Cross-Cultural Management Exam Solutions
Course Introduction
Cross-Cultural Management explores the complexities and challenges faced by organizations and individuals when working across different cultural contexts. This course examines key concepts such as cultural values, communication styles, leadership approaches, conflict resolution, and decision-making in a multicultural environment. Students will analyze real-world case studies, develop awareness of their own cultural perspectives, and learn strategies for effective management in international and diverse teams. The course provides essential tools for navigating global business environments, enhancing intercultural competence, and fostering inclusive organizational cultures.
Recommended Textbook
International Business Competing in the Global Marketplace 11th Edition by Charles
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20 Chapters
2183 Verified Questions
2183 Flashcards
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Page 2
W. L. Hill
Chapter 1: Globalization
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) A number of econometric studies have found consistent evidence of a hump-shaped relationship between income levels and pollution levels. According to this, as an economy grows and income levels rise:
A) initially the pollution levels remain low.
B) after a while, the pollution levels decrease.
C) the pollution levels also rise in proportion to the economic growth.
D) there is increasing industrialization which leads to greater pollution.
Answer: B
Q2) Which of the following is true about the International Monetary Fund?
A) It is primarily responsible for policing the world trading system.
B) It is seen as the lender of last resort to nation-states whose economies are in turmoil.
C) It is responsible for establishing multinational treaties to govern the global business system.
D) It was established to formulate a coordinated policy response to financial crises in developing nations.
Answer: B
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3
Chapter 2: National Differences in Political Economy, and Legal Systems
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) _____ argued that individual diversity and private ownership are undesirable.
A) Karl Marx
B) Plato
C) John Stuart Smith
D) Aristotle
Answer: D
Q2) Compare and contrast the four forms of totalitarianism.
Answer: In a totalitarian country, an individual's right to freedom of expression and organization, a free media, and regular elections are denied to the citizens. There are four forms of totalitarianism. Communist totalitarianism was until recently the most widespread form of totalitarianism. This form of totalitarianism advocates that socialism can only be achieved through totalitarian dictatorship. Theocratic totalitarianism is found in states where political power is monopolized by a party, group, or individual that governs according to religious principles. Tribal totalitarianism occurs when a political party that represents the interests of a particular tribe monopolizes power. Right-wing totalitarianism permits some individual economic freedoms but restricts individual political freedom.
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4
Chapter 3: National Differences in Economic Development
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105 Flashcards
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Sample Questions
Q1) Which of the following statements is true about Samuel Huntington?
A) Samuel Huntington argues that there is a universal civilization based on widespread acceptance of Western democratic ideals.
B) Samuel Huntington argues that the rise of Islamic fundamentalism is a response to the alienation produced by modernization.
C) Samuel Huntington argues that global terrorism is a product of the static nature of traditional values and religious systems.
D) Samuel Huntington argues that many societies, by adopting the material paraphernalia of the modern world, are becoming more Western.
Answer: B
Q2) It may be more costly to do business in relatively primitive or undeveloped economies because of:
A) international trade restrictions.
B) the lack of governmental support.
C) difficulty obtaining workers.
D) the lack of infrastructure and supporting businesses.
Answer: D
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Chapter 4: Differences in Culture
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Discuss the limitations of Hofstede's research.
Q2) The protection of the right to private property is embedded within _____.
A) Islam
B) Christianity
C) Hinduism
D) Protestantism
Q3) A caste system is a closed system of stratification in which social position is determined by the family into which the person is born.
A)True
B)False
Q4) A _____ is a less rigid form of social stratification in which social mobility is possible.
A) caste system
B) normative system
C) religious system
D) class system
Q5) Explain how the Koran views business.
Q6) Discuss the relationship between society and the nation-state.
Q7) Explain the concept of social stratification.
Q8) What are the implications of cultural differences for international businesses?
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Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics because of which of the following?
A) They are surrounded by their ordinary social context and supporting culture.
B) They are psychologically and geographically closer to the parent company.
C) They may be based in a culture that does not place the same value on ethical norms important in the manager's home country.
D) They may be surrounded by local employees who have more rigorous ethical standards.
Q2) Discuss the utilitarian approach to business ethics. When was this approach developed? What are its drawbacks?
Q3) _____ is a French term that refers to honorable and benevolent behavior considered the responsibility of people of high (noble) birth.
