Cross-Cultural Management Study Guide Questions
Course Introduction
Cross-Cultural Management explores the challenges and opportunities that arise when managing individuals and teams from diverse cultural backgrounds in a global business environment. The course examines cultural frameworks, communication styles, negotiation strategies, leadership approaches, and ethical considerations across various cultures. Through case studies, group discussions, and practical assignments, students develop skills to navigate cultural differences, foster inclusive workplaces, and effectively manage international collaborations. Students also gain insights into adapting management practices to enhance cross-cultural effectiveness and achieve organizational success in multicultural contexts.
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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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Sample Questions
Q1) Currency risk refers to the risk posed by adverse fluctuations in exchange rates.
A)True
B)False
Answer: True
Q2) Philip Baxter reported on the risks associated with establishing the plant in Country
A. The most significant risk, in his view, was posed by the government's complex bureaucratic structure. Philip reported the likelihood of significant administrative delays in opening the plant. The risk identified by Philip is an example of which of the following?
A) country risk
B) commercial risk
C) currency risk
D) cross-cultural risk
Answer: A
Q3) Exporting is an entry strategy involving the sale of products or services to customers located abroad.
A)True
B)False
Answer: True
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3
Chapter 2: Globalization of Markets and the
Internationalization of the Firm
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Sample Questions
Q1) Countries that liberalize international trade and investment enjoy faster per-capita economic growth.
A)True
B)False
Answer: True
Q2) How has the adoption of free markets worldwide served as a driver of market globalization? Provide three examples to support your answer.
Answer: The collapse of the Soviet Union's economy in 1989 and China's free-market reforms marked the end of the 50-year Cold War and smoothed the integration of former command economies into the global economy. Numerous East Asian economies, stretching from South Korea to Malaysia and Indonesia, had already embarked on ambitious market-based reforms. India joined the trend in 1991. These events opened roughly one-third of the world to freer international trade and investment. China, India, and Eastern Europe have become some of the most cost-effective locations for producing goods and services worldwide. Privatization of previously state-owned industries in these countries has encouraged economic efficiency and attracted massive foreign capital into their national economies.
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Page 4
Chapter 3: Organizational Participants That Make
International Business Happen
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Sample Questions
Q1) In an international value chain, sourcing occurs before research and development.
A)True
B)False
Answer: False
Q2) Many commercial banks are reluctant to extend credit to SMEs.
A)True
B)False
Answer: True
Q3) A ________ is the initiator of an international business transaction.
A) facilitator
B) focal firm
C) distribution channel intermediary
D) freight forwarder
Answer: B
Q4) A firm that grants another the right to use an entire business system in exchange for fees, royalties, or other forms of compensation is known as a licensor.
A)True
B)False
Answer: False
Page 5
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Chapter 4: The Cultural Environment of International Business
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Sample Questions
Q1) ________ are letters, figures, colors, or other characters that communicate a meaning.
A) Rituals
B) Symbols
C) Norms
D) Customs
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) Acculturation is defined as the process of ________.
A) segregating ethnic minorities by distinct groups
B) adjusting and adapting to a culture other than one's own
C) learning the behavioral patterns and rules of one's own society
D) forcing minority cultures to adopt the values of the dominant culture
Q4) How is culture like an iceberg? In a short essay, explain the relationship between the iceberg theory and international business relationships.
Page 6
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Chapter 5: Ethics and International Business
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Sample Questions
Q1) ________ is the procurement of products or services from suppliers located abroad.
A) Licensing
B) Franchising
C) Deceptive marketing
D) Global sourcing
Q2) Which of the following approaches to ethical standards for corporate governance reflects the view that the best ethical action is the one that provides the most good or the least harm?
A) common good approach
B) utilitarian approach
C) virtue approach
D) fairness approach
Q3) The Nike "Swoosh" is an example of a ________.
A) patent
B) fad
C) copyright
D) trademark
Q4) What is an ethical dilemma? In a short essay, include one example of an ethical dilemma that a business manager might face.
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Chapter 6: Theories of International Trade and Investment
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Sample Questions
Q1) Which of the following would be the most important for Earth-Rite executives to determine when deciding whether to collaborate with the Brazilian grocery store chain?
A) Did employee empowerment lead to increased efficiencies across Earth-Rite's subsidiaries?
B) Would a collaborative venture allow Earth-Rite to internationalize rapidly?
C) What is the density of venture capitalists in Brazil?
D) Is employee empowerment culturally favored in Brazil?
Q2) Which of the following is true about networks?
A) Networks are neither formal organizations with clearly defined hierarchical structures nor impersonal, decentralized markets.
B) In networks, buyers and sellers share no linkages and rarely interact with each other.
