Deck 4: Managing in a Global Environment

Question 1

The ________ was formed by twelve member countries with the primary motivation of reasserting the region's economic position against the United States and Japan.

A)African Union
B)European Union
C)Central America Free Trade Agreement
D)Association of South-East Asian Nations

Answer 1

B

Question 2

Parochialism is a tendency to ________.

A)think highly of the foreign country in which the organization is doing business
B)focus on best approaches and people from around the globe
C)view the world solely through one's own eyes and perspectives
D)let employees in the host country figure out how best to do things

Answer 2

C

Question 3

While talking with her advisor at the university,Jane deduces that she has a(n)________ attitude,as she has never traveled abroad and relates well only to people from her home country.

A)regiocentric
B)polycentric
C)ethnocentric
D)geocentric

Answer 3

C

Question 4

The polycentric attitude is a world-oriented view focusing on using the best approaches and people from around the globe.

Question 5

The single European Union currency is called the ________.

A)krone
B)krona
C)pound
D)euro

Question 6

Samanex Corporation maintains production facilities in 13 different countries on three continents.Each facility is managed by a native of the country where it is located.This practice is indicative of a(n)________ attitude.

A)ethnocentric
B)geocentric
C)polycentric
D)multicentric

Question 7

A(n)________ attitude is the view that employees in the host country know the best practices for running their operations.

A)ethnocentric
B)polycentric
C)geocentric
D)regiocentric

Question 8

Only speaking one language is one sign that a nation suffers from ________.

A)parochialism
B)ethnocentrism
C)polycentrism
D)geocentrism

Question 9

Americans tend to suffer from parochialism.

Question 10

In today's global environment,managers must have a(n)________ attitude to be successful.

A)ethnocentric
B)parochial
C)bigoted
D)geocentric

Question 11

Bill Sanderson,a manager in a manufacturing firm in New York has a tendency to view the world only through his U.S.-based perspective.What can be deduced about his attitude?

A)He has an elitist attitude.
B)He has a polycentric attitude.
C)He has a parochialistic attitude.
D)He has a geocentric attitude.

Question 12

Melanie joins an international student association in order to better understand the views of students from other countries.She is trying to become more ________ in her attitude.

A)parochialistic
B)polycentric
C)ethnocentric
D)geocentric

Question 13

List and discuss the three attitudes managers might have toward international business.

Question 14

A(n)________ attitude is characterized by parochialism.

A)geocentric
B)acculturated
C)multilinguistic
D)ethnocentric

Question 15

Managers with a(n)________ attitude view every foreign operation as different and hard to understand.

A)geocentric
B)polycentric
C)ethnocentric
D)regiocentric

Question 16

An ethnocentric attitude ________.

A)prompts managers to have a global view and look for the best approaches and people regardless of origin
B)is the belief that the home country has the best work approaches and practices
C)is the view that employees in the host country know the best work approaches and practices
D)gives a manager a much broader understanding of what it takes to manage in a global environment

Question 17

Managers with a polycentric attitude tend to view every foreign operation as different and hard to understand.

Question 18

Define parochialism.Discuss why parochialism is a problem for U.S.managers and discuss reasons why it is important to overcome parochialism in today's business environment.

Question 19

Managers with an ethnocentric attitude do not trust foreign employees with key decisions or technology.

Question 20

A manager who wishes to be successful in international business should avoid a(n)________ attitude.

A)multicultural
B)multiracial
C)ethnocentric
D)geocentric

Question 21

When the twelve original members formed the European Union in 1992,the primary motivation was to reassert the region's economic position against the United States and Japan.

Question 22

Solidarity in the European Union is being undermined by protectionist pressures in some member countries.

Question 23

The World Trade Organization was formed in the year ________.

A)1995
B)1967
C)1971
D)1983

Question 24

What is the International Monetary Fund? What does it do?

Question 25

Critics of the WTO claim that ________.

A)global trade destroys jobs and the natural environment
B)it favors third-world countries over developed countries
C)shifting jobs to developing countries harms the economies of member nations
D)has too little power to be effective

Question 26

What is the World Bank Group and what does it do?

Question 27

The International Monetary Fund is an organization that ________.

A)rules on disputes over tariffs and subsidies
B)helps countries conduct trade through a system of rules
C)provides financial assistance to developing countries
D)promotes international monetary cooperation

Question 28

Heinrich,a purchaser for an optics company in Germany,must place an order for materials for use in its production process.He is most likely to order from ________.

A)a company within the European Union because there would be no barriers to trade
B)a company in the United States because we have the same quality as any European company
C)a company in Switzerland because the Swiss are known for their fine detail work
D)a company in Asia because labor is cheaper there

Question 29

The World Trade Organization ________.

A)advises developing countries on issues of trade barriers
B)promotes long-term economic development and poverty reduction
C)exists to help countries conduct trade through a system of rules
D)facilitates trade among third-world countries and developed nations

Question 30

Mercosur is a trading group made up of ten South American countries.

Question 31

The purpose of the OECD is ________.

