Cross-Cultural Management Exam Bank
Course Introduction
Cross-Cultural Management explores the challenges and opportunities of managing individuals and teams in a diverse, international business environment. The course examines the impact of national culture, values, communication styles, and organizational behavior on managerial practices across different countries. Students will learn to recognize and analyze cultural differences, develop cross-cultural competencies, and design strategies for effective leadership, negotiation, conflict resolution, and teamwork in multicultural organizations. By combining theoretical frameworks with practical case studies, this course prepares students to navigate global business contexts and foster inclusive, high-performing work environments.
Recommended Textbook
International Business 15th Edition by John
Daniels
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Page 2
Chapter 1: Globalization and International Business
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Q1) Managers need to understand not only the laws of countries where they operate,but also how those laws are enforced.
A)True
B)False
Answer: True
Q2) Governments have signed treaties to protect foreign-owned property rights,such as investments and patents.A primary reason for doing so is to ________.
A) gain reciprocal advantages
B) reduce the domestic effects of other countries' economic policies
C) deal with areas of concern outside the territory of any one country
D) reduce national conflicts leading to violent political demonstrations
Answer: A
Q3) Globalization refers to all economic transactions among countries.
A)True
B)False
Answer: False
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Page 3
Chapter 2: The Cultural Environments Facing Business
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Q1) When a company does business in another country whose official language is the same as its home country's,the company should most likely ________.
A) assume that communications will go smoothly
B) use back-translation on all written documents
C) realize that words may have different meanings
D) assume that word meanings are the same despite spelling differences
Answer: C
Q2) Assume a U.S.firm plans to expand into Mexico,Germany,or Japan.Its executives are traveling to each country to meet with local businesspeople in the decision-making process.Which of the following would be LEAST beneficial when the executives make a presentation?
A) requesting a translator with technical vocabulary knowledge
B) simplifying vocabulary and terminology for the audience
C) conducting back translations for written work
D) avoiding repetition to prevent boredom
Answer: D
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4
Chapter 3: The Political and Legal Environments Facing Business
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Q1) ________ refers to a political system in which government is organized by and accountable to the people.
A) Totalitarianism
B) Fascism
C) Socialism
D) Democracy
Answer: D
Q2) The fundamental element of democracy is justice.
A)True
B)False
Answer: False
Q3) A democracy grants the voting citizenry the power to alter the laws and structures of government.
A)True
B)False
Answer: True
Q4) Democracy and totalitarianism fall on the same end of the political spectrum.
A)True
B)False Answer: False
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Chapter 4: The Economic Environments Facing Businesses
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Q1) Which of the following is most likely a FALSE statement about income inequality?
A) The richest 1% of the world's population claims as much income as the bottom 57%.
B) GNI is the most effective tool for estimating the relative wealth of a nation's citizens.
C) Among industrialized nations, the U.S. has the largest inequality gap between rich and poor.
D) Income inequality between metropolitan and rural areas threatens a country's social stability.
Q2) Between 2000 and 2008,China's economy grew at a faster rate than Japan's economy.
A)True
B)False
Q3) The range of economic systems in the world today,when represented on a spectrum,has one end anchored by the idea of capitalism,the other with that of socialism.
A)True
B)False
Q4) What is gross national income? How is it calculated? Illustrate your answer with a specific example.
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Chapter 5: International Trade and Factor-Mobility Theory
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Q1) The free trade theories of specialization assume that countries will be better off even though some people are unemployed.
A)True
B)False
Q2) According to the product life cycle theory,production and sales are primarily domestic in the introductory stage because ________.
A) businesses need quick market feedback
B) tariff reductions remain under negotiation
C) international transport costs are too high
D) international patents have not been approved
Q3) In a short essay,discuss the four stages of the international product life cycle.
Q4) The foreign-born population as a percentage of total population is substantial for some countries and insignificant for others.
A)True
B)False
Q5) What is the country similarity theory? According to this theory,what factors affect trade patterns?
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Chapter 6: Governmental Influence on Trade
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Q1) Advocates of the comparable access argument for trade protection primarily assert that domestic industries ________.
A) will deteriorate in countries that have lower import restrictions than their trading partners
B) should be required to implement export-led development policies on foreign competitors
C) are entitled to the same access to foreign markets as foreign industries have to their markets
D) are forced to lower prices for domestic consumers because of foreign import restrictions
Q2) List and define the types of nontariff barriers that limit the quantity of goods traded: quotas,embargoes,buy local legislation,standards and labels,specific permission requirements,administrative delays,and reciprocal requirements.
Q3) Governments sometimes prohibit operations of private companies,foreign or domestic,in some sectors because they feel these services should not be sold at a profit.
A)True
B)False
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Chapter 7: Cross-National Cooperation and Agreements
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Q1) Identify and briefly compare the major regional trading groups in Latin America,Asia,and Africa.
Q2) The European Union is an example of regional integration.
