Cross-Cultural Management
Midterm Exam
Course Introduction
Cross-Cultural Management explores the challenges and opportunities that arise when people from different cultural backgrounds interact within a business environment. This course examines key concepts such as cultural dimensions, communication styles, negotiation strategies, leadership, and decision-making in a global context. Students will learn how cultural differences impact workplace dynamics, team collaboration, and organizational effectiveness. Through case studies, discussions, and real-world applications, the course equips students with the skills needed to navigate and manage diversity, foster inclusive teams, and successfully lead businesses across borders.
Recommended Textbook
International Business Competing in the Global Marketplace 11th Edition by Charles
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W. L. Hill
Chapter 1: Globalization
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) Supporters of debt relief argue that new democratic governments in poor nations should not be forced to honor debts incurred by corrupt and dictatorial predecessors.
A)True
B)False
Answer: True
Q2) Globalization is criticized because it increases the power of:
A) governments to own enterprises.
B) unskilled labor to form labor unions.
C) supranational organizations over nation-states.
D) nation-states to regulate markets and reduce competition.
Answer: C
Q3) The total cumulative value of foreign investments is best referred to as:
A) accumulation of foreign shares.
B) portfolio investments.
C) stock of foreign direct investments.
D) stock market investments.
Answer: C
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Chapter 2: National Differences in Political Economy, and Legal Systems
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108 Verified Questions
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Sample Questions
Q1) In common law, _____ refers to cases that have come before the courts in the past.
A) custom
B) precedent
C) codification
D) tradition
Answer: B
Q2) Which of the following statements about the legal systems of countries is true?
A) They can affect the attractiveness of a country as an investment site or market.
B) They are not influenced by the prevailing political system of the country.
C) They are almost the same for all countries.
D) They are of little importance to international business.
Answer: A
Q3) Patents discourage companies from committing themselves to extensive basic research.
A)True
B)False
Answer: False
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Page 4
Chapter 3: National Differences in Economic Development
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Sample Questions
Q1) Paralleling the spread of democracy, since the 1980s there has been the transformation from:
A) free-market economies to socialist economies.
B) mixed economies to collectivist economies.
C) open economies to closed economies.
D) command economies to market-based economies.
Answer: D
Q2) In Sen's view, development is an economic process that should be assessed by material output measures such as GNI per capita.
A)True
B)False
Answer: False
Q3) Since the 1980s, there has been a transformation from _____ economies to _____ economies.
A) mixed; market-based
B) centrally planned command; market-based
C) centrally planned command; mixed
D) market-based; centrally planned command
Answer: B
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Page 5
Chapter 4: Differences in Culture
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) 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
Q2) The _____ dimension of Hofstede's study explores how a society deals with the fact that people are unequal in physical and intellectual capabilities.
A) power distance
B) individualism versus collectivism
C) uncertainty avoidance
D) masculinity versus femininity
Q3) Like Christianity and Judaism, Islam is a polytheistic religion.
A)True
B)False
Q4) Both Hindus and Buddhists stress the afterlife and spiritual achievement rather than involvement in this world.
A)True
B)False
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Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability
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Sample Questions
Q1) The _____ approaches to ethics hold that the moral worth of actions or practices is determined by their consequences.
A) naïve immoralist
B) cultural relativist
C) righteous moralist
D) utilitarian
Q2) 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.
Q3) Milton Friedman's basic position is that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.
A)True
B)False
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Chapter 6: International Trade Theory
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107 Flashcards
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Sample Questions
Q1) New trade theory suggests that nations:
A) increase their commitment to research and development.
B) adopt policies that promote strong competition within domestic markets.
C) cannot benefit from trade when they do not differ in resource endowments or technology.
D) may benefit from trade even when they do not differ in resource endowments or technology.
Q2) David Ricardo's theory of comparative advantage explains global trade in terms of the:
A) first mover advantage that certain countries and firms enjoy.
B) geographical differences between various countries.
C) international differences in labor productivity.
D) late mover advantage that certain countries and firms possess.
Q3) The theories of Smith and Ricardo show that countries should not engage in international trade for products that it is able to produce for itself.
A)True
B)False
Q4) Do you think a new trade theorist would stress the role of luck and entrepreneurship? Explain.
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Chapter 7: Government Policy and International Trade
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111 Flashcards
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Sample Questions
Q1) Which of the following is a trade barrier that affects a firm's strategy?
A) Tariffs lower the cost of exporting.
B) Quotas may enhance a firm's ability to serve a country from outside of that country.
C) To conform to local content regulations, a firm may have to locate more production activities in a given market than it would otherwise.
D) The threat of antidumping actions promotes the firm's ability to use aggressive pricing to gain market share in a country.
Q2) The _____ specifies that government agencies must give preference to American products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage.
