Business and Globalization Exam Materials
Course Introduction
This course examines the dynamic relationship between business operations and the processes of globalization. Students will explore how the globalization of markets, production, and investments has transformed the business landscape, creating both new opportunities and challenges for firms. Topics include the impact of global trade agreements, cross-border supply chains, multinational enterprise strategies, cultural differences, and the ethical implications of operating in diverse global environments. The course also addresses the role of technology, emerging economies, and international regulatory frameworks in shaping business strategies in a globalized context.
Recommended Textbook
Global Business Today 10th Edition by Charles
W. L. Hill Dr
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17 Chapters
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Page 2
Chapter 1: Globalization
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Q1) Which of the following is most likely to be observed in today's global economy?
A)increasing U.S.share of world output
B)large U.S.entrepreneurial firms dominating the international business scene
C)increasing U.S.dominance in the world economy and world trade picture
D)most of the nations being governed by centrally planned economies of the communist world
E)continued rise in the share of world output accounted for by developing nations such as China and India
Answer: E
Q2) Why was the World Bank set up?
A)to preserve peace through international cooperation
B)to promote economic development
C)to maintain order in the international monetary system
D)to formulate a coordinated policy response to financial crises
E)to police the world trading system
Answer: B
Q3) The Uruguay Round extended GATT to cover services as well as manufactured goods.
A)True
B)False
Answer: True
3
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Chapter 2: National Differences in Political, Economic, and Legal Systems
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Q1) Compared to a common law system,it is more expensive to draw up contracts in a civil law jurisdiction.
A)True
B)False
Answer: False
Q2) Silver Tape Corporation has developed a new type of adhesive tape.Which of the following types of legal protections can grant the company exclusive rights for a defined period to the manufacture,use,or sale of the new adhesive tape?
A)warrant
B)patent
C)copyright
D)trademark
E)writ
Answer: B
Q3) When law courts interpret civil law,they do so with regard to tradition,precedent,and custom.
A)True
B)False
Answer: False
Page 4
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Chapter 3: National Differences in Economic Development
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Q1) How does privatization help stimulate gains in economic efficiency?
A)It allows newly privatized firms to gain monopoly position in a particular industry.
B)It provides incentives to new private owners to search for increases in productivity and to enter new markets.
C)It encourages state control over price and production output.
D)It raises barriers to direct investment by foreign enterprises.
E)It results in reservation of heavy industry for state ownership and the increase of import tariffs.
Answer: B
Q2) In the context of political economy,one notable development of the past 30 years has been the spread of
A)centrally planned economies.
B)mixed economies.
C)totalitarian governments.
D)democracy.
E)communism.
Answer: D
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Chapter 4: Differences in Culture
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Q1) In 1904,who theorized that there was a relationship between Protestantism and the emergence of modern capitalism?
A)Karl Marx
B)Alfred Schmidt
C)Max Weber
D)Abraham Maslow
E)Adam Smith
Q2) Which of the following is the most widely spoken language in the world,and is increasingly becoming the language of international business?
A)Chinese
B)French
C)English
D)Spanish
E)German
Q3) The concept of mobility between castes within an individual's lifetime makes no sense to traditional Hindus.
A)True
B)False
Q4) How does a caste system differ from a class system?
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Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability
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Q1) Based on Hofstede's cultural dimensions,enterprises headquartered in a country which scores high on masculinity and power distance measures are more likely to behave ethically than enterprises headquartered in a culture where individualism and uncertainty avoidance are strong.
A)True
B)False
Q2) Brain Wing Inc.has won the bid to build airplanes for a host country government.However,the execution of the contract has been delayed due to certain unproductive,bureaucratic procedures in the less developed nation.In order to legally overcome this problem,Brain Wing Inc.could resort to the payment of A)customs duties.
B)excise taxes.
C)expatriation taxes.
D)speed money.
E)repatriation fees.
Q3) Discuss the utilitarian approach to business ethics and examine its weaknesses.
Q4) Compare and contrast cultural relativism and righteous moralism.
Q5) Discuss the global tragedy of the commons.
Q6) What are grease payments?
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Chapter 6: International Trade Theory
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Q1) The new trade theory states that
A)the locus of global production initially switches from the United States to other advanced nations.
B)world trade in certain products may be dominated by countries whose firms were first movers in their production.
C)differences in technology may lead to differences in productivity,which in turn drives international trade patterns.
D)differences in labor productivity between nations underlie the notion of comparative advantage.
E)a rich country might actually be worse off by switching to a free trade regime with a poor nation.
