55 terms

International Management: Culture, Strategy, Behavior - Chapter 1

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The process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political and cultural environments is:


A. Strategic management

B. Internationalization

C. Globalization

D. International management
D. International management
To qualify as a multinational corporation, a firm must meet all of the following criteria except:


A. Operations in more than one country

B. International sales

C. A nationality mix of managers and owners

D. Sales of at least one million dollars per year
D. Sales of at least one million dollars per year
Globalization:


A. Is the growth of interstate trade, spurred on by the progress toward free-market policies

B. Is the subcontracting of activities to endogenous organizations that had previously been performed within the firm

C. Is the process of social, political, economic, cultural and technological integration among countries around the world

D. Is the process of a business crossing national and cultural borders
C. Is the process of social, political, economic, cultural and technological integration among countries around the world
Identify the statement that is false of globalization.


A. It can be defined as the process of social, political, economic, cultural and technological integration among countries around the world

B. It is the process of a business crossing national and cultural borders

C. Evidence of globalization can be seen in increased levels of trade, capital flows and migration

D. It has been facilitated by technological advances in transnational communications, transport and travel
B. It is the process of a business crossing national and cultural borders
The subcontracting or contracting out of activities to endogenous organizations that had previously been performed by the firm is called:


A. Homesourcing

B. Insourcing

C. Offshoring

D. Outsourcing
D. Outsourcing
The process by which companies undertake some activities at offshore locations instead of in their countries of origin is:


A. Homesourcing

B. Insourcing

C. Offshoring

D. Globalization
C. Offshoring
Antiglobalization activists:


A. Contend that even within the developing world, it is protectionist policies, not trade and investment liberalization, that result in environmental and social damage

B. Believe globalization will force higher-polluting countries such as China and Russia into an integrated global community that takes responsible measures to protect the environment

C. Assert that if corporations are free to locate anywhere in the world, the world's poorest countries will relax or eliminate environmental standards and social services in order to attract first-world investment and the jobs and wealth that come with it

D. Believe that industrialization will create wealth that will enable new industries to employ more modern, environmentally friendly technology
C. Assert that if corporations are free to locate anywhere in the world, the world's poorest countries will relax or eliminate environmental standards and social services in order to attract first-world investment and the jobs and wealth that come with it
The global organization of countries that oversees rules and regulations for international trade and investment, including agriculture, intellectual property, services, competition and subsidies is the:


A. WTO

B. NAFTA

C. WIPO

D. ITO
A. WTO
A free-trade agreement between the United States, Canada and Mexico that has removed most barriers to trade and investment is:


A. AFTA

B. CEFTA

C. CAFTA

D. NAFTA
D. NAFTA
The World Trade Organization (WTO) meeting in Cancun in September of 2003 was led by:


A. India and Brazil

B. The U.S. and Japan

C. The U.K. and France

D. EU members
A. India and Brazil
The World Trade Organization (WTO) meeting in Doha in November of 2001 was referred to as:


A. The "Annecy Round"

B. The "Development Round"

C. The "Tokyo Round"

D. The "Torquay Round"
B. The "Development Round"
The United States, Canada and Mexico make up the _____, which in essence has removed all barriers to trade between these countries and created a huge North American market.


A. General Agreement on Tariffs and Trade

B. North American Common Market

C. North American Free Trade Agreement

D. North American Trade Union
C. North American Free Trade Agreement
Agreements like NAFTA and CAFTA:


A. Not only reduce barriers to trade but also require additional domestic legal and business reforms in developing nations to protect property rights

B. Do not include supplemental commitments on labor and the environment to encourage countries to upgrade their working conditions and environmental protections like the FTAA

C. Rely exclusively on MNCs exporting or setting up operations locally rather than buying out a domestic firm

D. Provide firms with enough security so they cannot go out of business, which simply encourages a lack of efficiency or incentive to monitor costs
A. Not only reduce barriers to trade but also require additional domestic legal and business reforms in developing nations to protect property rights
The NAFTA agreement and the DR-CAFTA agreement are examples of:


A. Defunct bilateral agreements

B. Regional trade agreements

C. Plurilateral agreements

D. Proposed bilateral agreements
B. Regional trade agreements
Due to the stalled progress with the WTO and FTAA, the United States has pursued _____ with a range of countries, including, Australia, Bahrain, Chile, Colombia, Israel, Jordan, Malaysia, Morocco, Oman, Panama, Peru, Malaysia and Singapore.


