Cross-Cultural Management Final Exam Questions
Course Introduction
Cross-Cultural Management explores the challenges and opportunities that arise when individuals and organizations interact across different cultures in a business context. This course examines how cultural norms, values, and communication styles impact organizational behavior, leadership, team dynamics, negotiation, and decision-making. Students will analyze real-world case studies, develop cultural intelligence, and learn strategies for effectively managing diverse teams and global projects. Emphasis is placed on understanding cultural differences, managing conflicts, and leveraging diversity to enhance organizational performance in an increasingly interconnected world.
Recommended Textbook
International Business The New Realities 3rd Edition by S. Tamer Cavusgil
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Page 2
Chapter 1: Introduction: What Is International Business
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Q1) Dan discusses an investment opportunity that involves the purchase of selected securities from the Chinese stock market. This opportunity represents which type of international investment?
A) indirect production
B) international portfolio
C) foreign direct
D) domestic securities
Answer: B
Q2) Exporting is the most common foreign market entry strategy of the SME.
A)True
B)False
Answer: True
Q3) Each of the following types of organizations is active in international business EXCEPT
A) MNE
B) SME
C) RND
D) NGO
Answer: C
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Page 3
Chapter 2: Globalization of Markets and the
Internationalization of the Firm
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Sample Questions
Q1) Which of the following is characteristic of globalization of markets?
A) lack of skilled labor
B) conservatism
C) declining trade barriers
D) diminishing gap between the rich and the poor
Answer: C
Q2) In a typical value chain, the firm ________.
A) rarely conducts research and development
B) performs most upstream value-chain activities abroad, when exporting
C) performs marketing activities such as pricing, promotion, and selling
D) performs most downstream activities in the home market, when exporting
Answer: C
Q3) "McDonaldization" or "Coca-Colonization" of the world refers to the idea that globalization can alter people's norms, values, and behaviors, which may tend to homogenize over time.
A)True
B)False
Answer: True
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Chapter 3: Organizational Participants That Make International Business Happen
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Sample Questions
Q1) Which of the following best describes a firm that allows a partner the right to use certain intellectual property for a specified period of time in exchange for royalties or other compensation?
A) franchisor
B) licensor
C) manufacturer
D) trading company
Answer: B
Q2) A born global firm is defined as ________.
A) a consortium of firms that plan, finance, organize, manage, and implement all phases of a project and then hand it over to a foreign customer after training local personnel
B) a large global company that sells diverse and unrelated products
C) an intermediary that engages in import and export of a variety of commodities, products, and services
D) a young entrepreneurial company that initiates international business activity early in its evolution, moving rapidly into foreign markets
Answer: D
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Chapter 4: The Cultural Environment of International Business
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Sample Questions
Q1) Jordan is employed in an American investment firm and is currently working with some Japanese clients on a new project. He uses a lot of hand gestures during meetings which his clients find very distracting and rude. This has also led to many misunderstandings between Jordan and his Japanese clients in the recent past. Which of the following best describes such a situation?
A) risk aversion
B) organizational anarchy
C) cross-cultural risk
D) acculturation
Q2) Which of the following, if true, strengthens the conclusion of the above passage?
A) In China, companies belonging to deal-oriented cultures have been the most successful.
B) American companies best thrive in cultures that are deal-oriented.
C) For the Chinese, relationship is less important than business deals.
D) The management of Grande is characterized by a host country mind-set.
Q3) Technological advances are a key determinant of culture and cultural change.
A)True
B)False
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Chapter 5: Ethics and International Business
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Q1) What is an ethical dilemma? In a short essay, include one example of an ethical dilemma that a business manager might face.
Q2) In a short essay, explain the value of CSR for businesses.
Q3) When making decisions regarding ethical business actions, managers should ________.