C) In a network, continued interaction among partners leads to competition and rivalry that bring down productivity.
D) Networks represent the economically beneficial short-term relationships the firm undertakes with other business entities.
Q3) Explain the limitations of early trade theories. Discuss born global firms.
Q4) In a short essay, explain mercantilism and the monopolistic advantage theory.
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8
Chapter 7: Political and Legal Systems in National Environments
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Sample Questions
Q1) Like most legal systems, Islamic law evolves with changing times to better meet the needs of the Islamic society.
A)True
B)False
Q2) The immediate cause of country risk is a legal or political factor.
A)True
B)False
Q3) Host-country employees provide firms with information about country risks that might harm the firm and its international interests.
A)True
B)False
Q4) Which of the following legal systems is based on legal precedents and past practices set by the nation's courts through interpretation of statutes, legislation, and past rulings?
A) common
B) religious
C) socialist
D) civil
Page 9
Q5) What is transparency? Explain how transparency varies around the world.
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Chapter 8: Government Intervention in International Business
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Sample Questions
Q1) ________ is at odds with free trade, the unrestricted flow of products, services, and capital across national borders.
A) Lower-cost import
B) Government intervention
C) FDI
D) Factors of production
Q2) ________ are transfer payments or tax concessions made directly to foreign firms to entice them to invest in the country.
A) Investment incentives
B) Antidumping duties
C) Countervailing duties
D) Quotas
Q3) What is the primary ethical concern regarding the import of products from poor countries?
A) Higher tariffs hurt poor nations more than developed nations.
B) Nations lacking economic freedom cannot afford to export.
C) Emerging nations use government intervention to protect domestic industries.
D) Lack of subsidies adversely affect poor countries.
Q4) In a short essay, explain how the GATT changed international trade.
Page 10
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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) Regional integration often forces corporate restructuring which may lead to ________.
A) economic nationalism
B) increased trade barriers
C) reduced global trade
D) worker layoffs
Q4) Regional integration gives rise to trade creation and trade diversion.
A)True
B)False
Page 11
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Chapter 10: Understanding Emerging Markets
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Sample Questions
Q1) Which of the following refers to a distinctive trait of the type of economy discussed by Andrei's group?
A) low inward FDI
B) rapidly liberalizing trade barriers
C) highly developed industry
D) low trade volume
Q2) Excessive bureaucracy is usually associated with ________.
A) strong legal framework
B) low country risk
C) lack of transparency
D) low trade barriers
Q3) Developing economies ________.
A) account for nearly two-thirds of world GDP
B) are often highly developed in historical and cultural terms
C) are characterized by high purchasing power
D) have a high literacy rate
Q4) In emerging markets, the size and growth rate of conglomerates serve as signals of a dynamic market economy.
A)True
B)False
Page 12
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Chapter 11: The International Monetary and Financial Environment
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Sample Questions
Q1) Which of the following would a firm considering a corporate merger consult for issues related to the merger?
A) private bank
B) offshore bank
C) commercial bank
D) investment bank
Q2) Which of the following terms refers to the price of one currency expressed in terms of another?
A) countertrade
B) monetization
C) credit derivative
D) exchange rate
Q3) Which of the following questions would be more important to evaluate in determining the reason behind the inflation in Country X?
A) Has momentum trading of agricultural commodities been occurring in Country X?
B) What is the exchange rate between Country X currency and the euro?
C) How quickly was the money supply increased by the central bank of Country X?
D) How many pounds of coffee beans are being imported annually to Country X?
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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 ________ strategy is characterized by substantial control over country operations by headquarters in order to increase efficiency and integration.
A) multilocal
B) home replication
C) multidomestic
D) global
Q3) Discuss the advantages and implementation of a transnational strategy, and explain why this strategy is closely associated with a global matrix structure.
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Chapter 13: Global Market Opportunity Assessment
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Sample Questions
Q1) According to the A.T. Kearney 2012 Foreign Direct Investment Confidence Index, investors have the highest confidence in ________.
A) Malaysia and Brazil
B) South Africa and Indonesia
C) Turkey and Russia
D) China and India
Q2) Describe the variables used to identify the best markets for FDI entry. Which countries are popular for FDI entry? Why are they popular?
Q3) Focal firms that intend to sell their trademark and copyrights typically work with foreign licensing partners instead of franchisors.
A)True
B)False
Q4) The extent of a country's openness to imports is termed ________.
A) market intensity
B) market size
C) market receptivity
D) market growth rate
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Chapter 14: Exporting and Countertrade
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Sample Questions
Q1) Countertrade refers to an international business transaction in which full or partial payments are made in kind rather than cash.
A)True
B)False
Q2) The top trading partner for the European Union is ________.
