in plants that make goods for U.S. markets.
D) from participating in unsustainable development in third world countries.

Question 30

The biggest difference between an international business and a transnational business is that the transnational business tries to operate __________.*

A) under different international laws
B) with only senior expatriate managers
C) without a strong national identity
D) in every country in the world

Question 31

__________ is the full time employment of children for work normally done by adults.

A) Children camp
B) Child labor
C) Scout camp
D) Sweatshop

Question 32

A __________ is a business with extensive foreign operations in more than one country.

A) conglomerate
B) wholly owned subsidiary
C) partnership
D) multinational corporation

Question 33

Business arrangements between firms of different nationalities are done for many reasons and in many different ways. These arrangements, whatever their structure, are called __________.

A) subsidiaries
B) global strategic alliances
C) franchises
D) licensed partnerships

Question 34

Which of the following approaches to international business offers the most control with the greatest risk?

A) Joint ventures
B) Foreign subsidiary
C) Importing
D) Licensing

Question 35

A joint venture is a form of __________ in which each partner invests in and accepts the risks and rewards of the venture.*

A) sustainable development
B) subsidiary
C) franchise
D) strategic global alliance

Question 36

The problem of "currency risk" refers to:

A) fluctuations in the electrical grids of foreign countries.
B) terrorism or armed conflicts.
C) fluctuations in foreign exchange rates.
D) nationalization of foreign assets.

Question 37

A __________ is a local operation completely owned by a foreign company.

A) foreign partnership
B) franchise
C) foreign subsidiary
D) licensee

Question 38

Which of the following is NOT an MNC complaint about host countries?

A) Profit limitations
B) Overpriced resources
C) Interference with government
D) Exploitative rules

Question 39

The possible loss of investment or control over foreign assets due to instability or political changes in foreign countries is called __________.

A) political instability
B) adverse operating conditions
C) political risk
D) environmental instability

Question 40

A company that employs workers at very low wages, for long hours, and in poor working conditions is called a(n) __________.

A) subsidiary
B) joint venture
C) MNC
D) sweatshop

Question 41

According to research from Transparency International, which of the following countries ranked #1 as the least corrupt for doing business?

A) Somalia
B) Spain
C) USA
D) New Zealand

Question 42

Host countries always complain that MNCs do not have respect for local customs.

Question 43

The Foreign Corrupt Practices Act can actually put U.S. firms at a competitive disadvantage in certain areas of the world.

Question 44

A foreign subsidiary is a local operation in which a foreign firm owns at least 51%.

Question 45

The two main ways of organizing multinational corporations for global operations are global __________ and global __________ structures.

A) economy; risk
B) area; economy
C) product; market
D) area; product

Question 46

A foreign subsidiary can be created either by buying out an existing firm or by building a new firm from scratch.

Question 47

If you purchase the latest CD from your favorite artist or the latest blockbuster DVD for a very low price while traveling internationally, you are likely facilitating the violation of intellectual property rights.

Question 48

A multinational corporation is the same as a transnational corporation.

Question 49

There are 90 members in the World Trade Organization.

Question 50

Most multinational corporations retain strong national identities even while operating around the world.

Question 51

Importing involves buying goods from foreign companies for sale overseas.

Question 52

Managers who are aware of international developments and competent in working across cultures are called __________ managers.

A) senior
B) national
C) global
D) foreign

Question 53

In a global economy, resources, markets and competition are worldwide in scope.

Question 54

International franchising involves selling the right to use your name and operating methods to foreign companies.

Question 55

In her book The Travels of a T-Shirt in the Global Economy, economist Pietra Rivoli tracks a t-shirt that she bought while on a vacation to Florida.

Question 56

One of the challenges to international business is the cultural relativism forced upon them by local laws and customs.

Question 57

The main difference between domestic and international businesses is that the latter crosses national boundaries.

Question 58

In global sourcing, firms purchase and sell goods and services around the world for local use.

Question 59

The forecasting of political events that may impact foreign investments is called __________.

A) currency analysis
B) political-risk analysis
C) analytical forecasting
D) international forecasting

Question 60

Products For You, Inc. is an international company with five presidents in charge of its American, European, African, Asian, and the ROW (rest of the world) operations. Products For You, Inc. is using a global __________ structure.

A) area
B) matrix
C) product
D) vertical

Question 61

__________ is the term used to describe places in which employees are given low wages for long hours in poor, and often unsafe, working conditions.

Question 62

MNC is an acronym that stands for __________.

Question 63

What are the pros and cons of conducting business internationally?

Question 64

__________ involves the use of laws and politically-driven tariffs to shield a country's domestic businesses from foreign competitors.

Question 65

__________ is process of growing interdependence among elements of the global economy.

Question 66

The acronym WTO stands for the __________.

Question 67

A local operation that is completely owned and controlled by a foreign company is called a(n) __________.

Question 68

__________ is the form of international business involving the sale of domestically made goods in foreign markets.

Question 69

Currency risk means that the amount you actually receive for your sale of products or services may vary depending on currency fluctuations.

Question 70

__________ forecasts how political events may impact foreign investments.

Question 71

Define a joint venture and a foreign subsidiary and the differences between them.

Question 72

__________ shifts local jobs in foreign locations to take advantage of lower-wage labor in other countries.

Question 73

Define and differentiate between multinational and transnational corporations.

Question 74

The possible loss of profits because of fluctuations in exchange rates is called __________.

Question 75

Define franchising and licensing. Explain the difference.

Question 76

The most common multinational organizational structures are done by product and area.

Question 77

A(n) __________ operates in a foreign country through co-ownership with local partners.

Question 78

Being a loner, acting uncooperative, and being irritable are considered universal inhibitors of leadership success.