The concept of guanxi, defined as ______, is important in _____ business culture.

Which of the following is NOT a common criticism of the IMF?

Provides excessively lenient repayment terms to poor countries

Inappropriate policies

Moral hazard

Lack of accountability
1 points
Question 5

Empirical research has demonstrated that corruption tends to _______economic growth, foreign direct investment, and international trade.

increase

reduce

precede

preclude
1 points
Question 6

Why would a manufacturing firm prefer to execute a green-field investment instead of acquiring an existing asset in a foreign country?

Because green-field investments are typically less costly to execute

Because green-field investments are typically less risky

Because green-field investments are less likely to be targeted by host governments and/or protesters

Because the acquiring firm may want to have full control of facility design and layout
1 points
Question 7

Firms that compete in the global marketplace typically face two types of competitive pressures. They face pressures for cost reductions and:

pressures for volume increases

pressures to be locally responsive

pressures to be politically savvy

pressures for price reductions
1 points
Question 8

_____ refers to identifying distinct groups of consumers whose purchasing behavior differs from others in important ways.

Market penetration

Market development

Market segmentation

Product development
1 points
Question 9

The _____ refer(s) to systematic reductions in production costs that have been observed to occur over the life of a product.

experience curve

learning effects

location economies

efficiency slope
1 points
Question 10

According to the article "Strategies that Fit Emerging Markets," McDonald's experience in Russia suggests that:

Institutional voids can be overcome

Some countries, particularly those with collectivist orientations, are just not open to Western fast-food restaurants

Business models developed for advanced, Western markets rarely succeed in the developing world

Even the most successful multinational firms can lose their way when they forsake the four elements of Porter's diamond
1 points
Question 11

A (an) _________ may be defined as a situation in which none of the available alternatives seems morally acceptable.

existential conflict

tragedy of the commons

cognitive conundrum

ethical dilemma

1 points
Question 12

In terms of the influence of cultural differences on product attributes, which of the following is evidence of the trends that Theodore Levitt described?

Differences in traditional eating habits

Cultural differences due to historical and idiosyncratic reasons

Market segments that remained confined to national borders

Tastes and preferences becoming cosmopolitan
1 points
Question 13

Which of the following strategies is most likely to pursued by a firm when there are strong pressures for cost reductions and demands for local responsiveness are minimal?

Domestic strategy

Global standardization strategy

International strategy

Transnational strategy
1 points
Question 14

In return for licensing one of its products to a foreign firm, the licensor:

gets preferential trade treatment from the country of the licensee

gets a special subsidy from the country of the licensee

collects a royalty fee on every unit the licensee sells

gets a suitcase full of unmarked bills tossed from a bridge
1 points
Question 15

In the context of value chain analysis, which of the following is an example of a "primary" activity?

Materials management

Research and development

Manufacturing

Human relations
1 points
Question 16

A country's __________ of FDI refers to the total accumulated value of foreign-owned assets at a given time.

portfolio

inventory

flow

Stock
1 points
Question 17

The task of the International Monetary Fund, as established by the Bretton Woods agreement, is to:

promote general economic development

maintain order in the international monetary system

provide letters of credit on behalf of first-time exporters

facilitate the establishment of regional trade agreements
1 points
Question 18

______ is (are) payment/s made to ensure that a foreign company receives standard treatment that might otherwise be obstructed by a host country government official.

facilitating payments

hush money

blackmail

arbitrage
1 points
Question 19

Labor productivity increases over time as individuals understand the most efficient ways to perform particular tasks. This is as a result of _____.

diminishing returns

location economies

economies of time

learning effects
1 points
Question 20

Which of the following is true according to Theodore Levitt's article in the Harvard Business Review about the globalization of world markets?

Multinational corporations consider the world to consist of distinct and unique entities.

Multinational corporations operate at low relative costs.

Multinational corporations operate from a single country.

Multinational corporations do not adjust their products and practices to suit each country.
1 points
Question 21

According to the article "How Wal-Mart is Changing China," which of the following is NOT a reason why Wal-Mart established the Direct Farm Program in China?

To drive down costs by eliminating unproductive pieces of the supply chain

To be able to get produce to customers in cities faster, thereby reducing spoilage

To be better able to control the standards of the food it advertises as green and organic

To comply with Beijing's demand that they purchase food directly from rural communes

1 points
Question 22

In the 1930s, confidence in the _____________ shattered because countries were devaluing their currencies at will.

fixed exchange system

international currency board

gold standard

International Monetary Fund
1 points
Question 23

A Jamaican brewery is working on its methods of advertising, promoting, and selling its product. This is an example of _____.

primary activities in the value chain

support activities in the value chain

procurement activities in the value chain

service activities in the value chain

1 points
Question 24

How did the U.S. Justice Department learn about Chiquita's payments to illegal groups in Colombia?

