Question 1

A company is licensing its products when it
A) allows another company to pay it a fee to train its employees.
B) allows a foreign company to pay it a fee to make or distribute the first company's product or service.
C) pays a competitor a fee to stop the competitor from selling its products in the company's territory.
D) develops a strategic plan for another organization.
E) barters goods for goods in lieu of a monetary payment.

Accepted Answer

In licensing, a company allows a foreign company to pay it a fee to make or distribute the first company's product or service.

Question 2

Based on the text, many companies are interested in expanding globally in order to
A) gain access to supplies, new markets, and lower labor costs.
B) gain access to natural resources, new markets, and a diverse workforce.
C) implement tariffs and import quotas.
D) utilize export embargoes to increase business.
E) increase the diversity and creativity of their workforce.

Accepted Answer

Companies expand internationally to gain access to supplies, new markets, and lower labor costs, as well as to access finance capital or avoid tariffs and import quotas.

Question 3

Pietro, the vice president of marketing, is talking to Ryan, a sales manager in a foreign office, about several local situations that Ryan's reps are facing in their territory. Pietro tells Ryan that he believes there are differences and similarities between home and foreign personnel and practices, and that Ryan should use whatever techniques are most effective. Pietro is a(n) ________ manager.
A) parochial
B) ethnocentric
C) global
D) geocentric
E) polycentric

Accepted Answer

Geocentric managers accept that there are differences and similarities between home and foreign personnel and practices, and they believe that managers should use whatever techniques are most effective.

Question 4

Betsy, the vice president of sales for an international organization, believes that employees in her foreign offices understand best how to handle the personnel and practices in their offices. So when the corporate HR manager approached Betsy about reprimanding Francois, a native Parisian who is the Paris office manager, for not doing things according to corporate policy, Betsy backed Francois and said, "I believe that the home office should leave Francois alone because he best understands the local culture." Betsy is a(n) ________ manager.
A) ethnocentric
B) global
C) native
D) polycentric
E) parochial

Accepted Answer

Polycentric managers take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone.

Question 5

Countertrading is ________ goods for goods.
A) outsourcing
B) sourcing
C) bartering
D) selling
E) licensing

Accepted Answer

Countertrading is bartering goods for goods.

Question 6

________ is another word for ethnocentrism.
A) Geocentrism
B) Ecocentrism
C) Parochialism
D) Open-mindedness
E) A flexible management style

Accepted Answer

Parochialism is a narrow view in which people see things solely through their own perspective.

Question 7

Kishore owns an international grocery store, the Global Market, where customers can purchase foods and canned goods from other countries. Global Market is an example of a company that
A) exports.
B) globalizes.
C) inputs.
D) imports.
E) countertrades.

Accepted Answer

When importing, a company buys goods from outside the country and resells them domestically.

Question 8

Henry, a regional manager for a global corporation, is meeting with several upset managers from the Rome plant about Michael, who is originally from Texas but moved to Italy to manage the Rome facility. Antonio, the assistant manager, tells Henry, "We all feel that Michael sees things only one way-his-and very seldom considers our perspective on things." Michael is employing a ________ management style.
A) traditional
B) ecocentric
C) geocentric
D) polycentric
E) parochial

Accepted Answer

Parochialism is a narrow view in which people see things solely through their own perspective.

Question 9

Ethnocentric managers believe that their native country, culture, language, and behavior
A) are equal to all other cultures.
B) are hurtful to others.
C) need to be changed.
D) make them citizens of the world.
E) are superior to all others.

Accepted Answer

Ethnocentric managers believe that their native country, culture, language, and behavior are superior to all others. Ethnocentric managers tend to believe that they can export the managers and practices of their home countries to anywhere in the world and that those managers will be more capable and reliable than the native managers.

Question 10

Pablo, a construction manager with employees working in Puerto Rico, is having a hard time with employee turnover. While speaking with his human resources manager, Avery, he says he does not understand why the workers come to work late, take longer lunches, and yet still punch out at five o'clock. He feels they should want to work to get the country back on its feet and do what it takes to get the job done. Based on this example, Pablo is most likely a(n) ________ manager.
A) geocentric
B) ethnocentric
C) innovative
D) open-minded
E) polycentric

Accepted Answer

"The main thing is to get the job done." Certainly, there are international firms with managers who have this perspective. They are called ethnocentric.

Question 11

Fresh Toppings is based in Sacramento, California and has restaurants in 25 countries. In the United States, Fresh Toppings would be viewed as which of the following?
A) multinational corporation
B) conglomerate
C) multinational organization
D) international enterprise
E) foreign firm

Accepted Answer

A multinational corporation, or multinational enterprise, is a business firm with operations in several countries.

Question 12

Sox for All is a global nonprofit organization that works with schools and various companies to donate socks and shoes to poor children throughout the world. Sox for All is an example of a
A) multinational corporation.
B) conglomerate.
C) foreign firm.
D) philanthropic corporation.
E) multinational organization.

Accepted Answer

A multinational organization is a nonprofit organization with operations in several countries. Examples are the World Health Organization, the International Red Cross, and the Church of Latter-day Saints.

