Question 1

A cosmetics company that is considering entering the South American market would be especially interested in the discretionary income within that region. In other words, which of the following would be a determining factor in its global strategy?
A) purchasing power
B) political uncertainty
C) expropriation potential
D) infrastructure
E) sociocultural trends

Accepted Answer

Purchasing power is defined as a comparison of the relative cost of a standard set of goods and services in different countries. Discretionary income is that portion of purchasing power above and beyond income required to meet basic living expenses (i.e., spending money).

Question 2

A firm using a__________ strategy to prevent or reduce political risks will lobby foreign governments or international trade agencies to change laws, regulations, or trade barriers that hurt their business in that country.
A) defensive
B) control
C) cooperative
D) protectionist
E) avoidance

Accepted Answer

This is the definition of the control strategy.

Question 3

The purpose of pre-departure language and cross-cultural training is to__________ .
A) cater to employees who require affective learning
B) increase job empathy
C) encourage job specialization
D) reduce the uncertainty for those becoming expatriates
E) avoid legal problems in the future

Accepted Answer

Pre-departure language and cross-cultural training aim to prepare individuals who are becoming expatriates for the new cultural and social environment they will encounter in the host country. By reducing the uncertainty surrounding their new living conditions, expatriates are less likely to experience culture shock, communication difficulties, and other challenges that could negatively affect their productivity and well-being. Therefore, D is the best answer as it captures the main purpose of this type of training.

Question 4

According to Hofstede, when people in a culture are oriented to the present and seek immediate gratification, that culture is described as__________ .
A) having a long-term orientation
B) masculine
C) having a short-term orientation
D) individualistic
E) feminine

Accepted Answer

Hofstede's dimension of "long-term orientation" refers to cultures that prioritize future rewards and consider present sacrifices necessary for long-term success. Therefore, the opposite of having a long-term orientation is having a "short-term orientation," which refers to cultures that prioritize immediate gratification and enjoyment without much concern for future consequences.

Question 5

An expatriate is someone who__________ .
A) claims dual citizenship
B) lives and works outside of his or her own country
C) believes strongly in nationalization
D) is unhappy with his or her present residence
E) desires to be employed in a country outside of his or her own

Accepted Answer

An expatriate is someone who lives and works outside of his or her own country.

Question 6

The most important factor used by a globalizing company for determining if a country or a region has an attractive business climate is__________ .
A) easy access to growing markets
B) marketplace metamorphosis
C) global synergy
D) a large, unskilled workforce
E) natural boundaries

Accepted Answer

None of the other market factors can compensate for a lack of access or poor market potential.

Question 7

A country or region that has an attractive business climate for companies that want to go global has__________ .
A) a large population of unskilled workers
B) an effective but cost-efficient place to build an office or manufacturing site
C) a small youth population
D) natural boundaries
E) all of these

Accepted Answer

Three attributes that contribute to an attractive business climate are identified as: (1) easy access to growing markets; (2) cost-efficient location; and (3) lower level of political risk.

Question 8

The Green Giant consumer products company learned that it could not use their Jolly Green Giant character in parts of Asia where a green hat worn by a man signifies that he has an unfaithful wife. This is an example of a(n) __________that influenced global marketing.
A) geocentric attitude
B) control strategy
C) cooperative strategy
D) cultural difference
E) avoidance strategy

Accepted Answer

This scenario exemplifies a cultural difference that needs to be considered in global marketing. The meaning of a green hat in Asia is different from the symbol of the Jolly Green Giant, and this must be taken into account when marketing in these regions.

Question 9

Which of the following factors helps a company determine the growth potential of a foreign market?
A) political uncertainty
B) purchasing power
C) type of infrastructure
D) land availability
E) natural boundaries

Accepted Answer

Purchasing power is defined as a comparison of the relative cost of a standard set of goods and services in different countries. The growth potential of a given market is determined by its purchasing power and the strength of foreign competitors. Markets are most attractive when they have solid and growing purchasing power and relatively weak existing competition.

Question 10

What are the strategies that can be used to minimize or adapt to the political risk inherent to global business?
A) protectionist, avoidance, and offensive strategies
B) creative, cooperative, and defensive strategies
C) cooperative, customary, and nationalistic strategies
D) avoidance, protectionist, and guerrilla strategies
E) control, avoidance, and cooperative strategies

Accepted Answer

Control strategies involve keeping a close eye on political developments and having strong relationships with government officials to mitigate political risk. Avoidance strategies involve steering clear of countries or regions with high political risk. Cooperative strategies involve partnering with local businesses or organizations to reduce political risk. These three strategies together can help minimize and adapt to political risk inherent to global business.

Question 11

The term __________is used by Hofstede to describe the degree to which people in a country are uncomfortable with unstructured, ambiguous, unpredictable situations.
A) power distance
B) masculinity
C) short-term/long-term orientation
D) uncertainty avoidance
E) risk aversion

Accepted Answer

The term "uncertainty avoidance" is used by Hofstede to describe the degree to which people in a country are uncomfortable with unstructured, ambiguous, unpredictable situations.

Question 12

What are the two types of political risk that affect companies conducting global business?
A) political uncertainty and policy uncertainty
B) policy uncertainty and expropriation potential
C) cultural strength and political risks
D) infrastructure dynamism and political uncertainty
E) nationalism and economic uncertainty

Accepted Answer

The answer of What are the two types of political...