A private company cable was discovered by U.S. investigators

Colombian politicians filed a complaint

A competitor spilled the beans

The company came forward and admitted it
1 points
Question 25

Which of the following did Chiquita CEO Fernando Aquirre NOT do in dealing with his company's crisis in Colombia?

turn itself into the U.S. Justice Department

cease making illegal payments

sell off its Colombia banana unit

pay reparations to the family members murdered by guerrillas and paramilitaries
1 points
Question 26

In international business, the benefits frequently associated with entering a foreign market early are known as _____.

pioneering costs

first-mover advantages

absolute advantages

bandwagon effects
1 points
Question 27

Chinese towel-maker Loftex is cited in the article "How Wal-Mart is Changing China," as a success story. How come?

Because it has achieved ambitious energy-reduction goals set by Wal-Mart

Because it has developed new synthetic micro-fibers that are cheaper than cotton

Because it has found a way to lower production costs while simultaneously improving working conditions within its factories

Because it has found a way to lower production costs while raising worker salaries by 25 percent

1 points
Question 28

The number of intermediaries between the product (or manufacturer) and the consumer is referred to as _____.

channel length

channel quality

channel exclusivity

channel fragmentation
1 points
Question 29

_____ explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.

The Friedman doctrine

The Sullivan principle

Utilitarianism

Kantian ethics
1 points
Question 30

Whereas in developing countries most FDI takes the form of _______, in developed countries most FDI take the form of _______.

greenfield investments; acquisitions

acquisitions; greenfield investments

joint ventures; licensing deals

licensing deals; turnkey operations

1 points
Question 31

In terms of an international firm considering foreign expansion, _____ include the costs of promoting and establishing a product offering, and educating customers.

Sunk costs

Pioneering costs

Opportunity costs

Intangible costs
1 points
Question 32

In the film "The Curse of Inca Gold," Newmont executive Larry Kurlander is caught on tape telling Peruvian intelligence chief Vladamiro Montesinos that he wants a ______.

$1 million kickback deposited into his Swiss bank account

friend for life

guarantee that the government will suppress protests at the Yanacocha mine

guarantee that the government will award Newmont and its partners a $1 billion mining concession
1 points
Question 33

Which of the following is an element of a firm's marketing mix?

Product attributes

Employee management

Customer service

Population demographics
1 points
Question 34

According to the article "How Wal-Mart is Changing China," October 24, 2005 was a critical date in the company's recent history. How come?

Because the CEO gave an important speech committing the company to going green

Because the company opened its 100th store in China, becoming the country's largest foreign retailer

Because Wal-Mart was selected by China's government as a top-tier corporate sponsor for the 2008 Beijing Summer Olympics, bestowing upon it copious amounts of guanxi and good karma

Because the CEO gave an important speech committing the company to enhancing worker rights in its supplier factories

1 points
Question 35

A _____ means the value of the currency is fixed relative to a reference currency, and then the exchange rate between that currency and other currencies is determined by the reference currency exchange rate.

flexible exchange rate

pegged exchange rate

real exchange rate

dirty float exchange rate
1 points
Question 36

Managers pursuing a ____ seek to make their product or service different from those of competitors on dimensions valued by customers.

global strategy

differntiation strategy

cost leadership strategy

multipoint competition strategy

1 points
Question 37

A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a _____ strategy.

standardization

differentiation

target-identification

low-cost
1 points
Question 38

Kapstein argues in "Avoiding Unrest in a Volatile Environment," that savvy multinational companies should to seek to win the favor of foreign governments and their citizens by embedding themselves deeply in the communities in which they operate. In other words, they ought to follow a (an) ______ strategy.

engagement

multi-domestic

enclave

transnational
1 points
Question 39

In a _____, a mode of entry into foreign markets, a firm agrees to set up an operating plant for a foreign client and hand over the plant when it is fully operational.

franchising agreement

turnkey project

licensing agreement

wholly owned subsidiary
1 points
Question 40

Which of the following modes of entry into foreign markets have the advantage of being characterized by low development costs and risks?

Exporting

Licensing

A greenfield investment

A wholly owned subsidiary
1 points
Question 41

In the 1960s, RCA licensed its leading-edge color television technology to a number of Japanese companies, which later took over the market. This demonstrates:

The Japanese are not to be trusted

There are certain capabilities that are often not amenable to licensing

Licensing may result in a firm's giving away valuable technological know-how to a potential foreign competitor

Licensing does not give a firm the tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability
1 points
Question 42

The _____ of a firm is measured by the difference between the value of a product to an average consumer and the average unit cost of producing that product.

customer surplus

value creation

cost curve

value efficiency
1 points
Question 43

If Boeing won an order to sell 50 of its new 787 airplanes to China, but the Chinese government stipulated that 40 percent of the component parts be produced in China, that stipulation would be an example of a (an):

ad valorem quota

anti-dumping duty

administrative policy

local content requirement
1 points
Question 44

Which of the following is an advantage of wholly owned subsidiaries as a mode of entry into foreign markets?