A) minimize employee empowerment to achieve greater control
B) focus mainly on the company's obligations to produce profits for its shareholders
C) place the highest emphasis on enhancing the company's ability to benefit from a common pool of resources
D) balance their obligation to shareholders with explicit contributions to the broader public good
Q4) In helping identify ethical problems, the firm's code of conduct should be tailored to match the norms of each individual region from which the firm operates.
A)True
B)False
Q5) Define ethics. Provide examples of unethical behavior exhibited by firms.
Q6) What is a code of conduct? What function does it serve for businesses?
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Page 7
Chapter 6: Theories of International Trade and Investment
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Sample Questions
Q1) Which of the following statements would be supported by Michael Porter?
A) Economic prosperity depends primarily on inherited national advantages.
B) The presence of strong competitors in a nation hinders national competitive advantage.
C) The presence of highly demanding customers discourages innovation.
D) Rivalry among industry competitors spurs innovation.
Q2) Which of the following is an element of the comparative advantage principle?
A) per unit cost advantage
B) relative efficiency of production
C) absolute cost of production
D) negative balance of trade
Q3) According to the internationalization process model, a firm starts out in a pre-export phase and is preoccupied with business in its home market.
A)True
B)False
Q4) What is a collaborative venture? In a short essay, describe the two major types of international collaborative ventures.
Q5) Explain the limitations of early trade theories. Discuss born global firms.
Q6) Why do nations trade? What would the world be like without international trade?
Page 8
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Chapter 7: Political and Legal Systems in National Environments
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Sample Questions
Q1) Common law is primarily judicial in origin and based on court decisions.
A)True
B)False
Q2) ________ are the people and organizations that support the political system and receive government resources.
A) Subsidiaries
B) Regional trade blocs
C) Constituents
D) Shell corporations
Q3) Which of the following is characteristic of an effective legal system?
A) a stable and rigid framework of rules and norms across nations
B) systematically enforced laws and regulations
C) political involvement in business transactions
D) universal emphasis on religious law over common and civil law
Q4) Boycotts and protests have the potential to harm businesses by ________.
A) preventing businesses from shipping their products to foreign markets
B) reducing sales and requiring additional public relations activity
C) destroying the ability of all local firms to carry on normal business operations
D) raising concerns about a firm's foreign operations by initiating lawsuits
9
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Chapter 8: Government Intervention in International Business
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Sample Questions
Q1) Given the high trade barriers in Mexico, the management of NAC is most likely to consider ________ to be an inappropriate entry strategy.
A) exporting
B) FDI
C) joint ventures
D) licensing
Q2) The GATT created a forum for resolving trade disputes.
A)True
B)False
Q3) Tariffs and most nontariff trade barriers apply to FDI, whereas investment barriers apply to exporting.
A)True
B)False
Q4) By adopting procurement policies, governments ________.
A) incentivize dumping
B) increase the costs of production of domestic industries
C) alienate domestic industries
D) restrict purchases to home-country suppliers
Q5) In a short essay, explain how the GATT changed international trade.
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Chapter 9: Regional Economic Integration
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Sample Questions
Q1) Which of the following is an example of a common market?
A) EU
B) ASEAN
C) NAFTA
D) EFTA
Q2) Which of the following is most important to consider when making the decision to create an economic bloc comprised of Country A and Country B?
A) Are the economic interests and goals of both countries compatible?
B) What would be the impact of an economic bloc on small firms in Country C?
C) How successful has Country C been in an economic bloc?
D) Can Country A and Country B agree on a central banking location?
Q3) Harmonization of standards is one of the steps taken by the EU to become an economic union.
A)True
B)False
Q4) Explain how the creation of an economic bloc facilitates the rationalization of operations for international firms. Describe how the rationalization of operations can help firms achieve scale economies and enhanced productivity.
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11
Chapter 10: Understanding Emerging Markets
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Sample Questions
Q1) Governments and state enterprises in emerging markets are major targets for sales of infrastructure-related products and services.
A)True
B)False
Q2) Which of the following situations will discourage business activities of foreign firms in an emerging market?