Question 13

Alpha Computing is a U.S. company that specializes in IT research. It has formed a joint venture with Microchips Inc., a Belgium organization that has a reputation for producing quality PCs. The two companies will work together to market laptops in China, sharing the risks and rewards of starting the new enterprise together. Alpha Computing and Microchips Inc. are partners in a(n)
A) strategic alliance.
B) global strategy.
C) export strategy.
D) import strategy.
E) franchising strategy.

Accepted Answer

A U.S. firm may form a joint venture, also known as a strategic alliance, with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country.

Question 14

Sometimes a country's laws forbid foreigners from owning a business in the nation. In the presence of such laws, a(n) ________ is one way for an American company to have a presence in that foreign country.
A) export agreement
B) MBO pact
C) import agreement
D) 50/50 ownership split
E) joint venture

Accepted Answer

A U.S. firm may form a joint venture, also known as a strategic alliance, with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country. Sometimes a joint venture is the only way an American company can have a presence in a certain country, whose laws may forbid foreigners from owning a business there. Indeed, in China all foreign cars are sold through joint ventures with Chinese companies.

Question 15

Luke is the owner of Fun Times, a U.S. event-planning company. He plans to open an event-planning company, Events & Adventures, in Germany. Events & Adventures will be totally owned and controlled by Fun Times, which makes Events & Adventures a ________ of Fun Times.
A) joint venture
B) total investment agreement
C) strategic alliance
D) wholly owned subsidiary
E) maquiladora

Accepted Answer

A wholly owned subsidiary is a foreign subsidiary that is totally owned and controlled by an organization. The foreign subsidiary may be an existing company that is purchased outright.

Question 16

Airbus Inc., a company that builds airplanes, typically orders parts for its airplanes from other companies. ________ is the practice Airbus Inc. is using.
A) Countertrading
B) Bartering
C) Trading
D) Outsourcing
E) Diversifying

Accepted Answer

Outsourcing, a common practice of many companies, is defined as using suppliers outside the company to provide goods and services.

Question 17

In exchange for $1,000 of office supplies, Anthony's IT Services uses ________ to install new network computers and printers at no cost to Quality Office Supply.
A) outsourcing
B) sourcing
C) inputting
D) countertrading
E) importing

Accepted Answer

Countertrading is bartering goods for goods.

Question 18

Pinetops Resorts, an American company, sells the rights to other hospitality companies globally to open resorts with the Pinetops name for a fee and a share of the profit, in return for using Pinetops' brand name and a package of materials and services. Pinetops is engaged in
A) franchising.
B) importing.
C) offshoring.
D) exporting.
E) countertrading.

Accepted Answer

Franchising is a form of licensing in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first company's brand name and a package of materials and services.

Question 19

Wendy's Truffles makes quality desserts and sells its products to customers in other countries. Wendy's Truffles is ________ its products.
A) bartering
B) countermarketing
C) exporting
D) dumping
E) importing

Accepted Answer

When exporting, a company produces goods domestically and sells them outside the country.

Question 20

________ are Mexican manufacturing plants with low labor costs that give special privileges to their American owners in return for employing Mexican citizens.
A) Diversedoras
B) Barteristas
C) Globalists
D) Internationaladoras
E) Maquiladoras

Accepted Answer

Many American companies have found it cheaper to do their manufacturing outside the United States. For example, maquiladoras, which are foreign-owned manufacturing plants in Mexico that offer special privileges to companies in return for employing Mexican citizens, and provide less expensive labor for assembling many types of manufactured goods.

Quiz 4: Global Management Managing Across Borders

A company is licensing its products when it

Based on the text, many companies are interested in expanding globally in order to

Countertrading is ________ goods for goods.

________ is another word for ethnocentrism.

Kishore owns an international grocery store, the Global Market, where customers can purchase foods and canned goods from other countries. Global Market is an example of a company that

Ethnocentric managers believe that their native country, culture, language, and behavior

Fresh Toppings is based in Sacramento, California and has restaurants in 25 countries. In the United States, Fresh Toppings would be viewed as which of the following?

Sox for All is a global nonprofit organization that works with schools and various companies to donate socks and shoes to poor children throughout the world. Sox for All is an example of a

Sometimes a country's laws forbid foreigners from owning a business in the nation. In the presence of such laws, a(n) ________ is one way for an American company to have a presence in that foreign country.

Luke is the owner of Fun Times, a U.S. event-planning company. He plans to open an event-planning company, Events & Adventures, in Germany. Events & Adventures will be totally owned and controlled by Fun Times, which makes Events & Adventures a ________ of Fun Times.

Airbus Inc., a company that builds airplanes, typically orders parts for its airplanes from other companies. ________ is the practice Airbus Inc. is using.

In exchange for $1,000 of office supplies, Anthony's IT Services uses ________ to install new network computers and printers at no cost to Quality Office Supply.

Pinetops Resorts, an American company, sells the rights to other hospitality companies globally to open resorts with the Pinetops name for a fee and a share of the profit, in return for using Pinetops' brand name and a package of materials and services. Pinetops is engaged in

Wendy's Truffles makes quality desserts and sells its products to customers in other countries. Wendy's Truffles is ________ its products.

________ are Mexican manufacturing plants with low labor costs that give special privileges to their American owners in return for employing Mexican citizens.