A) Norway
B) Mexico
C) China
D) Russia
Q3) 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
Q4) In a short essay, explain why receiving payment can be more complicated in international business, and explain how countertrade can be both a method of payment and a form of foreign market entry.
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Page 16
Chapter 15: Foreign Direct Investment and Collaborative Ventures
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Sample Questions
Q1) Which of the following most likely supports a decision to enter the Asian market by building a factory near Tokyo?
A) Executives at ABC want the firm to have the flexibility to reconfigure operations at the Japanese plant.
B) The Japanese yen has been fluctuating over the last year and analysts do not anticipate it settling down.
C) ABC managers want to delegate responsibility of much of the Japanese plant to local intermediaries.
D) The CEO of ABC is willing to invest a large amount of capital and other assets to ensure success in Japan.
Q2) International portfolio investment refers to a firm's direct control of foreign operations and is an equity-based method of foreign market entry.
A)True
B)False
Q3) International expansion invariably results in a decrease in a firm's economies of scale.
A)True
B)False
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Chapter 16: Licensing, Franchising, and Other Contractual Strategies
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Sample Questions
Q1) Which of the following challenges is applicable to the franchisee in a franchising agreement?
A) The franchisee must make their own arrangements to acquire initial training and know-how.
B) The franchisor holds much power, including superior bargaining power.
C) There is no scope to operate an independent business.
D) There is decreased likelihood of business success.
Q2) A cross-border contractual relationship provides the focal firm with ________ over the foreign partner.
A) a low level of control
B) a moderate level of control
C) a high level of control
D) seldom any control
Q3) To minimize the complexity of franchising, focal firms must ________.
A) bribe government officials to reduce nontariff trade barriers
B) have a subjective view of moral and ethical standards
C) conduct advance research on the host country's laws on intellectual property
D) appoint managers from the home country to avoid legal disputes
Q4) Describe six unique qualities shared by all cross-border contractual relationships.
Page 18
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Chapter 17: Global Sourcing
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Q1) A ________ is the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized.
A) demand chain
B) buying center
C) global supply chain
D) decision making unit
Q2) Focal firms typically source from external suppliers for all of the following reasons EXCEPT ________.
A) the product or service obtained is non-core
B) the product can be purchased inexpensively
C) the supplier specializes in providing the product or service
D) the supplier offers the same product to competing firms
Q3) The likelihood of internalizing ________ rather than outsourcing it is considerably high.
A) R&D
B) manufacturing of parts
C) sales and distribution
D) customer service
Q4) What are the benefits of global sourcing?
Page 19
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Chapter 18: Marketing in the Global Firm
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Sample Questions
Q1) A firm that uses the Internet to provide detailed product information and the means for foreigners to buy offerings is using ________.
A) modular architecture
B) direct marketing
C) lengthy distribution channels
D) internal marketing
Q2) Serving a key global customer in a consistent and standardized manner, regardless of where in the world it operates is known as ________.
A) global account management
B) offshoring
C) marketing communications
D) insourcing
Q3) Most MNEs employ advertising agencies to create promotional content and select media for foreign markets.
A)True
B)False
Q4) Adaptation is counterproductive in multidomestic industries.
A)True
B)False
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Chapter 19: Human Resource Management in the Global Firm
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Sample Questions
Q1) Which of the following is a recent trend regarding women in business?
A) Companies worldwide are substantially increasing the number of women on foreign assignments.
B) The majority of international managers are female.
C) Better-educated women are no more likely to obtain jobs than their less-educated counterparts.
D) New legislation in Norway requires listed and state-owned companies to ensure that women hold no more than 20 percent of seats on corporate boards.
Q2) Conrad's training for his assignment in Romania would most likely include
A) technical training
B) area studies
C) training on developing global managers
D) natural disaster management
Q3) In a short essay, discuss the key tasks in international human resource managers.
Q4) Discuss the reasons why labor union membership has declined in recent years.
Q5) In a short essay describe the four elements management must consider when compensating expatriates.
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Chapter 20: Financial Management and Accounting in the Global Firm
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Sample Questions
Q1) Through ________, a subsidiary can defer payment for goods and services received from its parent firm.
A) trade credit
B) royalty payments
C) fronting loan
D) dividend remittances
Q2) In international financial management, after raising funds for the firms, the MNE immediately ________.
A) assesses the financial attractiveness of major investment projects, such as foreign expansion
B) determines the ideal long-term mix of financing for the firm's international operations
C) learns to operate in a global environment with diverse accounting practices and international tax regimes
D) administer funds passing in and out of the firm's value-adding activities
Q3) Firms obtain debt financing by selling stock shares to investors who then have an ownership interest in the firm.
A)True
B)False
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