Question 1

If a company was having difficulty distributing products by truck to customers because of a poor road system, the problem would be related to:

Accepted Answer

The issue is related to an inadequate road infrastructure, which is hindering the company's ability to distribute products to customers.

Question 2

Which aspect of business management would not change when doing business internationally?

Accepted Answer

All aspects of business management, including planning, organizing, controlling, and leading, may need to be adapted or modified when doing business internationally due to variations in cultural differences, laws, regulations, etc. Therefore, there is no aspect of business management that would not change when doing business internationally.

Question 3

A supermarket is having trouble getting the local farmers to supply it with fresh produce. This is a problem with the:

Accepted Answer

The issue of not being able to find local farmers to supply fresh produce is related to the natural resource market because it pertains to the availability and accessibility of agricultural products.

Question 4

When making foreign direct investments, companies that purchase insurance against the possible expropriation of their assets by host governments is an example of which sector of the international business environment?

Accepted Answer

Purchasing insurance against the possible expropriation of assets by host governments is a precautionary measure taken by companies to mitigate political and legal risks associated with foreign direct investment. Therefore, it is an example of the political and legal sector of the international business environment.

Question 5

A company wants to reduce shipping costs by producing goods closer to their customers in foreign countries. This strategy would reduce transportation costs and storage costs. The company is engaging in which strategy?

Accepted Answer

The strategy being described is foreign direct investment, which involves establishing a physical presence in a foreign country to produce and sell goods locally. This can help reduce transportation costs and storage costs, as goods are produced and sold closer to customers. The other options, such as franchising, exporting, licensing, and barter agreements, do not involve establishing a physical presence in a foreign country.

Question 6

In international business, the economic environment represents all of the following factors EXCEPT:

Accepted Answer

The economic environment typically includes factors like infrastructure, resource and product markets, inflation, and exchange rates. Laws and regulations, however, are part of the legal or regulatory environment, not the economic environment.

Question 7

All of the following countries are considered emerging economies EXCEPT _____.

Accepted Answer

Canada is not considered an emerging economy. It is a developed country with a strong economy. The other countries listed (Brazil, Russia, India, and China) are all considered emerging economies.

Question 8

Which of the following is NOT a legal-political factor in the international environment?

Accepted Answer

Language is a cultural factor, not a legal-political factor in the international environment.

Question 9

A foreign subsidiary over which an organization has complete control is called a:

Accepted Answer

A wholly owned foreign subsidiary is a foreign entity over which the organization has complete control. Joint ventures, licensing agreements, and franchises all involve a degree of shared ownership, control, or contractual obligations between the organization and other entities. A foreign venture is a broad term that could refer to any type of business activity or investment in a foreign country, and does not necessarily imply complete control over a subsidiary.

Question 10

The management of business conducted in more than one country is called:

Accepted Answer

International business management refers to the management of business operations conducted across national borders. Global management encompasses a broader range of management practices that may include international business management, but also includes management of global teams, cross-cultural communication, and navigating complex global regulatory frameworks. Outsourcing management is a subset of operations management that involves the management of outsourced tasks or departments. Planning management is a general term for management practices related to strategic planning, operational planning, and performance planning. Domestic management refers to the management of business operations within a single country.

Question 11

Language, values, religion, education, culture all describe which dimension in the international business environment?

Accepted Answer

Language, values, religion, education, and culture are all sociocultural factors that describe the dimension of sociocultural environment in international business.

Question 12

A country's physical facilities that support its economic activities such as ports make up its _____.

Accepted Answer

Infrastructure refers to a country's physical facilities such as ports, highways, railways, airports, and telecommunication networks that support its economic activities. Resource markets refer to markets where resources such as labor, capital, and natural resources are bought and sold. Physical markets refer to markets where goods and services are bought and sold. Plants and equipment refer to the tangible assets used in production.

Question 13

Which of the following is a sociocultural factor in the international business environment?

Accepted Answer

Sociocultural factors refer to social and cultural aspects such as language, beliefs, values, norms, and customs that affect the behavior of people in a particular society. Language is a sociocultural factor that plays a critical role in international business. It can affect communication, negotiation, and marketing strategies. Understanding the language and cultural nuances of a foreign market is essential for success in international business.

Question 14

A company's risk of loss of assets, of reduced earning power and of losing managerial control because of adverse events and actions taken by a host government is referred to as:

Accepted Answer

Political risk refers to the risk of loss of assets, reduced earning power, and loss of managerial control due to adverse events and actions taken by a host government. GDP, tariffs, duties, and quotas are not directly related to the risk of loss due to actions of a host government.

Question 15

Access to natural resource, infrastructure, exchange rates all describe which dimension in the international environment?

Accepted Answer

These factors are all related to economic conditions and resources within a country or region.

Question 16

In international operations, the economic environment includes:

Accepted Answer

The answer of In international operations, the economic environment includes:
...

Question 17

Political risk is defined as an organization's risk of _____ because of adverse events and actions taken by host governments against it.

Accepted Answer

Political risk can result in an organization experiencing loss of assets, losing managerial control, and reduced earning power as a result of adverse events and actions taken by host governments against it. Therefore, option D, which includes all of these choices, is the best answer. Option E is incorrect because political risk involves negative consequences, rather than gaining managerial control and earning power.

Question 18

The legal-political environment in international business includes which of the following?

Accepted Answer

The legal-political environment in international business includes political risks, which may arise due to changes in government policies, nationalization of assets, or political unrest. Shared knowledge, beliefs, and values fall under the cultural environment, social organizations come under the social environment, and infrastructure comes under the economic environment.

Question 19

_____ is a social measure used to classify countries as developed countries or emerging countries.

Accepted Answer

Per capita income is a social measure used to classify countries as developed countries or emerging countries. Per capita income refers to the average income earned per person in a specific country and is used as an indicator of the country's economic development. Countries with higher per capita income are generally considered developed countries, while those with lower per capita income are considered emerging countries.

Question 20

Exchange rates are included in which of the following international environments?

Accepted Answer

Exchange rates are a part of the economic environment, as they reflect the value of currencies in relation to one another and can impact international trade and investment flows. The legal-political sector, sociocultural environment, and government sector are all important aspects of the international business environment, but they do not directly involve exchange rates. The barter system environment is not a commonly recognized sector of the international business environment.

Quiz 5: Managing in a Global Environment