Cross-Cultural Management Solved Exam Questions
Course Introduction
Cross-Cultural Management explores the complexities and opportunities of working in multicultural environments, focusing on the impact of cultural differences on organizational behavior, leadership, communication, negotiation, and decision-making.
Through the examination of theories, case studies, and practical examples, students develop an understanding of how cultural values, beliefs, and practices influence management styles and team dynamics in a global context. The course prepares students to analyze cultural challenges, apply intercultural competency skills, and implement effective strategies for managing diversity and fostering inclusive workplaces within international organizations.
Recommended Textbook
International Business Competing in the Global Marketplace 12th Edition by Charles W. L. Hill
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20 Chapters
2122 Verified Questions
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Chapter 1: Globalization
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Sample Questions
Q1) Managing an international business is different from managing a purely domestic business for which of the following reasons?
A) Countries prefer to keep business transactions between domestic partners.
B) The range of problems confronted is wider and more complex.
C) International businesses have an added layer of U.N. regulations.
D) International transactions involve exchanging currencies through each country's treasury.
Answer: B
Q2) According to supporters of debt relief, 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
Q3) When Cyprus had a financial crisis, it went to the World Bank, known as the lender of last resort, to bail it out.
A)True
B)False
Answer: False
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3
Chapter 2: National Differences in Political, Economic, and Legal Systems
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107 Verified Questions
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Sample Questions
Q1) Which of the following philosophies can be traced back to the ancient Greek philosopher Aristotle?
A) socialism
B) individualism
C) collectivism
D) anarchism
Answer: B
Q2) Company Zee has been found guilty of manufacturing a product that caused harm to its users, violating criminal liability laws. Which of the following is the most likely outcome for Company Zee?
A) payment and monetary damages
B) more severe punishment if Company Zee is outside the United States
C) fines or imprisonment
D) nothing if it was Company Zee's first offense
Answer: C
Q3) Most modern democratic states practice representative democracy.
A)True
B)False
Answer: True
Page 4
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Chapter 3: National Differences in Economic Development
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103 Verified Questions
103 Flashcards
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Sample Questions
Q1) ________ is seen as a way to stimulate gains in economic efficiency by giving owners a powerful incentive-the reward of greater profits-to search for increases in productivity, to enter new markets, and to exit losing ones.
A) Globalization
B) Economic transformation
C) Deregulation
D) Privatization
Answer: D
Q2) One of the reasons for the spread of democracy is the emergence of ________ who have pushed for democratic reforms.
A) a more vocal working poor
B) better educated lower classes
C) a desperate urban poor
D) increasingly prosperous middle and working classes
Answer: D
Q3) Economic risks are independent of political risk.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Differences in Culture
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Sample Questions
Q1) ________ are social conventions concerning things such as the appropriate dress code in a particular situation, good social manners, eating with the correct utensils, neighborly behavior, and the like.
A) Values
B) Beliefs
C) Mores
D) Folkways
Q2) There are three values central to the Confucian system of ethics that have very important economic implications. Which of the following is one of these values?
A) filial piety
B) rule-based law
C) humaneness
D) honesty in dealings with others
Q3) Consider the influence of Confucian ethics on the economies of China, Japan, South Korea, and Taiwan.
Q4) What are the implications of cultural differences for international businesses?
Q5) Discuss the relationship between society and the nation-state.
Q6) Describe the four dimensions of culture as identified by Geert Hofstede.
Q7) Explain the concept of social stratification.
Page 6
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Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability
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108 Verified Questions
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Sample Questions
Q1) According to ________, the social responsibility of business is to increase profits, so long as the company stays within the rules of law.
A) the naive immoralist
B) the righteous moralist
C) cultural relativism
D) the Friedman doctrine
Q2) Which of the following is an example of an external stakeholder?
A) employees
B) customers
C) stockholders
D) the board of directors
Q3) Describe the five-step process that businesses can use to think through ethical problems.