A) General Agreement on Tariffs and Trade
B) Buy America Act
C) American Reinvestment Act
D) Smoot-Hawley Act
Q3) The World Trade Organization was created as part of the Uruguay Round.
A)True
B)False
Q4) What is dumping? How do governments respond to charges of dumping?
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Page 9
Chapter 8: Foreign Direct Investment
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Sample Questions
Q1) Mergers and acquisitions are quicker to execute than greenfield investments.
A)True
B)False
Q2) What is the term that describes when two or more enterprises encounter each other in different regional markets, national markets, or industries?
A) Multipoint competition
B) Monopoly
C) Location-specific competition
D) Oligopoly
Q3) Through their choice of policies, home countries can both encourage and restrict FDI by local firms. Policies designed to encourage outward FDI include which of the following?
A) Tax rebates
B) Political pressure
C) Expropriation
D) Domestic risk insurance
Q4) John Dunning pioneered the eclectic paradigm.
A)True
B)False
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Chapter 9: Regional Trade Pacts Give the Mexican Auto
Industry an Edge
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110 Verified Questions
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Sample Questions
Q1) Which of the following is directly elected by the populations of the member states and is primarily a consultative rather than legislative body?
A) The European Parliament
B) The European Commission
C) The Council of the European Union
D) The Court of Justice
Q2) What is the most enduring free trade area in the world?
A) NAFTA
B) EFTA
C) ASEAN
D) Mercosur
Q3) The judges of the European Court of Justice are required to act as representatives of national interests, rather than as independent officials.
A)True
B)False
Q4) The European Union is an example of a perfect economic union.
A)True
B)False
Page 11
Q5) Discuss the trend toward increased regional economic integration.
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Chapter 10: The Foreign Exchange Market
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Sample Questions
Q1) Assume that an American company today invests some of its spare cash in a Hungarian money market account that will earn 8 percent for a period of two months. Which of the following, if it happens during the next two months, would imply that the company will earn less than 8 percent on its investment?
A) The Hungarian forint rises in value against the dollar.
B) Interest rates in the United States move down.
C) Short-term interest rates in Hungarian money markets shoot up.
D) The dollar appreciates against the Hungarian forint.
Q2) The _____ is the rate at which a foreign exchange dealer converts one currency into another currency on a particular day.
A) spot exchange rate
B) forward exchange rate
C) futures exchange rate
D) spread
Q3) The value of a currency is determined by the interaction between the demand and supply of that currency relative to the demand and supply of other currencies.
A)True
B)False
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Page 12
Chapter 11: The International Monetary System
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Sample Questions
Q1) World Bank offers low-interest loans to risky customers whose credit rating is often poor.
A)True
B)False
Q2) 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
Q3) Which of the following is an advantage of using the gold standard?
A) The standard makes sure that goods are not priced out from markets due to inflation.
B) The standard does not require a commitment from nations to maintain its currency's value.
C) The standard effectively prevents the devaluation of currencies across the world.
D) The standard contains a powerful mechanism for achieving balance-of-trade equilibrium by all countries.
Q4) What is gold standard? What was the major advantage of the system?
Q5) What is international monetary system? What are the major trading currencies?
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Chapter 12: The Global Capital Market
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Sample Questions
Q1) Foreign bonds are sold within the borrower's country and are denominated in the currency of the country in which they are issued.
A)True
B)False
Q2) As investors increase the number of stocks in their portfolio, the portfolio's risk:
A) increases initially and declines later.
B) declines slowly and steadily.
C) increases exponentially.
D) declines rapidly in the beginning.
Q3) Banks charge borrowers a lower interest rate on Eurocurrency borrowings than for borrowings in the home currency.
A)True
B)False
Q4) 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
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Chapter 13: The Strategy of International Business
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Sample Questions
Q1) Support activities are always less important than the primary activities in achieving a competitive advantage.
A)True
B)False
Q2) _____ activities are basically concerned with creating the product, marketing and delivering the product to buyers, and providing support and after-sales service.
A) Support
B) Subordinate
C) Ancillary
D) Primary
Q3) Skills within the firm that competitors cannot easily match or imitate and that may exist in the firm's value creation activities.
A) Experience curves
B) Core competencies
C) Economies of scale
D) Learning effects
Q4) Discuss efficiency frontier. How does strategic positioning relate to the efficiency frontier?
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Chapter 14: The Organization of International Business
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Sample Questions
Q1) Consider the use of personal controls in international firms. In which type of firm is this control most common?
Q2) Organizational structure refers to the totality of a firm's organization.
A)True
B)False
Q3) Firms pursuing a transnational strategy:
A) have a low need for coordination.
B) require very few integrating mechanisms.
