Cross-Cultural Management Exam Bank
Course Introduction
Cross-Cultural Management explores the complexities and challenges of managing individuals and teams in a globalized business environment. The course examines cultural differences, communication styles, leadership approaches, negotiation tactics, and decision-making processes across diverse cultures. Students will learn to identify and bridge cultural gaps, develop strategies for effective multicultural teamwork, and understand the impact of cultural diversity on organizational dynamics. By integrating theoretical frameworks with practical case studies, the course prepares students to manage cross-cultural interactions with sensitivity, adaptability, and competence in various international business contexts.
Recommended Textbook
International Business Competing in the Global Marketplace 8th Edition by Charles W. L. Hill
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Chapter 1: Globalization
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Sample Questions
Q1) One of the UN central mandates is the promotion of higher standards of living,full employment,and conditions of economic and social progress and development.
A)True
B)False
Answer: True
Q2) Many economists,politicians,and business leaders believe that the shift toward a more integrated and interdependent global economy is a positive trend.
A)True
B)False
Answer: True
Q3) Firms based in _____ accounted for 14.7 percent of the stock of foreign direct investment in 2007,up from only 1.1 percent in 1980.
A)Asia
B)developing countries
C)United Kingdom
D)NAFTA region
Answer: B
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Page 3
Chapter 2: National Differences in Political Economy
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Sample Questions
Q1) Identify the incorrect statement regarding individualism.
A)It advocates for a socialist political system
B)It promotes free market economics
C)It creates a pro-business environment
D)It translates into an advocacy for democratic political systems
Answer: A
Q2) A civil law system tends to be more adversarial than a common law system.
A)True
B)False
Answer: False
Q3) According to political scientist Samuel Huntington's thesis,global terrorism is a product of the tension between civilizations and the clash of value systems and ideology.
A)True
B)False
Answer: True
Q4) The Foreign Corrupt Practices Act allows for grease payments.
A)True
B)False
Answer: True
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Chapter 3: Differences in Culture
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Sample Questions
Q1) The individualism vs.collectivism dimension of Hofstede's study explored:
A)the extent to which different cultures socialized their members into accepting ambiguous situations and tolerating uncertainty.
B)the relationship between gender and work roles.
C)how a society deals with the fact that people are unequal in physical and intellectual capabilities.
D)the relationship between the individual and his/her fellows.
Answer: D
Q2) There is a one-to-one correspondence between culture and the nation-state.
A)True
B)False
Answer: False
Q3) Individualism has led to a high degree of managerial mobility between companies resulting in managers who have good general skills but lack company-specific experience.
A)True
B)False
Answer: True
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5
Chapter 4: Ethics in International Business
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Sample Questions
Q1) According to the naive immoralist:
A)a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
B)the social responsibility of business is to increase profits,so long as the company stays within the rules of law.
C)ethics are nothing more than the reflection of a culture.
D)if firms in a host nation do not follow ethical norms then the manager of a multinational should also not follow ethical norms there.
Q2) International businesses cannot gain economic advantages by making payments to corrupt government officials.
A)True
B)False
Q3) Internal stakeholders:
A)are individuals or groups who work for or own the business.
B)do not have any claim on a firm or its activities.
C)typically comprise customers,suppliers,lenders,governments,unions,etc.
D)are individuals,except employees,board of directors,and stockholders that have some claim on the firm.
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Chapter 5: International Trade Theory
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Sample Questions
Q1) Discuss the mercantilist philosophy.What was the theory's main flaw?
Q2) According to the new trade theory,firms that establish a first-mover advantage with regard to the production of a particular new product may subsequently dominate global trade in that product.
A)True
B)False
Q3) Contrary to what the Heckscher-Ohlin theory would predict,the United States has been a primary importer rather than an exporter of capital goods.This phenomenon is referred to as the _____ paradox.
A)zero-sum
B)Leontief
C)empirical
D)Ricardo
Q4) Ricardo noted the importance of country factors such as domestic demand and domestic rivalry in explaining a nation's dominance in the production and export of particular products.