A foreign firm is relieved of many of the costs and risks associated with opening a foreign market on its own.

The risk of losing control over a firm's technological competence is reduced.

A foreign firm is insulated completely from the threat posed by high transport costs.

It is the most politically acceptable mode of entry into foreign markets.
1 points
Question 45

According to Michael Porter, primary value chain activities involve _____.

planning, finance, accounting, legal activities, and government relations

acquiring, training, evaluating, compensating, and developing human resources

expertise and the tools or equipment related to the exercise of that expertise

creating a product or service and distributing it to customers

1 points
Question 46

Which of the following is true of the marketing and research and development (R&D) departments in an international firm?

Marketing and R&D should always work independently.

R&D identifies gaps in a market so that marketing can work to fill those gaps.

R&D defines the market's needs for the marketing personnel.

A major contributor to the success of new-product introductions is a close relationship between marketing and R&D.
1 points
Question 47

_____ implicitly rejects the idea that universal notions of morality transcend different cultures.

Just distribution

Cultural relativism

The Kantian ethic

Utilitarianism
1 points
Question 48

Franchising, a mode of entry into foreign markets, is employed primarily by _____ firms.

service

manufacturing

online

high-technology
1 points
Question 49

According to our textbook, firms often view _____ and licensing as alternatives to FDI:

importing

exporting

franchising

dumping
1 points
Question 50

A righteous moralist is most likely to claim that:

a multinational s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.

a firm should adopt the ethics of the culture in which it is operating.

people should be treated as ends and never purely as means to the ends of others.

human beings have fundamental rights and privileges that transcend national boundaries and cultures.
1 points
Question 51

BMW announces plans to build a state-of-the-art automobile assembly factory in Jacksonville, Florida. Shortly thereafter, Delphi automotive, a parts supplier, opens a warehouse down the street and hires 200 people to staff the facility. With respect to BMW s initial investment, the new Delphi jobs are considered:

Direct employment

Indirect employment

Supplemental employment

None of the above
1 points
Question 52

A _____ allows two or more firms to share the fixed costs (and associated risks) of developing new products or processes.

franchising agreement

global web

free trade agreement

strategic alliance
1 points
Question 53

The turning point for Newmont Mining in Peru took place when ______.

The company refused to pay a bribe to intelligence chief Vladamiro Montesinos

The minister of energy and mines revoked the company's license to operate

An accidental mercury spill sent dozens of local villagers to the hospital

The Fujimori government expropriated its assets
1 points
Question 54

Other things being equal, FDI is ________ and ________ compared to exporting or licensing.

expensive, risky

expensive, risk averse

inexpensive, risky

inexpensive, risk averse
1 points
Question 55

_____ are the economies that arise from performing a value creation activity in the optimal place for that activity, wherever in the world that might be.

Diversification economies

value-building economies

Location economies

Support economies
1 points
Question 56

Which of the following is an advantage of exporting as a mode of entry into foreign markets?

A firm can avoid the cost of establishing manufacturing operations in the host country.

A firm does not have to bear the development costs and risks associated with opening a foreign market.

A firm can earn returns from process technology skills in countries where FDI is restricted.

A firm has access to local partner s knowledge.

1 points
Question 57

Which of the following is true of a localization strategy?

It allows a firm to capture the cost reductions of mass-producing a standardized product.

It reduces duplication of functions.

It involves longer production runs.

It makes sense if the value added by customization supports higher pricing.
1 points
Question 58

The Sullivan principles attempted to fight against _____.

globalization

apartheid laws

legalization of facilitating payments

democratic structures
1 points
Question 59

According to the article "How Wal-Mart is Changing China," the country's burgeoning middle class has embraced Western branded fast-food and grocery chains primarily because:

They have new purchasing power and like the novelty of Western brands

They are captivated by Western advertising campaigns featuring characters like Colonel Sanders and Ronald McDonald

They are seen as more trustworthy food purveyors than their local counterparts

Their prices are on average 25 percent cheaper than at their Chinese counterparts

1 points
Question 60

A _____ refers to a system under which some currencies are allowed to float freely, but the majority are either managed by government intervention or pegged to another currency.

managed-float system

pegged exchange rate system

fixed exchange rate system

floating exchange rate system
1 points
Question 61

_____ arises when people behave recklessly because they know they will be saved if things go wrong.

Systemic risk

Moral hazard

Ethical dilemma

Tragedy of the commons
1 points
Question 62

The pragmatic nationalist view sees FDI as having:

both benefits and costs

benefits and essentially no costs

costs and essentially no benefits

neither benefits nor costs
1 points
Question 63

According to the video on Chiquita in Colombia, the U.S. banana company admitted to paying protection money to:

left-wing guerrillas

right-wing paramilitaries

drug lords

corrupt government officials