A) allowing foreign firms to access the country's energy resources
B) increasing the requirements for licenses, approvals, and paperwork
C) using a strong legal framework and patent laws
D) investing in a strong Internet infrastructure
Q3) Outsourcing enables foreign firms to increase efficiency by limiting corruption in the emerging markets.
A)True
B)False
Q4) Which of the following is a promising investment target in Africa?
A) banking sector
B) food processing sector
C) information technology
D) agriculture
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Chapter 11: The International Monetary and Financial Environment
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Q1) The floating exchange rate system is also called a pegged exchange rate system.
A)True
B)False
Q2) The official price of gold is used to determine the value of all major currencies in the exchange rate system used for international trade today.
A)True
B)False
Q3) Which of the following does the central bank perform in order to accommodate a nation's economic growth?
A) enforce strict regulations on foreign direct investment
B) increase the nation's money supply
C) establish a voluntary export restraint
D) restrict innovation and entrepreneurship
Q4) Currency risk can best be defined as the risk that occurs when ________.
A) currency values remain constant for prolonged periods
B) one currency changes in relation to another currency
C) buyers and sellers disagree over which currency to use
D) fluctuations in the stock market affect all exchange rates
Page 13
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Chapter 12: Strategy and Organization in the International Firm
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Sample Questions
Q1) Which of the following best characterizes the concept of global integration?
A) Effective global competition requires that products be specialized based on the market.
B) Making adjustments for unique markets is an essential element of international business.
C) Creating variations of the same product for different markets is an unnecessary expense.
D) The differences in market-to-market distribution channels must be accommodated.
Q2) A culturally diverse team would ________.
A) use diverse languages for business communications across various teams across the globe
B) follow country-specific ethical standards across the globe
C) use local employees, for accountability, for all major company decisions
D) create a global view inside the firm while remaining in touch with local realities
Q3) What is the integration-responsiveness framework? Describe the two main components of the framework.
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Chapter 13: Global Market Opportunity Assessment
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Q1) Natural disasters in foreign countries is one of the reasons for the emergence of potential target markets for selling products and services.
A)True
B)False
Q2) According to the Emerging Market Potential Indicators index, ________ is an indicator of market size.
A) real GDP growth rate
B) telephones per 100 habitants
C) population per retail outlet
D) urban population
Q3) Which of the following market characteristics offers the most potential for a firm's success at internationalization?
A) a widely-distributed product or service
B) an unaffordable product or service
C) an unavailable product or service
D) an unknown product or service
Q4) Exporting, FDI, and sourcing all have identical screening criteria.
A)True
B)False
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Chapter 14: Exporting and Countertrade
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Q1) Incoterms were developed by the International Chamber of Commerce in order to
A) provide permission to export
B) standardize the cost of shipping and insuring exported items
C) define how the buyer and seller share freight and insurance costs
D) reduce the costs of shipping and insuring exported products
Q2) Which of the following actions most likely occurs in the experimental involvement stage of internationalization?
A) Managers open franchises within an economic bloc to gain valuable experience.
B) Management aggressively targets the domestic market to take control over competitors.
C) Managers target low-risk, culturally close markets through exporting or licensing.
D) Management targets psychically close markets through collaborative ventures or FDI.
Q3) Which of the following is an example of a push factor for a focal firm?
A) foreign government incentives
B) increasing competition in the home market
C) collaborative venture with a competitor in the foreign market
D) increasing demand in the home market
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Chapter 15: Foreign Direct Investment and Collaborative Ventures
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Sample Questions
Q1) Many international firms are investing in local communities and establishing global standards of fair treatment for workers in an effort to be socially responsible.
A)True
B)False
Q2) The rate of inflation is a(n) ________ factor to be considered while selecting the location for FDI.
A) profit retention
B) market
C) infrastructural
D) human resource
Q3) Discuss the four key differences between project-based, nonequity ventures and equity ventures.
Q4) Which of the following terms is used to refer to a focal firm's partial ownership of an existing firm?