A)True
B)False
Q5) What are the benefits of free trade?
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Chapter 6: The Political Economy of International Trade
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Sample Questions
Q1) Which of the following is not one of the main instruments of trade policy?
A)Tariffs
B)Credit portfolios
C)Local content requirements
D)Administrative policies
Q2) Under a tariff rate quota,a higher tariff rate is applied to imports within the quota than those over the quota.
A)True
B)False
Q3) Which of the following is not a reason for the pressure for greater protectionism that occurred during the 1980s and early 1990s?
A)The growing U.S.trade surplus with Japan strained the world trading system.
B)Japanese economic success strained the world trading system.
C)The persistent trade deficit in the United States strained the world trading system.
D)Many countries found ways to get around GATT regulations.
Q4) Discuss the Buy America Act and its connection with local content requirements.
Q5) Explain how trade barriers affect a firm's strategy.
Q6) Discuss the establishment of GATT.What was GATT's objective?
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Chapter 7: Foreign Direct Investment
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Sample Questions
Q1) Foreign direct investment can make a positive contribution to a host economy by supplying capital,technology,and management resources that would otherwise not be available and thus boost that country's economic growth rate.
A)True
B)False
Q2) Consider the notion that FDI flows are a reflection of strategic rivalry between firms in the global marketplace.What is the main limitation of the theory?
Q3) The stock of FDI is:
A)the amount of FDI undertaken over a given period of time.
B)the total accumulated value of foreign-owned assets at a given time.
C)the flow of FDI out of a country.
D)the flow of FDI into a country.
Q4) The amount of FDI undertaken over a given time period is known as the flow of FDI.
A)True
B)False
Q5) What are the two forms of foreign direct investment?
Q6) Discuss the shift in FDI from manufacturing to services.What is driving the trend?
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Page 9
Chapter 8: Regional Economic Integration
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Sample Questions
Q1) The Council of the European Union is responsible for proposing EU legislation,implementing it,and monitoring compliance with EU laws by member states.
A)True
B)False
Q2) The Asia-Pacific Economic Cooperation was established to increase multinational cooperation in view of the economic rise of the Pacific nations and the growing interdependence within the region.
A)True
B)False
Q3) All of the following are true of the euro except:
A)its notes and coins were first issued on January 1,1999.
B)it required participating countries to give up their own currencies.
C)countries lost control of monetary policy when it was established.
D)it created the second largest currency zone in the world.
Q4) Briefly describe the four main institutions that make up the political structure of the EU.
Q5) The ultimate controlling unit within the EU is the European Council.
A)True
B)False
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Chapter 9: The Foreign Exchange Market
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Sample Questions
Q1) The _____ states that a country's "nominal" interest rate is the sum of the required "real" rate of interest and the expected rate of inflation over the period for which the funds are to be lent.
A)PPP theory
B)efficient market theory
C)inefficient market theory
D)Fisher Effect
Q2) The foreign exchange market serves two main functions.These are:
A)collect duties on imported products and convert the currency of one country into the currency of another.
B)insure companies against foreign exchange risk and set interest rates charged to foreign investors.
C)collect duties on imported products and set interest rates charged to foreign investors.
D)convert the currency of one country into the currency of another and provide some insurance against foreign exchange risk.
Q3) Discuss the two schools of thought on exchange rate forecasting.
Q4) With the help of an example explain how a tourist participates in the foreign exchange market.
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Chapter 10: The International Monetary System
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Sample Questions
Q1) The exchange rates of all currencies are determined by the free play of market forces.
A)True
B)False
Q2) The Louvre Accord pledged to support the stability of exchange rates around their 1987 levels by intervening in the foreign exchange markets when necessary to buy and sell currency.
A)True
B)False
Q3) A pegged rate means that the value of a 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.
A)True
B)False
Q4) What was the Bretton Woods agreement? How was it different from the gold standard?
