Deck 2: The Global Business Environment

Question 1

 Which of the following statements is true about businesses and their leaders?

A) Some leaders focus their efforts on lobbying to influence the government's role in business.
B) Businesses and their leaders often operate in isolation.
C) Business leaders are often reactive to their changing environment but not proactive in adapting their strategies accordingly.
D) Successful business leaders usually do not try to influence the global business environment.

Answer 1

A

Question 2

 Identify the trade agreement that created a single market by a system of laws that apply in all member states, guaranteeing the freedom of movement of people, goods, services, and capital.

A) North American Free Trade Agreement
B) Economic Community of West African States
C) European Union
D) Central American Common Market

Answer 2

C

Question 3

 Which of the following countries is one of the original members of ASEAN?

A) Canada
B) Philippines
C) Guatemala
D) Nigeria

Answer 3

B

Question 4

 Which of the following is the best example of Hofstede's long- versus short-term orientation dimension?

A) People in Erbia believed that competition, ambition, and accumulation of wealth are typical masculine qualities.
B) The members of a particular society often prefer more rules and structure and are incapable to adapt to quick changes.
C) In an organization, it is mandatory for managers to make decisions by giving more importance to the future than the present.
D) The host country employees of an organization prefer to unquestionably abide by the rules of the top management.

Question 5

 Which of the following is the best example of Hofstede's low versus high power distance dimension?

A) In an organization, it is mandatory for managers to make decisions by giving more importance to the future than the present.
B) The members of a particular society often prefer more rules and structure and are incapable to adapt to quick changes.
C) The host country employees of an organization prefer to unquestionably abide by the rules of the top management.
D) People in Erbia believe that competition, ambition, and accumulation of wealth are typical masculine qualities.

Question 6

 The _____ was formed to deal with the rules of trade between nations and is responsible for negotiating and implementing new trade agreements and policing member countries' adherence to them.

A) General Agreement on Tariffs and Trade
B) World Trade Organization
C) Association of South East Asian Nations
D) European Union

Question 7

 Which of the following is one of the primary goals of ASEAN?

A) Eliminating tariffs among countries
B) Easing travel of citizens and goods
C) Creating a single financial market
D) Ensuring peace and stability

Question 8

 The members of a particular society in Rhodia often find it hard to adapt themselves to the changing situations. Therefore, they prefer to follow standard rules and procedures in an attempt to reduce the occurrences of any anxiety-causing situations. Which of the following of Hofstede's social dimensions is described in this example?

A) Low versus high uncertainty avoidance
B) Long- versus short-term orientation
C) Low versus high power distance
D) Individualism versus collectivism

Question 9

 The fourth largest regional trading group, MERCOSUR, comprises the countries of

A) Argentina, Brazil, Paraguay, Uruguay, and Venezuela.
B) Bahrain, Kuwait, Oman, and Qatar.
C) Canada, Mexico, and United States.
D) Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.

Question 10

 Which of the following entities belongs to the general environment of an organization?

A) Culture
B) Technology
C) Customers
D) Employees

Question 11

 The president of a small nation is promoting and nurturing coffee agriculture because he believes it is the product at which the country can be the most efficient producer. He is operating under

A) the Theory of Comparative Advantage.
B) the Theory of Economic Dimension.
C) Hofstede's Low versus High Power Distance Dimension.
D) the Principles of Uncertainty Avoidance.

Question 12

 Which of the following demonstrates the interconnectedness of the global economy? 

A) The expected growth of the Chinese middle class from 300 million people in 2012 to 500 million people in 2020 
B) The changing composition of the Dow Jones Industrial Average from 1896 to 2015
C) GE's business portfolio going from 75% manufacturing in the 1980s to 75% services today
D) The U.S. mortgage crisis in 2008 following by high unemployment in Greece

Question 13

 To remain competitive, companies

A) shouldn't be proactive to their changing environments.
B) should not try to influence the global business environment.
C) can no longer sell exclusively in their domestic markets.
D) should not make any attempts to expand globally.

Question 14

 As a delegate to the World Trade Organization, Kate stated during negotiations that the same rules and regulations that applied to another country's domestic firms must also be applied to her country's firms operating in that country. Kate was invoking the

A) principle of national treatment.
B) consensus principle.
C) most favored nation principle.
D) least favored nation principle.