A)True
B)False
Q3) Production location is not an important choice when doing business in the European Union.
A)True
B)False
Q4) )Which of the following is the primary focus of the African Union (AU)?
A) FDI influx
B) democracy
C) economic integration
D) intrazonal trade relations
Q5) Which of the following members of the European Union has NOT adopted the euro?
A) United Kingdom
B) Estonia
C) Germany
D) Greece
Q6) What are the rules of origin and regional content provisions of NAFTA?
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Chapter 8: Global Foreign-Exchange Markets
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Q1) An offer is the right but not the obligation to buy or sell foreign currency.
A)True
B)False
Q2) The pound-dollar forward rate for pounds is $1.9068,and the spot rate is $1.9059.Pounds are selling at a ________.
A) discounted premium
B) backward discount
C) forward premium
D) forward discount
Q3) A letter of credit that provides an exporter with the guarantee of another bank in addition to the importer's bank is called ________.
A) a confirmed letter of credit
B) a time draft letter of credit
C) an amendable letter of credit
D) a cash in advance letter of credit
Q4) Hong Kong is one of the top four largest markets in the world in foreign-exchange trades and the largest in Asia.
A)True
B)False
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Chapter 9: The Determination of Exchange Rates
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Q1) In a country with a currency that is not freely floating,the timing of an exchange rate change is often a ________ decision.
A) cultural
B) consensus
C) political
D) market
Q2) Dollarization of a currency occurs when a country takes all of its own currency out of circulation and replaces it with U.S.dollars.
A)True
B)False
Q3) The primary result of the Jamaica Agreement was to ________.
A) allow greater exchange-rate flexibility
B) set austerity measures for debt control
C) establish a system based on par values
D) implement fixed exchange rates
Q4) The IMF's primary role is to identify exchange rate regimes.
A)True
B)False
Q5) What is a Special Drawing Right (SDR)? How is it used?
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Chapter 10: Global Capital Markets
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Q1) The international bond market is much larger and more lucrative than the domestic bond market.
A)True
B)False
Q2) The long-term financing dimension of cash management deals with the selection,issuance,and management of long-term debt and equity.
A)True
B)False
Q3) One way to account for the challenge of the variability of future cash flows is to ________.
A) adjust the hurdle rate for the project
B) use the most likely cash flow estimate
C) ignore different rates of inflation to prevent confusion
D) leave out a consideration of the terminal value of an investment
Q4) ADRs cannot be exchanged for the underlying shares of the foreign stock,therefore,arbitrage cannot keep the prices in line with the foreign price of the stock.
A)True
B)False
Q5) What is an offshore financial center? What are the main characteristics of OFCs?
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Chapter 11: Globalization and Society
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Q1) U.S.MNEs that operate in Europe are under pressure to conform to the emissions standards of the Kyoto Protocol.
A)True
B)False
Q2) According to utilitarianism,actions are moral if they produce the greatest amount of good for the greatest number of people.
A)True
B)False
Q3) Which of the following is a reason for an MNE to base its standards for ethical behavior on a country's laws?
A) The law embodies many of a country's moral beliefs but is an inadequate guide for proper conduct.
B) The law contains unenforceable rules that are impossible for society to follow.
C) The law represents a consensus derived from significant deliberation.
D) The law is based on precisely defined moral concepts.
Q4) What is the Foreign Corrupt Practices Act? How has this law affected ethical behavior among international businesses?
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13
Chapter 12: The Strategy of International Business
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Q1) Political,legal,economic,monetary,and institutional forces comprise the ________ of international business and influence managers' actions.
A) environment
B) competition
C) culture
D) threat
Q2) The term ________ refers to a global company that thrives on seeking unique ideas and insights from locations around the world and then leveraging that knowledge in international markets.
A) multidomestic
B) domestic
C) metanational
D) cross-cultural
Q3) A strategy that focuses on lowering operating costs is referred to as a ________ strategy.
A) differentiation
B) cost leadership
C) niche market
D) diversification
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Page 14
Chapter 13: Country Evaluation and Selection
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Q1) Committing resources to one country usually means forgoing or delaying projects in others.
A)True
B)False
Q2) The ability to compare production costs among countries in an effort to determine where to locate production is significantly hampered by all of the following EXCEPT
A) the number of ways the same product can be made
B) restrictions on the international flow of data
C) the ways that laws may be enforced
D) future costs from exchange rate changes
Q3) Sales expansion is probably the most important variable in determining international location decisions.This statement is most likely based on the assumption that ________.
A) consumer demand exceeds supply
B) increased sales will lead to more profits
C) the company will have a first-mover advantage
D) raw materials are available in the country targeted for sales
Q4) In a short essay,discuss liquidity preference as it relates to monetary risk.
Q5) What is scanning? What opportunities and risks are most relevant to scanning?