Q2) Porter argues that an absence of domestic rivalry is vital to the creation and persistence of international competitive advantage in an industry.
A)True
B)False
Q3) Briefly describe new trade theory.
Q4) Discuss the policy implications of Porter's theory of national competitive advantage.
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Chapter 7: Government Policy and International Trade
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Q1) Antidumping actions seem to be concentrated in certain sectors of the economy such as basic metal industries (e.g.,aluminum and steel),chemicals,plastics,and machinery and electrical equipment.
A)True
B)False
Q2) Explain the organizational structure and the key functions of the WTO.
Q3) The tiny South Pacific island country of Maroji produces a lot of milk and milk-based products.To protect this industry,Maroji mandates that only designated trading companies can import cheese,each of which is allocated the right to import a maximum number of pounds of cheese each year.By doing this,Maroji controls the amount of imported cheese.This is an example of a(n)
A)import quota.
B)subsidy.
C)import tariff.
D)local content requirement.
E)import duty.
Q4) Define local content requirements.Explain how this helps domestic firms.
Q5) What are the political arguments for government intervention into international trade? Give examples.
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Chapter 8: Foreign Direct Investment
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Q1) In the context of the internalization theory,explain why licensing may not be an attractive option.
Q2) Which of the following is true regarding the pragmatic nationalist view of FDI?
A)One aspect of pragmatic nationalism is the tendency to aggressively court FDI believed to be in the national interest by,for example,offering subsidies to foreign MNEs in the form of tax breaks or grants.
B)The pragmatic nationalist view states that FDI always has a positive effect on the balance of payments which arises from the outflow of a foreign subsidiary's earnings and from the import of inputs from abroad.
C)According to the pragmatic nationalist view,international production should be distributed among countries based on the theory of comparative advantage.
D)According to the pragmatic nationalist view,FDI should not be allowed to enter into a country because its costs always outweigh its benefits.
E)The pragmatic nationalist view of FDI accepts the Marxist theory,and suggests that FDI by MNEs is an instrument of imperialism.
Q3) Describe Dunning's arguments regarding the location-specific advantages.
Q4) What are the benefits of FDI to the home (source)country?
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Chapter 9: Regional Economic Integration
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Q1) How is a common market different from an economic union?
Q2) Which of the following has 751 members as of 2016,and is directly elected by the populations of the member-states?
A)Court of Justice
B)European Council
C)European Commission
D)European Parliament
E)European Community
Q3) The _____ proposed that all impediments to the formation of a single market be eliminated by December 31,1992,resulting in the Single European Act.
A)Delors Commission
B)Andean Pact
C)Treaty of Rome
D)North American Free Trade Agreement
E)Maastricht Treaty
Q4) In theory,the World Trade Organization rules should ensure that a free trade agreement results in trade diversion.
A)True
B)False
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Chapter 10: The Foreign Exchange Market
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Q1) _____ is concerned with the present measurement of past events.
A)Economic exposure
B)Transaction exposure
C)Arbitrage
D)Translation exposure
E)Currency speculation
Q2) Which of the following is true of inflation?
A)It occurs when the demand for a particular currency is more than the supply.
B)It occurs when securities are purchased in one market for immediate resale in another.
C)It occurs when two parties agree to exchange currency and execute a deal at a specific date in the future.
D)It occurs when the quantity of money in circulation rises faster than the stock of goods and services.
E)It occurs when output increases faster than the money supply.
Q3) When residents and nonresidents rush to convert their holdings of domestic currency into a foreign currency,the phenomenon is generally referred to as capital flight.
A)True
B)False
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Chapter 11: The International Monetary System
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Q1) From mid-2008 through early 2009,the value of the dollar moderately increased against major currencies,despite the fact that the American economy was suffering from a serious financial crisis.Which of the following was a reason for this phenomenon?
A)high real interest rates in the United States compared to any other developed region in the world sparked an inflow of funds into the country.
B)U.S.assets were characterized by a high-risk,high-return payoff which prompted foreign investors to park their funds.
C)foreign investors were excited at the possibility of high returns following the government bail-out of financial institutions.
D)foreign investors put their money in low-risk U.S.assets such as low-yielding U.S.government bonds.
E)foreign investors saw opportunities in the United States as the level of indebtedness had begun to reduce.
Q2) Explain the concept of a currency board.
Q3) Elaborate on the main criticisms of the International Monetary Fund's approach to financial crises.
Q4) Briefly describe the Bretton Woods agreement of 1944.
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Page 13
Chapter 12: The Strategy of International Business
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Q1) In which of the following tasks will the learning effects be most significant?