A. Plurilateral trade agreements

B. Multilateral trade agreements

C. Bilateral trade agreements

D. Regional trade agreements
C. Bilateral trade agreements
The Asian economic block, made up of Indonesia, Malaysia, the Philippines, Singapore, Brunei, Thailand, Cambodia, Myanmar and Vietnam is referred to as:


A. Association of Southeast Asian Nations (ASEAN)

B. Southeast Asia Free Trade Agreement (SWAFTA)

C. Southeast Asia Common Market

D. Asian Economic Union
A. Association of Southeast Asian Nations (ASEAN)
A method which adjusts GDP to account for different prices in countries is called:


A. Cumulative distribution function

B. Nominal GDP

C. Current currency exchange rate

D. Purchasing power parity
D. Purchasing power parity
The following are characteristics of the BRIC economies except:


A. Demand for higher priced goods is expected to continue to be low in the future

B. The BRIC economies share of world growth is expected to rise to about 40 percent by 2025

C. Per capita income in the BRIC countries is rising

D. Demand for basic goods will be strong
A. Demand for higher priced goods is expected to continue to be low in the future
The Goldman Sachs global economics team:


A. Estimates that Chile will occupy a dominant role in the global economic system and will surpass the United States in output by 2035

B. Reports that the economic potential of Brazil, Russia, India and China is such that they may become among the four most dominant economies by the year 2050

C. Estimates that the BRIC economies' share of world growth could rise from 40 percent in 2000 to more than 70 percent in 2025

D. Reports that Germany, followed by India a decade later, will overtake the United States as the world's largest car market
B. Reports that the economic potential of Brazil, Russia, India and China is such that they may become among the four most dominant economies by the year 2050
The term used to indicate the amount invested in property, plant and equipment in another country is:


A. Exporting

B. Foreign direct investment

C. Importing

D. Trade imperfection
B. Foreign direct investment
In 2009, global merchandise exports and global commercial services exports:


A. Declined for the first time since 1983

B. Nearly doubled

C. Remained fairly consistent

D. Decreased by almost 50 percent
A. Declined for the first time since 1983
In 2009, FDI inflows and outflows:


A. Nearly doubled

B. Nearly tripled

C. Fell substantially

D. Remained fairly constant
C. Fell substantially
The emerging global community is becoming increasingly:


A. Socially isolated

B. Economically interdependent

C. Culturally interdependent

D. Financially independent
B. Economically interdependent
A _____ is comparable to a monopoly in the sense that the organization, in this case the government, has explicit control over the price and supply of a good or service.


A. Command economy

B. Market economy

C. Mixed economy

D. Socialist economy
A. Command economy
A _____ exists when private enterprise reserves the right to own property and monitor the production and distribution of goods and services while the state simply supports competition and efficient practices.


A. Command economy

B. Market economy

C. Mixed economy

D. Socialist economy
B. Market economy
_____ is the United States' largest trading partner, a position it has held for many years.


A. England

B. Canada

C. Japan

D. Mexico
B. Canada
Which country receives the most foreign direct investment (FDI) by U.S. companies?


A. Netherlands

B. Mexico

C. Great Britain

D. Canada
C. Great Britain
Which of the following statements is false with regard to a mixed economy?


A. Regulations concerning minimum wage standards, social security, environmental protection and the advancement of civil rights may raise the standard of living

B. Ownership of organizations seen as imperative to the nation may be transferred to the state to subsidize costs and allow the firm to flourish

C. Regulations concerning minimum wage standards, social security, environmental protection and the advancement of civil rights ensure that those who are elderly, sick or have limited skills are taken care of

D. Businesses in this model are owned by the state to ensure that investments and practices are done in the best interest of the nation despite the often opposing outcomes
D. Businesses in this model are owned by the state to ensure that investments and practices are done in the best interest of the nation despite the often opposing outcomes
The following statements are true about the United States and Canada except:


A. The legal and business environments of the two countries are very different

B. Both countries are participants in NAFTA

C. Canada is the largest trading partner of the U.S

D. In recent years, Canadian firms have begun investing heavily in the U.S
A. The legal and business environments of the two countries are very different
Which of the following statements is true of the economic system of North America?