Question 13

Which of the following factors should be considered when choosing an office/manufacturing location in the Brazilian market for a U.S. company that operates cinemas and wants to open a chain of movie theatres there?
A) work force quality
B) the strategy of the movie theater chain
C) tariff and nontariff barriers
D) exchange rates
E) all of these

Accepted Answer

All of the given factors should be considered when choosing an office/manufacturing location in the Brazilian market for a U.S. company that operates cinemas and wants to open a chain of movie theaters there. Workforce quality is important for hiring skilled employees. The strategy of the movie theater chain is crucial to adapt it to local market demands. Tariff and nontariff barriers should be considered for smooth import-export operations. Exchange rates affect the cost of doing business in Brazil, and the profitability of the movie theater chain.

Question 14

According to Hofstede's research on cultural dimensions,__________ cultures emphasize the importance of relationships, modesty, caring for the weak, and quality of life.
A) economic-based
B) feminine
C) relationship-oriented
D) individualistic
E) masculine

Accepted Answer

According to Hofstede's research, cultural dimensions related to modesty, caring for the weak, and quality of life are associated with a feminine culture. This implies that there is an emphasis on nurturing and empathy in such cultures, where people tend to focus on the well-being of others as opposed to individual success or material possessions.

Question 15

The __________strategy of minimizing or adapting to the political risk inherent to global business makes use of joint ventures and collaborative contracts.
A) defensive
B) control
C) cooperation
D) avoidance
E) offensive

Accepted Answer

This is the definition of the cooperation strategy.

Question 16

Hofstede's research has shown that there are__________ .
A) no cultural differences among nations in which Spanish is the national language
B) two distinct methods for dealing with cultural differences--adaptation and continuation
C) direct relationships existing between type of infrastructures and growth potential
D) five consistent dimensions of cultural differences across countries
E) four factors upon which a company should base its decision to globalize

Accepted Answer

Hofstede identified five consistent cultural dimensions: (1) individualism/collectivism, (2) masculinity/femininity, (3) uncertainty avoidance/acceptance, (4) short-/long-term orientation, and (5) power distance (high/low).

Question 17

The Japanese government decreed that Japanese snow was different from all others and required that all snow equipment marketed in the country be made in Japan for safety reasons. The elimination of non-Japanese companies from the market is an example of how __________can influence global business.
A) infrastructure modifications
B) policy uncertainty
C) political uncertainty
D) competitive uncertainty
E) sociocultural modifications

Accepted Answer

Policy uncertainty is defined as the risk associated with changes in laws and government policies that directly affect the way foreign companies conduct business. The Japanese government changed its policy regarding snow equipment.

Question 18

Uganda is one of only two countries in the world that produce a mineral required in the manufacturing of cellular phones. Several mining companies recently moved their operations out of the region due to a bloody civil war resulting from a change in rulers. This is an example of how __________can influence global business.
A) political uncertainty
B) policy uncertainty
C) economic risk
D) infrastructure failure
E) nationalization

Accepted Answer

Political uncertainty is defined as the risk of major changes in political regimes that can result from war, revolution, death of political leaders, social unrest or other influential events.

Question 19

__________is the set of shared values and beliefs that affects the perceptions, decisions, and behavior of people from a particular country.
A) National mindset
B) National culture
C) Cultural nationalization
D) Cultural diversity
E) National diversity

Accepted Answer

National culture refers to the set of shared values and beliefs that affect the perceptions, decisions, and behavior of people from a particular country. It includes traditions, customs, social norms, and ways of thinking that are passed down from generation to generation within a given society.

Question 20

Uganda is one of only two countries in the world that produce a mineral required in the manufacturing of cellular phones. A company which mines that rare mineral decided to not invest in the country due to a bloody civil war resulting from a change in rulers. The mining company used a(n)__________ .
A) avoidance strategy
B) control strategy
C) cooperative strategy
D) elimination strategy
E) self-protection strategy

Accepted Answer

Avoidance is used when a company judges the political risk to be too high in a particular market and decides not to operate in the market.

Quiz 8: Section 1: Global Management

A cosmetics company that is considering entering the South American market would be especially interested in the discretionary income within that region. In other words, which of the following would be a determining factor in its global strategy?

A firm using a__________ strategy to prevent or reduce political risks will lobby foreign governments or international trade agencies to change laws, regulations, or trade barriers that hurt their business in that country.

The purpose of pre-departure language and cross-cultural training is to__________ .

According to Hofstede, when people in a culture are oriented to the present and seek immediate gratification, that culture is described as__________ .

An expatriate is someone who__________ .

The most important factor used by a globalizing company for determining if a country or a region has an attractive business climate is__________ .

A country or region that has an attractive business climate for companies that want to go global has__________ .

The Green Giant consumer products company learned that it could not use their Jolly Green Giant character in parts of Asia where a green hat worn by a man signifies that he has an unfaithful wife. This is an example of a(n) __________that influenced global marketing.

Which of the following factors helps a company determine the growth potential of a foreign market?

What are the strategies that can be used to minimize or adapt to the political risk inherent to global business?

The term __________is used by Hofstede to describe the degree to which people in a country are uncomfortable with unstructured, ambiguous, unpredictable situations.

What are the two types of political risk that affect companies conducting global business?

Which of the following factors should be considered when choosing an office/manufacturing location in the Brazilian market for a U.S. company that operates cinemas and wants to open a chain of movie theatres there?

According to Hofstede's research on cultural dimensions,__________ cultures emphasize the importance of relationships, modesty, caring for the weak, and quality of life.

The __________strategy of minimizing or adapting to the political risk inherent to global business makes use of joint ventures and collaborative contracts.

Hofstede's research has shown that there are__________ .

The Japanese government decreed that Japanese snow was different from all others and required that all snow equipment marketed in the country be made in Japan for safety reasons. The elimination of non-Japanese companies from the market is an example of how __________can influence global business.

__________is the set of shared values and beliefs that affects the perceptions, decisions, and behavior of people from a particular country.