A)pizza delivery for a fast-food major
B)data entry for a loan recovery center
C)assembly process involving 1,000 complex steps
D)sewing buttons onto shirts in a garment factory
E)delivering letters to different recipients
Q2) A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a low-cost strategy.
A)True
B)False
Q3) A firm is most likely to pursue a global standardization strategy when
A)it wants to implement a high-cost strategy on a global scale.
B)it wants to reduce consumer surplus.
C)there are no universal needs to be served.
D)there are strong demands for local responsiveness.
E)there are strong pressures for cost reduction.
Q4) Consumer surplus captures some of the value of a product thereby reducing the price a firm can charge for it.
A)True
B)False
Page 14
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Chapter 13: Entering Foreign Markets
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Q1) Which of the following modes of entry into foreign markets can result in a lack of control over quality?
A)exporting
B)franchising
C)turnkey projects
D)wholly owned subsidiaries
E)joint ventures
Q2) Licensing is NOT attractive to which of the following firms?
A)firms lacking the capital to develop operations overseas
B)firms unwilling to commit substantial financial resources to an unfamiliar market
C)firms requiring tight control of operations for realizing experience curve and location economies
D)firms wanting to explore markets but prohibited from doing so by investment barriers
E)firms with intangible properties with business applications that it does not want to develop itself
Q3) Describe how pressures for cost reductions affect the choice of entry mode.
Q4) Describe the disadvantages of licensing as a mode of entry into the foreign market.
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15
Chapter 14: Exporting, Importing, and Countertrade
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Q1) A firm concludes a counterpurchase agreement with a foreign country for which it receives some counterpurchase credits for purchasing its goods.The firm does not want any foreign goods,however,so it sells the credits to a third-party trading house at a discount.The trading house finds a firm that can use the credits and sells them at a profit.This is an example of A)barter.
B)switch trading.
C)an offset.
D)a buyback.
E)compensation.
Q2) The mission of the Foreign Credit Insurance Association is to provide financing aid that will facilitate exports,imports,and the exchange of commodities between the United States and other countries.
A)True
B)False
Q3) While small firms tend to be proactive about seeking opportunities for profitable exporting,large firms are very reactive.
A)True
B)False
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Chapter 15: Global Production and Supply Chain Management
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Q1) Which of the following is a recent trend among international businesses regarding make-or-buy decisions?
A)Foreign facilities are considered nothing more than low-cost production facilities.
B)Research and design operations are restricted to home-country production facilities.
C)Manufacturing facilities are being based in each major national market.
D)Firms are avoiding time-based competition with each other.
E)Outsourcing decisions are expanding to embrace the production of service activities.
Q2) Flexible manufacturing technologies allow a company to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output.
A)True
B)False
Q3) What are the important strategic objectives of an international firm's production and logistics functions?
Q4) Describe the Six Sigma methodology.
Q5) What are the ways in which improved quality control reduces costs?
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Chapter 16: Global Marketing and Research and Development
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Q1) Cassidy Boeheim,the international sales manager for Knoll Home Products is trying to determine the channel length for Brazil,a market that the company hopes to enter.Which of the following is the most important determinant of channel length?
A)degree to which the retail system is fragmented
B)increase in car ownership and two-income households
C)level of consolidation in the global retail industry
D)amount of difference between product or technical standards
E)level of economic development of a country
Q2) Which of the following is true of price discrimination as a part of international pricing strategy?
A)The more competitors there are,the lesser consumers' bargaining power will be.
B)The more competitors there are,the less likely consumers will be to buy from the firm that charges the lowest price.
C)A firm may charge a higher price for its product in a country where competition is limited than in one where competition is intense.
D)Many competitors cause low elasticity of demand.
E)If a firm raises its prices above those of its competitors,consumers will refuse to switch to the competitors' products.
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Chapter 17: Global Human Resource Management
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Q1) OptiCare is a firm that specializes in eye care products such as contact lenses and sun glasses.OptiCare believes that market needs for eye care products are the same worldwide.In keeping with this perspective,OptiCare emphasizes global standardization.Firms such as OptiCare that emphasize global standardization try to create value by
A)retaining products and competencies within the parent country.
B)realizing experience curve and location economies.
C)focusing on local responsiveness.
D)emphasizing localization.
E)adopting an ethnocentric staffing approach.
Q2) Transnational firm managers need not be able to detect pressures for local responsiveness because it is not part of their skill set.
A)True
B)False
Q3) Citizens of a foreign country working in the home country of their multinational employer are known as repatriates.
A)True
B)False
Q4) What is repatriation? What is its importance?
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