A) Bienveillante
B) Honourable
C) Aristocratic
D) Noblesse oblige
Q4) Describe the five-step process that businesses can use to think through ethical problems.
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Chapter 6: International Trade Theory
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107 Verified Questions
107 Flashcards
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Sample Questions
Q1) The production possibility frontier will be _____ if constant return to specialization is observed.
A) convex
B) parabolic
C) a straight line
D) logarithmic
Q2) Mercantilist doctrine advocates unrestricted free trade between countries.
A)True
B)False
Q3) First-mover advantages are the economic and strategic advantages that accrue to early entrants into an industry.
A)True
B)False
Q4) A capital intensive country exports products that are capital intensive. Which theory is this an example of?
A) New trade
B) Leontief Paradox
C) Porter Diamond Model
D) Heckscher-Ohlin
Q5) Explain Ricardo's theory of comparative advantage.
Page 8
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Chapter 7: Government Policy and International Trade
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111 Verified Questions
111 Flashcards
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Sample Questions
Q1) WTO rules allow countries to _____ foreign goods that are being sold cheaper than at home, or below their cost of production, even when domestic producers can show that they are being harmed.
A) impose antidumping duties on
B) subsidize
C) lower the import quota on
D) place countervailing duties on
Q2) Which of the following is one of the main instruments of trade policy?
A) Tariffs
B) Credit portfolios
C) Opportunity costs
D) Countervailing duties
Q3) The _____ raised tariff barriers in the hope of protecting jobs and diverting consumer demand away from foreign products.
A) Smoot-Hawley Act
B) Helms-Burton Act
C) General Agreement on Tariffs and Trade
D) Buy America Act
Q4) Explain the notion of predatory behavior with regard to dumping.
Q5) Compare and contrast import quotas and voluntary export restraints.
Page 9
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Chapter 8: Foreign Direct Investment
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106 Verified Questions
106 Flashcards
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Sample Questions
Q1) As transportation costs or trade barriers increase, exporting becomes unprofitable, and the choice is between FDI and _____.
A) subsidies
B) incentives
C) licensing
D) resource endowments
Q2) Other things being equal, the greater the capital investment in an economy, the more favorable its future growth prospects are likely to be.
A)True
B)False
Q3) What are the possible adverse effects of FDI on a host country's balance-of-payments position?
Q4) Which political view allows FDI so long as the benefits outweigh the costs?
A) The traditional view
B) The pragmatic nationalist view
C) The radical view
D) The free market view
Q5) Discuss an example that substantiates Dunning's argument about location-specific advantages.
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Chapter 9: Regional Trade Pacts Give the Mexican Auto
Industry an Edge
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) How has the euro contributed to increasing competition in the European region?
A) By increasing hedging costs
B) By increasing the cost of capital
C) By making price comparisons easy
D) By enabling a common monetary policy
Q2) The _____ represents the interests of member states and is clearly the ultimate controlling authority within the EU.
A) European Council
B) European Parliament
C) Court of Justice
D) European Commission
Q3) The Single European Act committed EU countries to adopting a common currency by January 1, 1999.
A)True
B)False
Q4) 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
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Chapter 10: The Foreign Exchange Market
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105 Flashcards
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Sample Questions
Q1) Capital flight is most likely to occur when:
A) the value of the domestic currency is depreciating rapidly because of hyperinflation.
B) a country's economic prospects are solid and promising.
C) the value of the domestic currency is appreciating rapidly.
D) he value of the foreign currencies are depreciating rapidly.
Q2) With the help of an example, explain how a tourist participates in the foreign exchange market.
Q3) _____ draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements.
A) Lead strategy
B) Fundamental analysis
C) Lag strategy
D) Technical analysis
Q4) Discuss the failure of PPP theory to predict exchange rates accurately. What is the purchasing power puzzle?
Q5) Where is the foreign exchange market located? What is the nature of the market? Is the market growing or shrinking on a global basis?
Q6) Explain the notion of economic exposure. How can economic exposure be minimized?
Page 12
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Chapter 11: The International Monetary System
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107 Verified Questions
107 Flashcards
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Sample Questions
Q1) International Monetary Fund members were _____ in the Jamaica agreement.