Q4) What is the term for a company's formal statement of the ethical priorities it expects all of its employees to follow?
A) code of ethics
B) stakeholders pledge
C) moral courage
D) difference principle
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Chapter 6: International Trade Theory
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Sample Questions
Q1) Identify the theory that predicts that countries will export those goods that make intensive use of factors that are locally abundant.
A) theory of comparative advantage
B) Ricardo theory
C) new trade theory
D) Heckscher-Ohlin theory
Q2) Which of the following is the reason most economists prefer Heckscher-Ohlin theory to Ricardo's theory?
A) Heckscher-Ohlin stresses the differences in productivity between nations.
B) Ricardo's theory considers factor endowments to describe national competitiveness.
C) Heckscher-Ohlin theory makes fewer simplifying assumptions.
D) Ricardo's theory considers the law of marginal returns.
Q3) How does the Heckscher-Ohlin theory explain international trade?
Q4) According to Paul Samuelson's critique, a poor country will rapidly improve its productivity if a rich country enters into a free trade agreement with it.
A)True
B)False
Q5) Explain how the rivalry within an industry affects international competence.
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Chapter 7: Government Policy and International Trade
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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) Discuss the economic reasons for government intervention in markets.
Q3) Discuss the infant industry argument for intervention in markets. What is GATT's position on the argument?
Q4) What was the result of the Smoot-Hawley Act?
A) Other countries reacted by raising their own tariff barriers.
B) Other countries reacted by lowering their trade barriers.
C) U.S. exports increased.
D) The United States began to get out of the Great Depression.
Q5) Tariffs are generally pro-consumer and anti-producer.
A)True
B)False
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Chapter 8: Foreign Direct Investment
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Sample Questions
Q1) The pragmatic nationalist view highlights ________ of FDI.
A) only the benefits
B) only the costs
C) both the benefits and costs
D) neither the benefits nor the costs
Q2) FDI has been declining in the last few decades because protectionist pressures have become less intense.
A)True
B)False
Q3) The amount of foreign direct investment (FDI) undertaken over a given time period is known as the flow of FDI.
A)True
B)False
Q4) What is an oligopoly? Discuss the impact of interdependence in an oligopoly.
Q5) FDI undertaken to serve the home market is known as A) outsourcing.
B) FDI substitution.
C) offshore production.
D) home market FDI.
Q6) Describe the situations when licensing is not a good option for a firm.
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Chapter 9: Regional Economic Integration
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Sample Questions
Q1) Which of the following explains why economic integration has never been easy to achieve or sustain, despite the strong economic and political arguments in support?
A) No country has shown significant improvement because of economic integration.
B) Countries fear a reduction of their political weight in the world because of economic integration.
C) Linking neighboring economies and making them increasingly dependent on each other creates little incentive for political cooperation.
D) While a nation as a whole may benefit significantly, certain groups may lose.
Q2) Country X and Country Y reach an agreement to boost bilateral trade. They agree to remove all barriers to the trade of goods and services. They, however, are free to determine their own trade policies with regard to nonmembers. Which level of economic integration is this an example of?
A) a customs union
B) an economic union
C) a common market
D) a free trade area
Q3) What is ASEAN? What is its basic goal? How successful is ASEAN?
Q4) Discuss the trend toward increased regional economic integration.
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Page 11
Chapter 10: The Foreign Exchange Market
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Sample Questions
Q1) Governments allow convertibility to preserve their foreign exchange reserves.
A)True
B)False
Q2) An American company today invests some of its spare cash in a Hungarian money market account that will earn 8 percent for 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.
Q3) Assume that the law of one price holds. A shirt that retails for $120 in New York sells for £60 in London. The exchange rate between the British pound and the dollar is £1 = $1.50. Assuming away transportation costs and trade barriers, this creates a profit-making opportunity called
A) currency swap.
B) arbitrage.
C) carry trade.
D) straddle.