A)to settle disputes arising from trade between developed and third-world countries
B)to help member countries achieve sustainable economic growth
C)to raise the standard of living in South American countries
D)to control interest rates and inflation in member countries

Question 32

The North American Free Trade Agreement includes ________.

A)Mexico,Canada,and the United States
B)Canada,Mexico,the United States,and Costa Rica
C)the United States,Canada,Mexico,and Honduras
D)Canada,Mexico,Panama,and the United Sates

Question 33

The United States,Canada,and Mexico are parties to the North American Free Trade Association.

Question 34

Explain some of the benefits and challenges faced by American businesses because of America's membership in NAFTA.

Question 35

The World Trade Organization evolved from which of the following?

A)Mercosur
B)General Agreement on Tariffs and Trade
C)Truman Doctrine
D)Marshall Plan

Question 36

Cypress Exports would like to establish retail outlets in Mongrovia,a quasi-democratic African country with a growing middle class.But the national and local officials all want "gratuities" to process the applications for permits.Cypress Exports should appeal to ________.

A)the World Trade Organization
B)the International Monetary Fund
C)the African Union
D)the Organization for Economic Cooperation and Development

Question 37

The ________ is a group of five closely associated institutions,all owned by its member countries,that provides vital financial and technical assistance to developing countries around the world.

A)International Chamber of Commerce
B)World Bank Group
C)Organization for Economic Cooperation and Development
D)World Economic Forum

Question 38

The forerunner of the Organization for Economic Cooperation and Development was the ________ that was formed in 1947 to administer American and Canadian aid under the Marshall Plan for the reconstruction of Europe after World War II.

A)Organization of European States
B)Organizational Council of Europe
C)Organization for European Economic Cooperation
D)Organization for European Investment

Question 39

What is the purpose of the WTO? Give an example of the type of issue that might come before this organization.

Question 40

The Association of Southeast Asian Nations is a trading alliance of ________.

A)eight Southeast Asian nations and Japan
B)eight Southeast Asian nations
C)ten Southeast Asian nations
D)ten Southeast Asian nations and China

Question 41

Theodore and James decide to enter into an agreement with a firm in Europe allowing them to use the rights to their software,brand name,and software specifications in return for a lump sum payment.The firm is a service organization that plans to use the software to assist its customers.Their agreement is a(n)________.

A)export agreement
B)licensing agreement
C)franchise agreement
D)import agreement

Question 42

Marco works for a multinational corporation as a plant manager but must receive approval from the home office for any management changes to production processes.Marco most likely works for ________.

A)a global company
B)a multidomestic corporation
C)an polycentric company
D)a transnational company

Question 43

A corporation drops its organizational structure based on countries and reorganizes into industry groups.This is an example of the company becoming a(n)________.

A)ethnocentric company
B)polycentric organization
C)borderless organization
D)global company

Question 44

The international operations of their firm continues to grow.Theodore and James have realized that decentralized management using foreign nationals to run operations in the host countries works best.Their firm has developed into a ________ organization.

A)transnational
B)multidomestic
C)borderless
D)global

Question 45

The ________ decentralizes its management and other decisions to the local country.

A)multidomestic corporation
B)global company
C)transnational organization
D)borderless organization

Question 46

Multidomestic corporations reflect the ________.

A)ethnocentric attitude
B)polycentric attitude
C)geocentric attitude
D)xenophobic attitude

Question 47

Transnational organizations are also known as ________.

A)ethnocentric organizations
B)polycentric organizations
C)borderless organizations
D)multidomestic organizations

Question 48

According to the text,which of the following is a typical definition of a multinational corporation?

A)It is a company that maintains operations in multiple countries.
B)It is a company that maintains franchises in multiple countries.
C)It is a company that has multiple home bases and manufacturing plants.
D)It is a company that pays corporate taxes in at least two countries.

Question 49

Which of the following is the basic difference between multidomestic corporations and global companies?

A)Multidomestic corporations typically do business with more countries than global companies.
B)Multidomestic corporations are run by global companies but must be owned by a local,national company.
C)Multidomestic corporations decentralize management to the local country,while global companies centralize management in the home country.
D)Multidomestic corporations reflect an ethnocentric attitude,while global companies reflect a polycentric attitude.

Question 50

Which of the following types of global organizations reflects the geocentric attitude?

A)multidomestic corporation
B)transnational organization
C)global company
D)regional organization

Question 51

Which of the following is a multinational corporation that tailors marketing strategies to the host country's unique characteristics?

A)borderless organization
B)global company
C)multidomestic corporation
D)transnational organization

Question 52

In 1984 Toyota and General Motors formed a company called NUMMI to build cars carrying both the General Motors and Toyota brands.NUMMI is an example of a(n)________.

A)equity strategic alliance
B)joint venture
C)global venture
D)nonequity strategic alliance

Question 53

Harley Davidson makes motorcycles but in its retail stores it also sells clothing,motorcycle accessories,jewelry,and many related products made by other companies.Harley Davidson is engaging in ________.

A)global sourcing
B)exporting
C)franchising
D)licensing

Question 54

Which of the following is a feature of a multidomestic corporation?