A) not permitted to sell their own gold reserves
B) permitted to sell their own gold reserves, but only at the price set by IMF
C) required to hold their gold reserves in escrow
D) permitted to sell their own gold reserves at the market price
Q2) _____ are popular among many of the world's smaller nations.
A) Floating exchange rates
B) Full fixed exchange rates
C) Fixed exchange rates
D) Pegged exchange rates
Q3) A currency crisis occurs due to:
A) the loss of confidence in a country's banking system.
B) heavy foreign debt obligations.
C) high levels of trade deficit.
D) a speculative attack on the exchange value.
Q4) Interest rates adjust automatically under a strict currency board system.
A)True
B)False
Q5) Do you think businesses can influence government policies? Explain your answer.
Page 13
Q6) Present the common arguments that favor fixed exchange rates.
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Chapter 12: The Global Capital Market
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108 Flashcards
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Sample Questions
Q1) The spread between the Eurocurrency deposit rate and the Eurocurrency lending rate is more than the spread between the domestic deposit and lending rates.
A)True
B)False
Q2) Which of the following is a factor that makes Eurobonds more attractive than most major domestic bonds?
A) Presence of a regulatory interference
B) Strong disclosure requirements
C) Favorable tax status
D) Protection from exchange risks
Q3) Which of the following is a disadvantage of global capital market?
A) Foreign investments may be driven by speculative flows in the market.
B) A truly global market reduces the liquidity of investments.
C) The availability of capital is low in a global capital market.
D) The cost of capital is more in a global market than a domestic market.
Q4) Explain the two basic factors reflected by the relatively low correlation between the movements of stock markets in different countries.
Q5) How can a borrower hedge against unpredictable movements in exchange rates?
Q6) What is a capital market? Define market makers.
Page 14
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Chapter 13: The Strategy of International Business
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106 Verified Questions
106 Flashcards
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Sample Questions
Q1) Lenovo's ThinkPad laptop computers are designed in the United States, the case, keyboard, and hard drive are made in Thailand; the display screen and memory in South Korea; the built-in wireless card in Malaysia; and the microprocessor in the United States. In each case, these components are manufactured and sourced from the optimal location given current factor costs. In this example, Lenovo has:
A) vertical integration advantages.
B) a global web of value creation activities.
C) learning effects.
D) high local responsiveness.
Q2) Economies that arise from performing a value creation activity in the optimal place for that activity are referred to as _____.
A) factor economies
B) production economies
C) location economies
D) value creation economies
Q3) Describe the benefits of global expansion for firms.
Q4) How can the marketing and sales functions of a firm create value?
Q5) What is the difference between profitability and profit growth?
Q6) What are learning effects? When are learning effects most significant?
Page 15
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Chapter 14: The Organization of International Business
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Sample Questions
Q1) The basic principle behind incentive systems is to ensure that the incentive scheme for an individual employee is linked to an output target that he or she has some control over and can influence.
A)True
B)False
Q2) Which of the following decisions is typically centralized at a firm's headquarters?
A) Production decisions
B) Human resource management
C) Marketing decisions
D) Overall firm strategy
Q3) The need for coordination between units is greatest in firms pursuing a localization strategy.
A)True
B)False
Q4) Discuss the issues involved in refreezing an organization.
Q5) An organizational culture can be strong but bad.
A)True
B)False
Q6) Explain the five reasons why a firm should decentralize its decision-making.
Page 16
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Chapter 15: Entry Strategy and Strategic Alliances
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Sample Questions
Q1) Discuss the three primary characteristics of a good ally.
Q2) Which of the following is true of strategic alliances?
A) Strategic alliances can make entry into a foreign market difficult.
B) Strategic alliances, while they have many benefits, do not allow firms to share the fixed costs of developing new products or processes.
C) Strategic alliances allow firms to bring together complementary skills and assets that neither company could easily develop on its own.
D) Strategic alliances, while beneficial to firms, make the establishment of technological standards for an industry difficult.
Q3) Which of the following is true of wholly owned subsidiaries?
A) It is the least expensive method of serving a foreign market from a capital investment standpoint.
B) It the most feasible entry mode due to the political considerations.
C) It is required if a firm is trying to realize location and experience curve economies.
D) It is particularly useful where FDI is limited by host-government regulations.