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Page 12
Chapter 11: The International Monetary System
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101 Flashcards
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Sample Questions
Q1) Which of the following is a common underlying cause of financial crises?
A) a narrowing current account deficit
B) excessive expansion of domestic borrowing
C) low relative price inflation rates
D) asset price deflation
Q2) A country is said to be in balance-of-trade equilibrium when
A) the income its residents earn from exports is equal to the money its residents pay to other countries for imports.
B) it produces all the goods needed for domestic consumption.
C) the income its residents earn from imports is equal to the money its residents pay to other countries for exports.
D) it produces all the goods needed for exportation.
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) Recent policies of the International Monetary Fund have drawn a lot of criticism. Discuss these criticisms.
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Chapter 12: The Global Capital Market
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Sample Questions
Q1) The cost of capital is
A) higher in a purely domestic capital market than in a global market.
B) lower in a domestic capital market than in an international market.
C) higher in a global market than in a purely domestic capital market.
D) the same in either a global market or a purely domestic capital market.
Q2) Explain the changes observed in the risk of investments when an investor increases the number of stocks in his or her portfolio.
Q3) Which of the following statements is true of market makers?
A) Commercial banks are not allowed to function as market makers.
B) Market makers are large investors who drive an economy.
C) Market makers facilitate only equity-based loans.
D) Market makers connect investors and borrowers in a capital market.
Q4) Eurodollars are
A) the exchange value of the dollar with the euro.
B) used to pay for imports from Europe.
C) dollars banked outside of the United States.
D) the exchange buffer that the euro has against dollar.
Q5) What are the financial advantages that make the Eurocurrency market attractive to both depositors and borrowers?
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Chapter 13: The Strategy of International Business
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Sample Questions
Q1) ________ enable a firm to reduce the costs of value creation and/or to create perceived value in such a way that premium pricing is possible.
A) Core competencies
B) Global standardization strategies
C) Operations
D) Location economies
Q2) What are the two types of competitive pressures that firms competing in the global marketplace face? How do firms respond to these pressures?
Q3) The basic strategy paradigm suggests that to maximize its profitability, a firm should do which of the following?
A) Choose, according to strategy, any position on the efficiency frontier as all positions are viable.
B) Pick a position on the efficiency frontier that is viable in the sense that there is a low product demand anticipated.
C) Configure its external operations so that they support the position of diminishing returns.
D) Make sure that the right organization structure is in place to execute its strategy.
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Chapter 14: The Organization of International Business
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Sample Questions
Q1) In practice, the dual hierarchy in a global matrix structure
A) lessens all forms of conflict.
B) makes it easy to ascertain accountability.
C) results in extremely quick decision making.
D) can lead to perpetual power struggles.
Q2) It is important to realize that organizational change will occur regardless of the commitment of senior managers to it.
A)True
B)False
Q3) Beyond the initial functional division of the organization, further horizontal differentiation may be required if the firm significantly diversifies its product offering, which takes the firm into different business areas.
A)True
B)False
Q4) A manager receives a bonus because the national operating subsidiary that she is in charge of exceeds its performance target. This is an example of an incentive.
A)True
B)False
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Page 16
Chapter 15: Entry Strategy and Strategic Alliances
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Sample Questions
Q1) Which of the following statements about franchising is true?
A) It guarantees consistent product quality.
B) It tends to involve more short-term commitments than licensing.
C) It is a specialized form of licensing.
D) It is employed primarily by manufacturing firms.
Q2) The costs and risks associated with doing business in a foreign country are typically
A) low in an economically advanced nation.
B) low in the countries of the European Union.
C) high in an economically advanced nation.
D) high in a politically stable democratic nation.
Q3) The most typical joint venture is a ________ venture.
A) 50-50
B) 60-40
C) 75-25
D) 10-90
Q4) Imagine that you are meeting with your superiors to discuss entering a foreign market. Your boss has asked you to analyze a joint venture prospect. Why might you tell your boss that the joint venture is not a good idea?