A. The free-market-based economy of this region allows for more freedom in decision-making processes of private firms

B. The command economy of this region allows for greater flexibility with decisions and low barriers for other countries to establish business

C. The free-market-based economy of this region results in lowering barriers when attempting to move into other countries

D. The command economy of this region allows competition to strive while the government can extend assistance to individuals or companies
A. The free-market-based economy of this region allows for more freedom in decision-making processes of private firms
In the early 1990s, _____ had recovered from its economic problems of the previous decade and become the strongest economy in Latin America.


A. Brazil

B. Argentina

C. Mexico

D. Chile
C. Mexico
The United States holds a dominant position in all of the following industries except:


A. telecommunications

B. biotechnology

C. media

D. textiles
D. textiles
A factory, located in a Mexican border town, that imports materials and equipment on a duty and tariff-free basis for assembly or manufacturing and re-exports is called a:


A. Vertically integrated corporation

B. Keiretsus

C. Maquiladora

D. Chaebols
C. Maquiladora
The term "maquiladora" is used to describe a specific kind of _____ industry.


A. Brazilian

B. Mexican

C. South Korean

D. Chinese
B. Mexican
Identify the statement which is not true of Mexico.


A. When it joined NAFTA, Mexico was on the verge of becoming the major economic power in Latin America

B. Mexico has free-trade agreements with more than 50 countries

C. Mexico's trade with Asia is declining

D. Mexico's government are probusiness
C. Mexico's trade with Asia is declining
Which of the following observations about NAFTA is incorrect?


A. Mexican businesses are finding themselves able to take advantage of the U.S. market by replacing goods that were previously purchased from Asia

B. Mexican firms are now able to produce products at highly competitive prices thanks to lower-cost labor and proximity to the American market

C. Mexican firms can now export goods into the European community only by paying a heavy tariff

D. Mexico's trade with Asia is on the rise which is important to the country as it wants to reduce its overreliance on the U.S. market
C. Mexican firms can now export goods into the European community only by paying a heavy tariff
A major development in South America is:


A. Is the implementation of the single currency and the regional central bank

B. The growth of inter-country trade, spurred on by the progress toward free-market policies

C. Is the privatization of traditionally nationalized industries

D. Is the elimination of all trade barriers among member countries
B. The growth of inter-country trade, spurred on by the progress toward free-market policies
A recent survey (reported in our textbook) of business people from Argentina, Brazil, Chile, Columbia and Venezuela found that the _____ market, on average, was more important to their economic well being than any other.


A. Mexican

B. Japanese

C. U.S

D. European Union
C. U.S
The ultimate objective of the EU is to:


A. Develop separate custom duties for member countries

B. Eliminate all trade barriers among member countries

C. Have a single government that represents all EU countries

D. Increase imports into EU countries
B. Eliminate all trade barriers among member countries
The European Union:


A. Has achieved the reality of a single currency and a regional central bank

B. Has eliminated all trade barriers among member countries

C. Subjects member nations to quotas on the manufacture and shipment of high-quality, low-cost goods

D. Imposes duties on member nations for the manufacture and shipment of high-quality, low-cost goods
A. Has achieved the reality of a single currency and a regional central bank
The Central and Eastern European republics:


A. Have attempted to grow in terms of intercountry trade, spurred on by the progress toward free-market policies

B. Have attempted to decrease inflation by lowering the GDP

C. Are attempting to make a shift from centrally planned economies to market based economies

D. Are attempting to make a shift from a centrally planned economy to a mixed economy
C. Are attempting to make a shift from centrally planned economies to market based economies
The former communist countries that have become most visible in the international arena include:


A. Romania, Poland and Bulgaria

B. Czech Republic, Bulgaria and Poland

C. Hungary, Romania and Albania

D. Poland, Hungary and the Czech Republic
D. Poland, Hungary and the Czech Republic
Which of the following statements is true with regard to the economy of Poland?


