Deck 5: Global Management and Cultural Diversity

Question 1

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

Answer 1

False

Question 2

Tariffs are basically taxes that governments impose on imports.

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

Knowledge about foreign cultures is known as cultural intelligence.

Question 6

A common first step into international business is global sourcing.

Question 7

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

Question 8

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

Question 9

In exporting,local products are sold abroad to foreign customers.

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

Barbara shocked all her friends when she arrived at the party wearing a silk kimono,a traditional Japanese outfit.The reaction of her friends is an example of culture shock.

Question 21

Members of polychronic cultures do not like if someone is late or brings an uninvited guest.

Question 22

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 23

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 24

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

A)Reducing imports
B)Spreading assets among multiple countries
C)Boosting domestic demand
D)Establishing market monopoly
E)Promoting ethnocentrism

Question 25

The growth of export industries ________ the exporting country.

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

Question 26

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

Question 27

When Iris Inc.,a hand-bag 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 28

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

Question 29

When Zest Inc.,a pharmaceuticals company,bought the rights of manufacturing and selling Bayman Pharma's vitamin supplement Vita Plus in Cuba,Zest engaged in ________.

A)exporting
B)global sourcing
C)foreign direct investment
D)insourcing
E)licensing

Question 30

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

Question 31

Tight cultures are characterized by clear social norms.

Question 32

Proxemics is how people use space to communicate.

Question 33

Howard 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

An)________ 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 35

Which of the following is an effect of globalization?

A)Reduced cooperation among nations in the global economy
B)Weakening of economic integration across countries
C)Reduced interdependence among the components in the global economy
D)Increasing importance of nation states
E)A borderless world

Question 36

Juan,a wealthy industrialist,owns several coffee plantations in Brazil.Encouraged by the rising sales figures in the domestic market,Juan decides to sell his 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 37

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

Question 38

The ecological fallacy refers to the belief that a cultural value such as individualism does not apply equally to all Americans.

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

Members of monochronic cultures are more flexible toward time than those of polychronic cultures.

Question 41

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 42

What are sweatshops?

A)Local business operations that expand internationally through foreign direct investment
B)Arbitrating firms that settle labor disputes
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 43

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 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 ethics
C)the business laws in Yemen
D)Yemeni culture
E)the banking system in Yemeni

Question 44

The goal of most tariffs is to:

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

Question 45

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

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

Question 46

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 capital investments abroad.
E)poor working conditions.

Question 47

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

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

Question 48

________ 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)Moral

Question 49

Arguments on the negative side blame NAFTA 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 50

Culture shock is:

A)a hatred of foreign cultures.
B)an individual's failure to comply with the codes of his 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)the discomfort a person experiences when in an unfamiliar culture.

Question 51

________ are taxes governments levy on imports from abroad.

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

Question 52

________ 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 53

Which of the following is true about culture?

A)Culture is a set of legal codes.
B)Culture occupies a position of peripheral importance in international business.
C)Culture is not common to a group.
D)Culture remains static over time.
E)Cultural miscues can be costly in international business.

Question 54

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.
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 engage in corrupt practices overseas.

Question 55

Which of the following countries is a part of NAFTA?

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

Question 56

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 an economic and political alliance of major importance.

Question 57

Stephanie Mann,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)xenophobia
B)culture shock
C)cognitive dissonance
D)acculturation
E)boredom

Question 58

Which of the following is an example of child labor?

A)A six-year old boy accompanying his mother to the carpet factory where she works
B)A ten-year-old boy working in a chemicals factory
C)A ten-year-old girl helping her younger brother with schoolwork
D)A thirteen-year-old boy earning $10 for helping his father harvest strawberries from the family garden
E)A nineteen-year-old girl working as a salesgirl in the local supermarket

Question 59

Which of the following is an example of a sweatshop?

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

Question 60

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 61

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

A)They rely on nonverbal and situational cues.
B)The main part of the real message is conveyed by what is actually said.
C)Body language and the physical setting are 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 62

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 preference for foreign cultural values
D)Encouraging ethnic minorities to adopt the traits of the dominant culture
E)Failing to comply with the cultural values of one's own group

Question 63

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 64

Monochronic cultures focus on ________.

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

Question 65

________ 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 66

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 67

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 68

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

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

Question 69

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 70

Which of the following is true about proxemics?

A)It studies the importance of time in the context of business.
B)It emphasizes the importance of gestures in the communication process.
C)It emphasizes verbal communication.
D)It focuses on the use of space in communication.
E)It focuses on the comparative analysis of the cultural traits of different groups.

Question 71

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 72

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 73

Thomas Wiegler,a German businessman,decided to meet one of his clients in the latter's office in Abu Dhabi.He was frustrated to find that after an initial warm greeting,his client continued to deal with the continuous stream of visitors flowing in and out of his office.Thomas concluded that he was not being given the dedicated attention he deserved.Thomas closely identifies with ________ cultural values.

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

Question 74

________ cultures emphasize communication via spoken or written words.

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

Question 75

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

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

Question 76

________ is how people use space to communicate.

A)Proxemics
B)Kinesics
C)Haptics
D)Chronemics
E)Vocalics

Question 77

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

A)They are known to be punctual without exception.
B)They are generally reluctant to accomplish many different things at once.
C)They are flexible toward time.
D)They regard time as the primary focus of business.
E)They prefer following a pre-determined sequence for accomplishing a given task at a given time.

Question 78

Sam,an American national,was sent to India as part of a cultural exchange program in his university.On his arrival in India,he did not respond to his host who greeted him by folding his hands.He also declined the tea that was offered,emphasizing a cultural preference for coffee.Sam displayed ________.

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

Question 79

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

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

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 an)________ culture.

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