Q5) Why should a firm be cautious about entering a licensing agreement?
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Chapter 16: Exporting, Importing, and Countertrade
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Sample Questions
Q1) A ________ allows for a delay in payment-normally 30, 60, 90, or 120 days.
A) bill of lading
B) sight draft
C) bill of exchange
D) time draft
Q2) A banker's acceptance
A) is payable to the drawee immediately on presentation in a bank.
B) is a time draft that has been drawn on and accepted by a bank.
C) is a sight draft that can be used as a negotiable instrument in banks.
D) allows a buyer possession of the merchandise without signing any formal documents.
Q3) As a receipt, the bill of lading indicates that the carrier
A) provides a written promise of payment before releasing the merchandise.
B) has obtained the merchandise described on the face of the document.
C) receives payment from a third-party such as a bank or trading house.
D) is obligated to provide a transportation service in return for a certain charge.
Q4) Describe the process involved in financing imports and exports using a letter of credit. Why has this system developed? What is the advantage of using this system?
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Chapter 17: Global Production and Supply Chain Management
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Sample Questions
Q1) Decentralization of production is appropriate when
A) a product's value-to-weight ratio is high.
B) the product serves universal needs.
C) barriers to trade are low.
D) volatility in key exchange rates is expected.
Q2) Central to the concept of economies of scale is the idea that the best way to achieve high efficiency, and hence low unit costs, is through the
A) customization of products for each individual market.
B) mass production of a standardized output.
C) production of goods that vary from one another.
D) production of small volumes of high-quality products.
Q3) Concentration of production should be avoided when important exchange rates are expected to remain relatively stable.
A)True
B)False
Q4) Production is also sometimes referred to as operations as part of a global supply chain.
A)True
B)False
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Chapter 18: Global Marketing and R&D
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Sample Questions
Q1) When a channel is exclusive
A) the firm sells and distributes only high-end products.
B) it is controlled by market leaders or by firms who have a niche market.
C) the firm's products are focused only on elite, upper class customers.
D) it is often difficult for a new firm to get access to shelf space in supermarkets.
Q2) A channel is considered to be very short if the producer sells
A) through an import agent.
B) through a wholesaler.
C) through a retailer.
D) directly to the consumer.
Q3) Discuss the notion of cross-functional teams and their role in cross-functional integration. What are the attributes that make a product development team successful?
Q4) Discuss the role of technology in new-product development, including the concept of "creative destruction."
Q5) What are the arguments for standardized advertising across international markets?
Q6) Explain the concept of price elasticity of demand. What are its determining factors?
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Page 20
Chapter 19: Global Human Resource Management
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Sample Questions
Q1) ________ refers to the relationship between the country of assignment and how well an expatriate adjusts to a particular posting.
A) Cultural toughness
B) Self-orientation
C) Perceptual ability
D) Others-orientation
Q2) Discuss the concerns of organized labor.
Q3) A firm that adopts a polycentric approach to staffing is likely to suffer from cultural myopia.
A)True
B)False
Q4) ________ staffing policy seeks the best people for key jobs throughout the organization, regardless of nationality.
A) An ethnocentric
B) A polycentric
C) A eurocentric
D) A geocentric
Q5) Discuss the reasons expatriate managers fail to complete their foreign assignment.
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Chapter 20: Accounting and Finance in the International Business
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Sample Questions
Q1) ________ represent the remuneration paid to the owners of technology, patents, or trade names for the use of the technology or the right to manufacture and/or sell products under patents or trade names.
A) Royalties
B) Transfer costs
C) Fees
D) Licensing costs
Q2) 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.
Q3) Funds can be moved out of a particular country in which a parent country has set up a subsidiary by
A) setting high transfer prices for the goods supplied.
B) removing royalties imposed on the subsidiary.
C) charging a discounted fee on the subsidiary.
D) issuing loans to the subsidiary at discounted rates.
Page 22
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