Question 1

With the rise in world commerce, government regulatory bodies are no longer able to closely monitor foreign business practices.

Accepted Answer

Government regulatory bodies continue to monitor foreign business practices, often using international cooperation and advanced technologies to manage the complexities of global commerce.

Question 2

Trade barriers are one of the unique and diverse risks that face multinational corporations.

Accepted Answer

Trade barriers, such as tariffs and import restrictions, can affect the operations and profitability of multinational corporations by limiting market access and increasing costs.

Question 3

List at least five potential advantages to initiating, continuing, and/or expanding international operations.

Accepted Answer

The answer of List at least five potential advantages to...

Question 4

Perhaps the greatest advantage of international operations to a firm is the ability to gain new customers for its products and services, thus increasing revenues.

Accepted Answer

International operations allow firms to access new markets and customer bases, potentially increasing sales and revenue.

Question 5

Although a firm's power and prestige in domestic markets may be significantly enhanced when the firm competes globally, this rarely translates into improved negotiating power among creditors, suppliers, or distributors.

Accepted Answer

Competing globally can enhance a firm's negotiating power with creditors, suppliers, and distributors due to increased market presence, economies of scale, and diversified risk, which can make the firm a more attractive and reliable partner.

Question 6

Potential advantages to initiating, continuing, or expanding international operations is that foreign operations can absorb excess capacity, reduce unit costs, and spread economic risks over a wider number of markets.

Accepted Answer

International operations can help utilize excess production capacity, lower costs through economies of scale, and diversify market risks by not relying on a single economy.

Question 7

Although growth in revenues and profits is a common expectation of shareholders, it is not a measure of organizational success.

Accepted Answer

Growth in revenues and profits is a key measure of organizational success as it indicates financial health and the ability to generate returns for shareholders.

Question 8

It is possible to obtain insurance from the U.S. government's OPIC to eliminate all risks associated with doing business internationally.

Accepted Answer

The U.S. government's OPIC (now DFC) provides insurance to mitigate certain risks, but it cannot eliminate all risks associated with international business.

Question 9

Weaknesses of competitors in foreign lands are often underestimated, and strengths are often overestimated.

Accepted Answer

The answer of Weaknesses of competitors in foreign lands are...

Question 10

One of the dangers of remaining a local competitor is that more aggressive companies will use their global growth to capture economies of scale and learning.

Accepted Answer

Remaining a local competitor can limit a company's ability to achieve economies of scale and learning, which larger, global competitors can leverage to reduce costs and improve efficiency, potentially outcompeting local firms.

Question 11

Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people.

Accepted Answer

Different languages, cultural norms, and value systems can lead to misunderstandings and misinterpretations, affecting communication and management effectiveness across countries.

Question 12

Geographic distance and cultural differences are two of the factors that can make communication between domestic headquarters and overseas operations difficult.

Accepted Answer

Geographic distance can lead to time zone differences and logistical challenges, while cultural differences can result in misunderstandings and misinterpretations in communication.

Question 13

U.S. firms doing business internationally face the complications of having to deal with two or more monetary systems.

Accepted Answer

U.S. firms operating internationally must navigate multiple monetary systems, including currency exchange rates and differing financial regulations, which can complicate financial transactions and operations.

Question 14

The availability, depth, and reliability of economic and marketing information in different countries vary extensively.

Accepted Answer

Economic and marketing information can differ greatly between countries due to factors like data collection methods, government transparency, and economic development levels.

Question 15

Before entering international markets, firms should do research to try and diminish the risk of doing business in new markets.

Accepted Answer

Conducting research helps firms understand the new market's cultural, economic, and legal environment, reducing potential risks and increasing the chances of success.

Question 16

Keeping informed about the number and the nature of competitors is easier when doing business internationally.

Accepted Answer

It is often more challenging to keep informed about competitors in international markets due to differences in regulations, languages, and market dynamics.

Question 17

A motivation for initiating international operations is that competitors in foreign markets may not exist, or competition may be less intense than in domestic markets.

Accepted Answer

Entering international markets can provide opportunities where competition is less intense or non-existent, allowing a company to establish a strong presence and gain market share.

Question 18

Strategists in multinational corporations are often confronted with the need to be globally competitive and nationally responsive at the same time.

Accepted Answer

Strategists in multinational corporations must balance global competitiveness with national responsiveness to effectively operate in diverse markets while maintaining a cohesive global strategy.

Question 19

More time and effort are required to identify and evaluate external trends and events in domestic corporations than in multinational corporations.

Accepted Answer

Multinational corporations typically require more time and effort to identify and evaluate external trends and events due to their operations across multiple countries with diverse economic, political, and cultural environments.

Question 20

As long as the price and quality of a firm's products and services are competitive on a local basis, it has nothing to worry about.

Accepted Answer

A firm must also consider other factors such as market trends, customer preferences, global competition, and technological advancements to remain competitive and successful.

Quiz 11: Global and International Issues