A. The consensus decision making system of Poland turns out to be too time-consuming in the new speed-based economy

B. During the 1970s and 1980s, Poland's economic success had been without precedent

C. Poland is among the largest of the former communist countries which receives the least media coverage

D. Political instability and risk, large external debts, a deteriorating infrastructure and only modest education levels have led to continuing economic problems in Poland
D. Political instability and risk, large external debts, a deteriorating infrastructure and only modest education levels have led to continuing economic problems in Poland
Which of the following statements is not true of Hungary's economic reform measures?


A. In Hungary, state-owned hotels have been privatized

B. Western firms have been entering into joint ventures with local companies in Hungary, attracted by the low cost of highly skilled, professional labor

C. Hungary had a head start on the other former communist-bloc countries in terms of adopting economic reform measures

D. MNCs have been making direct investments in Hungary, as in the case of General Electric's purchase of Tungsram
C. Hungary had a head start on the other former communist-bloc countries in terms of adopting economic reform measures
Which of the following statements is not true of Japan?


A. During the 1970s and 1980s, Japan's economic success had been without precedent

B. During the 1970s and 1980s, the country had a huge positive trade balance, the yen was strong and they recognized as the world leaders in manufacturing and consumer goods

C. Assumptions about the Japanese workforce have turned out to be more myth than reality and some of the former strengths have become weaknesses in the new economy

D. Japan's consensus decision making system turns out to be very efficient and effective in the new speed-based economy
D. Japan's consensus decision making system turns out to be very efficient and effective in the new speed-based economy
An organizational arrangement in Japan in which a large group of vertically integrated companies bound together by cross-ownership, interlocking directorates and social ties provide goods and services to end users is:


A. Vertically integrated corporation

B. Keiretsus

C. Maquiladora

D. Chaebols
B. Keiretsus
MITI is a _____ government agency that identifies and ranks national commercial pursuits and guides the distribution of national resources to meet these goals.


A. Chinese

B. Japanese

C. South Korean

D. Philippine
B. Japanese
Despite setbacks, _____ remains a formidable international competitor and is well poised in all three major economic regions: the Pacific Rim, North America and Europe.


A. Japan

B. Chile

C. China

D. Argentina
A. Japan
The four other widely recognized powerhouses in Asia, in addition to Japan and China are:


A. South Korea, Hong Kong, Singapore and Taiwan

B. Indonesia, South Korea, Japan and Taiwan

C. Thailand, South Korea, Indonesia and Hong Kong

D. Singapore, South Korea, Indonesia and Thailand
A. South Korea, Hong Kong, Singapore and Taiwan
Identify the statement false of China's economic condition.


A. China's GDP has remained strong, maintaining at 11.5 percent growth in 2009

B. In the first quarter of 2010, China's GDP grew at a blistering 11.7 percent causing some concerns that the Chinese government has been unable to tap the breaks on this rapid growth

C. Trade relations between China and developed countries and regions, such as the United States and the EU, are lax

D. Massive savings glut in the corporate sector, the globalization of manufacturing networks are major challenges faced by China
C. Trade relations between China and developed countries and regions, such as the United States and the EU, are lax
Chaebols are large, family-held conglomerates in:


A. Thailand

B. Japan

C. South Korea

D. China
C. South Korea
Which of the following is true of India today?


A. It has a relatively small middle class

B. Education levels tend to be low

C. It is attractive to MNCs

D. There is a distinct lack of government funds for economic development
C. It is attractive to MNCs
Which of the following countries was not amongst the world's 10 most competitive nations in 2010?


A. United States

B. Singapore

C. United Kingdom

D. Norway
C. United Kingdom
Identify the emerging market which is projected to have the largest market size in 2010.


A. China

B. India

C. Mexico

D. Argentina
A. China
According to the projections for 2010, which of the following countries has the best commercial infrastructure?


A. China

B. Hong Kong

C. India
B. Hong Kong