Question 15

 A firm's task environment includes

A) owners and the board of directors.
B) competitors, suppliers, and customers.
C) employees and culture.
D) economic and sociocultural factors.

Question 16

 Identify the country that is represented by NAFTA.

A) United Kingdom
B) Zimbabwe
C) Costa Rica
D) Mexico

Question 17

 Sam, the top manager of TechPark, decides to expand his business globally and creates a new market in Erbia, a neighboring country. Eventually, the company faces issues related to unskilled labor and poor resource positions/infrastructure, such as unreliable highway systems and improper communication networks. From this scenario, it can be inferred that Sam failed to focus on the _____ dimension of the external environment affecting business.

A) sociocultural
B) political
C) legal
D) economic

Question 18

 Which of the following countries was admitted to MERCOSUR in 2012 and is likely to increase the importance of fuel trade both within and outside the region?

A) Venezuela
B) Argentina
C) Paraguay
D) Brazil

Question 19

 Of the three main principles of GATT, the most favored nation principle meant that

A) a tariff rate granted to one member of GATT would be extended to all members.
B) foreign firms would be subject to the same rules and regulations as a country's domestic firms.
C) trade disputes would be settled by the unanimous agreement of all parties to the dispute.
D) countries should specialize in producing goods for which they have the lowest opportunity cost of production.

Question 20

 _____ refers to the integration and interdependence of economic, technological, sociocultural, and political systems across diverse geographic regions.

A) Innovation
B) Globalization
C) Proliferation
D) Competition

Question 21

 In contrast to the dimensions of the task environment, the general environment has the ability to exert a greater and more immediate influence over a firm.

Question 22

 Successful business leaders not only respond to changes in the global business environment but also try to influence it.

Question 23

 Which of the following statements is true about the dimensions of internal environment?

A) Owners serve as an intermediate group for shareholders.
B) Employees cannot directly impact a firm's competitive position.
C) Legal control of an organization is maintained by the board of directors.
D) Cultures at firms develop over a long period of time.

Question 24

 Globalization has presented challenges including the emergence of new, powerful competitors in many industries.

Question 25

 Which of the following has the least direct influence on a firm? 

A) Political/legal forces
B) Competitors
C) Employees
D) Suppliers

Question 26

 Explain the features of the European Union.

Question 27

 Which of the following has the most direct influence on a firm? 

A) Political/legal forces
B) Technological forces
C) Sociocultural forces
D) Organizational culture

Question 28

 Define task environment and its dimensions.

Question 29

 Which of the following entities belongs to the internal environment of an organization?

A) Technology
B) Suppliers
C) Employees
D) Customers

Question 30

 Fuel and mining products are increasingly important components of MERCOSUR's export base.

Question 31

 Sally is a fractional owner in a business and is given the opportunity to vote on proxy matters. Sally is most likely a(n)

A) member of the board of directors.
B) institutional shareholder.
C) individual shareholder.
D) manager of the business.

Question 32

 The Uruguay Round is noteworthy because it created the successor to GATT.

Question 33

 When Home Depot began offering a paint palette of colors named to reflect Hispanic culture, it was responding to changes in the

A) sociocultural dimension of the firm's general external environment.
B) legal dimension of the firm's general external environment.
C) polital dimension of the firm's external task environment.
D) economic dimension of the firm's general external environment

Question 34

 How do successful business leaders respond to the changing business environment?

Question 35

 Briefly describe the different dimensions of the general environment.

Question 36

 The sociocultural dimension of a firm's environment includes interest rates of all the countries where it sells its products and services.

Question 37

 Outline the components of a firm's internal environment.

Question 38

 The responsibility of James and Henry in an organization is to direct and oversee managers to ensure that the jobs are properly done. Both were elected by the shareholders of the organization to serve as an intermediate group. From this scenario, it can be inferred that James and Henry are the _____ of the organization.

A) employees
B) board of directors
C) institutional shareholders
D) owners

Question 39

 The factor that distinguishes an internal environment of an organization from an external environment is that:

A) the internal environment consists of the general environment and the task environment.
B) the internal environment includes owners, the board of directors, employees, and culture.
C) the internal environment includes entities that directly affect a firm on a continuous basis.
D) the internal environment consists of the technological, economic, and sociocultural factors.

Question 40

 Social values often pose a much lesser challenge than language barriers for a company wanting to expand globally.