Deck 5: Global Management and Cultural Diversity

Question 1

China's foreign direct investment in the U.S.has led to the creation of many jobs in China.This is an example of insourcing.

Answer 1

True

Question 2

Executives of transnationals view the entire world as their domain for acquiring resources.

Answer 2

True

Question 3

Extraction of excessive profits by global corporations is a potential host-country cost.

Answer 3

True

Question 4

Franchising refers to acquiring products from abroad and selling them in domestic markets.

Question 5

NAFTA was formed by the United Kingdom,France,and Germany.

Question 6

In exporting,local products are sold to foreign customers.

Question 7

In low-context cultures,what is actually said or written may convey only part,and sometimes a very small part,of the real message.

Question 8

Knowledge about foreign cultures is known as cultural intelligence.

Question 9

The goal of most tariffs is to protect local firms from foreign competition.

Question 10

Long hours of work and poor working conditions are prevalent in sweatshops.

Question 11

A common first step into international business is global sourcing.

Question 12

Cultural awareness is an important characteristic of a truly global manager.

Question 13

Sigma Inc.conducts for-profit transactions of goods and services across national boundaries.Sigma Inc.is an example of an international business.

Question 14

A foreign subsidiary is a foreign operation completely owned and controlled by a local firm.

Question 15

The growing interdependence among elements of the global economy is known as diversification.

Question 16

In World 3.0,local needs and priorities are largely ignored compared to the economic gains from global integration.

Question 17

Nigel is very proud of his British culture and tends to view other cultures as potentially inferior to his own.This is an example of ethnocentrism.

Question 18

Most manufacturers today shy away from using global sourcing owing to the growing concerns over issues related to quality.

Question 19

A foreign subsidiary represents the lowest level of involvement in international operations.

Question 20

Tariffs are basically taxes that governments impose on imports.

Question 21

Members of polychronic cultures do not approve of coming late or bringing an uninvited guest.

Question 22

Which of the following is an effect of globalization?

A) Reducing cooperation among nations in the global economy
B) Weakening economic integration across countries
C) Reducing interdependence among the components in the global economy
D) Increasing the importance of nation states
E) Creating a borderless world where economic integration becomes extreme

Question 23

In _____,the foreign firm buys the rights to use another's name and operating methods in its home country.

A) insourcing
B) franchising
C) global sourcing
D) exporting
E) offshoring

Question 24

Tight cultures are characterized by clear and rigid social norms.

Question 25

Intercultural competencies are skills that help an individual to function successfully in cross-cultural situations.

Question 26

When Veriol Inc.,a pharmaceuticals company,bought the rights of manufacturing and selling Nocturne Pharma's vitamin supplement,Vita Plus,in Mexico,Veriol Inc.engaged in _____.

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

Question 27

Most communication in low-context cultures takes place via the written or spoken word.

Question 28

In a tight culture,deviations from norms tend to be tolerated.

Question 29

Members of monochronic cultures are more flexible in their views of time than those of polychronic cultures.

Question 30

Which of the following is a common reason for doing international business?

A) Reducing imports
B) Accessing lower-cost labor
C) Boosting domestic demand
D) Establishing market monopoly
E) Promoting ethnocentrism

Question 31

People in high uncertainty-avoidance cultures prefer structure in their lives.

Question 32

Proxemics is the study of how people use space to communicate.

Question 33

Ronald is planning to expand his family business internationally and is currently in the process of purchasing materials,manufacturing components,and locating business services around the world.Which of the following best describes his actions?

A) Global sourcing
B) Insourcing
C) Licensing
D) Franchising
E) Outsourcing

Question 34

Sasha,a wealthy industrialist,owns several coffee plantations in Brazil.Encouraged by the rising sales figures in the domestic market,Sasha decides to sell her local brand of coffee in markets around the world.Which of the following terms is applicable to this business strategy?

A) Importing
B) Insourcing
C) Franchising
D) Exporting
E) Licensing

Question 35

People in high-power-distance cultures tend to be tolerant of power and are prone to follow orders.

Question 36

The growth of export industries _____ the exporting country.

A) reduces imports in
B) provides low-cost labor in
C) creates local jobs in
D) increases financial resources for
E) leads to an excess supply of products in

Question 37

When Miriam Inc.,a handbag manufacturer headquartered in the U.S.,decided to invest in Japan,it tied up with a Japanese fashion house in order to pool resources,share risks,and operate the new business together.This is an example of _____.

A) a joint venture
B) a foreign subsidiary
C) a greenfield venture
D) diversification
E) product development

Question 38

The ecological fallacy refers to the belief that a generalized cultural value,such as individualism,does not apply equally to all members of that culture.

Question 39

Which of the following terms is used to describe local job creation that results from foreign direct investment?

A) Restructuring
B) Franchising
C) Offshoring
D) Insourcing
E) Horizontal integration

Question 40

_____ involves managing business and organizations with interests in more than one country.

A) Global management
B) Territorial management
C) Reshoring
D) Insourcing
E) Economic development

Question 41

Why are some scarce minerals known as conflict minerals?