Q4) Discuss the three advantages of acquiring an enterprise in a target market.
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Page 17
Chapter 16: Exporting, Importing, and Countertrade
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107 Flashcards
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Sample Questions
Q1) Which of the following is a common difficulty that traders face when exporting goods or services to other countries?
A) Small firms tend to be more aggressive than larger firms in global trade.
B) Governments do not provide much assistance to exporters.
C) Growth opportunities are often limited in global markets.
D) Exporters often face voluminous paperwork and complex formalities.
Q2) In a(n) ____, one party agrees to purchase goods and services with a specified percentage of the proceeds from the original sale and this party can fulfill the obligation with any firm in the country to which the sale is being made.
A) switch trade
B) offset
C) barter
D) buyback
Q3) Which of the following is a major drawback of engaging in countertrade?
A) Countertrade is not useful when trading with developing nations.
B) Financing is difficult when engaging in a countertrade.
C) It is not attractive to small organizations.
D) Countertrade may involve the exchange of unusable goods.
Q4) Describe a typical international trade transaction.
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Chapter 17: Global Production and Supply Chain Management
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Sample Questions
Q1) How has the adoption of just-in-time inventory systems impacted firms' associations with suppliers?
A) The bargaining power of the firms over their suppliers has increased enormously.
B) It has reduced the level of data sharing between firms and their suppliers.
C) Firms are capable of switching suppliers often due to such technologies.
D) It has increased pressures to establish long-term relationships with suppliers.
Q2) At Six Sigma, a production process would be highly accurate and create just:
A) 3.4 defects per hundred thousand units.
B) 6.8 defects per million units.
C) 3.4 defects per million units.
D) 6.8 defects per hundred thousand units.
Q3) A multinational corporation uses both its own employees from inside the firm and an external supplier to perform certain tasks, often in concert with each other.
A) Insourcing
B) Offshore outsourcing
C) Nearshoring
D) Co-sourcing
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Page 19
Chapter 18: Global Marketing and RD
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Sample Questions
Q1) Concentrated retail systems tend to promote the growth of wholesalers to serve retailers, which lengthens channels.
A)True
B)False
Q2) The structure of market segments may differ significantly from country to country.
A)True
B)False
Q3) Dumping occurs whenever a firm sells a product:
A) for a price that is less than the cost of producing it.
B) without paying the necessary regulatory charges.
C) for a price that is higher than the market rate.
D) by including a premium for the R&D activities of the firm.
Q4) The most important determinant of channel length is the degree to which a retail system is _____.
A) concentrated
B) fragmented
C) decentralized
D) globalized
Q5) Explain briefly the regulatory influences on pricing.
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Chapter 19: Global Human Resource Management
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Sample Questions
Q1) A strong _____, the organization's norms and value systems, can help a firm to implement its strategy.
A) corporate culture
B) human resources division
C) mission statement
D) beliefs systems
Q2) Which of the following is an action taken by organized labor to respond to the increased bargaining power of multinational corporations?
A) Trying to establish international labor organizations
B) Increasing competition between national unions
C) Lobbying the European Union for legislation to restrict multinationals
D) Trying to achieve international regulations on multinationals through such organizations as the United Nations
Q3) Trade unions around the world:
A) developed simultaneously and in coordination with each other.
B) are widely varied in their structure.
C) have virtually the same ideology.
D) employ the same union structure.
Q4) What is human resource management? Why is HRM an important strategic component?
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Chapter 20: Accounting and Finance in the International Business
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Sample Questions
Q1) When using the projected spot exchange rate to translate both the budget and performance figures into the corporate currency, the projected rate in such cases will typically be the:
A) forward exchange rate as determined by the foreign exchange market.
B) exchange rate that exists at the start of a project.
C) exchange rate when the budget was prepared.
D) transfer price that a firm will offer to one or more of its subsidiaries.
Q2) Transfer price refers to the:
A) price at which goods and services are transferred to a subsidiary.
B) price at which the title of products is transferred to a customer.
C) price at which a supplier provides raw materials to a firm.
D) cost incurred when goods or services are transferred from one place to another.
Q3) The technical process by which an independent person gathers evidence for determining if financial accounts conform to required accounting standards is known as
A) standardization
B) an audit
C) reporting
D) a benchmark
Page 22
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