Question 1

Which of the following would be most important for Acme to determine before outsourcing its programming services to India?

Accepted Answer

It is important for Acme to determine whether outsourcing to India would allow them to sustain a competitive advantage through lower costs. This will help Acme make an informed decision on whether outsourcing to India makes financial sense for their business. Options A, B, and D are not relevant to Acme's decision to outsource their programming services to India.

Question 2

Globalization results in more demanding buyers who shop for the best deals worldwide.

Accepted Answer

Globalization has led to increased competition and accessibility of products from all over the world, making buyers more knowledgeable and conscious of price and quality. This has resulted in more demanding buyers who seek out the best deals and options available.

Question 3

Which of the following statements is true about value chain and international business?

Accepted Answer

Exporting firms typically perform upstream value chain activities (such as research and development and sourcing of raw materials) in the home market, while outsourcing downstream activities (such as marketing, sales, and distribution) to foreign partners or subsidiaries. This allows them to benefit from economies of scale and cost savings in production, while leveraging local knowledge and expertise in foreign markets.

Question 4

Which of the following statements is true about the firm-level consequences of market globalization?

Accepted Answer

Globalization has driven firms to seek out and relocate key value-adding activities to the most advantageous locations around the world, such as finding cheaper labor, more favorable tax policies, or better access to resources or technology. This can result in greater efficiency and cost savings for the firm, but it can also lead to job losses and economic disruption in the home market. The globalization of markets has actually increased the number of new business opportunities for internationalizing firms, not narrowed them down. A firm's value chain is subject to internationalization, as it is a key driver of competitiveness in a global marketplace. Offshoring involves relocating value-chain activities to a foreign location, not the home market.

Question 5

________ refers to the tendency of a financial or monetary crisis in one country to spread rapidly to other countries, due to the ongoing integration of national economies.

Accepted Answer

Contagion refers specifically to the spread of a financial or monetary crisis from one country to other countries. Nationalization and codetermination are not related to this concept and internationalization does refer to the integration of national economies but does not capture the idea of a crisis spreading rapidly.

Question 6

The most direct implication of market globalization is on the firm's ________.

Accepted Answer

Market globalization directly affects a firm's value chain as international competition increases and supply chains become more complex. Firms must adjust their value chain activities to remain competitive in the global market.

Question 7

Which of the following represents the final stage in a firm's value chain?

Accepted Answer

Sales and service represent the final stage in a firm's value chain, in which the company delivers the final product or service to the customer and provides ongoing support and after-sales service. Marketing and procurement are earlier stages in the value chain, focused on generating demand and acquiring the necessary inputs for production, respectively. Research and development is also an earlier stage, focused on developing new products or improving existing ones.

Question 8

Governments have facilitated economic integration by lowering barriers to international trade and investment, harmonizing their monetary and fiscal policies within regional economic integration blocs.

Accepted Answer

This statement is true. Governments have indeed facilitated economic integration by lowering barriers to international trade and investment, harmonizing their monetary and fiscal policies within regional economic integration blocs. This has helped to promote economic growth and development among participating countries.

Question 9

Converging tastes of consumers worldwide promote traditional lifestyles.

Accepted Answer

Converging tastes of consumers worldwide often lead to a more homogenized global culture, potentially diminishing the prevalence and appreciation of traditional lifestyles and local cultures.

Question 10

Market globalization compels firms to organize their sourcing, manufacturing, marketing, and other value-adding activities on a strictly local scale.

Accepted Answer

Market globalization compels firms to organize their sourcing, manufacturing, marketing, and other value-adding activities on a global or regional scale, in order to be competitive and take advantage of economies of scale and access to new markets.

Question 11

Reduction in trade barriers is associated with the emergence of ________.

Accepted Answer

Reduction in trade barriers leads to easier trade between countries, which can lead to the formation of regional economic blocs as countries look to increase their trading power and competitiveness. This is a common occurrence in today's global economy.

Question 12

Companies strive to decrease their costs and reduce their selling prices through economies of scale and standardization of finished products, among other possibilities.

Accepted Answer

Companies often seek to decrease their costs and reduce their selling prices through various methods, including economies of scale (whereby efficiencies in production lead to lower costs per unit of output) and standardization of finished products (which can lead to greater efficiency in the production process).

Question 13

Which of the following stages comes before procurement in a firm's value chain?

Accepted Answer

Research and development is the stage that comes before procurement in a firm's value chain. This is because procurement involves acquiring the necessary goods and services to produce a product or provide a service, and this cannot happen until the development of the product or service has been completed.

Question 14

In a typical value chain, the firm ________.

Accepted Answer

In a typical value chain, the firm performs marketing activities such as pricing, promotion, and selling. Research and development may be part of the upstream activities, but it is not the only activity performed in this stage. Upstream activities may also include sourcing raw materials and manufacturing of products. Downstream activities may include distribution, after-sales service, and customer support. When exporting, firms may perform both upstream and downstream activities abroad, depending on their strategies and the characteristics of the markets they operate in.

Question 15

Which of the following activities in Acme's value chain would be internationalized if Acme decides to establish a development contract with one of the Indian software firms?

Accepted Answer

Procurement involves the purchasing of goods or services for the company, including raw materials, equipment, and software development services. By establishing a development contract with an Indian software firm, Acme would be outsourcing its software development and thus internationalizing its procurement activity. The other options - sales, distribution, and marketing - all involve the company's interactions with customers and are not directly affected by outsourcing software development to India.

Question 16

The ability of a nation to govern its own affairs is known as ________.

Accepted Answer

Sovereignty refers to a nation's ability to govern itself without interference from other nations or external actors. It is a fundamental principle of international law and a key aspect of statehood. Liberalization refers to the opening up of a country's economy to market forces and foreign investment. Interdependence refers to the interconnectedness of nations and their economies, where actions by one nation can have ripple effects on others. Homogenization refers to the process of making things more uniform or similar, which is not directly related to governance.

Question 17

Which of the following would be most important for the consulting group to consider when deciding whether to recommend that Acme internationalize its sales efforts to Germany?

Accepted Answer

The level of competition in the German market for Acme's products will be a critical factor in determining the feasibility of internationalizing sales efforts. If the competition is too intense, it may not be worth the investment. Factors such as cost savings on advertising (A), programmer training (C), and employee empowerment (D) may be relevant but are less important than understanding the competitive landscape in Germany.

Question 18

In a short essay, discuss the impact of market globalization on consumer lifestyles and preferences around the world. Provide examples to illustrate your answer.

Accepted Answer

The answer of In a short essay, discuss the impact...

Question 19

In a "common market," barriers to the cross-border flow of factors of production are removed.

Accepted Answer

In a common market, there is free movement of goods, services, capital, and labor which means that barriers to cross-border flow of factors of production are removed.

Question 20

The globalization of capital refers to the aggregate activities of firms that gives rise to economic integration.

Accepted Answer

The answer of The globalization of capital refers to the...

Quiz 2: Globalization of Markets and the Internationalization of the Firm