A)all decisions are made in the home country
B)reflects an ethnocentric attitude
C)eliminates artificial geographic borders
D)has a decentralized management

Question 55

Nathan uses ethnic craftsmen to make high quality oak furniture.If he decides to offer his furniture for sale in other countries,he will be engaging in ________.

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

Question 56

Multidomestic corporations ________.

A)maintain operations in multiple countries,but do not allow managers in each country to make their own decisions
B)reflect ethnocentric attitudes
C)decentralize management and other decisions to the local country
D)attempt to replicate their domestic successes by managing foreign operations from the home country

Question 57

A global company reflects the ________.

A)pancentric attitude
B)ethnocentric attitude
C)geocentric attitude
D)polycentric attitude

Question 58

Adam has been hired by an organization that has a partnership with a foreign company.Both the partners share resources and knowledge while developing new products.Adam's organization has formed a ________.

A)licensing company
B)franchising company
C)strategic alliance
D)foreign subsidiary

Question 59

Natalya operates a retail store in Romania.She buys consumer electronics from vendors in China and Japan to sell in her store.Natalya is engaging in ________,

A)global sourcing
B)licensing
C)importing
D)franchising

Question 60

Melanie would like to become a part of the global retail community.Which of the following options should Melanie consider as her first step?

A)She should engage in global sourcing.
B)She should engage in licensing.
C)She should engage in franchising.
D)She should develop strategic alliances with foreign companies.

Question 61

Melamark LLC has customers on four continents.It would like to increase its global presence as a supplier to its global customers.The most expensive option would be to ________.

A)form a strategic alliance with an existing company in another country
B)directly invest in a production facility in another country
C)export from a single production plant
D)license producers in several countries

Question 62

Unlike the United States,the change from one regime to another in foreign countries can be less than peaceful.Differences in the ________ can lead to uncertainty and risk for global managers.

A)economic environment
B)cultural environment
C)political/legal environment
D)demographic environment

Question 63

A strategic alliance is a partnership between an organization and a foreign company partner in which both share resources and knowledge in developing new products or building production facilities.

Question 64

A domestic firm and a foreign firm sharing the cost of developing new products or building production facilities in a foreign country constitute a ________.

A)franchising agreement
B)strategic alliance
C)foreign subsidiary
D)joint venture

Question 65

Melamark's advisor on global affairs is concerned that ________ carries too much risk.

A)a strategic alliance
B)franchising
C)setting up a foreign subsidiary
D)a joint venture

Question 66

If Marla's company dropped its organizational structure based on country and reorganized into industry groups,it would best be considered a ________.

A)borderless organization
B)foreign subsidiary
C)global company
D)multidomestic corporation

Question 67

Licensing and franchising are similar approaches involving one organization giving another organization the right to use its brand name,technology,or product specifications in return for a lump sum payment or a fee usually based on sales.

Question 68

The process of exporting involves acquiring products made abroad and selling them domestically.

Question 69

Explain the differences between a multidomestic corporation,a global company,and a borderless organization.Include examples of companies for each of the types of organizations discussed.

Question 70

Managers who want to get into a global market with minimal investment start with global sourcing.

Question 71

In Malbadia,a central committee formed by the political powers decides what products and how many of each will be produced.This situation is typical of ________.

A)a free market economy
B)a freely planned economy
C)a free enterprise economy
D)a planned economy

Question 72

Joint ventures are a type of ________.

A)license
B)franchise
C)foreign subsidiary
D)strategic alliance

Question 73

If Shana's company decides to open another company in France but centralizes its management in the United States,it would be considered a ________.

A)transnational corporation
B)global company
C)borderless organization
D)multidomestic corporation

Question 74

Licensing is primarily used by service organizations and franchising is primarily used by manufacturing organizations.

Question 75

One section of Jose's company's business plan involves setting up a foreign subsidiary.This arrangement involves ________.

A)making products domestically and selling them abroad
B)Jose's company giving the foreign subsidiary the right to use its brand name
C)directly investing in a foreign country
D)minimum global investment

Question 76

Describe the different approaches that a company may use when it decides to go international.

Question 77

A ________ economy is one in which resources are primarily owned and controlled by the private sector.

A)free market
B)planned
C)command
D)democratic

Question 78

If the rate of inflation in Tomturkistan increased suddenly,what effect would that have on the exchange rate of Tomturkistan currency for U.S.dollars?

A)More U.S.dollars would be needed to purchase the same quantity of Tomturkistan goods as before inflation.
B)One U.S.dollar would purchase more Tomturkistan currency.
C)Tomturkistan currency would purchase more U.S.goods than before.
D)There would be no change; inflation is a domestic problem only.

Question 79

For American company Leather Exporters,first quarter sales in Italy were higher compared to the preceding year but profits were down.What could account for this difference?

A)a difference in the currency exchange rate
B)a change in the national leadership in Italy
C)a cultural change in Italian society
D)a reduction in trade barriers with Italy

Question 80

A transnational organization reflects an ethnocentric attitude.