Page 15
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Chapter 14: Export and Import
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Q1) The incremental internationalization view of exporting holds that companies first target countries that are ________ their home market.
A) different from
B) similar to
C) smaller than
D) larger than
Q2) All of the following are primary duties of the Bureau of Customs and Border Protection EXCEPT which one?
A) assessing all duties, taxes, and fees on imported merchandise
B) collecting import and export tariffs
C) protecting the U.S. from threatening imports
D) policing smuggling operations
Q3) Export intensity,the percentage of total revenues coming from exports,is not always correlated with company size.
A)True
B)False
Q4) What are some reasons that firms decide to export their products or services? What does a firm need to consider when developing an export plan?
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Page 16
Chapter 15: Direct Investment and Collaborative Strategies
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Q1) Wholly owned operations abroad inhibit a company's ability to pursue a global strategy.
A)True
B)False
Q2) The use of management contracts has been significant in hotel operations.
A)True
B)False
Q3) Exporting is usually more feasible when transportation costs are high rather than low in relation to production costs.
A)True
B)False
Q4) What is a key industry?
A) an industry that is locked up competitively by domestic producers
B) a turnkey operator specializing in the construction of infrastructure components
C) an industry that receives government subsidies
D) an industry that significantly affects the economy by virtue of its size or influence on other sectors
Q5) Explain how franchising agreements differ from licensing agreements.
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Chapter 16: The Organization of International Business
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Q1) ________ is a system of shared values about what is important and beliefs about how the world works among the employees of an organization.
A) Organizational system
B) Organizational structure
C) Organizational culture
D) Organizational vision
Q2) At Tyson Manufacturing,departments and units are organized around discrete business activities,such as finance,production,marketing,and human resources.Tyson most likely has a ________ structure.
A) network
B) matrix
C) functional
D) divisional
Q3) Companies tend to use geographic divisions when they have large foreign operations that are not dominated by a single country or market.
A)True
B)False
Q4) How might centralization of decision making adversely affect local managers in an MNE?
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Chapter 17: Marketing Globally
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Q1) What is the gray market?
A) sales targeted to elderly consumers
B) selling goods through unofficial distributors
C) a legal black market run by governments
D) selling counterfeit merchandise
Q2) When a company sells technologically advanced products to global customers,it is more likely to handle distribution itself.
A)True
B)False
Q3) Gap analysis may show that the combined market potential among several countries may justify product development costs.
A)True
B)False
Q4) The most common way of identifying market segments is through demographics.
A)True
B)False
Q5) In a short essay,discuss the standardization of two marketing components: advertising and distribution.
Q6) In a short essay,describe the various reasons for product alteration.
Page 19
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Chapter 18: Global Manufacturing and Supply-Chain Management
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Q1) What factors complicate the international transportation of goods? How can a firm make the process more efficient?
Q2) A multidomestic configuration is most important when ________.
A) demand in individual countries decreases significantly
B) exporting is the company's main strategy
C) demand in individual countries becomes significant
D) low-priced, standardized products are available
Q3) Which of the following is a sourcing strategy in the global context?
A) use only local purchasing agents
B) establish local purchasing offices
C) purchase only from global suppliers
D) assign domestic buyers for international purchasing
Q4) Which of the following is a set of universal standards for a globally accepted quality assurance system?
A) just-in-time (JIT) inventory management
B) Six Sigma
C) total quality management (TQM)
D) ISO 9000
Q5) Describe total quality management.
Q6) What are foreign trade zones? How are they used? Page 20
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Page 21
Chapter 19: International Accounting and Finance Issues
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Q1) The accounting value that relates to issues such as how to present financial information and discuss financial results is known as ________.
A) measurement
B) conservatism
C) disclosure
D) optimism
Q2) Coca-Cola has subsidiaries all over the world.The process of combining the results of its far-flung operations into one set of financial statements for investors is known as
A) combination
B) translation
C) consolidation
D) unification of results
Q3) The Netherlands is an example of a country that is micro-based from an accounting perspective,as opposed to macro-uniform based.
A)True
B)False
Q4) In a brief essay,discuss the concepts of transfer pricing and hedging.
Q5) How do exchange rates affect budgets used to evaluate performance in MNEs?
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Chapter 20: International Human Resource Management
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Q1) Executives from the home office typically demand richer compensation packages and impose higher relocation costs than third-country nationals do.
A)True
B)False
Q2) Which of the following is a drawback of the polycentric approach?
A) Host-country nationals become more committed to company headquarters than to their local colleagues.
B) Successful local units may increasingly function independently and pay less attention to headquarters.
C) Local units depend too much on headquarters for resources and innovations, with little incentive to develop their own.
D) Local managers study international business and cultural practices in other markets in preparation for international assignments at the expense of not fully investing in understanding the host country.
Q3) Unlike the geocentric and polycentric mindsets,the ethnocentric mindset is not tied to a particular home or host nation.
A)True
B)False
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