A) They bring in greater foreign investments.
B) They are found in abundance.
C) The money from their sales is used to fund armed violence.
D) The source of these minerals is easy to trace back.
E) They are available for a cheap price.

Question 42

An American executive goes to Yemen to finalize a business deal.He hands over his documents to his Yemeni host with his left hand,which Muslims in Yemen consider unclean.Moreover,he refuses to accept the dry fruits that he is offered,a behavior that deeply offends his host.As a result,the American loses the business deal to his Australian counterpart who was better versed in Yemeni ways.The lack of understanding of _____ is most likely to have resulted in the loss of business for the American executive.

A) the business trends in Yemen
B) Yemeni dress code
C) the business laws in Yemen
D) Yemeni culture
E) the banking system in Yemeni

Question 43

What are sweatshops?

A) Local business operations that expand internationally through foreign direct investment
B) Arbitrating firms that settle labor disputes between employees and employers
C) Business operations that employ workers at low wages for long hours in poor working conditions
D) Foreign firms that hire talented local personnel for training others in the host country
E) Foreign firms that are engaged in rampant corruption and bribery to gain easy access to the local resource pool

Question 44

A _____ is an MNE that operates worldwide on a borderless basis.

A) franchise
B) transnational corporation
C) foreign subsidiary
D) greenfield venture
E) limited liability company

Question 45

Arguments against NAFTA blame the organization for:

A) lower productivity of U.S. manufacturers.
B) lower cross-border trade.
C) substantial job losses to Mexico.
D) substantial job losses to the U.S.
E) deterioration of the Mexican business environment.

Question 46

Which of the following is one of the potential host-country benefits?

A) Smaller tax base
B) Interference with the governments
C) Economic domination
D) Introduction of new industries
E) Exploitation of natural resources

Question 47

Which of the following is true with regard to the European Union (EU)?

A) There is an absence of common consensus between the member states of EU with regard to political integration.
B) All the member states of the EU have adopted the Euro as the common currency.
C) The common currency of the EU is a weak competitor of the U.S. dollar.
D) The EU members are supposed to give one another most favored nation status.
E) The EU is a regional economic and political alliance of global importance.

Question 48

Home-country criticisms of global firms include complaints about:

A) interference with the local government.
B) hiring the most talented local personnel at a high cost.
C) failure to transfer advanced technologies.
D) sending scarce investments capital abroad.
E) poor working conditions for employees.

Question 49

Which of the following is true about culture?

A) Culture is a set of legal codes.
B) Culture is an irrelevant factor in international business.
C) Culture is not common to a group of people.
D) Culture remains static over time.
E) Cultural miscues can be costly in international business.

Question 50

_____ are taxes governments levy on imports from abroad.

A) Excise duties
B) Tariffs
C) Pay-offs
D) Corporate taxes
E) Subsidies

Question 51

Which of the following is a characteristic of a sweatshop?

A) Poor working conditions
B) High wages
C) Low power distance
D) High degree of foreign investment
E) Strong ethics

Question 52

Which of the following countries is part of NAFTA?

A) Canada
B) United Kingdom
C) Germany
D) Spain
E) France

Question 53

Which of the following is an example of child labor?

A) A 13-year-old boy accompanying his mother to the carpet factory where she works
B) A 10-year-old boy working in a chemical factory
C) A 10-year-old girl helping her younger brother with schoolwork
D) A 13-year-old boy earning $10 for helping his father pick strawberries
E) A 19-year-old girl working as a salesgirl in the local supermarket

Question 54

Cases presented before the World Trade Organization for resolution are likely to involve disputes regarding _____.

A) cultural appropriateness
B) restructures
C) cultural distance
D) ecological fallacy
E) tariffs

Question 55

The Foreign Corrupt Practices Act (FCPA)makes it illegal for:

A) countries who are not members of the EU to invest in the U.S.
B) U.S. firms to invest overseas in businesses.
C) foreign firms to offer nonmonetary gifts to U.S. officials.
D) foreign firms to offer bribes to U.S. firms.
E) U.S. firms and their representatives to offer bribes overseas.

Question 56

Which of the following is an example of a sweatshop?

A) Bane & Packhard, an American law firm, opened its branch in Taiwan as part of its business expansion strategy.
B) Rosenberg Inc., a pharmaceuticals company, bought the rights to manufacture and sell a fertility drug in Greenland from Kremline Pharmaceuticals.
C) Patron Wave, an electronic device manufacturing company, housed its employees in poor conditions and also overworked them.
D) Big Sell, a supermarket, sourced its canned fishes from Asia at a far lower price than most of its local competitors.
E) Mammoth InfoTech refused to increase the annual wages of its employees citing poor financial results in the last quarter.

Question 57

The goal of most tariffs is to:

A) improve present working conditions.
B) protect transnational corporations from political risks.
C) diversify the existing jobs.
D) protect local firms from foreign competition.
E) create jobs for foreign workers.