Q5) What two multinational institutions were established at the Bretton Woods agreement? What are their roles in the international monetary system?
Q6) Consider the case for fixed exchange rates.
Page 12
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Chapter 11: The Global Capital Market
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Sample Questions
Q1) In 1997,the stock markets of several Asian countries,including South Korea,Malaysia,Indonesia,and Thailand,lost over 50 percent of their value in response to the Asian financial crisis,while at the same time the S&P 500 increased in value by over 20 percent.This indicates that:
A)relatively low correlation exists between the movement of stock markets in different countries.
B)international diversification has failed in reducing the risks of global capital movement.
C)capital controls result in segmentation of different stock markets.
D)the integration of global capital disproportionately favors developed countries in Europe and America.
Q2) The spread between the eurocurrency deposit rate and the eurocurrency lending rate is higher than the spread between the domestic deposit and lending rates. A)True B)False
Q3) What are the two basic factors reflected by the relatively low correlation between the movements of stock markets in different countries?
Q4) What are foreign bonds?
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Page 13
Chapter 12: The Strategy of International Business
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Sample Questions
Q1) _____ strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences.
A)Localization
B)Transnational
C)Global standardization
D)International
Q2) Which of the following is not associated with firms following the global standardization strategy?
A)Low pressures for local responsiveness
B)Use cost advantage to support aggressive pricing in world markets
C)High pressures for cost reductions
D)Customize product offering and marketing strategy to local conditions
Q3) Michael Porter has argued that _____ and _____ are two basic strategies for creating value and attaining a competitive advantage in an industry.
A)differentiation; price competition
B)economies of scale; diversification.
C)low cost; differentiation
D)efficiency; promotion
Q4) Describe the benefits of global expansion for firms.
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Chapter 13: The Organization of International Business
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Sample Questions
Q1) A firm that needs greater flexibility should choose _____ for its decision-making.
A)vertical differentiation
B)centralization
C)horizontal differentiation
D)decentralization
Q2) When a company measures the performance of its national operating subsidiaries according to profitability,the company is using:
A)control systems.
B)lean processes.
C)incentives.
D)organizational culture.
Q3) The need for coordination between subunits is lowest in firms pursuing a(n):
A)localization strategy.
B)international strategy.
C)global strategy.
D)transnational strategy.
Q4) A strong organizational culture always leads to strong performance.
A)True
B)False
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Chapter 14: Entry Strategy and Strategic Alliances
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Sample Questions
Q1) Firms may avoid strategic alliances because their complexity usually delays entry into a foreign market.
A)True
B)False
Q2) A clear advantage of greenfield investments as compared to acquisitions is the short execution time involved.
A)True
B)False
Q3) The long-run benefits of doing business in a country are a function of factors such as the size of the market,the present wealth of consumers in that market,and the likely future wealth of customers.
A)True
B)False
Q4) Over the decade,between 50 and 90 percent of all FDI inflows have been in the form of mergers and acquisitions.
A)True
B)False
Q5) Discuss the advantages of using a joint venture to enter foreign markets.
Q6) Why should a firm be cautious about entering a licensing agreement?
Page 16
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Chapter 15: Exporting,Importing,and Countertrade
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Sample Questions
Q1) Once a time draft is stamped with an acceptance,the maker can sell the draft at a premium to its face value.
A)True
B)False
Q2) What is an export management company? What are the advantages and disadvantages associated with it?
Q3) In theory,the advantage of EMCs is that they:
A)provide export subsides to the exporting firms.
B)are not-for-profit organizations,hence provide free service.
C)are subsidized by the Department of Commerce.
D)are experienced specialists who can help the neophyte exporter.
Q4) EMCs are experienced specialists who can help the neophyte exporter avoid common pitfalls.
A)True
B)False
Q5) An export management company is an export specialist who acts as the export marketing department or international department for their client firms.
A)True
B)False
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Chapter 16: Global Production, Outsourcing, and Logistics
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Sample Questions
Q1) Explain how the role of foreign factories evolves over time.