C) have a very high need for cultural controls.
D) operate with a worldwide product division structure.
Q4) A _____ tends to be adopted by firms that are reasonably diversified and originally had domestic structures based on product divisions.
A) worldwide product division structure
B) global matrix structure
C) worldwide area structure
D) performance structure
Q5) Explain organizational structure.
Q6) Explain the five reasons why a firm should decentralize its decision-making.
Q7) Discuss the issues involved in unfreezing an organization.
Page 16
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Chapter 15: Entry Strategy and Strategic Alliances
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Sample Questions
Q1) In a ____, the firm owns 100 percent of the stock.
A) joint venture
B) wholly owned subsidiary
C) turnkey project
D) franchising agreement
Q2) Firms entering a market via a _____ must bear all the costs and risks associated with the venture.
A) licensing contract
B) joint venture
C) turnkey contract
D) wholly owned subsidiary
Q3) When an exporting firm finds that its local agent is also carrying competitors' products, the firm may switch to a _____ to handle local marketing, sales, and service.
A) wholly owned subsidiary
B) franchising arrangement
C) turnkey operation
D) licensing agreement
Q4) Compare and contrast licensing agreements and franchising agreements.
Q5) What are first-mover advantages? Discuss these advantages.
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Chapter 16: Exporting, Importing, and Countertrade
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Sample Questions
Q1) The main attraction of a(n) _____ is that it can give a firm a way to finance an export deal when there are no other means available.
A) countertrade
B) buyback
C) counterpurchase
D) offset
Q2) Describe a typical international trade transaction.
Q3) Which of the following is a successful exporting strategy used by 3M?
A) Add additional products once exporting becomes successful.
B) Enter many markets at one time to gain maximum exposure.
C) Bring in expert marketing specialists to promote the firm's products.
D) Enter on a large scale to flood the market.
Q4) The Export-Import Bank is an independent agency of the _____.
A) European Union
B) World Trade Organization
C) United Nations
D) U.S. government
Q5) A counterpurchase gives exporters more flexibility than an offset.
A)True
B)False
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Chapter 17: Global Production and Supply Chain Management
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Sample Questions
Q1) Make-or-buy decisions are decisions about:
A) the components to be used in manufacturing process.
B) procuring raw materials for a production process.
C) procuring the capital equipment for production.
D) whether or not to outsource value creation activities.
Q2) 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.
Q3) Just-in-time inventory systems:
A) are used when procurement is not organized.
B) require large warehouses for storage.
C) economize on inventory holding costs.
D) maintain large buffer for inventory.
Q4) Explain why a firm might adopt the just-in-time system. Why might a firm choose a different inventory system?
Page 19
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Chapter 18: Global Marketing and RD
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Sample Questions
Q1) A firm may be prevented from using _____ because of advertising regulations.
A) corporate advertising
B) culturally significant advertising
C) marketing strategies
D) standardized advertising
Q2) A pull strategy should be used when:
A) the firm is selling industrial products.
B) the distribution channels are short.
C) the distribution channels are long.
D) few print or electronic media are available.
Q3) Which of the following is an advantage of establishing cross-functional product development teams?
A) It reduces the need for collaboration within the development team.
B) It helps firms reduce the status differences between employees.
C) It facilitates integration between different functions in a firm.
D) It helps teams reduce the conflicts within product development teams.
Q4) A company that depends on mass media advertising to communicate its marketing message to potential consumers is using a push strategy.
A)True
B)False
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Chapter 19: Global Human Resource Management
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Sample Questions
Q1) A _____ may be paid to ensure that the expatriate enjoys the same standard of living in the foreign location as at home.
A) housing allowance
B) hardship allowance
C) cost-of-living allowance
D) differential allowance
Q2) An expatriate needs to have language fluency to show willingness to communicate.
A)True
B)False
Q3) Union influence in the auto industry is increasing in part due to Japanese carmakers building autos in the United States.
A)True
B)False
Q4) Most expatriates believe that more weight should be given to an on-site manager's appraisal than to an off-site manager's appraisal.
A)True
B)False
Q5) How can firms reduce the bias in performance appraisals of expatriate managers?
Q6) Discuss why the repatriation process is so difficult for so many expatriates.
Page 21
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Chapter 20: Accounting and Finance in the International Business
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Sample Questions
Q1) What are the considerations when seeking external financing for international business?
Q2) _____ enables top managers to compare, in a reasonably objective fashion, different investment alternatives within and across countries so they can make informed choices about where the firm should invest its scarce financial resources.
A) Auditing
B) Money management
C) Capital budgeting
D) Multilateral accounting
Q3) 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.
Q4) Identify a key accounting problem that international businesses are confronted with but that does not confront purely domestic businesses. Substantiate with a suitable example.
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