A) turnkey operation
B) greenfield investment
C) direct investment
D) equity participation
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Chapter 16: Licensing, Franchising, and Other Contractual Strategies
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Sample Questions
Q1) In a master franchising agreement, the master franchisee has the right to subfranchise to other independent businesses and thus assume the role of the local franchisor.
A)True
B)False
Q2) A collective mark ________.
A) is intended to improve the product's aesthetics and usability as well as increase its production efficiency, performance, or marketability
B) protects original works of authorship, giving the creator the exclusive right to reproduce the work, display and perform it publicly, and authorize others to perform these activities
C) is a distinctive design, symbol, logo, word, or series of words placed on a product label
D) is a logo belonging to an organization whose members use it to identify themselves and associate their products with a level of quality or accuracy, geographical origin, or other positive characteristic
Q3) Describe three challenges faced by professional service firms when they internationalize.
Q4) Describe the guidelines for protecting intellectual property.
Page 18
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Chapter 17: Global Sourcing
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Q1) Global sourcing has gained momentum in the current phase of globalization.
A)True
B)False
Q2) When outsourcing, managers can minimize the risk of creating employee tension by
A) increasing the number of junior managers for foreign assignments
B) increasing the annual training budget
C) sending domestic managers to foreign countries for training
D) reaching a consensus of managers and labor
Q3) Business activities that would most likely be offshored are characterized by
A) high-value-adding activities that contribute more productively to increasing company performance
B) services related to critical, long-term research projects and product development
C) routine tasks that do not relate to the firm's primary service or product
D) functions related to the firm's core competencies and strategic assets
Q4) How do firms decide whether or not to outsource? In a short essay, describe the factors that contribute to the decision to internalize or externalize business activities.
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Chapter 18: Marketing in the Global Firm
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Q1) Branding refers to the process of dividing a firm's total customer base into homogeneous clusters in a way that allows management to formulate unique marketing strategies for each group.
A)True
B)False
Q2) Channel length refers to the number of distributors or other intermediaries that it takes to get the product from the manufacturer to the market.
A)True
B)False
Q3) A subsidiary is most likely to receive favorable treatment from an MNE if it is located in a country with ________.
A) lower corporate income-tax rates
B) significant restrictions on profit repatriation
C) low tariffs for the product in question
D) political instability
Q4) The strength of a global brand is best measured by its brand equity.
A)True
B)False
Q5) Briefly discuss the principal advantages of standardization.
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Chapter 19: Human Resource Management in the Global Firm
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Q1) Which of the following employees is most likely a host-country national?
A) Shelly Eaton
B) Raj Patel
C) Keiko Tran
D) Marcus Field
Q2) ________ refers to an employee's ability to function effectively with those from different cultural backgrounds or in different cultural contexts.
A) Reverse culture shock
B) Ethnocentrism
C) Cultural intelligence
D) Cultural pluralism
Q3) Subsidiary managers are often assessed by multiple evaluators mainly because MNEs are typically characterized by a low level of mutual trust among employees.
A)True
B)False
Q4) In a short essay, discuss the connection between expatriate assignment failure and culture shock. What are the different components of training designed to prepare expatriates for assignments abroad?
Page 21
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Chapter 20: Financial Management and Accounting in the Global Firm
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Sample Questions
Q1) Economic exposure results from exchange-rate fluctuations that affect ________.
A) marketing strategies
B) tariffs and duties
C) brand personality
D) product pricing
Q2) ________ is the number of units of foreign currency obtained for one unit of domestic currency.
A) Indirect quote
B) Prime rate
C) Direct quote
D) Repo rate
Q3) Which of the following is characteristic of the parent's perspective in capital budgeting?
A) It estimates future cash flows from the project in the functional currency.
B) It adds the subsidiary's after-tax operating cash flows with the project's cost of capital.
C) It seldom uses the currency of the primary economic environment in which it operates.
D) It estimates the incremental after-tax operating cash flows in the subsidiary's local currency.
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