Question 58

_____ involves illegal practices to further one's business interests.

A) Corruption
B) Ethnocentrism
C) Polycentrism
D) Proxemics
E) Ecological fallacy

Question 59

A(n)_____ is a local operation completely owned and controlled by a foreign firm.

A) franchise
B) sweatshop
C) foreign subsidiary
D) global strategic alliance
E) export house

Question 60

_____ is a shared set of beliefs,values,and patterns of behavior common to a group of people.

A) Culture
B) Meme
C) Folklore
D) Conduct
E) Morality

Question 61

Cultures where it is possible to begin making business deals only after social relationships are established are referred to as _____ cultures.

A) ethnocentric
B) high-context
C) xenocentric
D) polychronic
E) popular

Question 62

In _____ cultures,people tend to do one thing at a time.

A) ethnocentric
B) xenocentric
C) monochronic
D) popular
E) high-context

Question 63

Culture shock is:

A) an extreme amount of hatred and rejection of foreign cultures.
B) an individual's failure to comply with the codes of his or her culture.
C) an assumption that one's own culture is superior to that of others.
D) an assumption that one's own culture is inferior to that of others.
E) a certain level of discomfort a person experiences when in an unfamiliar culture.

Question 64

John,an American national,was sent to India as part of a cultural exchange program from his university.On his arrival in India,he did not respond to his host who greeted him by joining his hands.He also declined the tea that was offered,emphasizing a cultural preference for coffee.He felt that his ways and culture were far superior to the ones in the host country.In this scenario,John displayed _____.

A) polycentrism
B) idealism
C) ethnocentrism
D) feudalism
E) collectivism

Question 65

Ilda Bach,an elderly German woman,decides to visit her friend living in Indonesia after many decades.Having never visited the country before,she feels confused,anxious,uncomfortable,and in need of information and advice during her stay.She is most likely experiencing _____.

A) claustrophobia
B) culture shock
C) cognitive dissonance
D) acculturation
E) boredom

Question 66

_____ cultures emphasize communication via spoken or written words.

A) High-context
B) Popular
C) High femininity
D) Low-context
E) Monochronic

Question 67

Which of the following is true with regard to people in high-context cultures?

A) They rely on situational cues as well as on spoken or written words.
B) The main part of the real message is conveyed by what is actually said.
C) Body language is ignored in the communication process.
D) They emphasize the importance of doing one thing at a time.
E) They focus on using time to accomplish many different things at once.

Question 68

People who tend to say or write what they mean and mean what they say belong to _____ cultures.

A) high-context
B) popular
C) low-context
D) mass
E) global

Question 69

In _____ cultures,time is used to accomplish many different things at once.

A) polychronic
B) ethnocentric
C) low-context
D) high-context
E) monochronic

Question 70

The capacities to listen,observe,and learn are the building blocks of cultural intelligence.These skills and competencies can be developed by better understanding what the anthropologist Edward T.Hall calls the "_____" languages of culture.

A) graphic
B) silent
C) transformative
D) spectacular
E) vocal

Question 71

In _____ cultures,what is actually said or written may convey only part,and sometimes a very small part,of the real message.

A) low-context
B) monochronic
C) polychronic
D) popular
E) high-context

Question 72

_____ is the confusion and discomfort a person experiences when in an unfamiliar culture.

A) Cultural appropriation
B) Culture shock
C) Cultural assimilation
D) Cultural relativism
E) Culture phobia

Question 73

People with cultural intelligence:

A) are flexible in dealing with cultural differences.
B) are uncomfortable with cultural differences.
C) view one's culture as superior to that of others.
D) view one's culture as inferior to that of others.
E) are eager to adopt the values of foreign cultures.

Question 74

Which of the following is a trait of ethnocentrism?

A) Showing no concern for the cultures of others
B) Being eager to adopt the elements of foreign cultures
C) Showing a preference for foreign cultural values to one's own
D) Respecting ethnic minorities and their culture
E) Failing to comply with the cultural values of one's own group

Question 75

Monochronic cultures focus on _____.

A) gestures
B) written language
C) social context
D) time
E) space

Question 76

Someone high in cultural intelligence views cultural differences as _____.

A) threats
B) ethical dilemmas
C) learning opportunities
D) moral dilemmas
E) barriers to learning

Question 77

_____ is the tendency to consider one's culture superior to that of others.

A) Regiocentrism
B) Isolationism
C) Geocentrism
D) Ethnocentrism
E) Polycentrism

Question 78

_____ is the ability to accept and adapt to new cultures.

A) Cultural imperialism
B) Cultural intelligence
C) Ethnocentrism
D) Cultural myopia
E) Cultural appropriation

Question 79

Which of the following is true about members of polychronic cultures?

A) They are known to be punctual without exception.
B) They do only one thing at a time.
C) They are flexible in their views of time.
D) They regard time as the primary focus of business.
E) They have a pre-determined sequence of agenda.

Question 80

Most businesspeople in the United States schedule meetings with specific people and focus on a specific agenda for an allotted time.This is characteristic of a(n)_____ culture.

A) polychronic
B) low-context
C) ethnocentric
D) high-context
E) monochronic