Q2) _____ is a management philosophy according to which mistakes,defects,and poor-quality materials are not acceptable and should be eliminated.
A)Scientific management
B)Total quality management
C)ISO 9000
D)Lean manufacturing
Q3) All of the following are the major efficiency benefits of flexible manufacturing technologies except:
A)it enables companies to customize products to the demands of small consumer groups.
B)it helps a company achieve mass customization,which increases its customer responsiveness.
C)it requires firms to establish manufacturing facilities in each major market to provide products that satisfy specific consumer tastes and preferences.
D)it improves capacity utilization and reductions in work in progress and waste.
Q4) What is meant by minimum efficient scale? Discuss the implications of minimum efficient scale.
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18
Chapter 17: Global Marketing and RD
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Sample Questions
Q1) An increase in car ownership,the number of two-income households,and the number of households with a refrigerator have all contributed to the more fragmented retail system found in developed countries.
A)True
B)False
Q2) Products sell well when their attributes match consumer needs.
A)True
B)False
Q3) What is channel length? What is the most important determinant of channel length? Mention two factors that shorten channel length.
Q4) Which of the following does not affect a firm's international communication?
A)Cultural barriers
B)Source effects
C)Channel exclusivity
D)Noise levels
Q5) A company's customers can be a primary source of new-product ideas.
A)True
B)False
Q6) Compare and contrast push strategies and pull strategies.
Page 19
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Chapter 18: Global Human Resource Management
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Sample Questions
Q1) An organization's norms and value systems are known as its corporate culture.
A)True
B)False
Q2) _____ is/are the linchpin of a firm's organization architecture.
A)People
B)Strategy
C)Business processes
D)Organizational structure
Q3) Cultural myopia refers to a firm's failure to:
A)adapt to certain ethnocentric cultures through the expatriate.
B)permanently implement parent-company culture in the host country.
C)understand host-country cultural differences that require different approaches to marketing and management.
D)identify countries which are much tougher postings than others because their cultures are more unfamiliar and uncomfortable.
Q4) According to Mendenhall and Oddou,poorly-adjusted expatriates tend to be nonjudgmental and nonevaluative in interpreting the behavior of host-country nationals.
A)True
B)False
20
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Chapter 19: Accounting in the International Business
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Sample Questions
Q1) Which of the following is typically not a main step in the control process by which a corporate headquarters controls subunits within the organization?
A)Head office and subunit management jointly determine subunit goals for the coming year.
B)Head office monitors subunit performance against the agreed goals only at the end of the year.
C)If a subunit fails to achieve its goals,the head office intervenes in the subunit to learn why the shortfall occurred.
D)If a subunit fails to achieve its goals,the head office can take appropriate corrective action if required.
Q2) Write a short note on the International Accounting Standards Board (IASB)?
Q3) It is possible that a multinational's balance sheet may not balance when it uses the temporal method to translate the accounts of a foreign subsidiary.
A)True
B)False
Q4) Describe the current rate method used by firms to determine what exchange rate should be used when translating financial statement currencies.
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Chapter 20: Financial Management in the International Business
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Sample Questions
Q1) In general,firms prefer to hold cash balances at a centralized depository for all of the following reasons except:
A)by pooling cash reserves centrally,the firm can deposit larger amounts.
B)it enables the firm to invest a larger amount of cash reserves in short-term,highly liquid financial instruments that earn a lower interest rate.
C)if the centralized depository is located in a major financial center,it has access to information about good short-term investment opportunities that the typical foreign subsidiary would lack.
D)the firm can reduce the total size of the cash pool it must hold in highly liquid accounts.
Q2) Adjusting discount rates to reflect a location's riskiness is a rare practice.
A)True
B)False
Q3) Many firms hold at least their subsidiaries' precautionary cash reserves at a centralized depository,having each subsidiary hold its own day-to-day-needs cash balance.
A)True
B)False
Q4) What are tax havens? What is their importance in international business?
Page 22
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